FORMAL COMPLAINT TO THE NEW YORK STATE OFFICE OF THE STATE COMPTROLLER
Division of Investigations
investigations@osc.ny.gov
Re: City of New Rochelle — Formal Complaint Requesting Investigation Pursuant to Article V, Section 1 of the New York State Constitution and Article III of the General Municipal Law
Complainant:
Robert Cox
Publisher, Talk of the Sound / Words in Edgewise
robertcox@talkofthesound.com
+353 89 972 0669 (WhatsApp)
Date: June 10, 2026
Subject Municipality: City of New Rochelle, Westchester County, New York
Introduction
I am the publisher and managing editor of Talk of the Sound, a local news outlet covering New Rochelle and Westchester County, New York, and Words in Edgewise, a subscription-based opinion and news analysis publication. I have covered New Rochelle municipal government for more than 17 years. I submit this formal complaint pursuant to the State Comptroller’s authority under Article V, Section 1 of the New York State Constitution and Article III of the General Municipal Law, and request that the Division of Investigations open a formal investigation into the financial management practices of the City of New Rochelle.
The basis for this complaint is a documented pattern of financial irregularities, state law violations, unauthorized fund transfers, no-bid contracting with politically connected vendors, and a sustained failure of internal controls — all of which have been partially disclosed through the city’s own independent audit process and through investigative reporting by this journalist over the past two years.
I. Illegal Interfund Transfer — New York Local Finance Law Section 165.10
The city’s independent auditors, EFPR Group CPAs, identified finding 2025-002 in their review of the city’s finances for the year ending December 31, 2025: a transfer from the capital projects fund to the general fund in violation of New York Local Finance Law Section 165.10, which governs advances between municipal funds.
The dollar amount of this transfer did not appear in the auditors’ public presentation to the City Council on June 9, 2026. It was disclosed only when Council Member Shane Osinloye asked directly. Finance Commissioner Alistair Featherstone confirmed the amount was approximately $19 million. The stated explanation was that the transfer was a timing measure to cover school tax payments to the district before mortgage payment receipts arrived.
Local Finance Law Section 165.10 permits short-term advances between funds under specific conditions, including authorization by the governing board and repayment within the same fiscal year. No council member asked — and no official volunteered — whether those conditions were satisfied. The authorization chain for this $19 million transfer has not been publicly established. Whether it was self-reported to this office is unknown. I am requesting that your office examine whether the transfer was properly authorized, whether it has been repaid, and whether any reporting obligations to the Comptroller were triggered and met.
II. Overspending Budgetary Authorizations — City Charter Article XIII, Section 116
Finding 2025-003 identifies that both the general fund and the Section 8 fund overspent their budgetary authorizations in fiscal year 2025 in violation of City Charter Article XIII, Section 116. The dollar amounts of the overspending were not disclosed in the auditors’ public presentation and were not elicited during council questioning. No explanation was provided as to who authorized expenditures in excess of appropriated amounts or whether the City Council was informed.
The City Charter’s appropriation requirements exist precisely to prevent city officials from spending money the governing body has not approved. That two separate funds exceeded their authorizations in the same fiscal year — on top of a prior year in which the fund balance was depleted by more than 63% through a pattern of mid-year legislative actions and unauthorized transfers — raises the question of whether these violations reflect a systemic disregard for the fiscal controls the Charter imposes.
III. Material Weakness in Internal Controls — Two Consecutive Years
EFPR Group has now identified a material weakness in internal controls over financial reporting for the second consecutive year, based on the volume of audit adjusting journal entries required to correct the city’s own bookkeeping: 97 adjustments in 2024, 78 in 2025. A material weakness represents a reasonable possibility that a material misstatement of the city’s financial statements would not be prevented or detected on a timely basis by city staff.
Sources with direct knowledge of the city’s year-end closing process have told this publication that the adjustment volume reflects, in part, a pattern of funds being moved between line items and backfilled from the unassigned fund balance — transactions that auditors were required to unwind. The city has not publicly explained the nature of the adjustments, the funds involved, or the authorization chain for the underlying transactions.
IV. Fund Balance Depletion — Pattern of Unauthorized Transfers and Anticipated Revenues That Did Not Materialize
The city’s unassigned General Fund balance declined by more than 63% — from approximately $24.5 million to approximately $10.5 million — in roughly 18 months following the inauguration of the Ramos-Herbert administration on January 1, 2024. As reported by Talk of the Sound in September 2025, sources with direct knowledge of the year-end closing process described a pattern in which funds were moved between line items and allocated to spending priorities, with the lines backfilled from the unassigned fund balance, predicated on the expectation that development revenues would replenish reserves before auditors arrived.
Central to this expectation was approximately $12-13 million owed to the city by Twining Properties in connection with the Pratt Landing development project. That payment did not arrive. As of the date of this complaint, it has still not been paid. I am requesting that your office examine whether that receivable was properly recorded on the city’s books, whether spending decisions were made in reliance on its anticipated receipt, and whether its non-payment was disclosed to the City Council.
I am further requesting that your office examine every interfund transfer from January 2024 through December 2025, the authorization chain for each, and whether any transfers were made without the unanimous City Council approval required under City Charter Article XII.
V. No-Bid Contracts — New Rochelle Corporation for Local Development
The New Rochelle Corporation for Local Development, a local development corporation whose board is identical to that of the New Rochelle Industrial Development Agency, has issued a pattern of no-bid contracts to politically connected vendors under the direction of Development Commissioner Adam Salgado. The following vendors received payments through no-bid contracts, the terms and deliverables of which have not been publicly disclosed:
• Kingdom Community Consultants (principals: Mark McLean and Josiah Mott)
• Rocjoyful Productions (principal: Rocky Middleton)
• Big Viv, Inc. (principal: Vivian Spady)
• Feeding the Sound (principal: LaChonne Williams)
The CLD is delinquent in filing its 2024 financial report with the New York State Authorities Budget Office, in violation of Section 2800 of the Public Authorities Law. It appears on the ABO’s list of public authorities that have failed to file required reports. The IDA’s 2024 financial report was similarly delayed. Both entities have seen their net positions decline significantly in recent years.
No-bid contracting with vendors connected to elected officials or senior staff is a documented vector for the misappropriation of public funds. One principal of a vendor receiving no-bid contracts was subsequently appointed to the powerful Board of Appeals on Zoning.
I am requesting that your office examine every CLD and IDA contract issued since January 2022, the procurement process — or lack thereof — for each, the deliverables received, and the financial disclosures of every vendor principal.
VI. The Annual Financial Report Has Not Been Filed
The 2025 Annual Comprehensive Financial Report for the City of New Rochelle has not been filed with the New York State Office of the State Comptroller as of the date of this complaint. What was presented to the City Council on June 9, 2026 was a slide deck — a summary document prepared for a public audience. The full audited financial report, containing the complete findings, management letter, dollar amounts associated with each violation, and detailed narrative on every deficiency, has not been made public.
This follows the same pattern as fiscal year 2024, when the city presented preliminary audit results to the public in September 2025 before the audited financial report was finalized and filed with the Comptroller in December 2025. Former Finance Commissioner Edward Ritter retired in December 2025 and never returned to present the filed 2024 report to the council or the public.
The failure to file the annual report on a timely basis impairs the public’s ability to evaluate the city’s financial condition and the Comptroller’s ability to exercise oversight.
Here is the new section. Insert it as Section VII, renumbering the current VII (Relief Requested) to VIII and adding the new relief request items:
VII. Open Meetings Law Violations — Withholding of Audit Materials
The City of New Rochelle has violated New York Public Officers Law Section 103(e) in connection with both the September 9, 2025 and June 9, 2026 Committee of the Whole sessions at which audit results were presented.
Public Officers Law Section 103(e) requires that records to be discussed at an open meeting be posted on the public body’s website at least 24 hours before the meeting, to the extent practicable. The statute’s “to the extent practicable” exception is narrow. It does not excuse the routine withholding of materials that were prepared well in advance of a scheduled public meeting.
September 9, 2025
At the September 9, 2025 Committee of the Whole session, Finance Commissioner Edward Ritter and EFPR Group auditor Brian Sawma presented preliminary audit results for fiscal year 2024. None of the records discussed during that session — including the EFPR presentation, a fund balance usage report prepared by Ritter, and a revenues and expenses report for the first eight months of fiscal year 2025 — were posted to the city’s website before the meeting. While the meeting was in progress, this journalist emailed the City Clerk requesting the missing records. They were provided the following day.
Council members themselves complained at that meeting that receiving audit materials the same day as the presentation made it impossible to ask informed questions or fulfill their oversight responsibilities. Council Member Osinloye stated explicitly that getting audit information the day of the meeting was unacceptable. Mayor Ramos-Herbert, Council Member Stern, and Council Member Tarantino joined in demanding that materials be provided in advance. City Manager Melendez demurred, suggesting financial updates could be handled in private one-on-one sessions with individual council members — a response that compounds rather than addresses the transparency problem.
Nothing changed.
June 9, 2026
At the June 9, 2026 Committee of the Whole session, Finance Commissioner Alistair Featherstone and EFPR Group partner Thomas Smith presented audit results for fiscal year 2025. None of the materials were posted to the city’s website before the meeting began at 3:45 p.m.
At 1:04 p.m. Eastern time — more than two and a half hours before the session — this journalist emailed the City Clerk citing Public Officers Law Section 103(e) and asking whether the failure to post the materials constituted an OML violation. The email was copied to Mayor Ramos-Herbert, City Manager Melendez, and all six City Council members.
The City Clerk did not respond until 5:20 p.m. Eastern — an hour and 35 minutes after the meeting began. The reply was a single sentence: “The presentations are available on the website.”
No acknowledgment was made of the 24-hour requirement. No explanation was offered for why the materials had not been posted in advance.
Additional agenda items at the June 9 session — a proposed appointment to the Civilian Complaint Review Board and a proposed ordinance approving the 2026 Community Development Block Grant and HOME Annual Action Plan — also lacked supporting documentation. The CCRB item referenced a resignation letter, a council member recommendation, and the application and curriculum vitae of the proposed appointee. The CDBG/HOME item referenced the 2026 Annual Action Plan itself. None of those documents were posted.
The auditors’ slide decks were prepared well in advance. The EFPR fieldwork was conducted in April 2026. The financial statement draft was issued June 5, 2026. There is no credible basis for the city to claim it was impracticable to post these materials 24 hours before a scheduled public meeting. The pattern — withholding audit materials in both 2025 and 2026, across two different Finance Commissioners, with full knowledge of the statutory requirement — is not inadvertent. It is deliberate.
This issue was raised in 2025 by council member Shane Osinloye. Neither he nor any other council members raised the issue in 2026.
The practical consequence is that council members are asked to absorb complex financial findings, ask meaningful questions, and exercise oversight in real time, without preparation. As the September 2025 session demonstrated, this results in exactly what the administration appears to want: a confused, deferential council that accepts the auditor’s framing and asks few probing questions.
VIII. Relief Requested
I respectfully request that the Division of Investigations:
- Open a formal investigation into the financial management practices of the City of New Rochelle for fiscal years 2024 and 2025.
- Examine the authorization chain for the approximately $19 million capital-to-general fund transfer identified as finding 2025-002, and determine whether it complied with Local Finance Law Section 165.10 and the City Charter.
- Examine the general fund and Section 8 fund budget overspending identified as finding 2025-003, and determine who authorized expenditures in excess of appropriated amounts.
- Examine all interfund transfers from January 2024 through December 2025 for compliance with City Charter Article XII and applicable state law.
- Examine the Twining Properties / Pratt Landing receivable and whether spending decisions were made in reliance on anticipated revenues that did not materialize.
- Refer the CLD and IDA no-bid contracting matters to the Authorities Budget Office and any other appropriate oversight body.
- Direct the City of New Rochelle to file the 2025 Annual Comprehensive Financial Report with this office without further delay.
- Refer the Open Meetings Law violations described in Section VII to the New York State Committee on Open Government for advisory opinion and appropriate action, and direct the City of New Rochelle to comply with Public Officers Law Section 103(e) in connection with all future public meetings at which financial records are discussed.
Supporting Documentation
The following materials are available upon request and will be provided:
• EFPR Group audit presentation to New Rochelle City Council, June 9, 2026
• Video transcript of June 9, 2026 Committee of the Whole session, Item 1
• Talk of the Sound reporting on the September 9, 2025 audit presentation
• Talk of the Sound reporting on the 2024 Annual Financial Report
• New Rochelle CLD and IDA financial reports, 2021–2024
• New York State Authorities Budget Office delinquency listing for New Rochelle CLD
Respectfully submitted,
Robert Cox
Publisher, Talk of the Sound / Words in Edgewise
robertcox@talkofthesound.com
+353 89 972 0669
This complaint is being published simultaneously at Words in Edgewise (robertcox.ie) in the public interest. All factual assertions contained herein are sourced from public records, audited financial documents, and on-record reporting.
This document was prepared with the assistance of AI tools under the direction and editing of Robert Cox.
