MAHOPAC, N.Y. - A letter from the New York City Department of Environmental Protection (DEP) to town Supervisor Ken Schmitt that accuses the town of being in violation of the town’s Sewer Use Law (SUL), as well as a 1938 agreement between the city and the town, has prompted the Town Board to hire an outside law firm to defend itself.

The violation in question stems from the ongoing controversy over an alleged illegal hookup by Blu at the Lakehouse restaurant on South Lake Boulevard to the town sewer line. The property is owned by Councilman Mike Barile and the issue has been written about in a series of columns by David McKay Wilson for The Journal News.

In the Sept. 26 DEP letter obtained by Mahopac News, Paul V. Rush, deputy commissioner of the city’s Bureau of Water Supply, writes that the DEP has “spent several weeks reviewing the town of Carmel’s request to allow an out-of-district sewer connection for the business at 825 South Lake Boulevard. (Blu Restaurant). The town’s request came to us this summer after this restaurant received a violation notice for an unpermitted septic system from the state Department of Environmental Conservation.”

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Rush wrote that after receiving the town’s request for the hookup, the DEP took a number of routine steps to see if the restaurant qualified.

“DEP policy generally prohibits out-of-district connections to collection systems that feed City-owned wastewater treatment plants,” Rush wrote. “Limited exceptions, on a case-by-case basis, have been made in the past to protect water quality.”

The DEP’s review of the request required an onsite inspection, Rush wrote, and DEP personnel came to the site on Sept. 4. He wrote that the staff discovered that the cap had been removed from the sewer lateral that connects the restaurant to Sewer District No. 1, and noted that the cap had been in place when the DEP had visited the site one week prior.

“In our view, the unauthorized, out-of-district connection is a clear violation of…the Sewer Use Law,” noting that, “such agreements involving the Mahopac Wastewater Treatment Plant are not valid without prior written approval from the NYCDEP” and that the DEP had never provided written approval for the hookup.

Rush also wrote that the connection violates a 1938 agreement between the town and the city that outlines which properties can connect to the sewer system and under what circumstances they can do it.

The letter also notes that the County Department of Health had issued a letter of noncompliance for the sewer connection.

However, Bush concluded that the out-of-district connection would actually be beneficial if all the proper permits were obtained to qualify it.

“Given the restaurant’s proximity to Lake Mahopac, which ultimately drains into parts of the New York City reservoir system, it would be reasonable to consider an out-of-district connection to ensure the adequate collection and treatment of wastewater,” Rush wrote. “In the end, this could meet DEP’s chief objective of providing maximum protection for water quality in our reservoirs.”

However, Rush concludes that the DEP cannot consider the request until all the correct documents are filed and all alleged violations are brought to a “satisfactory conclusion.”

With town attorney Greg Folchetti recusing himself from the matter, the Town Board voted 3-0 at its Oct. 2 meeting, with Schmitt abstaining and Barile recusing himself, to hire Manhattan-based Cozen O’Connor law firm to handle the matter.

Cozen O’Connor is the firm that the board had considered hiring earlier this year to act as a lobbyist and help deal with the DEP and the town’s ongoing attempts to gain more latitude for things such as developing a sewer treatment plant and getting New York City to pay its “fair share” in property taxes. However, that resolution did not carry enough votes to pass.

Although Barile had to recuse himself from the vote on hiring Cozen O’Conner, he said he was vehemently opposed to it because he only had one permit left to obtain to remedy the Blu Restaurant sewer issue and therefore hiring the firm would be a waste of taxpayer money.

“Why are there no numbers attached (to the resolution) so taxpayers know how much money is being spent?” he asked. “I think the taxpayers should know, and I’d like to know how much money is being spent on this.”

The cost, he learned, would be in the range of $40,000.

Schmitt noted he would abstain from the vote because while he favored the concept of letting an outside law firm handle the matter, he felt the Cozen O’Connor contract was too costly.

“It’s excessive; it’s a lot of money,” he said. “When I first read it, I was very concerned about it. We are going to spend potentially in excess of $40,000 on it. I don’t think that needs to be the case at all. I think you heard tonight that Councilman Barile has been in touch with the regulatory agencies and it sounds like they are reviewing the matter and will be making a decision on it, and they are OK with issuing the necessary permits.”

Barile said he has approvals from the DEC, the county Health Department and the town of Carmel. He still awaits the DEP, but noted that the agency moves “at a snail’s pace.”

Barile also questioned why the town didn’t put out bids (requests for proposals) for an independent law firm, a problem he says has plagued the town for years and the reason why the state comptroller’s office recently performed an audit of the Carmel government’s procurement policies—the results of which are pending.

Schmitt agreed.

“I think we could have gotten RFPs from other law firms, but we didn’t do that,” the supervisor said. “So, I don’t want to accept this particular one because we don’t have competing proposals.”

Councilman John Lupinacci said he had contacted a firm in White Plains and Councilman Jonathan Schneider said he spoke with an Albany-based lawyer, adding that one consultant told him no local law firm would touch this case “with a 10-foot pole.”

But Schmitt said the town needed formal RFPs in writing, not consultations over the phone.

Barile contended that he had all the paperwork, which had been missing in Town Hall up until a month or so ago, and it documents the chronology of the controversial sewer hookup and will show he did everything correctly. He said only two board members were willing to look at the files, adding that if they had all inspected them, they would no longer feel the need to bring in outside counsel.

“I’m not an expert. I’ve always said, let the professionals do it,” Lupinacci said of Barile’s paperwork. “If you (Barile) have everything and it can be easily resolved then it should not cost close to $40,000. But we need outside counsel because right now we are flying somewhat blind.”

At one point, Barile contended that the whole matter was payback and retribution from fellow board members for notifying the state comptroller’s office regarding the procurement issue and asking for an investigation into what he called “corruption.” He said there are other sewer hookups throughout town with similar issues but no one was investigating those.

McDonough said she reviewed Barile’s documents and while admitting she was not an expert in such matters, she said it appeared there were some things still missing

“Was everything done that needed to be done? I did not see it,” she said. “Is it in the works? Well, I saw an email saying the Health Department now has everything. But I am looking to dot the I’s and cross the T’s.”

McDonough also noted that Barile’s documents did indicate that despite some published reports, the DEC would not require a State Pollution Discharge Elimination System (SPDES) permit because the discharge at Blu Restaurant did not exceed the flow-rate threshold.

Schneider went on to say that while the permitting process may indeed be coming to a close, he felt having it all vetted by independent counsel was important.

“There is a lot of discord that is being sewn out in the public based on misinformation,” he said. “It’s a small amount to pay to restore trust and confidence.”

Jennifer Maher, a local real estate agent and chair of the board of directors for the Putnam County Chamber of Commerce, told the Town Board that issues such as Blu Restaurant’s sewer hookup are common and hiring a law firm to deal with it is excessive.

“I deal with [violations] all the time and sometimes the trail can be quite complicated,” she said. “We had a deal just this week and I promise you, it was not the attorneys who solved the violations. It was the Realtors. I am not suggesting you get a Realtor involved, but I am suggesting you get an expediter, so you’re not spending all that money on an attorney doing that work. These are matters that attorneys are not necessarily very skilled in. Hiring an attorney to do a forensic search just doesn’t make any sense.”

Maher added that what happened to Barile and Blu Restaurant are commonplace and made more complex because the history of it goes back several decades.

“It is easy for me to understand what happened with [Barile’s] property because I am in the real estate business,” she said. “But it is really sad that it turned into this circus. I am saddened by these articles [in The Journal News]. It’s a simple violation; it’s a citation. We deal with them every single day. It doesn’t make someone corrupt. The amount of money you are going to spend [on lawyers] is going to be 10 times more than any damages done to the town or the taxpayers.

“This is a very simple thing,” she continued. “And I can guarantee you there are lots of other properties that have similar issues. Twenty years ago, the approval process was quite different, it was more lax, and this is something that happens quite often. A newspaper is basically making a mockery out of you guys and it’s sad.”