NY State Senate Bill 2019-S1713

Archive: Last Bill Status - In Senate Committee Local Government Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to local government
Jan 15, 2019	referred to local government

co-Sponsors

2019-S1713 (ACTIVE) - Details

See Assembly Version of this Bill:: A2508
Current Committee:: Senate Local Government
Law Section:: Nassau County
Versions Introduced in Other Legislative Sessions:: 2015-2016: A10743
2017-2018: S2308, A3869
2021-2022: A2454
2023-2024: A2088

2019-S1713 (ACTIVE) - Summary

Authorizes a state monitor for the town of Oyster Bay to provide direct oversight of the fiscal policies, practices, programs and decisions of the town of Oyster Bay.

2019-S1713 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S1713

SPONSOR: BROOKS
 
TITLE OF BILL:

An act authorizing the comptroller to appoint a state monitor to oversee
the town of Oyster Bay and establishing the powers and duties of the
state monitor; and providing for the repeal of such provisions upon
expiration thereof

 
PURPOSE:

To authorize the state comptroller to appoint a state monitor to oversee
the Town of Oyster Bay and establish the powers and duties of the state
monitor.

 
SUMMARY OF PROVISIONS:

Section 1. definitions

Section 2. provides that the Comptroller shall appoint a state monitor

to oversee to the Town of Oyster Bay at the Town of Oyster Bay's
expense.

Section 3. details the powers of the State Monitor which include the
ability to propose resolutions, issues bonds, approve or reject budgets,
require a multi-year financial plan, comment on proposed borrowing and
collective bargaining agreements, override decisions made by the town
supervisor or town board, access all town documents or records, direct
the town supervisor or board to undergo training, hire staff, and
conduct studies, reports, and reviews of town fiscal matters,

Section 4. details the duties of the State Monitor which will be to
develop and implement a five-year strategic fiscal improvement plan
which will include, measurable goals and benchmarks, improvements for
financial stability, transparency, attendance at all board meetings
including executive sessions, and annual reports.

Section 5. lays forth an appeal process for monitor decisions.

Section 6. provides the comptroller with the authority to promulgate
regulations related to the implementation of this act

Section 7. establishes a five year period for the appointment of the
monitor, with the authority to extend the appoint as deemed necessary by
the comptroller

Section 8. is the enacting clause.

 
JUSTIFICATION:

The Town of Oyster Bay has had a troubling history of fiscal mismanage-
ment. It has had a structurally unbalanced budget for over six years and
most of its operating funds have carried negative balances. Poor fiscal
management, unrealistic budgeting and ballooning debt have led Oyster
Bay to become the only municipality in the state with a junk credit
rating from Standard & Poor. The Town of Oyster Bay's credit rating has
fallen so precipitously because of financial mismanagement, debt misman-
agement and has suffered attendant cash flow deficiencies. It is the
only Long Island Town cited as having weak management. According to the
State Comptroller's Office, Oyster Bay has no long-term debt policy and
has accumulated more new debt from 2005 to 2014 than all other Long
Island cities and towns combined. Furthermore, when the financial crisis
hit, Oyster Bay depleted its reserves and then relied on short-term
borrowing since 2011 to pay its basic operating expenses.

Oyster Bay's credit rating has dropped six notches since 2011 when Stan-
dard & Poor had given it the highest possible rating, AAA. The down-
grades were because of the Town's deteriorating finances and repetitive
failures to adjust its budget to offset declining revenues. The total
bonded debt in 2014 was $717.4 million compared to $366.2 million in
2010; an increase of 96 percent. According to a report from Standard &
Poor, "Oyster Bay has had 10 consecutive years of audited operating
deficits in its general fund, and as a result, financial reserves and
liquidity have significantly deteriorated."  The operating deficit in
Oyster Bay's general fund for the 2012 fiscal year was $10.3 million
with a credit rating lowered to A. For the 2013 fiscal year there was
$16 million operating debt in the general fund and their rating lowered
to A-. For the 2014 fiscal year the operating debt in the general fund
was $19 million with their credit rating lowered to BBB. Now in 2016 the
town has been downgraded to junk status with a BB+ credit rating.

An unprecedented and grotesquely dangerous element contributing to
Oyster Bay's junk credit rating is that the Town Government obligated
itself to pay the debts of Harendra Singh, a restauranteur with Town
concession agreements which contained largely or wholly undisclosed loan
guarantees of $14.6 million for his S.R.B Concession Inc.  businesses,
including the food concessions he ran on the Town beaches and golf
course. It is important to note that the Town board members voted unan-
imously to extend its contracts with Singh in 2014 despite Singh's
companies being eight months late and more than $180,000 behind on rent
and utility payments to Oyster Bay. Unsurprisingly, when SRB defaulted,
its creditors placed a $14.6 million burden on the Town of Oyster Bay.
Oyster Bay had assumed the defaulting loans. The Town credit rating sank
to junk bond status. Singh was indicted in the United States District
Court on felony counts including bribing a former Town of Oyster Bay
Deputy Attorney with $50,000 in checks made out to cash and a $36,000
lease for a luxury car.

In response, the Town Supervisor placed Councilman Joseph G. Pinto, the
Town Board's liaison to the Comptroller's Office, in charge of a task
force charged with developing a plan of remediation. Absent from the
task force are independent members. A fair and objective task force
should be composed of individuals who would prosecute their work in an
unbiased and non-political manner, without the appearance or danger of
conflict of interest. Councilman Pinto is part and parcel of the Town
Council that facilitated this crisis.  In October 2016, Town Supervisor
John Venditto was indicted in the United States District Court on thir-
teen counts, including conspiracy to commit federal program bribery,
wire fraud, obstructing justice and making false statements. Supervisor
Venditto resigned in January 2017.

The appointment of a state monitor for the Town of Oyster Bay is neces-
sary to ensure the fiscal stability and health of a municipality that is
in imminent danger.

 
FISCAL IMPLICATIONS:
None to the state

 
EFFECTIVE DATE:
This act shall take effect immediately and shall expire and be deemed
repealed December 31, 2028.

2019-S1713 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1713
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             January 15, 2019
                                ___________
 
 Introduced  by  Sen.  BROOKS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Local Government
 
 AN ACT authorizing the comptroller to appoint a state monitor to oversee
   the town of Oyster Bay and establishing the powers and duties  of  the
   state  monitor;  and  providing for the repeal of such provisions upon
   expiration thereof
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Definitions. For the purposes of this act:
   (a)  "State  monitor"  or  "monitor"  shall  mean the person appointed
 pursuant to section two of this act, or an interim person  appointed  to
 such position.
   (b) "Board" shall mean the town board of the town of Oyster Bay.
   (c) "Supervisor" shall mean the supervisor of the town of Oyster Bay.
   § 2. Appointment. (a) The comptroller shall appoint a state monitor to
 provide direct oversight of the fiscal policies, practices, programs and
 decisions  of the town of Oyster Bay, the town board and the supervisor,
 within ninety days following the effective date of this act.  The  comp-
 troller  shall provide the monitor with technical support and assistance
 for the purposes of carrying out his or her duties under  this  act,  if
 requested  by  the  state  monitor. The state monitor shall serve at the
 pleasure of the comptroller.
   (b) The comptroller shall have the authority to appoint a state  moni-
 tor  on  an  interim basis during the search for a permanent appointment
 and in the event of resignation, death, incapacity, or any other  reason
 which  causes  the monitor to be unable to perform his or her duties and
 until such time as a permanent state monitor  is  appointed.  Any  state
 monitor  appointed  on an interim basis shall have the powers and duties
 of the state monitor contained in this act.
   (c) The state monitor, including his or her staff,  shall  be  paid  a
 fixed  salary  set by the comptroller and shall be reimbursed for actual
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD04584-01-9

 S. 1713                             2
 
 expenses incurred in the performance of  his  or  her  duties  including
 travel  and  supplies.  The  costs associated with the implementation of
 this act shall be borne by the town of Oyster Bay.
   (d) Notwithstanding any other provision of general or special law, the
 earnings limitations contained in any such general or special law, local
 law  and/or  charter  and  applicable  to the employment of persons in a
 position or positions in public  service  in  any  calendar  year  while
 retired  and  receiving  a  retirement  allowance shall not apply to any
 appointment authorized by this act. If applicable, the state monitor may
 continue as retired and without loss, suspension or diminution of his or
 her retirement allowance provided that  such  individual  is  granted  a
 waiver of retirement earnings limitation by the comptroller.
   (e)  For  the  purposes  of this act, the state monitor and his or her
 staff shall be considered state employees as defined in the public offi-
 cers law.
   § 3. State monitor powers. The state monitor shall have the power to:
   (a) Propose a resolution or course of action to be considered  by  the
 town board or supervisor if the state monitor finds that such resolution
 or course of action is necessary in order to carry out his or her duties
 required  by  this  act and is necessary for the fiscal stability of the
 town. If such resolution or course of action is proposed, the board must
 vote on the proposed resolution or course of action within fourteen days
 of receiving such resolution, or at the next regularly  scheduled  board
 meeting.
   (b)  Review  and  make  recommendations  on the operation, management,
 efficiency and productivity of the relevant municipality and any subsid-
 iary organization.
   (c) Issue bonds.
   (d) Consult with the locality during  the  budget-making  process  and
 make  recommendations.   The monitor shall have the authority to approve
 or reject budgets and required multi-year financial plans.
   (e) Comment on  the  proposed  borrowings  and  collective  bargaining
 agreements.
   (f)  Override  decisions by the board or supervisor if he or she finds
 that such override is necessary in order to carry out his or her  duties
 required  by  this  act and is necessary for the fiscal stability of the
 town. The state monitor may override a decision by the board or supervi-
 sor by issuing a directive, which must include specific findings  as  to
 the necessity of such override. The board may appeal the state monitor's
 override in accordance with section five of this act.
   (g)  Access  all  town  documents  and  records.  Town personnel shall
 provide any and all documents requested by the state monitor or  his  or
 her  designee without charge, and the state monitor shall have access to
 all electronic information systems, databases, and  planning  documents.
 The  monitor  shall  maintain  the  security  and confidentiality of all
 information protected from disclosure by federal or state law  or  regu-
 lation.
   (h)  Direct the board and supervisor to undergo any training as deemed
 necessary and pursuant to timelines established by the state monitor.
   (i) Hire staff necessary to assist in carrying out the state monitor's
 duties required by this act, subject to a staffing plan approved by  the
 comptroller.
   (j) Hold public hearings or forums on town fiscal matters as he or she
 deems necessary.
   (k)  Conduct any relevant studies, reports, and reviews of town fiscal
 matters.

 S. 1713                             3
 
   § 4. State monitor duties. The state monitor shall have the  following
 duties:
   (a)  Develop  and  implement  a five-year strategic fiscal improvement
 plan in consultation with the  comptroller  and  the  board  within  six
 months from the date of appointment.
   1. The monitor shall hold at least one public hearing within the town,
 prior  to  the  certification  of the plan by the state monitor, for the
 purpose of presenting the contents of the improvement plan  and  seeking
 public  comment on its contents. The supervisor shall ensure that notice
 for the public hearing or hearings are posted in a  manner  to  maximize
 the participation of residents.
   2.  The plan must establish a set of goals with appropriate benchmarks
 and measurable objectives and identify strategies to address areas where
 improvements are needed in financial stability.
   3. The plan shall be publicly available at least fourteen days  before
 the hearing or hearings at which it will be presented and the supervisor
 shall  ensure  that copies thereof shall be prepared and made available,
 upon request, to residents within the town.
   4. Following the hearing or hearings held pursuant to paragraph one of
 this subdivision, but prior to certification of the improvement plan  by
 the  state monitor, the state monitor shall publicly report to the board
 an assessment of all public comments concerning the proposed plan and  a
 description  of  any  changes  made  to  such plan as a result of public
 comments received. The certified plan must be submitted  to  the  board,
 comptroller,  governor,  the  temporary president of the senate, and the
 speaker of the assembly.
   (b) Attend all meetings of the  board  including  executive  sessions.
 The  state  monitor, or designee of the monitor, shall be deemed to be a
 non-voting member of the board and shall be entitled to sit  with  board
 members  at all meetings of the board and participate in all board hear-
 ings and meetings, and the  supervisor  shall  be  required  to  provide
 adequate  notice to the state monitor of all such meetings and hearings.
 The state monitor shall ensure to the extent practicable that the  board
 conducts  all meetings, including executive sessions, in compliance with
 article 7 of the public officers law, and shall be  authorized  to  seek
 written advisory opinions from the committee on open government.
   (c)  Supervise  the  fiscal  and  operational  management of the town,
 including, but not limited to, oversight over  the  development  of  the
 annual budget.
   (d)  Submit  an annual report to the board, comptroller, governor, the
 temporary president of the senate, and the speaker of  the  assembly  on
 the progress of the strategic fiscal improvement plan, actions undertak-
 en by the monitor, any financial information the monitor deems appropri-
 ate,  and  other  town matters of importance.   At the conclusion of the
 monitor's appointment as determined by section seven of  this  act,  the
 state  monitor shall issue a final report that includes long term recom-
 mendations that address the unique needs of the town.
   § 5. Appeal process for monitor decisions. Notwithstanding  any  other
 law, rule or regulation to the contrary, all decisions made by the state
 monitor,  including  decisions to overturn board and supervisor actions,
 shall be final and conclusive unless and until modified or  reversed  in
 an  appeal  to  the comptroller pursuant to this section. When the board
 alleges that a reversal of a board or supervisor decision by  the  state
 monitor  violates  the regulations of the comptroller, or the terms of a
 certified five-year strategic fiscal improvement  plan,  the  board  may
 appeal by petition to the comptroller.

 S. 1713                             4
 
   §  6.  Regulations.  The comptroller shall be authorized to promulgate
 regulations and immediately take such  other  actions  as  necessary  to
 implement the provisions of this act.
   § 7. Appointment period. The appointment of the state monitor shall be
 for  a  period of at least five years from the initial date of the state
 monitor appointment. At the expiration of the initial appointment  peri-
 od,  the  comptroller shall have the authority to extend the appointment
 for an additional period of time in intervals of one to five  years,  as
 determined  by  the  comptroller. The appointment may be extended, for a
 term or terms as the comptroller deems necessary,  consistent  with  the
 repeal date of this act.
   §  8.  This  act shall take effect immediately and shall expire and be
 deemed repealed December 31, 2028.

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Senate Bill S1713

Sponsored By

Archive: Last Bill Status - In Senate Committee Local Government Committee

co-Sponsors

2019-S1713 (ACTIVE) - Details

2019-S1713 (ACTIVE) - Summary

2019-S1713 (ACTIVE) - Sponsor Memo

2019-S1713 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S1713

Share this bill

Sponsored By

John E. Brooks

Archive: Last Bill Status - In Senate Committee Local Government Committee

co-Sponsors

James Gaughran

Anna M. Kaplan

Kevin Thomas

2019-S1713 (ACTIVE) - Details

2019-S1713 (ACTIVE) - Summary

2019-S1713 (ACTIVE) - Sponsor Memo

2019-S1713 (ACTIVE) - Bill Text download pdf

Comments