INSURER SAYS MOUNT VERNON COMPTROLLER & CITY NOT COVERED IN $21 MILLION LAWSUIT

MOUNT VERNON — The insurer for the City of Mount Vernon has informed the City that Comptroller Deborah Reynolds is NOT covered by insurance in a $21 million lawsuit, putting taxpayers at risk.

On May 1, The Chubb insurance company wrote to Mount Vernon stating that the City has no coverage under its policy for a $21 million lawsuit filed by the Mount Vernon City School District against Comptroller Reynolds. The school district has accused Comptroller Reynolds of failing to pay the school system at least $21 million in taxes her office has collected on the district’s behalf.

Essentially, taxpayers are not protected in this lawsuit, an avoidable risk if Comptroller Reynolds had obtained bonding.

“We’re talking about somebody being bonded against future bad acts,” said Corporation Counsel Lawrence Porcari. “The Mayor for a very long time, and the Inspector General, have been trying to get the City Council to comply with the (City) Charter and get the Comptroller bonded in the event that there is some sort of bad act…. They’ve refused.”

“The mayor has taken every step to work with the City Council and Comptroller, including meeting with members of the clergy, community leaders and every stakeholder in Mount Vernon to serve the citizens and resident,” said deputy corporation counsel Brian Johnson. “What else would you do to solve this problem?

The City Council’s inaction leaves taxpayers on the hook.

“There’s no insurance policy to cover this,” said Mayor Richard Thomas. “We’ve been warning about this from day one and we’ve gotten nothing but misinformation, misleading by mis-informers, and that is really wrong.”

Mayor Thomas is calling on local and state officials to take three immediate steps to remedy the risk to taxpayers.

• The City Council should require Comptroller Reynolds to become bonded so that her office is insured against lawsuits alleging her misconduct or malfeasance.
• The state Comptroller’s Office should return to Mount Vernon to investigate the operations of Comptroller Reynolds’ department.
• Governor Andrew Cuomo should respond to a petition submitted to his office in October by Mayor Thomas seeking Comptroller Reynolds’ removal because she is endangering city residents and blocking basic city services by failing to pay the city’s bills in a timely manner.

“We need the assistance of the state because there are vulnerabilities and exposures to our taxpayers, as well as our children,” said Mayor Thomas. “We need to make sure that education is not disrupted and we need to make sure that city services are also not disrupted.”

The school district’s lawsuit was filed on March 26 and it alleged that the district has received millions less in tax dollars in 2019 compared with previous years. The district has asked the court to order Comptroller Reynolds to turn over all taxes collected on its behalf, as well as financial records related to the collection of school taxes.

It’s unclear how much money is still owed to the school district. Mayor Thomas has repeatedly sought to examine the City’s finances, but Comptroller Reynolds has hidden the City’s finances from everyone but herself.

Last month Supreme Court Justice Susan Cacace ordered Comptroller Reynolds to give Mayor Thomas full access to the City’s financial records, including online banking records. As of today, Mayor Thomas has still not been given that access.