Tuesday, April 10, 2007

How The Rich -- And Connected -- Get Richer

One Part-Time Government Job At A time

We're sure you'll be glad to know that the D'Amatos -- call 'em Al and Kat -- have their family's health insurance premiums paid in full by the taxpayers of Hempstead Town.

And old Nassau County Assessors, like John Trapani, age 91, never die. Why should they, when they can move off to Ohio while county taxpayers foot the bill for lifetime health coverage.

Struggling to pay the monthly premiums for health insurance? Worse yet, have you no coverage for yourself or members of your familiy?

Forget univeral health care. You need a part-time job with the County or Town.

Good jobs, short hours, and great benefits, if you can get it, and more of your tax dollars at work -- albeit for someone elses benefit, and part-time, no less!
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Part-time board members get big-time benefits
By Sandra Peddie and Michael Rothfeld
sandra.peddie@newsday.com and michael.rothfeld@newsday.com

Katuria D'Amato, wife of former Sen. Alfonse D'Amato, gets free family health insurance as a member of the part-time Hempstead Zoning Board of Appeals.

Patrick E. Byrne Jr., an anti-tax activist from Lake Grove, gets his benefits as vice chairman of the board of Suffolk Off-Track Betting Corp.

And Kings Point Mayor Michael Kalnick, a partner in his own Manhattan law firm, gets his health benefits fully funded by serving as chairman of the board of the Water Authority of Great Neck North.

All across Long Island, at least 100 members of various appointed boards are given health insurance -- usually at no cost to them -- even though they work just part time, in some cases only a few hours a month. Many also are eligible for lifetime health insurance once they turn 55 and are considered vested -- sometimes after serving only a five-year term.

Offering fully paid health benefits to part-time board members is a little-known practice average taxpayers and even some government officials aren't aware of. Less apparent is that in some cases these part-time political appointees receive benefits for the rest of their lives.

Chief Deputy Suffolk County Executive Paul Sabatino said he was stunned to hear that part-time board members receive health benefits. "The existence and magnitude of this stealth tax in the form of lifetime benefits to all these boards takes my breath away," he said. "It makes me wonder what else is out there that we don't know about."

Oyster Bay homeowner Frank Manzella, already frustrated with his high tax bill, had never heard of the practice. "So they're screwing the taxpayers," said Manzella, 73, a retired comptroller for small companies. "When I was working, I had to pay for part of mine, and I was working full time."

Nassau Comptroller Howard Weitzman estimated the long-term cost of paying health insurance to just one board member who retires at 55 to be about $500,000. Although the current cost of supplying family benefits to an individual is about $15,000 a year, the price escalates over time.

"What's sneaky about this is that the true cost of this is not the few thousands of dollars you pay this year, it's the hundreds of thousands you're committing yourself to," said E.J. McMahon, director of the Empire Center for New York State Policy, a conservative think tank in Albany.

New York State Attorney General Andrew Cuomo ruled in February that some state public authorities could not legally offer paid health coverage to their board members.

By contrast, the health insurance some local governments voluntarily give members of their boards is a legal -- and costly -- perk that has received little scrutiny.

Lifetime perk for some

Consider the example of John Trapani, a lawyer who took a part-time job on Nassau's Board of Assessors in 1982. A Republican, he attended about two meetings a month and earned a salary that reached $60,000 a year. The county also gave Trapani, now 91 and living in Ohio, health insurance for the rest of his life.

Today, more than 14 years after he retired, Nassau still is paying 100 percent of his $735-a-month premiums. His son said he suffers from Alzheimer's and could not comment.

Proponents of offering benefits to board members argue that it's the only way to ensure good candidates will take the jobs. "They want to attract people who are better-quality people," said Stephen Mahler, a practicing lawyer who gets benefits -- and a $20,000 annual salary -- through Nassau's Assessment Review Commission, which meets once a month.

But in many places on Long Island, board members serve without benefits or pay."We're just asking people to serve their community, and many people are willing to do so without having remuneration, and we thank them," Edwin Eaton, the city manager of Long Beach, said of the city's "very part-time" members of the architectural review, fire, zoning and other boards.

A Newsday survey of the larger government boards found that the towns of Brookhaven, Huntington, Islip, Southampton, Hempstead and Oyster Bay offer health insurance to members of various appointed boards. The seven other towns do not. On the county level, Nassau gives benefits to members of its Board of Assessors, Assessment Review and Civil Service Commissions, for example, but not to the county Planning Commission or the Industrial Development Agency. The Suffolk County Water Authority and Off-Track Betting Corp. offer board members benefits, as well. The survey did not encompass the hundreds of smaller authorities and special districts on Long Island.

Suffolk County Executive Steve Levy said that although the county generally does not pay benefits to appointed board members, the question should be evaluated on a case-by-case basis.

"You can't paint them all with one brush. They're all very, very different," he said.

Nassau County Executive Thomas Suozzi declined to be interviewed on the issue. His aides said the county is "required" by a 1959 resolution to give part-time board members benefits. The resolution they cited said the county would cover its "officers and employees" in the state health insurance plan.

But Vincent Toomey, a labor and employment lawyer in Lake Success, said the county could pass a new resolution at any time if it did not want to cover part-time board members. Many other municipalities that insure full-time employees in the state health plan elect not to cover part-time board members, he said.

"It sounds more to me like a matter of willingness -- whether the county wishes to change this," Toomey said.

Free of charge

Most board members receive the benefits at no cost. Southampton Town requires board members to pay a portion of the premiums. Nassau County requires anyone appointed since 2002 to contribute up to 10 percent of premiums. The benefits are frequently more generous than health insurance offered in the private sector.

"Public employee benefits in general are more expensive than they should be for taxpayers when you consider the fact that the people paying the bills are not buying the same rich benefits for themselves," said Robert Ward, research director for the Business Council of New York State, a business association.

Some board members receiving benefits meet just three or four times a year, as is the case with the Brookhaven Board of Assessment Review. Planning and zoning boards meet more frequently, twice a month or more. But in Hempstead, officials estimate that town Civil Service commissioners work less than an hour a week, on average.

And in Islip, records show that the Plumbing Examiners Board, which meets once a month and whose members receive benefits, met for just an hour and 15 minutes in January, an hour and 20 minutes in February and two hours and 15 minutes in March.

Nationally, employees of private companies generally must work full time to qualify for health benefits, and they contributed an average of 27 percent for family coverage last year, according to the Kaiser Family Foundation.

Benefits given to part-time boards have been in the news lately. Democratic Islip Supervisor Phil Nolan recently tried to eliminate health benefits for paid part-time board members, but the Republican town board refused to bring his proposal to a vote. The Metropolitan Transportation Authority last month said it would no longer pay for its board members' benefits, after Cuomo ruled giving insurance to public authority board members is illegal because they are not supposed to be compensated.

Suffolk OTB is reviewing whether it legally is allowed to insure board members and has asked Cuomo's office for an opinion.

"As we start going through it, there's a lot of conflicting interpretations and conflicting legislation," said Suffolk OTB President Jeffrey Casale. "I need to have what I would call a definitive opinion."

Nassau's OTB does not offer health benefits to board members. "There's nothing in the bylaws requiring me to do it," said Nassau OTB President Dino Amoroso. "There's nothing right now that compels me to want to do it."

The state's Racing and Wagering Law limits OTB board members to earning $250 a day for regular meetings, up to $2,500 a year, plus up to $1,500 more a year for additional OTB work. The law makes no mention of health benefits, which are far more valuable.S

uffolk OTB provides insurance in the state health plan to Byrne and current Chairman Dominick Feeney, both Democrats, and to former board member Richard Krumholz, a Republican who retired in 2002 after serving 11 years.

Anti-tax activist Byrne promised county lawmakers considering his appointment to the OTB board that he would save taxpayers hundreds of thousands of dollars by eliminating patronage. His family health insurance provided by the board costs taxpayers $14,300 a year.

Byrne said he believes the benefits are justified and said the agency has cut costs during his tenure."These board members are completely responsible and have a fiduciary responsibility to operate a $250 million-a-year, quasi-governmental agency," he said.

Shelter Island Supervisor Alfred Kilb, whose appointed board members receive no pay or benefits, said it isn't unreasonable to offer them. "It depends on their workload and what they accomplish," he said.

A buddy system?

But opponents, such as Islip's Nolan, argue that benefits are given to a closed circle of political insiders. "Believe me, this is a clubhouse thing," he said.

Republican Katuria D'Amato named her husband -- now a prominent lobbyist who once was paid $500,000 for making a single phone call -- as a dependent on the health insurance she receives as a member of the Hempstead zoning board. The board meets two or three times a month, and she receives a $38,000 salary. Alfonse D'Amato is also insured separately, his spokeswoman said. Both D'Amatos declined to comment.

Mayor Kalnick receives $18,000 in salary a year, plus fully paid family health benefits, as chairman of the Water Authority of Great Neck North. He is the only board member to receive fully paid health benefits. Kalnick, who lives in a multimillion-dollar waterfront home in Kings Point, did not return calls seeking comment.

In Islip, board membership is literally a family affair. Alfonso Guadagno Sr. serves on the Board of Assessment Review. His son, Alfonso Guadagno Jr., serves on the planning board. Both men, Republicans named by the previous administration, get health benefits. Both declined comment.

Politics and patronage are often paramount when appointments to part-time boards are made.

When Republican John LaValle left his job as Brookhaven town supervisor, he did what many politicians do -- he helped secure plum posts for his allies before the new Democratic supervisor, Brian Foley, could fill them. LaValle could not be reached for comment.

Karen Wilutis, LaValle's town attorney, got a $20,000-a-year part-time position on the planning board, which meets twice a month. She gets family medical, dental and vision insurance for a total annual cost of $15,697.

Wilutis said she did not seek the position for the health benefits. She said it was offered to her and added, "I am totally qualified."

LaValle's former deputy, Edward Morris Jr., got a $20,000-a-year part-time slot on the zoning board, which meets twice a month. Morris receives medical, dental and vision insurance for himself and his family. He said he took the job because he enjoys government service and said he could have gotten health benefits through his wife's teaching job.

Underdogs get a shot, too

The positions are not always given exclusively to members of major parties. Candidates seeking minor-party endorsements sometimes offer board memberships to key players in those parties.

In Islip, for example, Lester Siems, husband of the town's former Independence Party leader, Fran Siems, sits on the town's Plumbing Examiners Board, which meets once a month. Siems gets a $6,600 salary, plus health benefits. Fran Siems said her husband didn't do it to get health benefits. "It's a public service," she said.

Part-time board members who don't take health insurance are sometimes offered a "buyback," or stipend, that ranges from $1,000 to $7,000 a year. That money is paid on top of their salaries, which currently range from $6,600 to $38,000 a year depending on the board.

Michael Norman, Suozzi's campaign treasurer and personal accountant, receives a $2,000 buyback because he waived health insurance for serving on the county Board of Assessors.

Norman, who was appointed to the $20,000-a-year post by Suozzi, said he doesn't need the benefits because he is insured as a Glen Cove city councilman.

"It's the compensation they give you in a job," Norman said. "The stipend, if you don't get , that's part of the provisions."

He added that he serves on volunteer boards, as well.

Lois Schmitt, the wife of Peter Schmitt, the Republican Minority Leader of the Nassau legislature, receives dental and vision benefits worth $1,650 a year for her part-time job on the Oyster Bay zoning board. She receives health benefits as a retired Nassau County employee. So Oyster Bay pays her almost $3,400 a year as a buyback. She did not return a call for comment.

Officials in several municipalities said they didn't know how or why the practice of offering benefits for part-time boards started. "I can only imagine it's being done under the category of, 'Because it's always been done,'" said Nassau Legis. Jeffrey Toback (D-Oceanside). "It would seem to me that practices that have been in effect for decades with regard to health insurance need to be revisited."

For those who serve on boards strictly as volunteers, there are reasons other than health insurance to serve.

"We don't get compensation," said Frank A. Nocerino, chairman of the Republic Airport Commission, which meets six times a year or more. "All we get is abuse," he said, laughing.

But, he quickly added, "It's because we want to do the right thing for the community."

Copyright 2007 Newsday Inc.

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