Archive: News

Town Will No Longer Handle Money for Non-official Committees

To be an official town committee or not to be?  That is the question facing two existing committees that inarguably add value to the quality of life in Lansing.  Town Board members discussed the official status of the Lansing Pathways Committee and the Friends of Salt Point and what that will mean for the groups' autonomy and finance handling.  At issue is whether or not the Town can hold funds for the committees, and who has authority over what they do.

"We're looking at it, and the short answer is the Town should not be managing any money that is not town-owned," Town Attorney Guy Krogh said at a Town Board working meeting Wednesday.  "The (required state) auditing procedures for these accounts have changed.  Now they've got a new set of standards, a new set of auditing requirements.  We're not a 501(c)(3) clearinghouse.  We're not a bill payer for a third party."

In the past the Town has agreed to hold private money for community groups that seek to improve Lansing's quality of life.  Changes in procedures raised questions about how non-town-owed monies are handled and the very status of such groups.

"I think it's because of the GASB auditing requirements... the same reason that most of the capital markets are moving overseas," Krogh said.  "That's what's triggering all these changes in accounting procedures as well.  The same trigger in auditing procedures ended up with a complete overhaul of the New york Not For Profit law.  These auditing rules are affecting everything."

There is no question that the committees in question provide tangible benefits to Town residents that also promote tourism within Lansing.  Many people from Lansing and other towns regularly use the facilities they care for.  The Lansing Pathways Committee created the 2.8 mile Lansing Town Center Trail and the Emilie Jonas Falls Nature Trail, raising money and providing labor to create and maintain the trails, erecting informational signs.  The group has also become a resource for the town planning board.  The Friends of Salt Point have raised money and provided volunteer labor that transformed the nature park, adding informational signs, bird houses, and an informational kiosk, forging walking trails, and keeping the park clean, among many other things.

The issue of how these groups' money is handled was raised after two Supervisor's office employees came back from state training that included a session on fiscal accounts that towns manage.  This led to a look at all committees associated with the Town of Lansing, and the two were identified as being in that gray area between being official town entities or independent committees.  A series of questions was sent to the members.  The Friends of Salt Point submitted answers Wednesday, and town officials met with members of the Pathways Committee that morning.


"The information Friends of Salt Point provided was to determine whether they are potentially a town committee and just need to restructure, or can they become one because they are serving a suitable public purpose and can fit into one of these statutory categories," Krogh reported.  "Once you determine what the options are, the next question is, does the committee want to be an official town committee?"

Lansing Supervisor Ed LaVigne said that some of the issues with Pathways have been resolved, but that changes still need to be made.  Krogh said that Pathways representatives told him they are not an official town committee and have never viewed themselves as such.  That raised questions about who manages and holds their money: the committee or the Town.

"We addressed the maintenance concern for the land across the road," he said.  "I think the solution is quite nice.  But you have other concerns like forging new paths and that kind of thing.  We can't hold the money for them.  The problem is that if we hold the money, when the books are closed at the end of the year it comes back into the general fund."

Krogh noted that there are advantages and disadvantages to being an official committee.  Disadvantages appeared to outweigh the benefits, at least for the two committees under consideration.  He said that official town committees can's conduct fundraising activities, and must receive Town Board approval for any activities or projects.

"You can't independently do what you determine is best -- you're stuck waiting on the approval of a town board that may not agree with you," Krogh noted.  "What you may believe is a reasonable town board in year one, in year forty it may not be.  If they start purchasing materials to build a new trail, in order for the Town to expend out of that fund we've got to pass a resolution, publish a notice of permissive referendum, then wait 30 days before we can get them the money.  If they're an official town committee are we now dealing with prevailing wage to build the trail?  There are a lot of layers to this."


LaVigne said that the Pathways Committee should open its own bank account in the short run while its members decide how they want to structure the committee.  Councilwoman Katrina Binkewicz noted it has become easier to become a 501(c)(3) now than it was 15 years ago.  Krogh added that right after the 9/11 attacks it was much harder, with up to a three year waiting period.  That was what the Lansing Community Council was faced with when it applied for 501(c)(3) status not long after new homeland security measures were put in place.

Krogh said that even though it is a faster process now, the IRS estimates it will take 12 to 16 hours just to fill in the application.  And he warned that the committees would be wise to either become independent 501(c)(3) corporations if they do not want to become official municipal committees.

"At this point the Town should not be holding those funds," Krogh said.  "They haven't been gifted to the Town to put into a reserve account.  they are not town money.  They're private money and we shouldn't be managing it for them.  They probably should become a not-for-profit corporation and register as a 501, or become a not-for-profit corporation and find an umbrella corporation that will carry them to give their donors a tax exemption.  The Community Council has done it in the past.  United Way will still do it for a certain amount of time.  But to be operating as an unincorporated association would be simply unwise, regardless of what your not-for-profit or public purposes are.  It's very dangerous."

"You look at the Community Council, you look at the Friends of Salt Point, you look at the Pathways Committee -- they all make a positive contribution to our community," LaVigne concluded.  "Hopefully they will continue that.  They'll just be under a different title.  We are simply trying to comply as fast as we can to the wishes of the NYS Comptroller."

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