Audits reports issued by New York State Comptroller Thomas P. DiNapoli

Audits reports issued by New York State Comptroller Thomas P. DiNapoli 

New York State Comptroller Thomas P. DiNapoli announced today the following audits have been issued:

Department of Health, Excessive Medicaid Payments for Services to Recipients Receiving Medicare Benefits (Follow-Up) (2012-F-29)
An initial audit report, issued in September 2010, examined whether DOH was correctly paying claims for services to Medicaid recipients who also had health insurance through Medicare. Auditors identified about $600 million in Medicaid payments that could have been avoided had DOH taken more comprehensive and proactive steps to administer Medicaid reimbursements for services provided to dual eligible individuals. In the audit just released, auditors found DOH and Office of the Medicaid Inspector General officials have made progress in correcting the problems identified in the initial report. All three prior audit recommendations have been partially implemented.

New York State Thruway Authority, Inspecting Highway Bridges and Repairing Defects (2012-S-33)
NYSTA is responsible for inspecting its bridges and repairing any defects found during inspections. If a serious (“red flag”) structural defect is identified during an inspection, NYSTA must notify the New York State Department of Transportation (DOT) within one week. NYSTA has six weeks to take appropriate action. In addition, NYSTA must provide DOT with the written determinations from bridge inspections within 60 days. Auditors found the authority repairs defects identified during inspections. However, highway bridges were not always inspected timely and DOT was not always notified of red flags within one week, as required.

Rochester-Genesee Regional Transportation Authority, Real Estate Portfolio (2012-S-90)
The Rochester-Genesee Regional Transportation Authority provides public transportation services in Monroe, Genesee, Livingston, Orleans, Wayne, Wyoming and Seneca counties. State law requires each authority to maintain adequate inventory controls for its property and report annually on all property held. It also requires authorities to determine which property shall be disposed of and transfer or dispose of such property as promptly as possible. Auditors found the authority has accounted for all of its property holdings and established a value for them. However, it owns two properties that have been identified as excess holdings for more than 14 years. Additionally, the authority did not accurately report its property holdings during the three years ended March 31, 2012.

Department of Environmental Conservation, Pollution Testing on Exhaust Emissions from Heavy Duty Diesel Vehicles (Follow-Up) (2013-F-3)
The initial audit report, issued in March 2010, examined whether DEC adequately fulfilled its testing program responsibilities for exhaust emissions. Auditors found DEC generally fulfilled its responsibilities but could improve by maintaining critical performance data and coordinating with DMV and DOT to ensure such data was maintained for all aspects of the program. Auditors also questioned whether DEC's coverage of inspection facilities was adequate. In a follow-up report, auditors found DEC officials have made progress addressing the issues identified in the initial report. Of the 12 prior audit recommendations four were implemented, five were partially implemented, and three were not implemented.

State University of New York, Fuller Road Management Corp., College of Nanoscale Science and Engineering - Network Security Controls (2012-S-28)
The college has a number of business relationships with both public and private organizations. As part of these relationships, the college facilitates the management and processing of financial, legal, research, and numerous other types of data. The New York Office of Cyber Security’s Information Security Policy defines a set of minimum security requirements that are considered best practices for all state entities, including SUNY campuses. Auditors found that in addition to the security measures established by the university, the college has implemented its own controls that protect the security of systems and data.

Department of Agriculture and Markets, Disposal of Electronic Devices (2012-S-70)
State policy requires all state agencies to establish formal procedures to address the risk that personal, private or sensitive information may be improperly disclosed. One way information can be compromised is through disposal of electronic devices. Auditors found that 15 of the 132 electronic devices readied for surplus by the agency still contained data, even though the department had certified that all memory devices had been removed. One of the hard drives contained personal, private and sensitive information related to an employee. The printer hard drive and cameras also contained retrievable data, and the cell phones had not been programmed back to their original manufacturer settings.

Capital District Transportation Authority, Real Estate Portfolio (2012-S-91)
The authority’s primary responsibility is the management of the capital region’s bus services. State law requires the authority to report its real property holdings, listings of properties purchased or sold and its sale/lease procedures annually. The authority has a real estate portfolio that consists of nine properties/facilities. In connection with this portfolio, the authority reported that it has entered into 23 leases that generate about $808,000 annually. Auditors found the authority’s annual report for 2011-2012 omitted three properties. In addition, the three properties were not disclosed on the authority website and the report that was available on the website was not dated. The authority also could not document that it achieved fair market value for the properties.

Department of Transportation, Collection of Lease and Permit Revenues (2012-S-6)
DOT has land that it does not use continuously. Interested parties can pay a fee for a permit to use such land temporarily. Auditors found DOT is not effectively collecting all unpaid lease and permit fees. As of May 2012, DOT was owed $6 million in lease and permit revenues, including $2.4 million between two and six years past due and another $1.4 million at least six years past due. In total, 195 permits were more than 30 days past due. Of 45 sampled permits which had outstanding balances, no action was taken on eight. These eight permits had a total of $417,000 outstanding at the time of the audit.

Statewide Travel Audits
As part of a statewide initiative to determine whether the use of travel money by selected government employees was appropriate, auditors looked at travel expenses for the highest-cost travelers in the state for the following state entity:

State University of New York, College at Plattsburgh - Selected Employee Travel Expenses (2012-S-141)
Auditors examined the travel costs of two college employees with $194,805 in travel costs. Most of the expenses examined were appropriate. However, one faculty member charged the College for $708 in expenses that were not related to official business and used his travel card for $177 of other inappropriate expenses.

For other recent audits, including those on travel, go to: http://www.osc.state.ny.us/audits/auditDateList.htm  

An appointing authority’s threatening to take adverse personnel action against an employee that it has a legal right to undertake does not constitute duress

An appointing authority’s threatening to take adverse personnel action against an employee that it has a legal right to undertake does not constitute duress 

2013 NY Slip Op 03252, Appellate Division, Fourth Department

Supreme Court determined that the resignation of a tenured teacher [Educator] formerly employed by the school district, "was involuntarily submitted as a result of fraud, coercion and duress" and directed Educator’s reinstatement with back pay and benefits.”

The school district appealed and the Appellate Division reversed the Supreme Court’s decision, indicating that further consideration and evaluation of Educator’s allegations of duress by the Supreme Court was required.

Citing Gould v Board of Educ. of Sewanhaka Cent. High Sch. Dist., 81 NY2d 446, the Appellate Division said that as a general rule "A resignation under coercion or duress is not a voluntary act and may be nullified."

In contrast, the Appellate Division, citing Rychlick v Coughlin, 99 AD2d 863, affd. 63 NY2d 643, explained that "it has consistently been held that a threat to do that which one has the legal right to do does not constitute duress."

Stated in the alternative, as the Court of Appeals held in Abramovich v Board of Educ. of Cent. Sch. Dist. No. 1 of Towns of Brookhaven & Smithtown, 46 NY2d 450, motion to reargue denied 46 NY2d 1076, cert denied 444 US 845, "[a] person's resignation may not be considered to be obtained under duress unless the employer threatened to take action which it had no right to take.”

Further, said the Appellate Division, under "appropriate circumstances . . . a tenured teacher may, as part of a stipulation in settlement of a disciplinary proceeding brought against him [or her], waive his or her continued right to the protections afforded by §3020-a of the Education Law" provided that such a settlement is “voluntarily and knowingly made” in contrast to having been made "lightly, inadvertently, inadvisedly or improvidently….”

The Appellate Division ruled that under the circumstances Supreme Court should conducted a trial "to resolve the factual issue raised by the pleadings and affidavits concerning [Educator’s] allegations of duress and to make appropriate findings of fact before proceeding any further" and remanded the case to Supreme Court for that purpose.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_03252.htm

State Comptroller reports a returned 10.38 % on for the State’s pension fund Investments in FY 2013, currently valued at an all time high of $160 billion

State Comptroller reports a returned 10.38 % on for the State’s pension fund Investments in FY 2013, currently valued at an all time high of $160 billion

On May 13, 2013 New York State’s Comptroller Thomas P. DiNapoli announced that the New York State Common Retirement Fund (Fund) was valued at an estimated $160.4 billion and earned an estimated 10.38 percent rate of return on its investments for the fiscal year ending March 31, 2013.

“The New York State Common Retirement Fund has reached a milestone,” DiNapoli said. “The Fund ended the fiscal year at an estimated $160.4 billion, an all-time high, and it remains well-positioned for growth as the financial markets continue to gain strength. Fiscal year 2014-2015 will be the final year that employer contribution rates will reflect the market loss of 2008-2009.”

Returns for the Fund’s asset classes were:

• Domestic Equities returned 14.48 percent (at 36 percent of the Fund’s total investments)
• Fixed Income returned 4.87 percent (28.2 percent)
• Non-US Equities returned 9.47 percent (14.1 percent)
• Private Equity returned 11.75 percent (8.6 percent)
• Real Estate returned 11.08 percent (6.8 percent)
• Global Equities returned 13.88 percent (2.9 percent)
• Absolute Return Strategies returned 7.95 percent (3.2 percent)
• Opportunistic Alternatives returned 7.89 percent (0.2 percent)

The Fund is the third-largest public pension fund in the country and remains one of the nation’s best-managed and best-funded pension plans. In February, Funston Advisory Services completed an independent review of the Fund that found it is well-run, operates with an industry-leading level of transparency and invests effectively on behalf of its members.

The New York State and Local Retirement System provides benefits to over one million state and local government employees, retirees and beneficiaries. Over the last 20 years, 82 percent of the cost of benefits have been funded from investment returns.

Click herefor prior year returns.

NYPPL's Decision of the Week for the Week ending May 18, 2013 - Allegations of unlawful racial discrimination

NYPPL's Decision of the Week 
For the Week Ending May 18, 2013

Allegations of unlawful racial discrimination

This action was brought by the United States Department of Justice pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seg. and alleged that hiring of New York City firefighters was tainted by unlawful racial discrimination and that the New York City Fire Department’s employment procedures for screening and selecting entry-level firefighters had an unjustified disparate impact on black and Hispanic applicants.

The principal issues in this appeal were [1] whether summary judgment was properly entered against the City on a claim of intentional discrimination, [2] whether claims against the City’s Mayor and former Fire Commissioner were properly dismissed, [3] whether an injunction, based both on the finding of intentional discrimination and an unchallenged finding of disparate impact in entry-level examinations, is too broad, and [4] whether, in the event of a remand, the case, or some portion of it, should be reassigned to another district judge.

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term 2011

Heard: June 26, 2012 Decided: May 14, 2013

Docket No. 11-5113-cv(L), 12-491-cv(XAP)

- - - - - - - - - - - - - - - - - - - - -

UNITED STATES OF AMERICA, Plaintiff-Appellee, THE VULCAN SOCIETY, INC., MARCUS HAYWOOD, CANDIDO NUNEZ, ROGER GREGG, Intervenors-Plaintiffs-Appellees-Cross-Appellants

v.

CITY OF NEW YORK, MICHAEL BLOOMBERG MAYOR, and NICHOLAS SCOPPETTA, NEW YORK FIRE COMMISSIONER, in their individual and official capacities, Defendants-Appellants-Cross-Appellees, NEW YORK CITY DEPARTMENT OF CITYWIDE ADMINISTRATIVE SERVICE, NEW YORK CITY FIRE DEPARTMENT, Defendants.

Before: NEWMAN, WINTER, and POOLER, Circuit Judges

Appeal by the City of New York, Mayor Michael Bloomberg, and former Fire Commissioner Nicholas Scoppetta from the December 8, 2011, order of the United States District Court for the Eastern District of New York (Nicholas G. Garaufis, District Judge), issuing an injunction against the City with respect to the hiring of entry-level firefighters, and a cross-appeal by the Intervenors from the February 1, 2012, partial final judgment dismissing federal and state law claims against Mayor Bloomberg and former Fire Commissioner Scoppetta.

The City’s appeal also seeks review of the January 13, 2010, order granting the Intervenors summary judgment on their disparate treatment claim, which alleged intentional discrimination, and, on the appeal from the injunction, seeks reassignment of the case to a different district judge.

Summary judgment on the disparate treatment claim against the City is vacated; dismissal of the federal claims against Mayor Bloomberg is affirmed; dismissal of the state law claims against Mayor Bloomberg and Commissioner Scoppetta is affirmed; dismissal of the federal law claims against Commissioner Scoppetta is vacated; the injunction is modified, and, as modified, is affirmed; and the bench trial on the liability phase of the discriminatory treatment claim against the City is reassigned to a different district judge.

Affirmed in part, vacated in part, and remanded.

[Judge Pooler dissents in part with a separate opinion.]

The full text of the majority’s 59-page opinion, together with the 23-page dissenting opinion of Judge Pooler, is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/155a2259-8686-4d25-b6fc-6a56bd4db3e0/2/doc/11-5113_complete_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/155a2259-8686-4d25-b6fc-6a56bd4db3e0/2/hilite/

The provisions in a collective bargaining agreement that are otherwise controlling may be waived if the waiver is “knowing and voluntarily” made

The provisions in a collective bargaining agreement that are otherwise controlling may be waived if the waiver is “knowing and voluntarily” made

2013 NY Slip Op 03251, Appellate Division, Fourth Department

In September 2006 an individual [Educator] was hired as a probationary teacher by the school district. At the end of the three-year probationary period, Educator was notified that he would not be recommended for tenure by the Superintendent. In lieu of termination, however, the school district, the Educator and the Teacher Association entered into a Juulagreement,* which extended the probationary period for one year.

In Juul the court held that agreements to extend probationary periods are valid and enforceable when found to be a "knowing and voluntary waiver of the protections afforded by the Education Law."

When the agreement ended, the parties entered into a second Juul agreement that extended Educator's probationary period for a fifth year and in exchange for this extension the Teacher Association "waive[d] any right it may have to pursue a grievance under the collective bargaining agreement [CBA]” relative to the deferral of the Superintendent's tenure recommendation, [or] the termination of [Educator’s] employment."

As the end of his fifth probationary year approached, Educator was informed by the Superintendent that he would not be recommended for tenure and that Educator’s appointment as a probationary teacher with the school district would end on a specified date.

The Association filed a grievance on behalf of Educator contesting his termination under various provisions of the CBA. The school district denied the grievance and the Association served a demand for arbitration.

The school district filed a petition in Supreme Court seeking a permanent stay of the arbitration. The court, agreeing with the school district that a valid agreement to arbitrate this particular dispute no longer existed, granted the school district’s petition.

The Appellate Division affirmed the lower court’s ruling.

The court explained that there was not dispute that the arbitration of the claim with respect to the subject matter at issue is authorized under the Taylor Law. Here, however, in accordance with the applicable two-step inquiry to be made by the courts in such situations, it must next be determined whether "such authority was in fact exercised and whether the parties did agree by the terms of their particular arbitration clause to refer their differences in this specific area to arbitration"

It was also undisputed that, absent the second Juul agreement, Educator’s termination would be subject to the grievance and arbitration procedures contained in the CBA. Rejecting the Association’s argument to the contrary, the Appellate Division concluded that the second Juul agreement “clearly manifested an intent to exclude the subject matter of [Educator’s] termination, including the just cause, teacher improvement and code of ethics grounds advanced by the Association, from the provisions of the CBA relating to grievances and arbitration.”

Similarly, employees in the classified service of the State and public authorities, public benefit corporations and other agencies for which the Civil Service Law is administered by the State Department of Civil Service   faced with termination for not satisfactorily completing his or her probationary period may be offered the opportunity to serve a second probationary position in accordance with the provision of 4 NYCRR 4.5 [b] [5] [ii]). Many local civil service commissions have adopted a similar rule.

However this provision requires that the extended probationary term to be served in a different assignment.

This last point is illustrated by the decision in Civil Serv. Employees Ass'n, Inc., Local No. 1000, AFSCME AFL-CIO, Oxford Veterans' Home Local No. 305 v. Venugopalan, 228 A.D.2d 767. In Venugopalan a cook appointed to the position of chief cook and who was required to serve a probationary appointment of from 26 to 52 weeks. When the employee’s 52 week probationary period ended it was determined that his probationary period would be extended for an additional 12 to 24 weeks rather than reinstate him to the cook position.

The court ruled that this second probationary period was “unauthorized” as there was no change in the individual’s “assignment” and thus his appointment as Chief Cook  “ripened into a permanent appointment upon his retention in the position beyond the 52-week period of probation.”

* Juul v Board of Educ. of Hempstead School Dist. No.1, Hempstead, 76 AD2d 837, affd 55 NY2d 648

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_03251.htm

An employee’s satisfying the employer’s residency requirement is critical to his or her continuation in employment

An employee’s satisfying the employer’s residency requirement is critical to his or her continuation in employment

Matter of Adrian v Board of Educ. of City School Dist. of City of Niagara Falls, 92 AD3d 1272, affirmed.

The City of Niagara Falls’ Local Law No. 7 requires City employees to establish and maintain residency within the City throughout the term of their employment. "Residency" for the purposes of this action was defined as "the actual principal place of residence of an individual, where he or she normally sleeps; normally maintains personal and household effects; the place listed as an address on voter registration; and the place listed as his or her address for driver's license and motor vehicle registration, if any."*

The City determined that one of its employees [Petitioner] principally resided outside the City in the Town of Niagara. Concluding that Petitioner did not comply with its residency policy, the City terminated her employment.

Petitioner challenged the City’s decision. Supreme Court granted her petition and directed the City to reinstate her to her former position. The Appellate Division disagreed with the Supreme Court’s ruling and vacated its decision.

The Appellate Division found that the evidence relied upon by the City was sufficient to establish that Petitioner's "actual principal place of residence" was in the Town of Niagara [Niagara] and thus outside the city limits of the City of Niagara Falls.

The evidence presented to the City included an investigative report indicating that Petitioner resided at the Niagara residence, the address of the Niagara residence was listed on Petitioner's joint tax return with her husband, Petitioner's signature appeared on a recent mortgage application for the Niagara residence, Petitioner's husband and children resided at the Niagara residence and Petitioner’s children attend school in the Niagara-Wheatfield School District.

In addition, said the Appellate Division, “a surveillance company observed Petitioner on multiple occasions driving to work from the Niagara residence early in the morning and driving from work to the Niagara residence at the end of the work day, "whereupon she would retrieve the mail and park in the garage."

Petitioner had testified that she resided at a City address and that the City address was listed on various documents, including her voter registration records and her driver's license. Notwithstanding such testimony, the Appellate Division concluded that such "evidence was not so overwhelming as to support the [Supreme] court's determination granting [her] petition."

Citing Beck-Nichols v Bianco, 20 N.Y.3d 540,** a case involving a school district employee’s failure to comply with the district’s residence requirement, the Appellate Division said that under the "extremely deferential standard" of review applicable in Petitioner’s case, it concluded that the City's determination that Petitioner principally resides outside the City is not “without foundation in fact,” and thus the City had "rationally concluded that [Petitioner] did not comply with the residency policy."

The court then reversed Supreme Court's decision "on the law" and the dismissed the City's former employee’s petition.

* The Appellate Division noted that this “definition [of residence] is akin to, if not synonymous with, the legal concept of ‘domicile,’ i.e., ‘living in [a] locality with intent to make it a fixed and permanent home.’”

** NYPPL’s summary of Beck-Nichols is posted on the Internet at: http://publicpersonnellaw.blogspot.com/2013/02/court-of-appeals-holds-that-residency.html

The City of Niagara Falls decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_03230.htm

An employee’s satisfying the employer’s residency requirement is critical to his or her continuation in employment

An employee’s satisfying the employer’s residency requirement is critical to his or her continuation in employment

Matter of Adrian v Board of Educ. of City School Dist. of City of Niagara Falls, 92 AD3d 1272, affirmed.

The City of Niagara Falls’ Local Law No. 7 requires City employees to establish and maintain residency within the City throughout the term of their employment. "Residency" for the purposes of this action was defined as "the actual principal place of residence of an individual, where he or she normally sleeps; normally maintains personal and household effects; the place listed as an address on voter registration; and the place listed as his or her address for driver's license and motor vehicle registration, if any."*

The City determined that one of its employees [Petitioner] principally resided outside the City in the Town of Niagara. Concluding that Petitioner did not comply with its residency policy, the City terminated her employment.

Petitioner challenged the City’s decision. Supreme Court granted her petition and directed the City to reinstate her to her former position. The Appellate Division disagreed with the Supreme Court’s ruling and vacated its decision.

The Appellate Division found that the evidence relied upon by the City was sufficient to establish that Petitioner's "actual principal place of residence" was in the Town of Niagara [Niagara] and thus outside the city limits of the City of Niagara Falls.

The evidence presented to the City included an investigative report indicating that Petitioner resided at the Niagara residence, the address of the Niagara residence was listed on Petitioner's joint tax return with her husband, Petitioner's signature appeared on a recent mortgage application for the Niagara residence, Petitioner's husband and children resided at the Niagara residence and Petitioner’s children attend school in the Niagara-Wheatfield School District.

In addition, said the Appellate Division, “a surveillance company observed Petitioner on multiple occasions driving to work from the Niagara residence early in the morning and driving from work to the Niagara residence at the end of the work day, "whereupon she would retrieve the mail and park in the garage."

Petitioner had testified that she resided at a City address and that the City address was listed on various documents, including her voter registration records and her driver's license. Notwithstanding such testimony, the Appellate Division concluded that such "evidence was not so overwhelming as to support the [Supreme] court's determination granting [her] petition."

Citing Beck-Nichols v Bianco, 20 N.Y.3d 540,** a case involving a school district employee’s failure to comply with the district’s residence requirement, the Appellate Division said that under the "extremely deferential standard" of review applicable in Petitioner’s case, it concluded that the City's determination that Petitioner principally resides outside the City is not “without foundation in fact,” and thus the City had "rationally concluded that [Petitioner] did not comply with the residency policy."

The court then reversed Supreme Court's decision "on the law" and the dismissed the City's former employee’s petition.

* The Appellate Division noted that this “definition [of residence] is akin to, if not synonymous with, the legal concept of ‘domicile,’ i.e., ‘living in [a] locality with intent to make it a fixed and permanent home.’”

** NYPPL’s summary of Beck-Nichols is posted on the Internet at: http://publicpersonnellaw.blogspot.com/2013/02/court-of-appeals-holds-that-residency.html

The City of Niagara Falls decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_03230.htm

Where there is broad arbitration clause in the collective bargaining agreement, the arbitrator rather than the court is to determine if the subject of the dispute is arbitrable

Where there is broad arbitration clause in the collective bargaining agreement, the arbitrator rather than the court is to determine if the subject of the dispute is arbitrable

Ontario County v County Sheriff's Unit 7850-01, CSEA, Local 1000, AFSCME, AFL-CIO), 2013 NY Slip Op 03204, Appellate Division, Fourth Department

The Collective Bargaining Agreement [CBA] between Ontario County and the Ontario County Sheriff's Unit 7850-01 provided that disputes over the meaning or application of the CBA were initially required to be submitted through the contract's grievance process. In the event the employee was "not satisfied" with the result obtained through that process, the Unit could submit the matter to arbitration .

The Ontario County Sheriff's Unit 7850-01 [Unit] filed grievances on behalf of two correction officers whose request for a shift exchange was denied. Contending that the denial "[v]iolated or [i]nvolved" the clause in the CBA that addressed "time exchanged between employees," the Unit informed County of its intent to seek arbitration. 

The County thereupon filed a petition in Supreme Court pursuant to CPLR Article 75 to stay arbitration and the Unit "cross-moved" to compel arbitration.

Supreme Court denied the County’s petition and granted the Unit’s cross motion.

The Appellate Division affirmed the Supreme Court’s ruling, noting that “A grievance may be submitted to arbitration only where the parties agree to arbitrate that kind of dispute, and where it is lawful for them to do so." In this instance,” said the court, “the parties do not challenge the lawfulness of arbitrating the instant dispute and, instead, [the County contends] that there is no valid agreement to arbitrate the grievances at issue inasmuch as the CBA did not contemplate shift exchanges."

The Appellate Division rejected the County’s argument, explaining that in determining whether the parties agreed to arbitrate the dispute at issue a court’s review “is limited to the language of the grievance and the demand for arbitration, as well as to the reasonable inferences that may be drawn therefrom"

In this instance, said the court, there is “a broad arbitration clause and a reasonable relationship between the subject matter of the dispute and the general subject matter of the parties.” Accordingly, the court decided that the was arbitrable and it was left to the arbitrator to make “a more exacting interpretation of the precise scope of the substantive provisions of the [CBA], and whether the subject matter of the dispute fits within them.”

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_03204.htm

Governor Cuomo's financial restructuring proposal to assist distressed local governments

Governor Cuomo's financial restructuring proposal to assist distressed local governments

On May 14, 2013, Governor Andrew M. Cuomo issued a proposal to create a Financial Restructuring Board to help distressed local governments manage their finances. The proposal includes an alternative binding arbitration process that municipalities and unions could voluntarily opt for to resolve contract issues in an expedited procedure.

In the words of the Governor: "Growing retirement costs, declining populations, decreasing property values, and the recent fiscal crisis have all contributed to the difficult financial issues facing localities today …The Financial Restructuring Board will bring together state and local officials to help localities make tough decisions and solve this crisis now instead of kicking the can down the road."

More money is not the solution to help local governments solve their fiscal issues said the Governor. “The State's existing Aid and Incentives for Municipalities (AIM) program does not reflect local government need or performance, and already constitutes a large percentage of the budgets of New York's largest cities (outside of NYC)”

The proposal to help fiscally distressed municipalities includes the following elements:

Financial Restructuring Board: The Board would include the State Budget Director, Secretary of State, Attorney General, Comptroller, and one private sector restructuring professional. The Budget Director would establish standards to determine which local governments qualify as fiscally distressed. Fiscally distressed local governments would be able to request the assistance of the Board, and work together to identify a specific restructuring plan.

Implementing Restructuring Plan: The 2013-14 Budget includes up to $80 million to assist local governments with reorganization plans. Recommendations of the Board would be binding upon any municipality that accepts funding. The Board may require development of multi-year financial plans, functional consolidation, mergers, shared services, fewer elected officials, and other measures.

The Board would also serve as a binding arbitration panel: The Board would provide an alternative to the binding arbitration process for police, fire, or deputy sheriff unions if municipalities and unions agree. The Board would render an arbitration ruling within 9 months.

Employee terminated following a disciplinary hearing after receiving counseling memoranda regarding serious and specific deficiencies in her job performance

Employee terminated following a disciplinary hearing after receiving counseling memoranda regarding serious and specific deficiencies in her job performance

Kuznia v Adams, 2013 NY Slip Op 03369, Appellate Division, Third Department

An individual [Petitioner] commenced her employment with the County Probation Department in 1979 and in 2004 was named as the Department's deputy director. When the Department’s director retired, Petitioner “effectively was in charge of the Department” until a new director was named in August 2010.

Although prior to serving as the Department's deputy director Petitioner had consistently received positive performance evaluations,* in March 2010 the County Administrator sent Petitioner a "letter of counseling" raising a number of concerns regarding her leadership, supervisory and time-management skills. Petitioner was encouraged to "immediately make every effort to improve [her] management skills" and was warned that her failure to do so could result in a loss of her employment.

In October 2010, Petitioner received a second counseling notification — this time in the form of a memorandum from the newly appointed director. The director noted, among other things, Petitioner's  failure to timely submit various state-mandated reports and surveys to the Department's oversight agency.

Subsequently it was found that there were significant past deficiencies and omissions in the operation of the Department during Petitioner's tenure as deputy director and  was served with disciplinary charges in March 2011 pursuant to Civil Service Law §75 alleging various acts of misconduct. The Hearing Officer sustained the bulk of the charges and specifications filed against Petitioner and recommended Petitioner's "dismissal from service [as] the only viable solution."

The County Administrator adopted the Hearing Officer's findings and recommendation and terminated Petitioner’s employment. Petitioner appealed, challenging the County Administrator’s decision and asked the court to direct her reinstatement as deputy director of the Department with back pay.

The Appellate Division affirmed the County Administrator’s determination, explaining that "[T]he standard of review to be applied in reviewing an administrative determination made pursuant to Civil Service Law §75 is whether the determination is supported by substantial evidence in the record as a whole.”

The Appellate Division noted that [1] Credibility determinations solely within the province of the Hearing Officer and that it may neither substitute its own judgment for that of the Hearing Officer nor weigh the evidence presented and [2] a finding of incompetence only requires evidence of some dereliction or neglect of duty.

As to the issue of penalty, the Appellate Division said that it was “well settled” that it would set aside the penalty imposed "only if it is so disproportionate as to be shocking to one's sense of fairness."

Despite the Appellate Division's considering Petitioner's many years of service and her prior positive performance evaluations, the court said that it did not find the penalty of termination to be shocking to its sense of fairness, explaining that in this instance “the record reflects that although Petitioner twice was warned regarding serious and specific deficiencies in her job performance, she continued to exercise poor professional judgment with respect to, among other things, the management, training and supervision of [Department personnel].

Further said the court, “The record … illustrates that Petitioner's neglect of her duties — particularly with respect to her failure to implement certain policies and/or comply with mandated reporting requirements — not only created what [Department’s director] aptly described as ‘a huge public safety issue,’ but also exposed the County to liability.”

* According to the decision, written performance evaluations of the Petitioner ceased after 2004 because the then County Administrator “preferred to personally conduct yearly evaluations in his office.”

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_03369.htm