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Treasurer takes over water board finances

JOHNSTOWN — The city in August froze the financial bank assets of the city Water Department and its Water Board, instead transferring the duties of overseeing of water accounts to the office of City Treasurer Michael Gifford.

The move comes ahead of an important Nov. 3 citywide referendum in the city calling for abolishment of the Water Board.

Board President Michael Capparello said today his board discovered recently the move through a letter from NBT Bank, and he is alleging the fiscal move was done deliberately to influence the Nov. 3 vote.

“It’s a bullying tactic so we won’t win the referendum,” he said.

Gifford couldn’t be reached this morning for comment.

The Common Council passed a resolution in August starting the process on a local law to abolish the city Water Board and transfer its powers and duties to the council. City voters must approve the move Nov. 3 to make it legal.

Mayor Vern Jackson today verified that in August, Gifford wrote NBT Bank to tell the financial institution that based on a new city investment policy, the city wanted signatory powers transferred from the Water Board to the city’s “chief financial officer,” himself. The city in recent years has a new internal control officer, Darryl Purinton, who has written new policies for city government.

Jackson said a new policy going back to 2019 says the city treasurer should be in control of Water Department finances. The mayor says the policy deals with “cash management and custody” of city finances.

The city government and Water Board — both served by City Attorney Michael Poulin — have had a contentious relationship the last several years. The board believes it is separate from council and government control, and its volunteer, voted members should be able to control its own operation and finances.

Capparello said that until he recently read the NBT letter, he didn’t know the city was taking over the board’s finances.

“This is the first I’ve heard about it,” he said.

He said the letter from NBT states that the board can no longer have signing authorization over water accounts. He said the board has operated the same way for nearly 40 years and now there is a change.

“I told them not to do that,” Capparello said of NBT.

But he said the bank responded that it didn’t want to get involved with the city issue and was referring it to the state Comptroller’s Office.

“I don’t see how it could be legal,” Capparello said. “It’s just another example of bullying tactics.”

Capparello said the move was purposely made by the city to influence the referendum and hamper the Water Department’s ability to do its job. He said that if he wanted to file an Article 78 proceeding to sue the city, it would take four months. That would be well after the referendum, he said.

He said the board would also have to hire outside counsel, but since its financial accounts are in the hands of the city, that would be hard.

“We were moving forward with the spillway project,” Capparello said.

Now he said he doesn’t know what to do with the water bills situation and projects, and Gifford’s office has been slow to communicate. He said Gifford demands originals on invoices, but Purinton doesn’t.

Capparello said that when he started as board president earlier this year he wanted to cooperate with the city. He said he has contacted Gifford 11 times and he’s never called back.

“I can’t give 100 percent if they take away 75 percent,” Capparello said.

The Johnstown Charter Review Commission in 2015 voted for and proposed a voter referendum that the city Water Board be abolished, and city government oversee Water Department operations. That recommendation was part of a larger attempt to change the charter, but that referendum was defeated that year by voters.

In more recent years, Fulton County District Attorney Chad Brown convened a county grand jury to hear complaints between city government and the Water Board.

Following a three-month investigation by the grand jury, on Dec. 31, 2019, County Court Judge Polly A. Hoye signed an order accepting the report and allowing it to be made public. The report mainly centered on two issues — how city Water Department employees report their work duties and are paid, and an issue involving a Linden Avenue property owner who was trying to tap into city water.

The grand jury report on an investigation into the Johnstown Water Board made public Jan. 7 didn’t call for indictments. But the report made four main recommendations for the board and city government for the future. Those recommendations were: The water board should hire a water superintendent, establish a chain of command for the Water Department, the board must have bylaws in place, and the city and water board should ensure any future land projects go through necessary steps to get state Department of Health approval for installing water lines prior to selling.

The last time the city had a full-time water superintendent was about 2000, officials say.

In March 2019, the Johnstown Water Board considered a proposed request for proposal for a new water superintendent drafted by the Fulton County Planning Department. The city later said it could provide the deputy city engineer as the water superintendent for free. But the board didn’t take that offer, instead choosing to hire former Gloversville Department of Public Works Director Dale Trumbull in March 2020 as the new water superintendent, only to have the $70,000 salary for the position not budgeted by the city, with Trumbull later taken off the payroll.

Trumbull was escorted off the water property by city police.

Michael Anich covers Johnstown and Fulton County news. He can be reached at manich@leaderherald.com.

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