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Written by Robert Berg

Category: The Goods

Published: 05 April 2022

(This letter was written by Scarsdale resident Robert Berg)
My message to the Administration and the School Board is best expressed by Pete Seeger in "Where Have All the Flowers Gone?": "Oh, when will you ever learn!" Last night's Board meeting presented the Administration and the Board with an opportunity to explain with at least some honesty and transparency the bombshell they dropped on the community last week at the Special Meeting. At the March 30th Special Meeting, they disclosed for the first time that the District screwed up its payment of payroll taxes to the federal government over multiple quarters, and the District owes the U.S. Treasury $1.77 million in interest and penalties. But as usual, the Administration and Board, instead of owning this bad situation and dealing with it openly, are engaging in a cover-up along with some wacky accounting that can only lead to further disaster down the road.

Founding Father Ben Franklin always said it right: "Honesty is the best policy." As soon as the Administration learned about the errors in the federal payments of payroll taxes -- which the Administration has admittedly known about for many months -- the School Board should have been immediately informed. Astoundingly, the Board tells us they first learned on March 25, 2022 about this unprecedented payroll tax payment mess; the ensuing IRS investigation; the massive amount of interest and penalties assessed against the District; and last night, we learned about a $1.7 million lien the IRS had placed against the District last summer.

I think we're being played for fools. The District has admittedly been negotiating with the IRS for months. This means that this District had to have engaged special tax counsel, and the Board would have had to have been informed about this very material and serious tax problem and the ramifications for the District's finances. Indeed, the Board likely would have had to authorize the hiring of the special counsel. Moreover, every member of the Board serves on the Board's Audit Committee. Is it at all credible that the District's outside auditors would not have informed the Audit Committee about the IRS investigation and negotiations and a $1.7 million IRS lien asserted against the District? The auditors have a fiduciary duty and professional obligation to keep the Audit Committee fully informed. Have they violated those duties? Very doubtful -- I'm certain that at least individual Board members have known, probably for months, what's going on, and have not told the public anything.

Let's assume the Board is telling the truth -- that is, every Board member had been kept entirely in the dark until March 25. If that's really what happened, then the whole Administration should be fired immediately. Failing to advise the Board about such a huge problem in internal controls, a major federal tax investigation of the District, a $1.7 million IRS lien, and substantial ramifications to the District's AAA credit rating, outstanding paper, and the upcoming budget, among other things, constitutes gross malfeasance on the part of the Administration, and demands immediate termination.

Has the District or the Board notified the State Department of Education about this situation? How about the State Comptroller's Office which oversees the finances of all New York State public school districts? Shouldn't these supervisory agencies be told?

"Something is rotten in the State of Denmark." Hamlet, Act I, Scene IV (67).

At the beginning of tonight's meeting, Board President Ceske shamelessly stated with a straight face: "The Board is committed to providing transparency." LOL. She then proceeded to provide a bizarre "clarification" of Stuart Mattey's wholly unsatisfactory explanation at the March 30th special meeting. Ms. Ceske asserted that a "keying" error occurred when making a Q1 2020 deposit, resulting in the Q1 payment being made late. The IRS then assessed a "failure to deposit" penalty. OK, seems like the IRS properly assessed the penalty, no? Then the District screwed up again - a Q3 payment was applied to Q2 and a Q4 payment was applied to Q3. The IRS assessed "failure to deposit penalties" for Q3 and Q4. These "failure to deposit" penalties weren't chump change. Ms. Ceske said they amounted to $1,309,636.81. Wow! The magnitude of the error needed to generate such huge penalties in such a short amount of time hasn't been disclosed, but it must be pretty big.

According to Ms. Ceske, the IRS applied the Q3 and Q4 tax payments, which the District had erroneously misallocated to Q2 and Q4, to pay the first "failure to deposit" penalty of $861,320. This led to a tax shortfall owed to the U.S. Treasury of $843,558 in Q4 of 2020. It turns out that this tax shortfall payment of $843,558 is the payment the Board authorized the Treasurer to pay at its March 30 Special Meeting. So the District is paying the IRS taxes back taxes owed of $843,558. Under standard accounting principles, paying taxes is an expense. But miraculously, as Stuart Mattey and Ms. Ceske explained, our District has been cleared by our auditors to book this tax payment as an "accounts receivable." This is an accounting gimmick. When you owe money on account, you have what's called an "accounts payable." So when you owe back taxes, these back taxes are booked as accounts payable. But if you say Scarsdale-cadabra, our District auditors allow us to transmogrify an accounts payable into an accounts receivable just like that. Who'd have thunk that mighty Scarsdale would sink to such a Trumpian accounting abyss? But here we are.

Stuart argues that this is all one big misunderstanding. Sure, the District messed up the "timing" of the payments, but we're paying everything we owe, so the District really shouldn't have to pay any penalties or interest, and we should get a refund for all of that -- to the tune of $1.3 million. And we've filed for abatements and refunds and abatements, and we've been talking with the IRS and they're really nice people and they're saying some nice things to us. So we are going to book the $843,558 back tax payment as an accounts receivable because we've got a decent chance of getting it back someday, maybe this year, maybe next, maybe never.

The thing is -- under real accounting rules like GAAP, you can't book monies as an accounts receivable unless you have a clear legal right to those monies and a high degree of certainty of collecting those monies in the near future, but certainly within 12 months. The District has, at best, a contingent claim for a refund of the $843,558. The IRS has not promised in writing to refund the monies to the District. All the IRS has done, maybe, is engage in some friendly discussions. Unless there's a signed agreement in writing for the refund by the IRS payable to the District within the next 12 months, the District's tax payment of $843,558 cannot be booked as an accounts receivable. It's bad enough that the District is a tax deadbeat. It shouldn't stray into cooking the books too.

Now why does this all matter? Stuart says this won't affect the budget at all -- it's just a cash flow issue. That's another lie. The $843k tax payment has to be booked as an expense. This expense has not been budgeted for, and so, the District must draw down its reserves to pay for this unanticipated expense. It can't carry the $843k as an asset on its books because there's no certainty of a refund. Now, remember, the proposed budget for next year is about to be finalized, and will be voted upon by the public in the middle of May. The proposed budget is just a smidgeon ($75k) below the tax cap. This $843k tax payment, if properly accounted for, reduces the reserves by that amount. If the District wants to maintain reserves at the proposed level, the District will have to raise taxes by another $843k to make up for the tax payment. This blows a giant hole through the tax cap. The ramifications are substantial. Very few "above the tax cap" school budgets are presented to voters each year in New York State because voters generally reject those budgets. A budget that's over the tax cap requires 60% of voters to vote in favor (a super-majority) in order to pass. The one time Scarsdale tried this in 2013, the school budget failed -- the first time a school budget failed in Scarsdale in 45 years.

What's worse, if the District keeps the $843k payment in the books as an accounts receivable - in violation of generally accepted accounting principles --- then the budget residents will be voting on in May will illegally appear to be within the tax cap -- and require a simple majority vote for passage -- when, if GAAP were followed, the budget would really be above the tax cap and require a super majority vote for passage. If the District puts forth a budget for public vote that doesn't conform with GAAP, the entire budget vote may be illegal. The District is placing everything in great legal jeopardy because it won't honestly and openly address its IRS problem and its federal tax pickle. We residents deserve much more from the Administration and Board.

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Written by Joanne Wallenstein

Category: The Goods

Published: 18 April 2022

(Updated April 21, 2022) We haven’t posted many or should I say ANY restaurant reviews lately, as there have not been many new openings in our area.

But happily the tide seems to be turning and last weekend we were happy to get a reservation at La Casa Bronxville, a new entrant to the lower Westchester dining scene. They opened in November 2021 and seem to have hit their stride. The night we visited, the restaurant was full and the atmosphere was lively.

Guacamole and Housemade ChipsLa Casa is owned and run by a long time Bronxville resident who left the corporate world to embark on a new venture. Spencer Pingel explained, “In 2020 I retired after 30 years working at Colgate Palmolive. I was interested in doing something totally new, had always been interested in restaurants, and in parallel wanted to start a local business where I could work with my 24 year old son Rory who is on the autistic spectrum. It all came together when this space became available and I decided to "go for it."

He said, “We are located in a historic building that was part of the Gramatan Hotel dating back to the late 1800s. The hotel suffered a fire and was replaced by condominiums in the 1970’s but the base of the hotel survived and that is what we are part of today. The prior restaurant was a rather mediocre Mexican restaurant called Blue Moon. My vision was for an upscale Mexican restaurant similar to the many excellent restaurants I experienced on frequent business trips to Mexico City. The design was done by Salisbury and Manus, a local design team based in Yonkers.”Crab Tostada

How was it to open during a pandemic? Pingel said, “The first six months were very challenging, as I was managing the redesign project, navigating the permit process, building a whole new team, learning the restaurant business, and navigating the Covid ups and downs all at the same time! I am very happy with the progress we have made and things have finally settled and I am enjoying this new life now. It is a lot of hours but I enjoy the work and in particular the opportunity to create a great experience for people and support the local community.”

Pingel has also involved his family in the operation. He said, “My son Rory currently helps with service set up prior to opening (polishing silverware, replacing candles, folding napkins, setting the tables). My daughter has been working as a host and will train to become a server this summer. It has been great working with them.”

Enmoladas de PolloPingel’s efforts appear to be paying off. On the night we visited, we were pleasantly surprised to find a spacious, well-appointed restaurant and bar, that had clearly been thoughtfully designed. Tables are well spaced and they offer outside seating as well.

The restaurant offers innovative Mexican fare, beyond the usual cheese quesadillas and chips and salsa – though those are provided as well. We started out with cocktails from their tempting list of margaritas and more. I chose the Paloma with tequila, grapefruit, lime juice and soda. The generous pour was sweet and refreshing and went down too fast. My husband had the margarita which came in a glass dipped in salt and chile. While we perused the menu and enjoyed our drinks we sampled their freshly made guacamole which came with house made chips and three salsas as well as the octopus appetizer and the crab and avocado tostadas, all highly recommended.

The service was speedy and we stalled a bit to slow down our dinner order. On the waitperson’s suggestion, I ordered the enmoladas de pollo which were almost a cross between dinner and dessert. What arrived were enchiladas filled with roasted chicken, smothered in a rich chocolate mole sauce and drizzled with sour cream. It was rich and delectable. Others ordered the camarones a la diabla, shrimp in red pepper sauce over white beans and bok choy. The plentiful portion of shrimp was large and tasty.Salmon a la Plancha

We also tried the salmon a la plancha, which was pan seared salmon served with mango salsa, quinoa and bok choy. That got rave reviews along with the tacos. These arrive two per order filled with a choice of carnitas (pulled pork), brisket, chorizo, chicken, mahi mahi or roasted cauliflower. The tacos were large and well-filled. I would like to go back and try those as well.

The service was warm, friendly and efficient and every dish was flavorful and thoughtfully prepared and presented. The kitchen is headed by executive chef Erik Lopez, who is originally from Puebla Mexico. Pingel explained, “Prior to joining La Casa Bronxville Erick was chef at Casa Enrique for nine years. Casa Enrique is based in Long Island City and is the only Mexican restaurant in NYC to receive a Michelin star. Chef Erik has also brought three additional cooks who have prior experience working together at Casa Enrique, so we now have a very strong kitchen team.”

Kudos to Pingel and his team for risking a new business in these unsettled time and successfully navigating rules, regulations and customers’ changing requirements to make it a winner.

We hear that in additioMargaritan to dinner on Tuesday through Saturday nights, they are also serving Sunday brunch. We’re eager to return and taste more from the dinner menu and breakfast too.

La Casa Bronxville
7 Pondfield Road
Bronxville, NY
(914) 222-9016
lacasabronxville.com

Details

Written by Joanne Wallenstein

Category: The Goods

Published: 28 March 2022

This letter was written by Max Grudin of Scarsdale:

Dear Friends and Neighbors:

Thank you for your support of the Ukrainian people.

The conflict in Ukraine has not ended, we are all aware of the suffering: over 10 million Ukrainians have been displaced, every second child does not live under the home roof, and Russia routinely targets civilians.
I want to focus on other aspects: the situation with Russia, the end game, and ways to help.

Here are a few snippets from the Russian media - they read like an upside down world:

● “This is not a war just against Ukraine. This is a war against all the rot inside Russia that has been betraying our country over the last few years”: Dmitry Rogozin, Director of the Russian Space Agency.
● On a popular right-wing show “Solovyov TV” it was claimed that Russia needs the
Ukraine land, and “all that filth that escapes to the West might as well stay there”.
● On the same show other presenters discussed potential nuclear strikes against Europe.
Russian politicians make calls to “denazify” Poland and other neighboring nations.
● Putin has mentioned that “national traitors” will be “spat out like gnats” during the
“necessary self-cleansing of society”.
● Some Russian media claim that both sides are to blame for the casualties.

At this point many people in Russia know what is happening. It is scary when people continue to support the war despite seeing the bloodshed. Members of the economic and political elites are undoubtedly aware of the horrors on the ground. I call on people who are in touch with Russian elites to remind them of their responsibility to guide Russia. I have heard of a wealthy Russian who wanted to donate to a Ukrainian humanitarian cause, but he preferred to remain anonymous and he wanted to avoid any mention of Ukraine on his social media. It is important for such people to act like leaders.

People from many nations and ethnic backgrounds have reached out to me with their support and donations. Yet 35 of the 193 governments abstained from the UN resolution demanding an end to the Russian invasion. We live in an educated and international community - it is fair to ask those governments to stop turning a blind eye on the ongoing slaughter in Ukraine.

What is the end game?
Just a couple of days ago Russia declared that its focus will shift to the east of Ukraine. That does not mean that Russia would not want to take over the entire country if an opportunity presented itself. On the other hand Ukraine does not have enough weapons for a major counter attack. The discussion of the end of hostilities assumes no major changes on the battlefield.

Historical connections between Ukraine and Russia go back 1000 years or so. Ukraine that is West-oriented contradicts Putin’s vision of it being a part of the “Russian world”. It is tragic that the Russian leadership views Ukraine only as a sacred “territory” that must make Russia stronger in its struggle against “the West.” Those historical ties and the prior aggression against the Crimea and Donbass mean that at the very least the Russian leadership aims to make some territorial gains in order to declare this war a success. There is a full expectation on the Russian side that as one condition for the end of conflict is for Ukraine to recognize Crimea, annexed since 2014, as part of Russia. The Donbass status is less clear.

The territorial dispute is hard to resolve. I understand that the vast majority of Ukrainians are against making any territorial concessions. They feel they have had enough war over the last 8 years and they would like peace on their terms rather than on terms of a war criminal. The Ukrainian leadership has injected a degree of pragmatism and any agreement will have to be accepted by the people. The people of Ukraine will come together to rebuild their country as a modern European society.
Even past the immediate cessation of hostilities Putin will be viewed as a war criminal by most in the West and likely a loser when the Russian public realizes what has transpired. That is not a way forward. In the long term Russia needs a leadership that can navigate the country out of this terrible situation.

What else can be done?
I want to emphasize the gratitude people of Ukraine express to all the support and donations. “Razom for Ukraine” is a US charity that helps with humanitarian supplies as well as tourniquets and protective equipment for territorial defense such as knee pads, bulletproof vests, etc. Things like that are sorely needed, as people are defending their land, their families and lives. As the situation on the ground changes I will be happy to let you know other most effective ways to donate.
Please call our political leaders about helping Ukraine with humanitarian supplies as well as with weapons. Also, if you are from Russia or other countries whose governments did not oppose this slaughter, please reach out to people there.

Max Grudin
mgrudin@gmail.com