Code of Ethics Passed by Town Board - Jack Conway

Last night the Town Board passed a new Code of Ethics by a vote of 5-0. It includes a financial disclosure requirement that is reasonable and, if correctly monitored, will protect residents from most financial conflicts of interest.  The new Code includes much of what was in the version drafted by the original Board of Ethics but the sections on nepotism and post-employment restrictions have been watered down to the point that there is little or no protection in those areas.  All in all, though, it is a Code well worth having and the board should be congratulated for making it the law of the town.  Improvements will have to be made over time but it's a very good start

It took three years to get this Code passed but as the German sociologist Max Weber said "Politics is slow boring in hard wood."  It probably shouldn't have taken this long but it was worth the wait to get a Code that could be backed by the full board.  The original members of the Board of Ethics - Joe Slater, David Youmans, Jim Breig and Justine Spada - did a great job and deserve our gratitude.  The members of the public who attended meetings and made invaluable suggestions - Ray Mooney, Pete Stenson, Eileen Grant, Ed Gilbert, Tom Grant and others - also deserve a vote of thanks.  Thanks also to all the bloggers who remained concerned about this issue and helped keep it in the public eye.  Thanks to the Gadfly for printing all of my ravings about the Code.

Rick Matters and Keith Langley supported the draft prepared by the Board of Ethics from the start and managed to put that version into the public record, a move that kept the issue alive and before the public.  Their decision to make it a central issue in this Fall's campaign created pressure that helped the final Code become law.  Ginny O'Brien, Sue Mangold and Phil Malone worked with Joe Liccardi to produce the version that is now law.  Their revisions were carefully considered and respectful of the original draft in most respects.  On a personal note I owe Ginny O'Brien a debt of gratitude for appointing me to the Board of Ethics and then giving me the space to work independently and to the best of my ability.  Last night was her last town board meeting after twenty-five years of public service.  Since she brought me into the process I was glad she was there to cast a 'yes.'  I wish her all the best.  Slan go foill Ginny.

How about some opinions on last night's Board meeting. From what I hear, I'll ask you to keep it clean.

The previous post has become a comment on the previous thread.

The 2014 Tentative Budget by Dwight Jenkins

In case you haven't reviewed the Supervisor's Tentative Budget yet, here is the link to it: http://eastgreenbush.org/downloads/cat_view/43-comptroller

Now that you've had a chance to look at it, I'm just wondering if any of the following items jumped out at you or made you wonder. This is not an exhaustive list, feel free to chime in with your own observations. (Water and Sewer funds have not been reviewed.) Maybe one of the readers will be able to fill in some of the gaps, because the budget is important. It looks like the Supervisor has tentatively found a way to keep things moving in Town without making us pay more. Of course, there are a number of steps that still remain in the process before the budget goes from Tentative to Actual, and that's why this is the time to begin talking about it. When it comes time for the Public Hearing and the election you want to be as informed as possible. Hopefully this post is a small part of that preparation. In no particular order:

There's a separate expense line this year called "Library-2012 Arrears" for $40,160.  Arrears for what? 

The Bruen (East Greenbush Ambulance) tax levy remains the same as last year at $671,913. Estimated revenue is $400K, also the same as last year, but this is $330K DOWN from the previous 2 years, and the tax levy is about $330K more than in those previous two years. Why? Bruen revenues are basically down 50% while tax levies are up 50%. What changed in 2 years?  

And why doesn't Bruen provide the same level of detailed information that the rest of the budget provides? At least with the library you can go to their outdated web site of proposed budgets  (the last budget info on the site is the "proposed" 2013 budget, produced in September 2012) and see some potentially important things. You get nothing from Bruen except a page at the end of the tentative budget showing no expenditures except Contractual Expenses (which are up $160K from 2012), Workers Comp and LOSAP retirement expenses. There must be more. And look at Bruen's Revenue: their property tax revenue went up $196,000 from 2012, and ambulance charges more than doubled in that time, from $191K to $400K. Notice also that 2012 final and 2013 projected lines show no LOSAP expenses. Why? Why? And why?
  
General Fund Expenditures:  Independent auditing is still budgeted even though they haven't produced a damn thing yet; the Tax Collector Personal Salary line shows the greatest increase of all the Town Hall positions: up about 7 or 8 % to $56,300 even though the salary of the tax collector is supposed to be $56,800. Where's the other $500 going?  And what has the position acquired in terms of duties to justify such a large increase?

The Attorney salary line is down $20K while the Contractual Expense line is up $11.7K. Why?

The Data Processing salary line is down $3K but Contractual Expenses are up $20K. Why?
  
Judgment and Claims CE (hired attorneys?) went from $92K in 2012 to a projected $23.00 (yes, $23.00) this year, but projected to be $20,000K next year. Why?

We have a Contingency fund of $110,00 this year- none last year or 2012. That's good.
You never know what life is going to throw at you.


Association of Towns meeting expenses will be cut by 2/3 if the Supervisor has his way, from $5.5K to $2K.


Assessor salary and Contractual Expenses lines both show decreases, with CE down by $65K. Why?

Parks/Playground Salaries and CE consume more than $200K a year. Seriously?

Youth Programs eat up $90K a year.  Are we getting a good return on this? Are we changing lives? Maybe yes, maybe no, but it's a lot of money and the question needs to be asked.

Beautification of the Town and Band concerts get only $1,000. Veterans get $3K and the elderly get $4,500. Given the above Parks/Recreation/Youth expenditures, these 3 pittances stand out as way different. A lot.

Planning Dept. Contractual Expenses are massively down this year (to $0) from last year's $95K and projected to be only $34K next year. Why?


State Retirement is up from $149K last year to almost $484 next year. Fire and Police Retirement similarly go from $181K last year to $582K next year. Social Security contributions, a measure of wage increases or an increase in the numbers of employees, have remained fairly steady, hovering around $300K. So why the big increases in the other things?


Health Insurance Longevity Buy-Out is cut in half next year, down $47K.


Bond Anticipation Payments (debt) are dramatically down this year and next, from $108K to $20K. Why?

The Total salary line is fairly steady at about $4 million, while benefits are up by about $700,000.

Total Revenues are down $130,000 from last year, and more than $600,000 from 2012. It seems we are stagnating, maybe even contracting.  Safety inspection fees are down by half, Planning Board fees (for filings ) are down by 25%. In a growing economy these numbers would be going up, not down.

Scrap metal sales are down about 50% both this year and next. People might be doing their own scrapping to make a few bucks.  Doubtful that scrap price per ton is down that much...but maybe. Worth mentioning, given the Town's sketchy scrap past.


County sales tax revenue is projected to be up $100K next year. This is a good thing. 

Finally, on the bottom line of the Revenue page: we showed a net surplus of $937,775 in 2012, and we are projecting an even bigger surplus of $1.1 million this year, with next year slated to be $0. So where's the extra money been going for the last two years? Debt payments are down, a lot. Go back and look at previous years' General Fund surpluses: $431K in 2009; $113K in 2010; $153K in 2011; $937K in 2012, with this year slated to be even bigger. How is this possible? And don't forget, 2012 was the last year of the "State Aid" handout: $847,675 that year! This year it was only $6,048 and next year nothing. Somehow this tentative budget absorbs that blow and comes out smelling like a rose. And we've been collecting more than we're spending by what, 15% of our General Fund levies both this year and last, yet we're considered near bankruptcy (by one guy) and still a junk bond credit risk (by lots of guys) ? Something isn't adding up.

Here's where you help add to the questions, or add to the clarity of the 2014 Tentative Budget:

The Courage to Govern II

FROM THE TROY RECORD
Wednesday, September 18, 2013

US Prosecutor Says NY Corruption 'Rampant'
By Jake Pearson and Michael Gormley
The Associated Press

NEW YORK- U.S. Attorney Preet Bharara told a new state commission Tuesday that corruption in New York politics has created a "show-me-the-money culture" that's permeating state and local officials, both Democrats and Republicans, and has reached intolerable proportions.

"Public corruption, based on all evidence, appears rampant," Bharara told The Commission To Investigate Public Corruption  at its first public hearing. "And the ranks of those convicted in office have swelled to absolutely unacceptable levels." .... U.S. Attorney Loretta Lynch testified about "self-interest and double-dealing" in New York politics. She called for "truly transparent financial disclosure" by politicians to ward off conflicts of interest. She also called on honest politicians to report misconduct by colleagues. "I do think there is room for public officials who see this wrongdoing and who hear these conversations to step up," she said.
________________________________________________________

The article continues, but we can chew on just the first two paragraphs for a while because they apply so directly to East Greenbush. As you've read in these pages many times: If you don't nail it you license it. The U.S. Attorney notes that BOTH state parties are actively and willfully corrupt, with that corruption running down like dirty water into the surrounding cities, towns, and villages. Any surprises? Shouldn't be. We've seen years of corruption at every level of Town life exposed in these pages and others. Anything changed? Maybe some. Not enough. Notice the way Ms. Lynch called for  transparent financial disclosure among politicians. We've had an Ethics Law stalled for over a year on  this very issue, and here we have a U.S. Attorney telling us exactly what we already knew but didn't have the courage to do.

Notice also the call for "honest politicians" (if they exist) to step up and report suspected violations. Over the last several years the citizens of East Greenbush have pointed out countless examples of possible corruption and conflict of interest by the Majority party. (Both sides have held a majority in that time, though the Democrats have had the honor for most of it.) What has the Minority done with this power? Almost nothing. There was one notable exception when the Democrat Minority actually brought a case to court over what they perceived to be wrong: the infamous "Double-Dipper" case. Regardless of the merits, the Minority at that time showed enough courage to spend the money and the political capital to go out on a limb for what they thought to be right. They won, and eventually won their Majority back as a result. But usually the Minority has left it to ordinary taxpayers to pursue honest government and political accountability on their own. In many cases the Minority has even gone so far as to turn on the very citizens doing the job that THEY should be doing! Obviously it doesn't work that way, and the U.S. Attorneys quoted in this article know that. They are specifically calling on the Minority Party to have the courage to govern. Town Hall, Candidates: You don't need a Majority... you just need a little courage. So far this year Mrs. Matters leads the pack in that category.

The Courage to Govern

In September of 2010, the truncated Town Board (McCabe, O’Brien and Matters), after several attempts to get it right, passed a retirement incentive to allow 5 insiders to retire early with full pensions.  The initiative cost taxpayers $500,000 – paid to the retirement system.  The initiative was, by law, supposed to save taxpayers 25% of the salaries eliminated in each of the next two years.  The Board pledged that it would save more.  I believe that there was also supposed to be a report.  We never heard any more about it, even though the question was raised from time to time, and one “Einstein” suggested on the blog that the report wasn’t for the people and that I should FOIL for it.  Well, I did FOIL.  Here’s the correspondence:

“Sent: Friday, August 02, 2013 4:12 PM
To: Keith Langley ; Linda Kennedy ; Kim Carlock
Subject: FOIL
Some time ago the Town spent $500,000 to fund an early retirement
incentive program for certain employees.  One of the provisions involved
in that action required a report on the savings achieved as a result of
that early retirement action.  Under the provisions of the Freedom of
Information Law, I am requesting any and all reports to any and all
governmental entities which document such savings. If such report(s) do
not exist, please advise.
Don Johnson

08/08/2013
Re: Foil
Mr. Johnson,
This is to inform you that we have received your request on 08/02/2013 for
Town records.
We have forwarded your request on to the Finance Department and the
Comptroller’s Office because these records are not in our office.
You will be able to obtain the requested records no later than 09/01/2013.
You will be notified by phone if the information you requested is available
sooner or by mail if they need more time.

If for any reason, any portion of your request is denied, the “denial of
Access” section of the Public record request will be completed in full and
returned to you.

You have the right to appeal any denial by writing to the Supervisor of the
Town of East Greenbush, 225 Columbia Turnpike, Rensselaer New York 12144.

Hi Don.
I wanted to let you know that we were unable to locate the records that you
were inquiring about. I know I said September 1st in my letter but I did not
take into consideration the Holiday. Have a good day.
Kimberly Carlock Deputy Town Clerk”

The Town Board(s) which were supposed to deliver on the legal requirements of the incentive, have basically given the people of the Town the Finger.  As Mr. Malone would say, “we’re the majority, and what we pass, passes.”

The Fiscal Advisers, the Bond raters, the OSC and the Independent Auditors all have basically the same litany of recommendations to get the Town out of the financial mess that it’s in.  These include a financial recovery plan, a hiring freeze, a workload analysis, a more intelligent budgeting process, accounting software, etc. But just like no report on the retirement incentive, we’ve seen NO action on the other generally accepted solutions to the financial difficulties. There will be no relief from the financial stresses which the Town faces until the people elected to govern muster the courage to stop the juvenile play-acting at government run a grown-up business-like operation.  This will take tough decisions in the interest of all the people and will require abandoning the parochial Party interests. 

Supervisor Langley's Advertiser Letter

East Greenbush’s Finances Remain Highly Stressed
 

Since taking office in 2012, I have attempted to lead the town board majority toward embracing an attitude of fiscal austerity where the town’s budget is concerned, especially in the area of spending.  I’ve encouraged a reduction in staffing, where appropriate, and have refused to backfill several positions in the department of public works which, alone, would have saved the town almost a quarter of a million dollars a year; however, as the expression goes, “you can lead a mule to water, but you can’t make it drink.”

These repeated savings could have been applied toward reducing the town’s inter-fund debt of over $2 million, which was incurred prior to my administration.  If applied toward the debt, which resulted from faulty fiscal gimmicks years ago, it could have been paid off in approximately half the time that it will now take.

Although I have done my level best to cooperate with the town board majority, my advice on fiscal prudence has apparently fallen on deaf ears as evidenced by the recent reports from numerous fiscal analysts who continue to warn the public of the precarious state of the town’s finances.  This includes the town’s current junk-bond status and the danger of bankruptcy.

Indeed, the failed fiscal practices of the past persist by the town board majority which has controlled our budgets for nearly three years.  This was underscored by the town’s recent financial audit by the State Comptroller, which found East Greenbush to be significantly stressed.

Currently, I am pushing hard to complete the independent, outside audit that I initiated last year.  Unfortunately, because of the poor condition of the town’s fiscal records going back to 2009, the town has had to hire another accounting firm to re-establish correct financial information so that the auditing firm can complete its work for the town.

The residents of East Greenbush deserve the truth about their town’s finances.  The willingness of the board majority to distort the true picture is a prime example of how East Greenbush got itself into such dire financial straights in the first place.

~Keith A. Langley, East Greenbush Town Supervisor

Some History on "Detroit East"

An Anonymous Blogger has been doing some homework on the Town's financial condition and has submitted the following for the edification of the Town's pocketbooks.  Everybody REALLY needs to put their thinking caps on and read this: 

"Maybe the recent media reports about East Greenbush following Detroit into bankruptcy have you wondering, "How could this be happening? Why haven't I heard anything before now?" Truth be told, this situation did not emerge from a vacuum, nor should you be surprised. What we're seeing is merely the bitter end to many years of foolish money games the town has played with our tax dollars. 

Would you believe that the accounting firm we contracted with in April of 2011 still can't come up with a successful audit of our 2010 books? Would you believe that we recently had to contract with the Town's old accounting firm to help the new accounting firm get a handle on what happened three years ago? Would you believe that the cost for this audit is now up to more than $70,000 between the two firms? Why? Because, as documented by the State Comptroller's audit, a private UHY LLP accounting audit, a Moody's Investor Services bond rating report, a Standard and Poor's bond rating report, and FAMI's (Fiscal Advisers and Marketing, Inc.) report...the people we pay to run our town have been squandering the money on themselves, their friends, and on bankrupt or non-existent policies. See, the game is rigged. The left wing of Town politics is in bed with Albany and the State; the right wing is in bed with Troy and the County. Unfortunately, the County is also in bed with the State. That leaves East Greenbush taxpayers sleeping on the floor because the politicians know that you probably aren't going to make a big deal about it. Or are you? See, we deserve better. We're a nice town and a nice place to live. What follows are merely a few telling snippets of truth about who we are, as seen by professional outsiders and unprofessional insiders. In all honesty, there seem to be precious few "good guys" in any of this. But you decide...

Town Board Resolution 31-2010, dated 1/13/10, really got the ball rolling after a series of politically damaging and embarrassing financial revelations and rumors. The resolution authorized Scott, Stackrow P.C. to perform a 2009 audit of the Town's books and put all this rumor-mongering behind us.  All council members voted yes. Scott, Stackrow subsequently must have voted NO on the project, however, because it wasn't until June that we suckered another firm into trying to clean up our financial mess. 

We got off to another false start with Resolution 40-2010, February 2010. Too bad it was tabled because it would have contracted BST Valuation and Litigation Advisers, LLC to prepare our 2009 AUD, or Annual Update Document, and begin phase 1 of a forensic audit to determine exactly where our money was going. It never happened. The Town Board was afraid of what would happen if you knew. It should not have been tabled, especially since February 2010 would be the last meeting of a full 5-member Town Board for the remainder of the year. By the following month a Democrat "double-dipper" lawsuit had prevailed, and council members Cristo and Danaher were no longer able to serve on the Town Board.  Resolution 51-2010 that same night authorized BST to prepare just the AUD, with no forensic audit involved. In other words, "Tell the State what we have to under the law, but keep the truth under wraps." We just reported a bunch of numbers and hoped for the best. We're still paying for that failed hope. See OSC's audit results below.

Also in early 2010, after having our bond rating fall into "junk bond" status, the Town engaged Fiscal Advisers and Marketing, Inc., a private financial advisement company, to give us a snapshot of where we'd been, where we are, and where we need to be. As part of their background information they included the Moody's downgrade report, pointing in particular to a ridiculous statement we made to the Moody's analysts: "The most concerning factor for the Moody's analysts was the Town's absence of a plan to stabilize operations... The Town stated that its only plan was to 'wait for the economy to turn around.'" That's the best we could come up with? 

 Our budgets- pitiful: "When comparing the 2008 budget to the actual results, we found that the Town was over $808,000 off in the budget projections. Revenues came in $178,000 below budget and expenditures came in $630,000 above budget. The result is that the General Fund deficit doubled to $1.68 million." Close enough for government work, yes? "The Town must reverse the damage that has been done to General Fund operations, and the Town's creditworthiness." Their first recommendation? Get an independent accounting firm to prepare our annual financial statements. Well, we tried that, but our records are so fouled that two and a half years later we're still waiting to see what happened, and we've had to bring in a second accounting firm to help us make sense of it all. And no, they're not doing it for free. We're paying about $30,000 more than expected for this independent audit. As for the nine other recommendations? I doubt we've managed to do two of them.

Resolution 99-2010 of May 2010's "rump board," brought by council member Matters and seconded by council member O'Brien, authorized the Town to contact the State Comptroller's office to get a legal opinion on the practice of questionable payments to town officials above and beyond their authorized salary (stipends, sick leave incentives, longevity pay). OSC did their review and condemned all three practices, but almost $200,000 of your money was effectively stolen by then. Sorry.

In June of 2010 we authorized an accounting firm, UHY LLP, to conduct an audit of the Town's 2009's financial statement. See the sickening results below.

Resolution 138-2010 of August, 2010 should perk your ears up. That's when the rump board voted to contract with a bankruptcy attorney! That's right, we consulted with special bankruptcy counsel Cristian Dribusch at $250/hour for a fee not to exceed a reasonable percentage of our "exposure." Seems our weenie was already showing back then, so the recent WNYT story is actually old news. Former Supervisor McCabe brought this bankruptcy-talk motion to the floor, and all three members of the rump board voted YES: let's talk about going bankrupt!

The September 2010 meeting saw the "Proud to be in East Greenbush" award go to Becker's Farm. If only Becker's could have planted the seed of fiscal responsibility in our Town Board members. Becker's is a successful, profitable business. We could learn how to run a town from them.

Resolution 161-2010, October 2010, saw the creation of an Ethics Board to update the Town's antiquated 1974 Ethics Law. The new Town Board carefully chose and empowered the members of the Ethics Board to craft an updated law, and almost three years later the Town Board continues to ignore the draft law presented to them, causing the chair of that Ethics Board to resign in protest last year. Are you beginning to see the pattern here?

Resolution 172-2010 in November, 2010 saw the newly constituted 5 member board accept the results of that UHY LLP audit and agree to make the report available to the public. Conveniently for some, this came just AFTER the elections so the voters didn't have a chance to know how bad things were: "Significant accounting and reconciliation entries are required to adjust the December 31, 2009 Annual Update Document... There is no systematic method of ensuring that timely and complete monthly reconciliation and closing procedures take place. Accounts receivable, accounts payable, compensated absences,  payroll and others were not reconciled on a systematic basis. This could result in significant errors in the financial records and financial statements  as well as allow irregularities, including fraud, to exist and continue without being identified promptly... No supervisory review of accounting transactions and month end reconciliations is performed.  This allows errors to exist within the books of account, and without subsequent correction they could continue to grow in magnitude." Are you beginning to see the pattern here?

Resolution 185-2010, December 2010, saw the new Board abolish the year old Finance Committee and replace it with a Citizens Fiscal Advisory Committee. The Finance Committee was peopled with people asking too many hard questions.  The CFAC was far more amenable to keeping things calm and quiet. Looming bankruptcy and bad financial reports didn't phase the CFAC nearly as much as they did the Finance Committee. Are you beginning to see the pattern here?

With Resolution 81-2011, April 2011, we contracted with Toski, Schaefer, and Co., P.C. to audit our books for 2010, 2011 and 2012. They are still not done- the books are either too mucked up to make sense of or too obviously corrupt for Toski to want to issue a report yet. Hence Resolution 67-2013, dated 5/15/13, authorized the Town to hire a Wojeski & Company (a firm that had handled our "audits" and annual State reports in the past) Certified Public Accountant at a 20% discounted rate of $104/hour to help Toski complete their 2010 audit. Not wanting to ruffle any feathers, both Councilperson Mangold and  Supervisor Langley went on record to state that none of these problems were a reflection on former comptroller Kate Bennett. Said Mr. Langley: "It is an accounting process that has to be worked through." See? It's nobody's fault! It's just a numbers thing! Are you beginning to see the pattern here?

In November 2012, conveniently just after the elections again, the State Comptroller's office released the results of its 1/1/10 - 10/31/11 town audit. The report was bleak:  "Due to the poor condition of the Town's records, we were unable to determine the exact amount of the fund deficit as of December 31, 2009. To get an estimate of the Town's financial position, we started with the unaudited fund deficit amounts for the general and highway funds that were reported to OSC on the 2009 AUD.... (In other words, things were so bad they didn't know where to start, so they started with what we sent to them for 2009, but we know from the private audit of 2009 that what we reported was garbage! It didn't even include our fuel usage, which added up to about $400,000 the previous year! ) ...Over the last several years, the Town has experienced significant signs of fiscal stress and deteriorating financial condition. The Town's accounting records were not accurate and, therefore, did not provide Town officials with the information necessary to evaluate the financial position of the Town's general and highway funds. Due to the poor condition of the Town's accounting records, Town officials could not determine with any degree of certainty what the Town's fund balances were at the end of the 2010 fiscal year or for most of 2011." The Comptroller and Supervisor were both singled out, by title, as responsible. Page 16 actually states that the town should consult legal counsel and recoup the $39,000 in illegal sick leave incentives and longevity payments made to the Receiver of Taxes and the former Supervisor. Councilman Malone recently went on television to state that it would not be cost effective to go after this money. 

So there you have it. This is why a respected economist and contributor to The Wall Street Journal pointed to East Greenbush as one of the top 20 municipalities in the nation he expects to see join Detroit in declaring bankruptcy. At least now you'll know why your house won't sell and your taxes are going up next year. Maybe you'll want to contact your Supervisor or other Town Board member to discuss these things? You're footing the bill, after all, again and again and again."