Lake Luzerne under state audit after supervisor hit with “no confidence” vote

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Lake Luzerne, N.Y.

LAKE LUZERNE, N.Y. (NEWS10) – This week, members of the Lake Luzerne town board officially acknowledged that the town is now being audited by the New York State Comptroller’s Office.

The news comes after the Lake Luzerne Town Board passed a unanimous vote of no confidence in town supervisor Gene Merlino in June, which itself comes after a list of activities on Merlino’s part that the board grew to question over a nine-month timeline.

The vote was held off at the June 14 meeting of the town board after Merlino suffered a medical incident, which has kept him out of meetings since. The audit request was made to the state the next day, and the vote of no confidence was brought to the public’s attention the following Monday.

In the weeks since, the town board has been able to split up the duties they say Merlino previously kept for himself.

“Everyone on the board has a job now, and that’s the big difference between the way it is now and how Mr. Merlino ran it,” said Deputy Supervisor Dan Waterhouse in a phone interview on Thursday. “He ran it as his own business.”

That “business” has comprised of at least nine months of actions that the town board brought forth in their June resolution of no confidence. First and foremost on the resolution list was the sale of a boat, and purchase of a new one, used by the town to handle invasive milfoil in water bodies.

The resolution says that Merlino openly admitted to selling the old 18-foot boat, and purchasing a new 24-foot one, without board approval. Waterhouse and board members believe the boat may have been stolen by the person who sold it to Merlino.

“The hull numbers were rubbed off the boat, the registration doesn’t match the boat,” Waterhouse said. “Even the DMV and state police are looking at it.”

The state has now been working with the town on the audit for about a month. Another part of the investigation is overtime, which Waterhouse said Merlino mishandled to the number of around $100,000 of uncertified funds spent.

“He openly admitted in a meeting that he never checked overtime,” Waterhouse said.

A town employee first brought the issue before the board, saying that whether he worked for an hour or just 20 minutes of overtime, Merlino would approve the employee for four hours of overtime.

In a small town, that adds up. Lake Luzerne has an operating budget of just $4 million, and Waterhouse estimated around a quarter of a million dollars were mishandled by Merlino.

Other costs cited by the town included an annual $12,000 paid to retired town employees without proper documentation; over $1,000 spent on flowers purchased from a town employee on two occasions; and failure to properly document issues with the town water pumps, spanning his entire 16-year run as supervisor.

The latter issue wasn’t discovered until a pump failed completely, causing an emergency order declaration while the town scrambled to get it replaced.

Ultimately, both town water pumps were replaced, to the tune of $30,000. The resolution alleges that expense could have been avoided if the pumps had been under proper maintenance.

These and more are all part of what the state is looking at. Waterhouse has twice met personally with the criminal division of the Comptroller’s office, and said that officers are coming in two weeks to begin reviewing things in person.

Merlino is still officially Lake Luzerne’s town supervisor, but Waterhouse and other members of the town board have taken responsibilities in his absence.

Merlino could not be reached for comment as of Thursday afternoon.

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