N.Y. Comptroller: Town of Owego mishandled capital project

New York State Comptroller Thomas DiNapoli’s office recently released an audit report regarding the Town of Owego’s shared services facility capital project, which stated that the municipality did not properly plan, authorize and monitor the endeavor. 

DiNapoli explained that the audit covered from 2016 to 2021, which was the period of time that the town board acquired two properties and approved three projects related to the new, shared services facility. In October 2015 the board officially began the multi-phase project by authorizing the town supervisor to sign an engineering and design contract.

The purpose of the facility was to consolidate the municipality’s highway garage, parks department and utilities department to avoid future damage following Tropical Storm Lee in 2011. Referred to as “Phase I,” the new municipal building would house shared space for the Town’s sewer and water department, as well as offices for the Town’s parks and highway departments.

“The board was not transparent about the cost of the project and did not adopt an itemized project budget,” DiNapoli stated, adding, “The town supervisor did not record all financial activities in the capital projects fund or prepare adequate monthly financial reports that compared actual revenues and expenditures to Board-approved contracts and financing sources. As a result, the supervisor made interfund advances of approximately $2.5 million to pay project expenditures without board approval.”

“As of the end of our fieldwork, the town still had an estimated $4 million in costs left to complete the Project without a planned funding source and still owed the part-town general fund $1.2 million, which may result in an inequity to the part-town taxpayers,” the comptroller added. 

Moreso, auditors stated that between phase one and phase two of the project, the board approved contracts totaling $14.1 million. However, the board only passed resolutions telling the public that the maximum cost estimate for the overall project would total $6.9 million. 

All told, auditors stated that town officials still had no formal plans for how to fund the remaining $4 million of the project, as of the audit report’s release. 

As a result of the audit, state officials issued the following recommendations to the town. 

• Closely oversee the remainder of the Project and determine how to finance shortfalls.
• Prepare, approve and monitor budgets for each capital project and amend as needed.
• Approve all interfund advances.

In a written response to state auditors, Owego Town Supervisor Donald Castellucci, Jr. disagreed that the board did not properly authorize or monitor the project. He also specifically stated that as for the alleged lack of transparency, all public meetings are recorded and minutes are posted on the town’s website. 

“Additionally, I would like to comment that I don’t particularly care for the tone of the language within the audit,” he said. “It creates a narrative that the town was not consistently aware of what the costs were for the project. It also states the project was not being monitored and reviewed, and that there are overruns and costs not communicated with the board. That is incorrect.” 

Castellucci also noted that phase two of project was actually running under budget by over $250,000. 

“While we do not agree with your findings, we were happy to comply and cooperate with your audit,” he said. “We are a fiscally conservative board that always puts the interest of our town’s taxpayers first. The bottom line is that the town will finish completing a shared services facility that will withstand future natural catastrophes. This will ensure we can maintain the town’s highways, provide clean water and sewer services and maintain our parks system more efficiently.” 

In multiple notes in response to Castellucci’s letter, auditors stated that the approved amounts do not include engineering design and construction management contracts. They also noted that no public meeting recordings were provided to auditors, nor were they available to the public on the town’s website. 

You can view the entire audit at http://www.osc.state.ny.us/local-government/audits/town/2022/09/30/town-owego-shared-services-facility-capital-project-2022m-42.