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Legislature defeats Community Action waiver after debate on nonprofit compliance
Summary
A proposed waiver and contract for Community Action (resolution 226) failed on May 20 after extended debate over the nonprofit’s missing filings and audits; an amendment narrowly limited a temporary waiver but the full resolution required 16 votes and did not reach that threshold.
The Ulster County Legislature debated and ultimately defeated a resolution on May 20 that would have authorized a waiver of a county policy requiring nonprofit vendors to be current on filings and tax returns before receiving county contracts. The measure concerned Community Action, a local nonprofit that oversees food distribution, HEAP and other services.
The county’s policy — adopted earlier to ensure transparency and compliance by nonprofit vendors — includes a waiver mechanism. Legislators discussed whether Community Action’s filings and single-audit reports were sufficiently current to allow a waiver. Legislator Jonathan Kovacs and others said the waiver process is part of the county’s oversight framework and is intended to provide short-term flexibility while organizations come into compliance.
Opponents, including Legislators Litz and Kovacs (in separate remarks), said Community Action had not filed IRS Form 990s for multiple years and was also missing federally required single audits for recent years; one speaker noted that failure to file Form 990 for three straight years can result in automatic loss of tax-exempt status. Questions were also raised about how funds had been used in prior years and whether payments had gone to employees rather than program services.
An amendment to the resolution that would have limited any waiver to expire on June 30 passed on a 14–6 vote with one abstention, but the full resolution required a supermajority of 16 votes and failed in that final tally (result recorded as: yes 6, no 14, abstain 1). Proponents argued the waiver was needed to avoid interruption of emergency food deliveries to vulnerable residents; opponents said financial and legal compliance must be verified before awarding taxpayer funds.
Because the resolution was defeated, the county did not grant the waiver and the proposed contract with Community Action did not proceed at that meeting. Legislators and county staff said agencies can reapply once audits and filings are current.
