New York State Comptroller Thomas P. DiNapoli issues report on local governments identified as under financial stress

Urging local communities to engage in more long-term planning, on September 27, 2019 State Comptroller Thomas P. DiNapoli issued reports concerning 25 local governments in fiscal stress identified under DiNapoli's Fiscal Stress Monitoring System (FSMS). Included are eight counties, nine cities, seven towns and one village. Ten of those municipalities are in the highest ranking designation of “significant fiscal stress.”

The Comptroller said “For those in fiscal stress, effective long-term planning is critical for charting a better path. These municipalities should use the tools my office provides and engage the public in those difficult, but important, discussions about community priorities.”

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The latest round of scores, released today, are based on financial information reported to DiNapoli’s office by local governments operating on a calendar year basis (Jan. 1 – Dec. 31). In New York that includes all counties and towns, 44 cities and 10 villages.

Eight municipalities designated to be in “significant fiscal stress” in this scoring round are in the same category for the second year in a row. They are: the large downstate counties of Nassau, Suffolk and Westchester, the cities of Niagara Falls and Poughkeepsie and the towns of German Flatts, Parish and Oyster Bay. The city of Elmira and the village of Islandia were designated as being in “significant fiscal stress” for the first time.

Monroe County and the town of Clarkstown are designated as being under “moderate stress” in 2018. The counties of Broome, Franklin, Montgomery and Onondaga, the cities of Plattsburgh, Albany, Glen Cove, Little Falls, Watervliet, Tonawanda  and the towns of Dayton, Colonie and Little Valley were designated as being “susceptible to fiscal stress.”

DiNapoli’s monitoring system, implemented in 2013, evaluates local governments on financial indicators and creates fiscal stress scores. Indicators assess year-end fund balance, cash-on-hand, short-term borrowing, fixed costs and patterns of operating deficits. The system also evaluates information such as population trends, poverty and unemployment in order to establish a separate “environmental” score for each municipality which can be used to help describe the environment in which these local governments operate.

In March, DiNapoli issued scores for all non-calendar year local governments, mostly villages, and found seven villages and three cities in fiscal stress.

The Comptroller also released a reporton the challenges faced by local governments in stress. The report looked at all 35 local governments in stress, regardless of when their fiscal year ended and found:  

Cities were the most likely to be in fiscal stress in FYE 2018. Almost 23 percent (12 out of 53 cities scored) were designated in some level of fiscal stress, up from 14.5 percent (eight of 55 scored) designated in stress in FYE 2017.

Counties also had a relatively high rate of stress, with just over 14 percent (eight of the 56 counties scored) found to be in some level of fiscal stress in FYE 2018. However, this is a decrease from the nearly 18 percent (10 of 56 scored) in fiscal stress in FYE 2017.

Only seven of 853 towns scored (less than 1 percent) and eight of 485 villages scored (less than 2 percent) were in fiscal stress, which is similar to FYE 2017 results.

This year, more local governments did not file their financial data with the Comptroller’s office in time to be included in the fiscal stress scores (139 in total), including the cities of Ithaca, Syracuse and Newburgh, which had each filed for FYE 2017.

The report also points to useful tools to help local governments experiencing stress, such as multiyear financial planning, to ensure that financial resources are available for future needs.

Most local governments (almost 98 percent of those that filed) were not in a stress category. However, a “no designation” rating does not necessarily indicate an absence of fiscal stress. Local officials should review their FSMS results, including performance on individual indicators, to identify potential risk areas and develop a plan to address problem areas.

For a list of municipalities in stress for fiscal year ending in 2018:

https://www.osc.state.ny.us/localgov/fiscalmonitoring/localgovernments/pdf/2018/munis-stressed.pdf

To sort fiscal scores by year and entity name, visit:

http://wwe1.osc.state.ny.us/localgov/fiscalmonitoring/fsms.cfm

For more detailed information about the Comptroller’s fiscal stress monitoring system, visit:

https://www.osc.state.ny.us/localgov/fiscalmonitoring/index.htm

For municipalities that have not filed or designated inconclusive, visit:

https://www.osc.state.ny.us/localgov/fiscalmonitoring/localgovernments/pdf/2018/not-filed.pdf

Arbitrator's consideration of "past practices" in resolving a collective bargaining dispute may be limited

A collective bargaining agreement between the School District [District] and the Teachers Association [Association] provided that "covered teachers shall be paid graduate hour compensation ... for additional study approved by the chief school administrator" up to a specified maximum number of semester hours beyond the bachelor's degree.

The Association filed a contract grievance on behalf of a number of teachers after the District refused to pay the teachers for graduate study hours earned prior to their employment by the District.

The contract was silent with respect to payment for "pre-employment" graduate study. An arbitrator, however, decided that these teachers should be paid for graduate study credits completed before they were hired by the District because of the District's "past practice" of granting "salary enhancement to newly hired teachers."

Supreme Court vacated this arbitration award, and the Association appealed. The Appellate Division affirmed the lower court's ruling to deny payment for graduate credits earned prior to employment by the District.

The Appellate Division explained that past practices may be considered by an arbitrator only when interpreting a specific contractual provisions covering the issue in dispute or when the agreement expressly allows for the consideration or  inclusion of past practices in fashioning a remedy.

Here the controlling collective bargaining agreement did not provide for the inclusion of benefits characterized as based on past practices. Furthermore, the arbitrator acknowledged that the agreement did not cover the situation before him.  Noting that the agreement "expressly provides that an arbitrator's decision shall be final and binding only as to the interpretation of the contract," the Appellate Division said that it was not persuaded by the Association's contention that the arbitrator "merely considered past practices as an aid to interpretation of the contract."

Rather, the Appellate Division decided that the arbitrator's decision "derived not from the contract ... but, rather, apparently from his deliberate and intentional consideration of matters dehors [i.e., is foreign to] the contract" and dismissed the Association's appeal.

The decision is posted on the Internet at:

https://www.leagle.com/decision/19971086238ad2d8481284

Controversy surrounds a whistle blower complaint reported to have been filed by a federal employee

New York State's §75-b of the State's Civil Service Law bars a public employer's taking “adverse personnel actions” against a public employee if the employee reports what he reasonably believe to be a violation of a law, rule, or regulation by his public employer to a governmental body.* However to come within the ambit of  §75-b, the employee must:

[a] Initially provide the information concerning the alleged violation to his appointing authority or the appointing authority's designee,** or have made a “good faith effort” to do so;

[b] Allow a “reasonable period of time" for the appointing authority to take appropriate action unless there is an imminent and serious danger to public health or safety; and

[c] In the event such an "imminent and serious danger" situation exists, the individual must report the alleged violation to a “governmental body".

Links to whistle blower cases posted in NYPPL

Arbitrator’s refusal to hear employee’s “whistle blower” defense in the course of disciplinary hearing requires the vacating of the award

Constitutionally protected speech of public officers and employees

Disclosing information that a "whistle-blower believes constitutes an improper governmental action

Employee alleges his termination was in violation of Civil Service Law §75-b, the so-called public employee Whistle Blower Law.

Federal whistle blower protection against retaliation is not triggered unless the individual complies with the procedures set out in the controlling federal law, rule or regulation

Free speech and whistle blowing

Protected speech vs. whistle blowing

Provisional appointee covered by the State’s “Whistle Blower Law”

United States Supreme Court distinguishes a law from a regulation for the purposes the federal whistle blower statute

Where the collective bargaining agreement so provides, an allegation that the employer violated the “whistle-blower” statute is adjudicated in accordance with the terms of the agreement 

Whistle blowing

Whistle blowing – complaint of retaliation

* Labor Law Article 20-c, Retaliatory Action By Employers, provides similar protections to employees in the private sector. See, also, New York City’s Administrative Code §12-113.

** The general rule is that an individual is not required to exhaust the available administrative remedy where such action would constitute an exercise in futility. Typically the courts apply this exception in situations where it determines that the administrative decision "is a foregone conclusion." See Gaffney v Addison, 132 AD3d 1360.

Concerns about Telecommunications, Electromagnetic Fields, and Human Health

Concerns about Electromagnetic Fields [EMFs] have been noted, most recently related to expanding of 5G antenna networks that are speeding up internet service in communities.  An article addressing this issue by Dr. Robert Michaels [bam@ramtrac.com] has been published in the Environmental Claims Journal. An abstract of the article is set out below:

Abstract

Telecommunication generates electromagnetic fields (EMFs) at radio and microwave frequencies.  Transmitters have proliferated with siting of wireless communication networks, often co-located among other transmitters.  ‘Cell’ phones also have proliferated, representing small transmitters used in contact with human heads, and stored on human bodies.  Telecommunications equipment is ubiquitous, and EMF exposure prolonged, raising the issue of possible health risks.  Such risks, if any, must be managed.  For example, epidemiology studies reported higher exposure to analog cell phone EMFs among brain cancer patients than among controls, but those risks were ‘managed’ via replacement of analog phones with today’s digital phones, which have not been associated with human cancer.  

Challenges remain, recently from rodent bioassays that show dose-related association of lifetime exposure to cell-phone-type EMFs with heart schwannomas (cancers of schwann cells, which insulate nerve cells) in male rats, though not females.  Human cancer risk, if any, remains to be characterized and quantified, which partly will depend upon whether EMFs indeed are non-ionizing as has been assumed, and whether a threshold or non-threshold (genotoxic) mechanism caused the cancers in the male rats.  Health concerns have motivated further exposure reduction suggestions, and sometimes opposition to siting transmitters.  

Credible, objective explication of technical information to primarily non-technical audiences is necessary to support informed public participation and dispassionate weighing of telecommunications risks and benefits in community decision-making.  

Ultimately, experts and non-experts should adhere to the ‘precautionary principle’, requiring adoption of reasonably (but not excessively) pessimistic exposure and risk assumptions, whether or not they are likely to materialize.

The full text of article can be downloaded at no charge from Research Gate via the following URL:  

https://www.researchgate.net/publication/331747414_Telecommunications_Electromagnetic_Fields_and_Human_Health.

New York State Comptroller Thomas P. DiNapoli Releases Audits

On September 24, 2019, New York State Comptroller Thomas P. DiNapoli announced the following audits and examinations have been issued.

Office of General Services (OGS): Compliance With Executive Order 88: Energy Efficiency of State Buildings (2018-S-62) OGS has developed targets and plans to contribute toward EO 88 and complied with the guidelines. However, OGS relied on one project to provide the majority of its energy savings. This project has met criticism from environmental and community advocates because of health concerns related to the burning of natural gas, and its implementation is currently in doubt. Should the project fail to move forward, it is unlikely that OGS will meet its goal of reducing energy usage by 20 percent.

Department of Health (DOH): Managed Care Organizations (MCOs): Payments to Ineligible Providers (Follow-Up) (2019-F-2)

An initial audit released in February 2018 found MCOs improperly paid $50.3 million to providers who were excluded from the Medicaid program or who were otherwise ineligible to receive Medicaid payments. Auditors also identified 22.5 million MCO claims (totaling over $2 billion) that lacked the provider identification information needed to assess the propriety of payments. In a follow-up, auditors found DOH officials made some progress in addressing the problems identified in the initial audit.

Division of Homeland Security and Emergency Services: Continuity of Operations Planning (COOP) (Follow-Up) (2019-F-13)

An initial audit issued in March 2018 examined the adequacy of state agencies’ continuity of operations planning for major unexpected events. Auditors tested a sample of 11 agencies, finding they had incorporated certain essential features of the COOP best practices endorsed by the division. Auditors also identified some opportunities for improvements. In a follow-up, auditors found the division implemented the recommendations in the original report.

Division of Housing and Community Renewal (DHCR): Enforcement of the Mitchell-Lama Surcharge Provisions (Follow-Up) (2019-F-9) An initial report issued in April 2018 found DHCR in general properly assessed surcharges at Mitchell-Lama housing developments, but there were significant deficiencies in the processes used. In a follow-up, auditors found that DHCR has made some progress in addressing the issues previously identified.

Office of Information Technology Services (ITS): Oversight of Information Technology Consultants and Contract Staffing (2018-S-38)

In general, ITS is monitoring IT services procured from consultants and contract staff to ensure compliance with contract terms and deliverables. For 14 of the 20 contracts reviewed, ITS provided adequate oversight to ensure that the contractor or consultant was fulfilling the contract. For the remaining six contracts, for which ITS paid out more than $156 million, there were deficiencies in contract monitoring – primarily of contractors’ reporting and documentation requirements.

Department of Labor: Examination of Unemployment Insurance Benefit Payments Jan. 1, 2018 – Dec. 31, 2018 (2019-UI-1)

Auditors identified 2,115 unemployment insurance overpayments totaling $788,487. Based on the findings, the department assessed penalties valued at $1,110,430 against certain claimants who received the overpayments. Auditors also identified 267 underpayments totaling $48,728.

Department of Labor: Restrictions on Consecutive Hours of Work for Nurses (Follow-Up) (2019-F-12)

An initial report issued in April 2018, found the department lacked policies and procedures to guide its complaint investigations, resulting in missing documentation, inconsistent application of the law, delayed investigations of state-operated facilities, and poor communication with complainants. In a follow-up, auditors found the department has made some progress in addressing the problems identified.

Metropolitan Transportation Authority (MTA): New York City Transit: Selected Safety and Security Equipment at Subway Stations (Follow-Up) (2019-F-7)

An initial report issued in April 2018, determined that preventive maintenance was not performed within the scheduled frequency levels set by MTA’s New York City Transit unit. Transit did not establish a timetable for preventive maintenance for intercoms passengers can use to obtain emergency assistance. Additionally, repairs were not always done on time. In a follow-up, auditors found the MTA made progress in addressing the problems identified.

Metropolitan Transportation Authority: Staten Island Railway (SIR): Selected Safety and Security Equipment at Train Stations (Follow-Up) (2019-F-8)

An initial report issued in April 2018, determined that SIR did not always perform the inspection and maintenance of security equipment on a timely basis. In September 2017, SIR officials developed a new maintenance procedure for security equipment. However, it was unclear if the new procedure included customer assistance intercoms. In a follow-up, auditors found that the MTA made progress in addressing the problems identified.

Department of Motor Vehicles: Assessable Expenses of Administering the Motor Vehicle Financial Security Act and Motor Vehicle Safety Responsibility Act for the Four State Fiscal Years Ended March 31, 2018 (2019-M-1)

Auditors performed certain procedures to ascertain the expenses the department incurred in administering the acts for the four State Fiscal Years ended March 31, 2018. On average, the department incurred $20.4 million in expenses to administer the acts for each year.

State Education Department (SED): Bilingual Care Inc.: Compliance with the Reimbursable Cost Manual (2018-S-51)

Bilingual is a New York City-based for-profit organization authorized by SED to provide preschool Special Education Itinerant Teacher (SEIT) services to children with disabilities who are between the ages of three and five years. In addition to the SEIT program, Bilingual operated one other SED-approved preschool special education program. For the three fiscal years ended June 30, 2015, auditors identified $370,685 in reported costs that did not comply with reimbursement requirements.

State Education Department: Audit of the Tuition Reimbursement Account (TRA) for the Five Fiscal Years Ended March 31, 2018 (2019-S-3)

The TRA’s financial statements represent, in all material respects, the respective financial position of the TRA for the five fiscal years ending March 31, 2018.

State Education Department: Springbrook NY Inc.: Compliance With the Reimbursable Cost Manual (2018-S-63)

Springbrook is an SED-approved special education provider located in Otsego County. Springbrook provides, among other programs, preschool special education services to children with disabilities who are between three and five years of age. For the fiscal year ended June 30, 2015, auditors identified $56,183 in ineligible costs that Springbrook reported for reimbursement. 

State University of New York: Oversight of Campus Foundations (Follow-Up) (2019-F-21)

An initial audit released in February 2018 found SUNY should improve its oversight of campus foundations. For example, it did not ensure each campus had an executed contract with its foundation or obtain and review available information that the foundations were required to have, such as the IRS Form 990. Auditors also identified certain questionable foundation expenses. In a follow-up, auditors found SUNY has made significant progress in addressing the problems identified.

Department of Taxation and Finance: Personal Income Tax and Property Tax (2019-BSE08-01)

In an examination of refunds and credits processed by the department from Jan. 1, 2018 through Dec. 31, 2018. Auditors returned 12,783 questionable or inappropriate refunds totaling $41.3 million to the department for follow up evaluation and appropriate action.  In addition, auditors returned 13,097 credits totaling $6.9 million to the department for follow-up and appropriate action.