Wednesday, September 21, 2005

Same Old Garbage In Town's Sanitary District 2

AUDIT OF TOWN OF HEMPSTEAD SANITARY DISTRICT #2 FINDS CUSTOMERS "GROSSLY OVERPAYING" FOR GARBAGE COLLECTION DUE TO EXCESSIVE SPENDING, NO-BID CONTRACTS

Sanitation Workers Working 4-5 Hours a Day, Four Days a Week, for Full-Time Pay. District Spends Millions Each Year On Insurance, Much Of It Unnecessary

Customers in the Town of Hempstead's Sanitary District #2, which collects garbage in Baldwin, Roosevelt, and South Hempstead, are "grossly overpaying" for garbage collection compared to residents of other areas of Nassau County, Comptroller Howard Weitzman said today.

The Comptroller, issuing an audit of the independent sanitary district, said that the district wastes millions of dollars every year on administrative expenses, including unnecessary and overpriced insurance sold to the district by a no-bid broker, cars and trucks for top staff, and gifts for employees, while allowing sanitation workers, in effect, to work part-time jobs for full-time pay.

"The commissioners of this garbage district, operating for the most part outside of the public view, spend extravagantly on contracts that were entered into without competition and on perks for themselves and their top managers. Meanwhile, at a time when high taxes are residents' number one concern, homeowners in Baldwin, Roosevelt and South Hempstead are overpaying for their garbage collection by millions of dollars every year. That's the bottom line," Comptroller Weitzman said.

District residents spend about $12 million a year (including disposal fees paid to the Town of Hempstead), or $734 per property owner, to obtain curbside garbage pickup and disposal, the audit found. In other areas of the Town of Hempstead where the Town itself provides garbage pick-up, the cost per parcel is only $603. And in the Port Washington garbage district, the subject of a recent Comptroller's audit, the cost per parcel is only $252.
"If the same rates were applied to District 2's customers, the district could save millions each year on its garbage collection costs," Comptroller Weitzman said.
If Hempstead were to service District 2's customers, based on the town's current cost per parcel, the cost would be approximately $9.9 million, a savings of $2.1 million a year. If District 2's costs were as low as Port Washington's, the Comptroller said, the cost would be only $4.1 million, a savings of nearly $8 million a year.

The report is the latest in a series of audits by the Comptroller of so-called "special districts" in Nassau. There are more than 140 town-created independent taxing authorities in the county, providing services such as garbage collection, water or street lighting, but which have had little or no oversight by the towns or any other governmental authority prior to the Comptroller's audits.

Comptroller Weitzman said, "Our previous audit of Sanitary District 1 in the Five Towns area was hampered at every turn by uncooperative district managers, yet it was able to uncover massive mismanagement and waste of taxpayer funds. District 2's managers were, by contrast, open and straightforward with us during the audit process, and they indicated they have begun to make certain changes recommended by the auditors.

"Nevertheless, these districts' wasteful practices speak to the larger issue: There are too many special governmental districts in Nassau County, adding to residents' property tax burden. Because these districts operate with virtually no oversight, we should not be surprised to find that some of them spend taxpayer funds freely, without appropriate financial checks and balances. And we should not be surprised if district residents end up overpaying for services." The audit found that District 2 has poor financial controls and does not competitively procure many of its contracts, whether for technology purchases, insurance, financial services, or legal services.

"One of the more outrageous policies we uncovered," Comptroller Weitzman said, "is that the district routinely allows sanitation workers to leave after a half-day of work, despite a collective bargaining agreement that defines their workweek as 40 hours:10 hours per day, four days a week." An analysis of time clock records revealed that the average workday in District 2 is four to five hours per day, four days a week, for a total of 16 to 20 hours a week. Despite actual hours worked, the workers are paid a full-time salary.

"As a result of its total reliance on one insurance broker, the district also carries more insurance than necessary, and pays more than necessary for the insurance it does need," Comptroller Weitzman said. In 2004, District 2 spent $2.2 million for insurance recommended by its insurance broker, the Louis Koch Agency of Baldwin. The district apparently has not conducted any competitive process for insurance services and has dealt exclusively with Koch since 1978. Insurance costs represented 25 percent of the district's total expenses in 2004. The broker recommends how much insurance the district needs, then provides it, while receiving commissions that are pegged to the premium amounts from the insurance carriers - "a conflict of interest," Comptroller Weitzman said.

Over the two-year audit period the district's insurance purchases, recommended by the broker, included $1.9 million for employee health insurance. If the district had insured its employees using the New York State Health Insurance Plan (NYSHIP), as it is entitled to do and as Nassau County does, its health insurance cost would have been approximately $1.3 million, a savings of nearly $600,000 over just two years.

"Most municipal employees consider NYSHIP coverage the Cadillac of health insurance," Comptroller Weitzman observed. "This district bought a Rolls, and stuck the taxpayers with the bill." In addition to the commissions the Koch agency received, the district paid the agency additional fees totaling $117,500 during the audit period, mostly to monitor the district's workers' compensation program and reduce its costs. "Instead of lowering the premium costs, however," Comptroller Weitzman said, "the costs for the workers comp program increased 53 percent from 2003 to 2004."

The audit also found that:

~ Ford Explorers and pick-up trucks are provided to 11 supervisory-level employees for their personal use, supposedly to enable them to respond to emergencies during off-hours. The district could provide no evidence that the individuals in question responded to emergencies or conducted any regular work outside of normal business hours. The district pays for all gas and maintenance on the vehicles, but there are no systems in place to monitor mileage and gas usage.

~ No time records at all are kept for the district's 20 top managers and commissioners. In 2001, the district bought a building for $180,000 with money from its contingency fund, without informing the community or including the real estate purchase in the district's budget. The district claims this real estate purchase was not financed, yet it reimbursed the contingency fund with funds obtained through a bank "equipment lease/purchase agreement." The agreement, which was supposed to pay for equipment, not real estate, was negotiated with the assistance of a Koch-related firm, Advanced Management Strategies, LLC, which received a $20,000 fee.

~ The district relies overly on its independent audit firm, R.S. Abrams & Co., L.L.P., both to conduct and review its financial affairs. Comptroller's staff found that the district does not have adequately maintained books and records to support its financial statements and does not employ personnel with adequate financial and accounting expertise to evaluate and approve the auditor's actions. Comptroller Weitzman said, "We saw very clearly in the case of the Roslyn schools what can happen when there are no financial controls and an outside auditor has too much influence over the district's finances."

~ Thousands of dollars were spent during the audited period for employee gifts and perks, including Thanksgiving turkeys for employees, holiday decorations and parties, food and flowers.

~ The district treats its two attorneys as full-time employees, apparently so that they can receive district-paid health insurance benefits, yet it does not report their "full-time" employment to the NYS Retirement System. Both attorneys maintain private practices, and documents clearly indicate that they are consultants on retainer.

~ The five district commissioners are paid $7,500 per year. The commissioners are treated as full-time employees, with full health insurance and other benefits, and are reported to the State Retirement System as full-time employees, except for one commissioner who already receives a state pension and retiree health benefits. Neither the commissioners nor the two attorneys have a defined work week, and no records of their time at work are kept. District practice for all other employees is that part-time employees do not receive benefits. The district lacks formal employee benefit policies and appears to practice favoritism in providing such benefits, the audit found.

The report is the fourth audit of independent sanitary districts to be released this month by the Comptroller. On September 8, Comptroller Weitzman released audits of Town of Hempstead Sanitary District #1 (Five Towns area), and garbage collection districts in Syosset and Port Washington. While Port Washington's service was found to be efficiently operated, significant overspending and lapses of management control were found in the other two. A fifth audit, of the Town of Hempstead's 6th Sanitation District, will be released in the next few weeks.

Sanitary District 2 has approximately 121 employees and provides service to 15,255 residential and 1,150 commercial properties. The audit covers the fiscal years 2003 and 2004.

The full audit report of Sanitary District 2 can be read or downloaded by clicking on the link below.

( ~ 251 kb, 43 pages, pdf file - Adobe Reader® required )

16 comments:

  1. Just got an e-mail from a neighbor regarding the results of the Sanitary 2 Audit - "See, its not as bad as Sanitary District 1," it read.

    No, not as bad. And Hurricane Rita may not be "as bad" as Katrina, but I wouldn't want to be in its path, or to have to pick up in its wake!

    Not as bad. Workers working part-time jobs for full-time pay and benefits.

    Not as bad. Supervisors getting SUVs for their personal use, with gas and maintenance included.

    Not as bad. Excessive insurance premiums paid to a politically-connected broker with a no-bid contract.

    Not as bad. Gifts and holiday turkeys for employees, holiday decorations and parties, and the usual perks that John Q. Public pays for out-of-pocket.

    Not as bad. Only some of the checks not entered in the ledger. Its not like they took $800,000 in CASH payments.

    Since when is "not as bad" good enough?

    No, I suppose living in the Town of Hempstead is "not as bad" as living in, say, Appalachia. At least we still have our teeth!

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  2. The point is that the mere existence of these special districts represent a completely superfluous layer of government, irrespective of the additional waste uncovered by Weitzman's audits. In essence, taxpayers are being hit with a double whammy -aside from having to fund the salaries and benefits of this unnecessary layer, (rather that consolidating redundant job requirements under one central agency), these commisioners and upper management do a very nice job protecting the interests of their district's employees to the detriment of taxpayers. Thus, for example, the commisioners who we elect have no problems paying their subordinates full time employees with full benefits while they work only 4-5 hours per day.

    You better believe if there was a bottom line involved and Town sanitation were run like a private sector business, nothing of this sort would happen. Imagine a CEO of a company claiming that she has no control over one of the company's subsidiaries and therefore can't control costs in that division. Well, that's exactly what Kate Murray is saying when she talks about her inability to reign in the sanitation districts.

    My guess is that Weitzman is leaving the best for last - the dist. 6 audit, which I'll be willing to bet will turn out to be far worse than the Dist. 2 results. Too darn bad we won't get as much as a yawn from a good majority of voters who, if I can borrow a phrase from Gen. Honore's press conference this morning (http://thepoliticalteen.com/video/stuckonstupid2.wmv), are "stuck on stupid".

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  3. jacob is absolutely right - TOH residents are "stuck on stupid!" Most of our neighbors either don't know what's going on, or they simply don't care. In some cases, its both.

    Many of those who do know either don't vote, or keep on voting the same self-serving drips (either by name or affiliation) back into office. We not only condone and accept bad government, we insist on it!

    I live practically around the corner from where Sanitary District 6 is located on Cherry Valley Avenue in West Hempstead. I don't need an audit to tell me that the crews work less than 1/2 a day, that the Supervisors run around in their SUVs (mostly to the Dunkin Donuts or the 7-Eleven on the Turnpike), and the Commissioners only come out to take photos of bushes they planted in front of Sanit 6 Headquarters - this while ignoring the trash, litter, etc. that piles up in the parking lot used by District workers - a lot situated directly across the street from HQ.

    We pay at least double the going rate in Sanit 6 for the same services Town Sanitation provide. I imagine most of that difference goes toward perks, gas for personal use of District vehicles, and maybe a steak dinner or two for management.

    I will also agree that it stains credibility for the Supervisor of the Town of Hempstead, Kate Murray, to say she has no control over the Town's Sanitary Districts, and takes no responsibility for their mismanagement. Clearly, the buck doesn't stop at Town Hall. [How could it? All those bucks are never getting further than the Sanitary Districts!]

    No control? How odd, when your Town Attorney is also the General Counsel for Sanitary District 6, and at least one former Sanit 6 Commissioner is now a sitting Town Councilman. Welcome to the Twilight Zone!

    Either the Supervisor takes control - and accepts responsibility - or we, the taxpayers, should smarten up and take back control of our Town on our own.

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  4. Again, only the surface is being scratched here. What goes down at the Sanitary Districts is well known to the Supervisor and her staff - with much more than tacit approval (wink, wink).

    Follow the money - and the party lines - at the Sanitary Districts, the Water Districts, and so on down the line. It is much more than "all in the family."

    Believe me, Kate Murray sees all, knows all, and, yes, controls all - at the behest of the all-powerful Mr. Mondello. Don't believe anyone who would tell you otherwise.

    To my fellow Republicans and Town workers (the words being interchangeable in Hempstead Town), I offer this advice: Obey your leaders BEFORE the election. Your jobs depend on it. When you step into the voting booth on election day, however, vote for Harvey Levinson. Taxpayers deserve a change -- and so do the rest of us who labor under the gun and under the thumb at Hempstead Town Hall.

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  5. NICE MY LAST POSTING WAS REMOVED GUESS FREEDOM OF SPEECH DOESN'T INCLUDE THIS BLOG SPOT????

    THE COMMUNITY ALLIANCE BLOG SPOT POST YOUR REPLY AS LONG YOU DON'T SAY ANYTHING ABOUT POOR HARVEY LEVINSON?

    I WILL REPEAT MY COMMENT I WILL NEVER VOTE FOR HARVEY LEVINSON AND I URGE ANYONE WHO IS BETTER GO AND GET THEIR HEAD EXAMINED!!!

    HE WILL NOT FIX OR REPAIR ANYTHING, AND THAT IS EXACTLY WHAT NEEDS TO BE DONE HERE THE WHY THESE DISTRICTS ARE RUN AND MANAGED NEEDS TO BE REDONE AND HARVEY LEVINSON IS NOT GOING TO GET IT DONE!!!

    WHAT HAS HE DONE AS THE NC ASSESSOR NOT A DAMN THING EXACT INCREASE EVERYONES ASSESMENT AND PLAY THE AVERAGE OF HOW MANY WILL CONTEST THE INCREASES!!!

    AND IF YOU DON'T LIKE MY POSTING TOO BAD!!!!

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  6. TO ncres4change: Not a single "comment" of yours has been removed from this blog site. Perhaps you simply cannot remember where it was on this site you posted your last "comment."

    To refresh your recollection, the "comment" that began with "I will never vote for Harvey Levinson," appears under the "Parks Is Parks" blog - which is exactly where you posted it.

    Yes, freedom of expression, in whatever form it may take, does exist at this site, and we'll even throw in the freedom to think, if you are so inclined! :-)

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  7. ncres4change:

    Whether or not Levinson lacks management skills necessary to run the Town is certainly up for debate. But at least you should give him credit for raising the issue of waste at our town special districts when no one else was talking about it. Compare that to Kate Murray's response -

    When someone purportedly complained to her about it at a community meeting and she dismissively told her, "Well if you don't like how your district is run, why don't you run for commisioner?". That doesn't exactly sound like a leader who wants to deal with this very real problem, much less recognize that the problem even exists.

    The likelyhood is that Murray simply cannot go after the special districts even if she wanted to because the redundancy and waste there seems to be machine-fed by patronage of her own political party. And while it's true that patronage exists everywhere in all levels of government, in this case it seems so entrenched in an unnecessary area of government that it may very well be the only way to remove it is if theres a change at the top.

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  8. Not too concerned about Harvey Levinson having the requisite managerial skills. I (a Republican) worked with him at the Nassau DA's office, where Mr. Levinson managed quite well, thank you (and under a Conservative Republican DA, no less, proving that Harvey can work with everyone).

    True, Harvey Levinson is no Kate Murray. The photo ops and mass mailings were kept to a minimum (read as, "none"). He used his knowledge and skills to build consensus in the office, while demonstrating a quiet strength and a "no plea bargain" approach in dealing with the tough issues that crossed his desk daily. Harvey Levinson knows about that which impacts directly upon the lives of the people he serves. He faced those tough decisions every day while serving as Denis Dillon's right hand man.

    Of equal importance - almost paramount to the long-overdue change that is required at Hempstead Town Hall - is bringing aboard the right people (after cleaning out the patronage bin)to make a real difference in Town government. Watch for the community activists and those who know our Town and care about its future to fill the positions currently held by GOP Committeemen, family members, and no-shows.

    Knowing Harvey Levinson, I have every confidence that, when elected, he will govern with the same conviction that served him so well during his 25 years at the District Attorney's office.

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  9. As someone who works in a Union environment, I want to explain the half-day work for full time pay. The Sani 2 workers have so much garbage allocated to pick up (their route). They have to pick up all garbage left out even if it takes them longer than the 10 hours allocated. It never takes them 10 hours because they work at a breakneck speed. If they worked at a normal persons pace, it would take them the 10 hours for which they are paid. They work faster because the time is theirs'. The workers also do not get the same benefits as the Supervisors, Commissioners and Lawyers. They (the workers) have to pay a percentage of the medical coverage themselves. The others all get a free ride.

    I am however outraged at how the Commissioners throw our tax dollars around to their friends. If you look up the word Patronage in the dictionary, there should be a picture of Sani 2 headquarters. I heard TOH Councilman Anthony Santino say at one of his monthly meetings that the residents of his district don't mind paying double, for the better service that Sani 2 says it delivers. He is probably correct if you go by the comments seen on News 12 ("they pick up the garbage OK, so I don't have any complaints.") Would they have any complaints if the Commissioners stole their wallets and gave them to their friends, because that's exactly what's happening?

    A question for the readers of this Blog. There have been some rumors around town about Councilman Santino's Sexual Preferences and that he is currently living outside his election district with his gay lover, I would like to know if anyone knows if this is true or just some election time bull?

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  10. And still no one has answered the tell tale question what has he done for the NC Assesments???

    No one wants to touch that one why not??

    His past accomplishments as in the DAs office??

    And I never posted about patronage, I posted about CORRUPTION and MISMANAGEMENT!!!

    And as far as my last posting Mr. Community Alliance I did post it here and it suddenly disappeared??

    And by the way thank you for the freedom to think?? Very generous of you to allow such a thing

    And one last concern where was Mr.Weitzman in the last few years??

    Now all of a sudden in an election year he dives into the audits of the sanitation districts???

    What like none of these overspending issues were ever there before???

    I question the political motives in these audits not the validity of them!!!

    These issues need to be fixed and the system of how they are run needs to be overhauled!!!

    And the individuals that run them need to be either made accountable, replaced or the whole sanitation districts need to be overhauled and run under 1 Department!!!

    And again Harvey Levinson may have had experience in the DAs office and the Department of Assesment ( What he actually did is another issue ) But he will never win for TOH Supervisor because he simply does not finish what he starts!!

    He was elected to run and fix the Counties Assesment Office - Has he done the task???

    So we are going to allow him just to leave that position and move onto the TOH???

    OOH thats right he's not really leaving unless he wins as TOH Supervisor if and WHEN he loses he still has his old job to fall back on!!!

    ReplyDelete
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