State appellate judges have upheld the right of the Southampton Town trustees to spend money independently of the town board, reversing a 2014 decision that threatened to strip the 329-year-old government body of its financial independence.
The Sept. 22 decision by a four-judge panel is a victory for the five trustees, who are elected to manage coastal areas but have been beleaguered in recent years by lawsuits challenging their authority. It reversed a January 2014 order by state Supreme Court Justice Peter Mayer that the trustees relinquish control of their budget to the town board. According to the appellate court decision, there was about $1 million in several trustee accounts when the lawsuit was filed in 2010.
"It's a tremendous relief," said Eric Shultz, who has been a trustee for 20 years. "One of the more important things of this case is, in the decision, it reaffirms that the trustees are a separate and distinct body and not an agency of the town. A lot of attorneys have been trying to paint a picture that we're almost like a department of the town."
The decision stems from a 2010 lawsuit in which four West Hampton Dunes homeowners argued that the trustees were improperly spending money collected from fishing fees, sand sales and other sources. J. Lee Snead, a Bellport attorney representing the homeowners, said they believe an appeal to the state's highest court will reverse the latest decision.
Snead said the lawsuit showed that the trustees "have given millions of dollars in public funds to favored companies, private entities, and even themselves, all without any oversight from the public."
The Southampton trustees, who have jurisdiction over beaches and bays, serve two-year terms and are elected separately from the town board. Court cases have been complicated by the body's role as a relic of the original town government from the era of English colonization. Only two other trustee boards exist in the state, in East Hampton and Southold.
Mayer's 2014 decision said "moneys coming into the trustees' hands constitute town finances" and must be "credited to the town." He criticized the trustees' financial practices, noting expenditures on funeral arrangements and donations to nonprofits.
But the appellate judges said "there is nothing in the constitutional or statutory history of this State that suggests that trust revenues are subject to town control."
Southampton trustees act as protectors of coastal environments and the public's right to access Hamptons' waterfront. But their powers have been challenged in recent years in the lawsuits by waterfront homeowners and incorporated villages.
One recent decision, which the trustees are appealing, stripped them of their power to regulate waterfront construction within incorporated villages.