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Hevesi
Proposing New Rules
That Could Affect RIOC
by Erik Kriss in
Albany
The Roosevelt Island Operating Corporation would have to create more
detailed budget plans and open them to public scrutiny under regulations
State Comptroller Alan Hevesi proposed recently.
RIOC is among 215 State and regional public authorities that would have
to report detailed financial information regularly and follow accepted
accounting and investing standards under the proposed rules.
"It is absolutely absurd that these public authorities are still not
answerable to any public body, and that, even after all the
irregularities we have uncovered, there remains no central accounting
for the billions of dollars that flow through these entities," Hevesi
said, in announcing the proposed rules. "The public deserves to know how
all this money is being spent and whether decisions are proper and
appropriate."
Hevesi’s proposed regulations, published in the December 7 issue of the
New York State Register, are subject to public comment until January 23
and could be altered before being adopted, perhaps not for another six
months.
Governor George Pataki’s administration has questioned whether Hevesi
has the power to impose regulations on public authorities.
The proposed rules would require the authorities to:
- Develop and make public annual budgets and
four-year financial plans, adhere to generally accepted accounting
principles, and provide detailed estimates of revenue and spending,
plus quarterly updates.
- Develop written investment policies, review
them annually, and follow "prudent investor standards."
- Establish a "pre-qualified" list of potential
vendors.
Steve Marcus, president of the Roosevelt
Island Residents Association, welcomed Hevesi’s proposal. "More
transparency is good," Marcus said. "We have very little
transparency at RIOC. Anything that will force them to look into the
future and plan for future requirements is also good."
RIOC President Herbert Berman said the Corporation will adhere to
whatever the law may be. But he said that, as things stand, anyone
can obtain, under the state Freedom of Information Law, RIOC’s
annual budget, which is approved in a public forum. He said RIOC
develops multi-year capital plans and already adheres to generally
accepted accounting principles. And he said the investment
guidelines should not apply since RIOC only invests reserve money.
But Marcus said that, at last count, RIOC had at least $7 million in
reserves, a sum he said could grow to $18 million in the near future
based on a payment involving the Octagon development.
Berman also was not enthusiastic about the idea of required
quarterly revenue and spending updates or a pre-qualified vendor
list.
"For a small corporation like us, that would be something of a
burden," said Berman, noting that RIOC’s annual budget is only $13
million to $15 million. "The only thing I would say is, have mercy
on the small guys like us."
David Bauer, a retired city manager and founder of Roosevelt
Island’s Maple Tree Group, which has called for elected resident
governance on the Island, said it’s important to make budget
proposals and annual reports "immediately available to the
citizens," and to give them the opportunity to "review and comment
on those plans, both before implementation and upon the results
accomplished." He added, "In the case of the Roosevelt Island
Operating Corporation, none of these things pertain. The budget
proposals are not made available to the affected public, except as
part of a fast-moving slide show which does not show enough detail
about the anticipated activities to be funded," Bauer added. "The
annual reports are late and neither identify nor quantify the
accomplishments resulting from the expense. The only public hearing
and comment comes after decisions are made, more or less as an
afterthought at the end of meetings which are punctuated by
‘executive sessions’ of indeterminate length, having the effect of
discouraging even token public attendance."
Both Bauer and former Residents Association President Matthew Katz
said giving Island residents the right to elect the people who
govern them is still the only real solution to the Island’s
problems.
Hevesi said the proposed regulations are modeled on those he
developed for the Metropolitan Transportation Authority in the wake
of an investigation by his office that accused the MTA of hiding
$512 million to justify a fare hike.
"I think there is a need," Charles Brecher, research director for
the watchdog Citizens Budget Commission, said of regulating public
authorities. "How well what he proposes addresses it I’d have to
study, but it is important."
Hevesi acknowledged that Pataki administration officials question
his constitutional and statutory authority to impose regulations on
public authorities. "There are some in the Division of the Budget
that don’t like to see the comptroller’s office pushing the
envelope," Hevesi said. "Do we push the envelope sometimes? Yeah,
within the authority of the law."
"The Comptroller made some positive suggestions, which we will
certainly take under advisement," said Pataki spokesman Kevin Quinn.
"However, we remain unconvinced that he has any actual legal
standing to require these changes."
The governor is expected to sign into law a public authorities
reform bill he proposed and the Legislature passed in June.
Hevesi was asked why it took him so long to propose authority rules.
"I needed an awakening, and it took awhile (to see) how bad our
system of authorities is," he said, noting that the 215 authorities
he studied, plus 40 others he surveyed, have run up $125.3 billion
in debt, costing $5.48 billion annually in interest. In all, the
State has more than 700 authorities.
Hevesi said New Yorkers spend more than 6.5 percent of their gross
personal income to pay off State debt, most of which is authority
debt. He argued the number should be 5% or lower.
And he noted spending and interest payments by the 255 surveyed
authorities has jumped 10 percent over two years.
Hevesi has the power to approve contracts for the Thruway and Long
Island Power authorities, but would need a State law for the power
to approve other authorities’ contracts. |
