Truck leasing sent to Ethics Board, Spitzer's office

Warwick — Leo Kaytes has been around Warwick for a long time. He's very active in the community, but most people know him for his Ford dealership, which he has owned in Warwick for the last 29 years. Earlier this summer, Kaytes and his son, also Leo, decided to join the newly forming Warwick Independent Business Alliance. "We figured it would be a good idea to belong to the IBA and support the businesses in town," said Kaytes. A few days later, Kaytes said he was surprised to find out that the Village Board had entered into an agreement with Gordon Ford in Haverstraw to lease several trucks through the Ford Motor Credit. "We're thinking it is a good idea to join the IBA and then we find out our own village just leased Ford trucks from a dealership 15 miles away," Kaytes said. In June 2004, the Village Board entered into a lease agreement with Ford Motor Credit for a 2004 Ford F-350 dump truck, a 2004 Ford F-250 Crew Cab with plow and a 2004 Ford F-350 stake body and plow. This year in June, the board leased an addition two 2005 Ford F-350 4X4s with plow. Kaytes let Mayor Michael Newhard know shortly after the village signed the 2005 lease agreement that he was disappointed that the village didn't let other dealerships bid on the deal. "All I wanted to know was why didn't we get an opportunity to bid," said Kaytes. "And by ‘we,' I mean Country Chevy, Warwick Dodge and us." Kaytes said that 75 percent of his business is done through Ford Motor Credit and that all dealerships get special pricing for municipalities. When buying vehicles, municipalities can use a state bid list, which eliminates the bidding process. There is no list for leases. Because the cost of leasing the vehicles through the lease was equal to the state bid for purchasing vehicles, according to Mayor Michael Newhard in a letter to the editor this week, the board thought the bidding process was unnecessary. Responding to Kaytes' concern, Newhard wrote him a letter on July 20: "I have carefully checked with our legal counsel, as well as the New York Council of Mayors legal counsel on how lease contracts should be handled. They both interpreted that such expenditures, even if they are below state bid amounts, should be publicly bid. "I apologize and assure you that our board will be more careful with the issue in the future," Newhard continued in the letter. "I believe the best form of government is one that readily understands its mistakes and willingly corrects its deficiencies and further champions the cause." Complicating matters is that Trustee George McManus works at Gordon Ford in its parts department. Although McManus did not benefit financially from the transaction, the fact that he works for the dealership has raised some questions about conflict of interest. McManus has not voted on any measures concerning the leases, recusing himself whenever the matter is brought up. Newhard, in his letter to Kaytes, said that both the village's legal counsel and the New York Council of Mayors' legal counsel agree that McManus acted "within proper ethical guidelines" since he recused himself from voting and is not a principal owner of the dealership. The matter was referred to the village's Ethics Board. The village also is seeking the state attorney general's opinion. McManus said he would not comment on the issue until the Ethics Board makes its determination. "I am embarrassed by these actions and disclosed them publicly and I have made directive steps to insure we follow correct procedure," said Newhard in his letter to Kaytes. "It is important that not only does everyone have a fair chance, but also that local purchasing becomes a priority. As a local businessman, I know how important the mission of the IBA is. As a public figure and responsible leader, I recognize the importance of my actions. I take both very seriously."