MTA Audit - NOW WHAT?

 NYS Comptroller Tom Di Napoli’s office released the long awaited audit of the MTA. Below is the summary included in the audit and a link to the report.

The objective of the audit was to determine whether the Metropolitan Transportation Authority has effectively managed and controlled its employee overtime costs.

(Click full report http://www.osc.state.ny.us/audits/allaudits/093010/09s88.pdf)

Audit Results–Summary
We found that the MTA has not eff ectively managed and controlled its overtime costs. Rather,there has been a culture of acceptance among MTA managers regarding overtime, and no real efforts were made to make significant changes in longstanding practices that resulted in routine, and often unnecessary, overtime. As a result, overtime has become the rule rather than the exception for many of the MTA’s employees, and the MTA’s already high overtime costs have continued to escalate.

The MTA provides public transportation in and around the New York City metropolitan area. It employs about 71,000 workers at an annual cost of about $4.6 billion. In accordance with its enabling legislation, the MTA is expected to be financially self-sustaining, and generate enough fare and other revenues to cover its expenses. However, in recent years, the MTA has consistently operated at a financial deficccit.
Between 2005 and 2009, the MTA’s annual overtime costs increased from $468 million to $590 million, an increase of 26 percent. We examined records showing the amount of overtime pay received by the MTA’s employees. We found that many of the employees are being paid significant amounts of overtime, as their annual overtime pay is approaching, and in some cases exceeding, their annual salaries. For example, in 2009, there were 3,274 employees whose total overtime pay for the year equaled at least 50 percent of their annual salaries, including 147 whose total overtime pay exceeded their annual salaries. There were 10,909 employees (more than 15 percent of the workforce) whose total overtime pay for the year equaled at least 30 percent of their annual salaries. When we examined why the employees at four of the MTA’s seven constituent agencies were working such significant amounts of overtime, and whether the overtime was, in fact, necessary,we found indications that the overtime often was not necessary. For example, routine track maintenance work is often performed by workers on overtime, because the workers’ regular work shifts coincide with peak service periods when the tracks are not available for routine maintenance.

In addition, many of the employees who work overtime are replacing absent workers, especially workers who have called in sick. Much of this overtime could be eliminated if absenteeism were reduced and absent workers were only replaced when necessary. We also found that many of the employees working overtime have no valid justification for doing so, and some may not actually work all the overtime hours claimed. If corrective actions were taken to eliminate the unnecessary overtime identifi ed by our audit, we estimate the MTA could save more than $56 million a year in overtime costs.

The MTA Central Office, together with the management of the seven constituent agencies, is responsible for overseeing the agencies’ operations. However, we found that these officials have not eff ectively managed and controlled the agencies’ overtime costs. For example, the agencies’ overtime budgets are seriously flawed, because past overtime inefficiencies are routinely incorporated into the current year’s budgets, and the Central Office routinely accepts the budgets, without question. Also, the Central Office has not worked actively with agency management to reduce overtime costs, even though the MTA has consistently faced serious budget shortfalls. Prior to our audit, neither the Central Office nor agency management had proposed reduction goals for overtime costs, such as a 10 percent reduction. Such a reduction would result in savings of nearly $60 million annually for the MTA, which could help off set
planned fare increases, cuts in service, and/or cuts in capital improvements.

When we discussed our observations with Central Office officials, we were told that, prior to the current administration, the management of the constituent agencies was left to agency officials. Officials in the current administration state that they plan to take a much more active role in managing and controlling employee overtime, and further indicate that some actions have already been taken to reduce overtime costs. According to officials in the four constituent agencies we examined, employee absenteeism and union work rules are the primary drivers of overtime. However, we note that only limited eff orts have been made by management to reduce absenteeism and address unproductive work rules,and management needs to be more proactive in these areas. We recommend MTA offi cials consider adopting some of the best practices of other public transportation authorities that have been able to control their
overtime costs.

Our report contains a total of six recommendations for improving the MTA’s management
and control of employee overtime. MTA offi cials are in general agreement with our fi ndings
and recommendations and intend to pursue them as part of their internal eff orts to reduce
overtime.
This report, dated August 5, 2010,

Demos - "I once again call on Randy Altschuler to come clean"

George Demos said:

“Instead of admitting that he was plagiarizing releases from another candidate, Randy Altschuler is compounding his plagiarizing scandal by lying to Long Island’s families.  Altschuler cynically instructed his consultant to assure us that plagiarism is standard practice because “when you’re in politics there’s only so many ways you can word stuff.”  Contrary to these bogus assertions, the press releases unambiguously state “Randy Altschuler said.” 

In the span of a few years Randy Altschuler switched from bragging about his outsourcing of our American jobs to India to now being ashamed of it.  He switched from the Green party to the Republican Party.  He switched from trying to run for Congress in New Jersey to now trying to run on Long Island.  Altschuler switched from being fervently pro-choice to now claiming to be pro-life.  

Randy Altschuler doesn’t know who he is or what he believes, and apparently he doesn’t know what to say about the issues either.  All he knows is that he has millions of dollars made from outsourcing our American jobs to India and that he wants to be a Congressman. 

I once again call on Randy Altschuler to come clean and release the press releases he scrubbed from his website.”

Rep. Israel Comes To Aid Of 9/11 Recovery Worker

Central Islip, NY— Thursday, Congressman Steve Israel (D-Huntington) joined with a group of 9/11 Recovery Workers at the home of fellow worker whose lungs were damaged working at the WTC site. While waiting for the key naturalization interview to secure citizenship for his Columbian wife, he ran through two oxygen tanks and was forced to leave, missing the appointment. His wife was denied citizenship. Rep. Israel announced that he was able to get the case re-opened and secure her citizenship. “When Chris Longley saw his community in need after the towers fell, he didn’t hesitate, he just went to help,” Israel said. “But when it was our turn to help him, he faced a bureaucratic roadblock. Chris and his family deserved better. I’m sorry it took a Congressman’s help to make things right, but I’m proud I was able to help a man who’s given so much for our community.” In 2001, Christopher Longley owned a bottled water company, Water Pure and Simple, and immediately following the attack on the WTC volunteered his time and product to the rescue efforts by remaining on the WTC site for weeks to provide free water to the men and women working on the recovery efforts. As a result, Mr. Longley developed serious lung disease. He breathes with assistance of oxygen tanks 24/7 and is currently on the waiting list for a double-lung transplant. Chris Longley is married to Melida Gutierrez Longley, a Columbian citizen. In June of this year, Mr. Longley and his wife, Melida Gutierrez Longley, went to a naturalization interview at the United States Citizenship and Immigration Services (USCIS) in Manhattan. When they arrived for the interview, they were told that Mrs. Longley’s file could not be found and they would have to wait. Mr. and Mrs. Longley waited so long for the interview that Mr. Longley had almost finished the 2 tanks of oxygen he had brought with him. When they informed the USCIS officer of the situation, they still would not accommodate them. Eventually, Mr. Longley ran out of oxygen and the Longley’s had to leave without being interviewed. Approximately a week later, Mrs. Longley received a notice denying her naturalization application. Mr. Longley contacted Congressman Steve Israel who was able to get the case re-opened. Israel’s office pointed to a number of factual errors in Mrs. Longley’s file—errors that would have been corrected during the naturalization interview—and explained Mr. Longley’s health condition. Mrs. Longley’s case was re-opened and approved. She is now scheduled to take her naturalization oath on August 19, 2010 at the Eastern District Court. At the announcement Thursday, Rep. Israel and the Longley family were joined by other 9/11 responders. The plight of 9/11 recovery workers and first responders has been in the news recently as Congress has considered The 9/11 Health and Compensation Act. The bill would provide health care for those exposed to toxins released by the collapse of the World Trade Center towers. When considered last week the bill did not reach the necessary, two-thirds majority required for passage necessary under the expedient procedure by which it was brought to the floor for a vote. However, the strong majority of 255-159 makes it likely that the bill will garner majority support when it is brought to the floor again in the fall

Republicans Join Wilson "Smoothing" plan for pensions too costly!

 

LONG ISLANDERS SOCKED WITH ‘DINAPOLI TAX’ $1,300 Property Tax Hike Per Family Coming

New York, Aug. 5…New York State homeowners living outside of New York City can expect their property taxes to rise an extra $1,300 on average over the next six years because of a secretive pension borrowing scheme passed by the New York State Legislature Tuesday night, state comptroller candidate Harry J. Wilson (R-C-I) today said. Mr. Wilson has been warning about this tax hike, aka ‘The DiNapoli Tax’, for weeks.

The secretive borrowing scheme, the brainchild of unelected state comptroller Thomas P. DiNapoli (D-WFP), authorizes the state to borrow money from the state pension fund to make constitutionally required payments to that very same fund, with interest.  The plan, which was devised to hide the massive under-performance of the pension fund relative to its 8% target return, will lead to higher property taxes everywhere in the state, except New York City, which maintains its own public employee retirement fund, Mr. Wilson said. Under New York State law, state and local governments are required to make up any shortfalls in the state pension fund, and that money is typically raised at the local level through property taxes, or other tax hikes.

 Mr. Wilson made his remarks at a news conference in Suffolk County, where he was joined by State Senator John Flanagan, Assemblymen Phil Boyle, Jim Conte, Mike Fitzpatrick and Dean Murry.  Mr. Wilson was also joined by Suffolk Legislators Tom Cilmi and Dan Losquadro. 

“New Yorkers are reeling from some of the highest property taxes in America, and thanks to Mr. DiNapoli, their taxes will be climbing even higher,” Mr. Wilson said. “Mr. DiNapoli was supposed to be looking out for taxpayers, but his irresponsible pension borrowing scheme puts the screws to them instead. It is Albany fiscal gimmickry at its worst, and, as usual, the people of New York State are now stuck paying for it.”

Mr. Wilson said that, based on the best available information, he estimates that under the DiNapoli scheme:

1.       In just the first six years, the State will borrow over $4.5 billion, and local governments will be able to borrow in excess of $6 billion, totaling roughly $11 billion in actual or potential borrowing. Because the most recent version of the plan is an indefinite program, this massive borrowing will only grow in later years;

2.      The associated interest expense, assuming the midpoint of the publicly stated range, or 5%, will be in excess of $3 billion for the state and local municipalities combined;

3.      Over the next six years, the pension contributions of state and local governments will roughly triple —- even assuming heroic but unlikely performance in the markets. For the average New York household, their share of these pension contribution costs will increase from just over $500 per household to over $1,800 per household - a $1,300 ‘DiNapoli Tax’ for every household outside New York City.

4.      It has been reported that these scenarios are based on the State Comptroller’s expectation that pension returns going forward will mirror returns from the period after the 1987 market crash. If those reports are correct, based on the current portfolio mix of the pension fund, the Dow Jones Industrial Average would have to hit 80,000 by 2022. If, instead, the Fund is basing its projections on its current, but also overly aggressive, 8% return assumption, then the Dow would have to hit nearly 30,000 by 2022. Both of these return scenarios dramatically exceed recent history and the expectations of professional investors. This enormous disparity highlights how important the Comptroller’s assumptions are to the policy debate, and he should provide transparency so that voters can evaluate exactly what he is proposing.

5. Mr. DiNapoli’s sole defense is that his plan is a “smoothing” plan that creates reserve accounts in good times. Yet two facts underscore why this defense is misleading:

a)      Under Mr. DiNapoli’s own projections, these reserve accounts don’t come into being for at least 15 years, and possibly much longer;

b)      In the only other time in New York State history that such a plan was tried, Alan Hevesi’s “one-time-only” plan also created reserve accounts but borrowed a tiny fraction of the amount available here. Those planned reserve accounts never came into use, yet New Yorkers still owe 60% of the original borrowing and pay nearly $100 million per year to pay off that borrowing. As unsuccessful as the Hevesi plan was, Mr. DiNapoli incredibly is seeking to expand it by 20 times or more - creating the largest Ponzi scheme in New York State history.

Mr. Wilson further said that, “given the lack of transparency provided by the comptroller on key assumptions surrounding this pension borrowing plan, we are limited in our ability to exhaustively analyze it, but based on our best estimates and the best available information, we believe the Comptroller is walking New York State into a fiscal disaster. We first raised this issue well over a month ago, and the Comptroller has yet to come clean with New Yorkers on his assumptions. We await him living up to his responsibilities to taxpayers.

Mr. Wilson again challenged Mr. DiNapoli today to show us other scenarios his office has run so we can see what happens to the Pension Fund if returns don’t mirror the best span the Fund has had. Mr. Wilson said the unelected incumbent state comptroller, who first proposed the controversial Pension borrowing scheme in May 2009, needs to explain this borrowing plan to the public.  Mr. Wilson specifically urged him to make clear exactly:

—How much will be borrowed over the next 6 years, both by the state government and by local governments?;

—How much interest expense will that borrowing cost NY taxpayers?;        

—How large will the contribution levels be in future years?, and     
 —How much worse will these problems be under more realistic market scenarios?

 SUPREME COURT JUSTICE ELENA KAGAN

It’s official Elena Kagan is the newest member of the United States Supreme Court. With a vote of 63 in support and 37 opposed Elena Kagan, 50, became the 112th justice and fourth female to sit on the US Supreme Court bench.  When Justice Kagan is sworn in it will be the first time  three women will be serving on the US Supreme court at the same time.

The nine Supreme Court Justices are John G. Roberts, Chief Justice.  Associate Justices Antonin Scalia, Anthony M Kennedy, Clarence Thomas, Ruth Bader Ginsburg, Stephen G. Bryer, Samuel Anthony Alito, Jr., Sonia Sotomayer, Elena Kagan.