Motion by Councilman Graber, seconded by Councilwoman Bove, to amend the motion and enter into a grant administration agreement dated June 23, 2008 between the Town of West Seneca and not-for-profit company WNY AmeriCorps Fund Inc., whereby the not-for-profit agrees to assume the town’s obligation under the grants
and authorize Councilwoman Bove to execute the agreement on behalf of the town. On the question, Supervisor Piotrowski questioned if Town Attorney Edwin Hunter had reviewed the agreement.
Mr. Hunter responded that he only heard about the agreement late this afternoon. He questioned who prepared the agreement and thought the recitals were lacking information. One of the recitals mentioned that the town had established partnerships with numerous other agencies, municipalities and not-for-profit organizations to meet the cash and in-kind requirements of the grants. These were stated to be in excess of $1,700,000 for each, both cash and in-kind. He questioned what the partnerships were and who they were with, noting that there was no mention in the contract. Mr. Hunter further stated that he was provided a copy of the agreement at this meeting and did not have the opportunity to review it in its entirety.
Councilwoman Bove questioned if Deputy Town Attorney Paul Notaro had an opportunity to review the grant administration agreement.
Mr. Notaro responded that Councilwoman Bove had contacted him this date and they went over a number of the items in the agreement. He supported the idea of the agreement, but thought there were some items that needed to be addressed before the document was signed. Mr. Notaro had some concern because they were not looking at the actual grant documents that had certain obligations for the town as far as providing space and other obligations because they were a party to the original grant. They needed to address these things because they could not just cancel a grant with the federal government or New York State. There were nine grants and two were ending this year. Mr. Notaro thought the basis of the agreement satisfied Supervisor Piotrowski’s desire to release the town of some of the burdens of the AmeriCorps program, but they could not ignore the burdens that the grant placed on the town that they could not avoid.
Councilwoman Bove questioned if the Town of West Seneca was contractually obligated to the federal and state government to at least the year 2011 by contract.
Mr. Notaro understood that the grants were through December 31, 2010 so the town would be obligated until then.
Mr. Hunter stated that they had not reviewed the grants, but there might be a means of contacting federal and state agencies to see if they would consent to the town being removed from responsibility on the grant and allow AmeriCorps to undertake full responsibility and fulfill the obligations. They would have to review the grants, but they also did not know anything about the other partnerships.
Councilwoman Bove questioned if Supervisor Piotrowski had read the grants.
Supervisor Piotrowski stated that he had not reviewed the grants. They were in the AmeriCorps building and he did not have access to them. The AmeriCorps was a private entity and they did not control the grant funds. Supervisor Piotrowski noted that the town had lent over $2 million to the AmeriCorps program and there was a delinquency in payments. The termination dates for each of the grants was between August 2008 and December 2010. Councilman Graber questioned Supervisor Piotrowski’s statement that the town lent over $2 million to the AmeriCorps program.
Comptroller Robert Bielecki responded that the town advanced payment through the payment of bills in excess of the amount received on the grants, close to $2,100,000 as of June 19, 2008.
Councilman Graber stated that Erie County advances $60 million a year for grant money they will receive from the state and federal government. This is totally put on the shoulders of the taxpayers because they know that during the reconciliation period all monies will be paid in full. Councilman Graber commented that advancing money was a way of doing business.
Mr. Bielecki stated that as of December 31, 2006 the advance was over $1 million, as of December 31, 2007 the advance was over $1,600,000 and on June 20, 2008 the advance had grown to $2,095,000. This was money the town was losing interest on and money that was growing exponentially. Mr. Bielecki thought that this situation should be brought under control.
Councilman Graber questioned at what interest rate the town could invest that money that would be a safe investment.
Mr. Bielecki responded that the money could be invested at 4 percent.
Councilman Graber stated that when the Town Board voted 15 years ago to commence the AmeriCorps program, no one ever imagined that it would become what it is today. In 2007, 461 AmeriCorps members provided 3420 hours of service, 17,312 volunteers were recruited and provided 234,496 hours of service, 66 non-profit partnerships, and 263 sites received AmeriCorps service. The Town of West Seneca’s share was $340,000 in 2007 and the total financial impact for 2007 was $23,450,000. Councilman Graber commented that the City of Buffalo, Town of Cheektowaga, and many other others would love to have AmeriCorps located in their municipality. The proposed agreement puts the burden of raising $3.5 million on the shoulders of WNY AmeriCorps, none of it is the responsibility of West Seneca taxpayers. They will be paying the town $75,000 towards facility costs to remain at the Burchfield Nature & Art Center. There will be 20 non-Civil Service full-time employees transferred from the town to the not-for-profit. The not-for-profit will be responsible for all vehicles and insurance, including providing a car for Executive Director Mark Lazzara. He was taking on the responsibility and did not want the town to pay for his vehicle any longer, the grant money would pay for it. The not-for-profit will provide the town with $1 million worth of insurance and the town’s only obligation was a pass through, advancing money during the reconciliation period. The taxpayers of West Seneca will pay nothing and in return WNY will receive over $20 million.
Councilwoman Meegan stated that Mr. Lazzara was giving up his car because the board members had discussed this issue with him. She had spoken to him months ago about the insurance on all the vehicles that the town was paying $14,000 to $18,000 annually, the building insurance, and taking care of their payroll and mailings.
Councilman Graber agreed with Councilwoman Meegan and stated that this was what the agreement was all about. The new Town Board began analyzing AmeriCorps and the Youth Bureau and they found that there was no clear separation. Many things were addressed in the agreement that Supervisor Piotrowski and Councilwoman Meegan were adamant about.
Councilwoman Bove thought the agreement was fair to the town and fair to AmeriCorps. She commented that there were many more issues in the town that they had to face and they would face them together as a community.
Supervisor Piotrowski referred to Paragraph #10 and questioned if the town was required to pay the amounts listed on the schedule each month to the AmeriCorps program or if it would be a line of credit.
Councilman Graber stated that it was the same as they had been doing in the past, the town pays the bills and is eventually reimbursed by the grant. The town advances the money and receives payment in the end. In all likelihood, the amount of money paid by the town on a monthly basis will begin to decrease up until December 2010. Any new grants will be entirely in the hands of WNY AmeriCorps. The agreement will take them to the end when there will be a total separation.
Mr. Bielecki stated that since January 1, 2008 when AmeriCorps owed the town $1.6 million, the town only collected $361,000. He looked at this as a line of credit, and most funding sources with a line of credit would like to see it go to zero at least once a year. This line of credit had grown exponentially from 2006 through this date, and it could go to $3 million by the end of the year.
Councilwoman Bove suggested that the Comptroller’s Office work with the AmeriCorps to get the money back in. If the claims have already been done, it was up to the Comptroller’s Office and AmeriCorps to get this accomplished.
Supervisor Piotrowski questioned when the vehicles would be transferred to AmeriCorps.
Councilman Graber responded that the vehicles would be transferred to AmeriCorps by August 1, 2008.
Supervisor Piotrowski questioned if the liability policy should be greater than $1 million to protect the town.
Mr. Hunter presumed that $1 million was a little light and there should probably be at least an umbrella to cover excess up to possibly $5 million.
Mr. Notaro agreed that the insurance should be high and thought that this amount could be worked out between he and Mr. Hunter before the document is signed.
Mr. Hunter noted that the town was making a representation at the end of the agreement that it had authority to enter into the agreement, but if the town executes the agreement at this time it may be in violation of its grant obligations. They could determine this by reviewing the grants, but the agreement should not be signed prior to reviewing them.
Ayes: All Noes: None Motion Carried