Escrow collection for Red Hook Commons site plan review

Village Law Article 7 grants planning boards authority over site plan review, and Village Law §7-725-a governs site plan approval procedures, but the authority to impose and collect escrow deposits to fund the municipality's own professional reviewers (as opposed to performance bonds) is typically grounded in a local law or fee schedule adopted by the board. Consider whether the Village of Red Hook has enacted a local law or resolution establishing an escrow/fee schedule for planning board professional review costs, and whether this $1,500 collection is consistent with that enacting instrument. Consider also consulting GML §64(23) (applicable to towns by analogy) and any Red Hook Village Code provisions on planning fees, as well as whether the escrow constitutes a 'charge' that requires a public hearing or permissive referendum under Village Law §9-908.

Escrow funds collected from an applicant are held in trust for a specific purpose and are not general village revenues. Consider whether the Village has designated a proper depository and account structure for holding applicant escrow funds, consistent with GML §10 (deposit of public funds) and any OSC guidance on cash management. Commingling escrow with operating funds could create accounting and audit concerns. The resolution does not address who holds, disburses, or reconciles the escrow account, which may warrant additional procedural documentation.

Professional legal services are generally exempt from the sealed-bid requirements of GML §103, but they are not exempt from the Village's procurement policy obligations under GML §104-b, which requires written policies for acquiring professional services not subject to competitive bidding. Consider whether the Village's procurement policy was followed in selecting or retaining the Planning Board attorney whose fees this escrow will fund, and whether the attorney engagement is documented by a written contract reviewed by the Village Attorney.

The OSC Local Government Management Guide on 'Seeking Competition in Procurement' notes that 'the governing board is responsible for adopting policies that describe its goals for procurements, including formal procurement policies and procedures that govern the acquisition of goods and services not required by law to be competitively bid.' Where a planning board attorney is retained with applicant escrow funds, consider whether the Village's written procurement policy explicitly covers this arrangement, and whether the escrow mechanism is documented in the policy or in a separate fee schedule reviewed by the board.

Best practice for applicant-funded escrow arrangements includes documenting in the authorizing resolution or an accompanying agreement: the conditions under which unused funds are returned to the applicant, the process for requesting additional escrow if costs exceed the initial deposit, and the Village officer responsible for administering the account. The absence of these terms in the resolution may create ambiguity about the Village's obligations to the applicant and the Planning Board attorney's billing relationship. Counsel review of the escrow terms is advisable.

The procedural record (mover: Pagano; seconder: Markusen-Weiss; unanimous vote) meets the basic requirements for a valid board motion. However, the resolution does not recite the basis for the $1,500 amount—whether it derives from a fee schedule, an estimate from the Planning Board attorney, or prior board policy. A brief recital in the WHEREAS clauses or meeting minutes would strengthen the record and assist future auditors in understanding how the figure was determined.