SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF ULSTER

In the Matter of the Application of

ULSTER COUNTY RESOURCE RECOVERY

AGENCY, and TIMOTHY DEGRAFF, as EXECUTIVE VERIFIED PETITION
DIRECTOR OF ULSTER COUNTY RESOURCE
RECOVERY AGENCY,
Index No.:
Petitioners,
-against-

MARCH S. GALLAGHER, ESQ., in her Official

Capacity as the ULSTER COUNTY COMPTROLLER,

Respondent.

TO THE SUPREME COURT OF THE STATE OF NEW YORK:

Petitioners ULSTER COUNTY RESOURCE RECOVERY AGENCY, and

TIMOTHY DEGRAFF, as EXECUTIVE DIRECTOR OF ULSTER COUNTY

RESOURCE RECOVERY AGENCY (“Petitioners”), as and for their Verified Petition in

this special proceeding pursuant to CPLR Article 4 and CPLR § 2304, respectfully allege as

follows:

1. Petitioners Ulster County Resource Recovery Agency (“UCRRA”) and Timothy

DeGraff, as Executive Director of UCRRA, submit this Verified Petition in support of their

application in this special proceeding for an Order pursuant to CPLR § 2304 to quash the a

Subpoena Duces Tecum, dated May 28, 2021, issued to the UCRRA by Respondent MARCH

S. GALLAGHER, ESQ., in her Official Capacity as the ULSTER COUNTY

COMPTROLLER (hereafter “Comptroller”) on the basis that the Comptroller does not have

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the authority to subpoena records from the UCRRA, the Comptroller does not have broad

untethered audit powers over the UCRRA, and the Comptroller is exceeding her powers by

subpoenaing such documents, and any further and other relief that the Court deems just and

proper.

2. This special proceeding is commenced by a Notice of Petition arising out of a

non-judicial subpoena duces tecum, and no prior application for the relief requested has been

made in this or other court.

3. This Court has jurisdiction over this special proceeding pursuant to CPLR §

401, et seq. and CPLR § 2304, which provides that an application to a court to quash, fix

conditions, or modify a subpoena may be made in the Supreme Court where the subpoena is

returnable.

The Parties

4. The UCRRA is a solid waste authority, public benefit corporation, and

permitted solid waste facility created by the New York State Legislature pursuant to Title 13-

G of the Public Authorities Law (§§ 2050-a, et seq.) in order to, among other things, protect

public health and the environment.

5. The UCRRA’s primary business location is 999 Flatbush Road, Kingston, New

York 12401.

6. The UCRRA’s mission is to promote sustainable materials management

practices in Ulster County by efficiently managing solid waste materials with a focus on

resource conservation.

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 7. As a public benefit corporation of the State of New York, the UCRRA manages

solid waste and recyclables in Ulster County, and following the Ulster County Flow Control

Law of 2012, all municipal solid waste generated in Ulster County, including curbside

collection, must come to a UCRRA facility.

8. In addition to managing solid waste and recyclables, the UCRRA also has a

compost program, whereby it manufactures and sells compost to the public. The UCRRA’s

compost is made locally and sustainably from wood chips and food scraps at its Organics

Recovery Facility in Kingston, where the compost is screened, unblended, and sold in bulk.

The UCRRA’s Organics Recovery Facility is permitted and regulated by New York State

Department of Environmental Conservation. No appointment is necessary to purchase

compost, and it is available on a first come first served basis to members of the public.

9. The Comptroller, March S. Gallagher, is currently serving as the Ulster County

Comptroller, having been elected to that position in November 2019 and taking office in

January 2020.

The Comptroller’s Attempt to Audit the UCRRA and the Subpoena at Issue

10. On May 3, 2021, a man with an ongoing personal dispute against an employee

of the UCRRA’s Organics Recovery Facility made a public comment at the Ulster County

Legislature’s Energy and Environment Committee meeting complaining about the availability

of compost for sale at the UCRRA’s Organics Recovery Facility.

11. For obvious political reasons, the substance of which is not relevant here, the

“complaint” about compost availability found its way to the Comptroller’s office.

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 12. On May 10, 2021, a staff member from the Comptroller’s office contacted

Petitioner DeGraff by email asking for a site visit and tour of the UCRRA’s facility “to gain a

better understanding of the [UCRRA’s] operations and procedures” and “address concerns

that are raised by the community”.

13. On May 14, 2021, Petitioner DeGraff responded to the Comptroller’s office’s

request on behalf of the UCRRA, stating that, in accordance with advice of counsel, he would

be holding off on accommodating the Comptroller’s office’s request for the time being.

14. Several days later, on May 17, 2021, the Comptroller issued a memorandum to

Petitioner DeGraff stating her intention to audit the UCRRA’s compost program, purportedly

“[u]nder the authority proscribed by the Ulster County Charter § C-57(A).” A copy of the

Comptroller’s Notice to Audit memorandum, entitled “Audit of Composting Program”, dated

May 17, 2021, is annexed hereto as Exhibit “A”.

15. In the Notice to Audit memorandum, the Comptroller requested the

production of an extensive amount of documents and demanded that they be produced in

electronic form within seven (7) days – i.e., by May 24, 2021. (See Ex. A).

16. On May 28, 2021, Petitioner DeGraff met with the Comptroller and advised

her that the UCRRA, while not conceding that the Comptroller had authority to demand the

documents or perform an audit, the UCRRA was willing to work with her in an effort to be

transparent. Petitioner DeGraff advised the Comptroller that it would voluntarily provide

certain information that she was seeking in her Notice to Audit memorandum, but that the

UCRRA wanted some time for its Board of Directors and governance committee to meet first

to discuss the issues. Petitioner DeGraff also cautioned the Comptroller that this matter need

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not play out as a political fracas, which the Comptroller is apparently intending it to be. The

Comptroller declined and informed Petitioner DeGraff that she intended to issue a subpoena

to the UCRRA and hire Whiteman Osterman & Hanna LLP as outside counsel for her on this

matter.

17. That same day, on May 28, 2021, the Comptroller issued a subpoena duces

tecum to the UCRRA, a copy of which is attached hereto as Exhibit “B” (hereafter “the

Subpoena”).

18. The Subpoena at issue seeks documents, records, and policies from the UCRRA

to allow the Comptroller to perform an audit, which is beyond the scope of the county

comptroller’s authority and should therefore be quashed pursuant to CPLR § 2304.

19. More specifically, the Subpoena demands numerous records, including, but not

limited to, documentation for imports of compost transactions, transaction records for sales

of compost materials, budget and actual expenditures for compost operations, detailed list of

receipts by customers for compost sales, a general ledger, a description of the inventory

control procedures, any policies or procedures in place regarding the sale of composted

material, a description of how the price of compost material is determined, how often the

price is evaluated, any policy or process that governs the setting of price for compost product,

detailed list of assets for composting program, any policy that governs nepotism, and any

policy or procedure that governs the termination of a customer’s ability to use the facility or

services of the agency. (See Ex. B).

20. On June 2, 2021, the UCRRA, through its retained counsel for this matter,

issued a letter to the Comptroller requesting that she withdraw the Subpoena pursuant to

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CPLR § 2304, given her lack of general oversight or supervisory powers to subpoena such

documents from the UCRRA. The UCRRA’s counsel’s letter also reminded the Comptroller

that the New York State Comptroller, not her, had financial oversight over the UCRRA. A

copy of the correspondence dated June 2, 2021, is annexed hereto as Exhibit “C”.

21. On June 4, 2021, the Comptroller, through her outside counsel for this matter,

responded to the aforementioned request to withdraw the Subpoena, declining to do so and

disparaging the UCRRA for not cooperating with the unauthorized Subpoena. A copy of the

correspondence dated June 4, 2021, is annexed hereto as Exhibit “D”.

22. The Comptroller’s counsel’s June 4th letter, which was released to the media,

stated that the Comptroller has the authority to audit and subpoena records from the UCRRA

by reason of (i) the Ulster County Charter, and (ii) an Agreement for Vendor Services (County

Contract No. 2017-00000512), fully executed on December 13, 2017, with a term ending

March 7, 2020.

23. On June 9, 2021, the Comptroller provided a further Memorandum to Manna

Jo Greene, the Chair of the Energy and Environment Committee of the Ulster County

Legislature, again stating that the Comptroller had broad authority to audit UCRRA, this time

basing her supposed jurisdiction allegations on the Solid Waste Service Agreement between

the County of Ulster and the UCRRA, dated January 1, 1992. A copy of the Memorandum

entitled Ulster County Solid Waste Service Contract with the UCRRA, dated June 9, 2021, is

annexed hereto as Exhibit “E”.

24. A copy of the Solid Waste Service Agreement, dated January 1, 1992, is annexed

hereto as Exhibit “F”, and a copy of the Agreement for Vendor Services (County Contract

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No. 2017-00000512), executed December 12, 2017, and as amended on October 10, 2020, is

attached hereto as Exhibit “G”.

25. The Solid Waste Service Agreement between the County of Ulster and UCRRA

was amended on five occasions, including in 1993, 1998, 2002, 2002, and 2015. A copy of

each amendment to the agreement are annexed hereto as Exhibits “H”, “I”, “J”, “K” and

“L”, respectively.

26. On June 9, 2021, counsel for the Comptroller also voluntarily adjourned the

return date of the subpoena to June 21, 2021, which makes this Petition timely. A copy of the

letter from the Comptroller’s counsel dated June 9, 2021, is annexed hereto as Exhibit “M”.

27. Article IX, Section C-57(A) of the Ulster County Charter sets forth the powers

and duties of the Comptroller, which requires the “Comptroller [to] prepare an annual audit

report including a risk assessment of the accounting methods utilized by the County, and shall

submit a copy of the report to the County Legislature and the County Executive by April 1 of

each year.” Ulster County Charter, § C-57(A). Attached hereto as Exhibit “N”, “O”, “P”,

and “Q” are the Ulster County Comptroller’s annual audit reports from 2016, 2017, 2018 and

2019, respectively, and attached hereto as Exhibit “R”, “S” and “T” are the Ulster County

Comptroller’s 2020 annual audit report from April 2, 2020, the 2020 annual audit report

(apparently revised) from April 1, 2021, and the Comptroller’s Risk Assessment Addendum

to the 2020 Annual Report issued on May 27, 2021 (just one day prior to the date of the

Subpoena), respectively.

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 28. All of the aforementioned reports are available in a repository on the

Comptroller’s website, which is incorporated herein by reference. See

https://comptroller.ulstercountyny.gov/audit-reports (last visited June 17, 2021).

29. As discussed more thoroughly in the accompanying Memorandum of Law, the

Comptroller’s Office did not include the UCRRA in the “risk universe” for the County in any

of these mandatory annual audit reports for county operations, as required by Ulster County

Charter, § C-57(A), from 2016 to 2019, and the one time it was mentioned by the Comptroller

in her first annual audit report several months after taking office, she corrected her mistake in

the subsequent 2020 annual audit report.

30. As further demonstrated in the accompanying Memorandum of Law, the

Comptroller does not have the authority—either statutorily or contractually—to subpoena the

aforementioned records or audit the UCRRA in her position as the Ulster County

Comptroller. As such, the Subpoena is unauthorized and must be quashed in its entirety.

WHEREFORE, Petitioners respectfully request an Order be entered in favor of

Petitioners pursuant to CPLR §§ 2304 and 411, quashing the Subpoena or, in the alternative,

vacating the Subpoena by protective order, together with any other and further relief this

Court may deem just and proper.

Dated: June 18, 2021

MONACO COOPER LAMME & CARR, PLLC

_____________________________________
Jacob F. Lamme, Esq.
Mackenzie E. Kesterke, Esq.
Attorneys for Petitioners
1881 Western Avenue, Suite 200

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Albany, New York 12203
Tel. (518) 855-3535
Fax (518) 855-3536
Email: jlamme@mclclaw.com
mkesterke@mclclaw.com