A pay raise for Community Board 1 District Manager Paul Goldstein was approved unanimously by the board last month despite complaints from one member that the salary increase might come from funds from the board-sponsored street fairs that Goldstein oversees.

At the same meeting a candidate for board chair, in a failed bid to unseat Madelyn Wils, called into question the propriety of Wils and Goldstein serving as heads of Friends of Community Board 1, the non-profit arm of CB1 that uses street fairs to raise revenue. Board member Marc Ameruso argued that decisions on how to generate and spend such funds weren't vetted through the community board, eliminating "checks and balances" and ceding too much "power to the few."

"There are 50 of us here that are talented and connected and should be included," he said.

Ameruso was defeated 35-10 in the vote for board chair.

"When you have an election, things can get heated as people look for issues, and I think this just became a convenient issue," said Goldstein.

At the meeting, Goldstein remained silent as board member Rick Landman railed from the podium against details in the pay increase resolution. Landman said he wasn't opposed to the increase, Goldstein's first in three years, but had concerns that some of the $16,000 the board annually adds to its budget through street fairs could be used to pay part of his salary.

"If the city does not come up with new money for the [board's] budget, we might have to tap into that reserve," he said.

Landman has long opposed the board's practice of sponsoring street fairs-which require board approval-for financial gain, and two years ago took his concern to the city's Conflict of Interest Board, where he claims the matter is still under review. A spokesman with that agency said he could not confirm if the matter was before the board.

"This is not an evil, dastardly scheme. We're not doing anything extraordinary here," said Goldstein. "If we are doing anything improper, we will desist, but no one from that board has contacted me or any of the staff."

Goldstein said the group is regularly audited and that funds have been spent on consultants, legal fees in the board's fight for rezoning of the South Street Seaport and a copy machine for the office. Funds also pay for neighborhood surveys and the board's newsletter.

"We have never dipped into those funds to pay for salaries," Goldstein said.