Œed Sanitary District 1, which serves the Five Towns, the state also pummeled the district with harsh criticism after an investigation uncovered numerous problems with the way it operates.
In the wake of the scathing audit by the State Comptroller-s Office, Nassau County Comptroller Howard Weitzman, who conducted his own investigation of the district in 2005, called on Hempstead Town Supervisor Kate Murray to assert her authority and review the sanitary district-s annual budget and operations which town officials said she plans to do.
However, Nat Swergold, attorney for Sanitary District 1, stressed that there-s nothing in the audit-s findings that is criminal in nature and that some of former State Comptroller Alan Hevesi-s criticisms and recommendations are unwarranted. Swergold added that the investigation makes no mention of the unique services provided by the sanitary district, such as offering rear-door pickup of trash and running its own recycling plant while maintaining the lowest tax rate in Nassau County.
Sanitary 1, which is considered a special taxing district, is responsible for collecting and disposing of residential and commercial trash in the Five Towns, a small portion of Valley Stream including Green Acres Mall and the unincorporated section of
Lynbrook.
The state audit, prompted by the 2005 analysis of the district by Weitzman, was conducted by former State Comptroller Alan Hevesi-s office before Hevesi resigned from the state post following a controversy over spending taxpayer dollars to provide a chauffeur for his ailing wife. State auditors found that the district operates in an uneconomical and inefficient manner, fails to follow appropriate procurement procedures and has weak internal financial controls.
Auditors also found that the district continued to pay health, dental and vision insurance premiums for some current and retired employees and dependent spouses after they had died. In one instance, the district continued payment of health insurance premiums for three years after the employee-s death, until auditors brought the matter to the district-s attention. In total, the district paid more than $28,000 in excess premiums, according to officials at the State Comptroller-s Office.
Weitzman-s 2005 audit determined that Sanitary District 1 charged one of the highest garbage collection fees in the county, and he forwarded his findings to state officials who then decided to do their own investigation.
In their outrageous response to the audit, the commissioners claim that they have the power to spend as much as they want on themselves because there are no more legal limits, said Weitzman.
Weitzman also points out that District 1 imposes one of the highest tax rates on homeowners of any sanitary district in Nassau County an average of $579 per home in 2006. He wants Supervisor Murray to join the towns of Oyster Bay and North
Hempstead in their practice of reviewing the budgets of special districts line by line, just as they review the budgets of districts and departments under direct town management.
Town of Hempstead spokesman Mike Deery said in a phone interview that Murray fully supports a comprehensive review of Sanitary District 1-s budget, along with the budgets of all special districts that operate within the town. District 1 is a commissioner-run district that operates within the town but is not controlled by the town. However, Murray would still like to make sure the money is being spent wisely, according to Deery.
We-ll do an absolute thorough and comprehensive job, said Deery. We find [the audit] absolutely offensive and we are disturbed by it.
Swergold said it-s unfair to compare District 1 to other local sanitary districts because of the unique services District 1 offers, and that many of the area-s roughly 30,000 homes have higher property values resulting in higher taxes.
It-s like saying that Smith is the CEO of operating cars and trying to compare him to a CEO who manufactures cars, said Swergold. It-s totally different.
Other findings in the state audit included that District 1 provided health, dental and vision insurance for life to commissioners serving as little as a single five-year term; supplied top managers and commissioners with life insurance policies ranging from $75,000 to $300,000, when the largest policy at one nearby sanitary district was $50,000 and two other districts provided no life insurance policies at all to them; and lacked necessary internal financial controls over procurement, payroll and revenues.
The audit also pointed out that the district regularly awards contracts of more than $10,000 with no competitive bidding, contrary to the General Municipal Law, and makes no effort to seek competitive proposals for such professional services as legal and engineering services as well as insurance brokers.
In response to the criticism about the contracts, Swergold said he informed the auditors that professional services are not subject to the public bidding rules and that he pointed this out to Hevesi-s office, which ignored it when it came time to issue the report.
Swergold also said that District 1 could make improvements in terms of record keeping, but so could many companies so there was no reason to highlight this in the report.
Swergold admitted a few errors were made by a clerk who lacked experience when he started but he quickly learned from his mistakes a fact he felt the audit should have acknowledged.
In regard to continuing to provide insurance premiums for the deceased, Swergold blamed it on a clerical error since the employee who had died was accidentally left on a list of people scheduled to receive the benefits for that particular month after he had passed away. After discovering the mistake, the district recouped almost all of the money lost, according to Swergold.
Swergold along with an accountant for the district were targeted in the audit for being provided benefits by the district and being treated as full-time employees when state officials said they should have been referred to as independent contractors. Swergold said in response to that criticism that he has cases to back up his arrangement, which is legal and consistent with other special districts in the state.
Deery explained that while the town plans a comprehensive review of District 1-s future budget, it will not be able to satisfy every criticism highlighted in the audit, particularly the insurance money spent on the dead employee since there would be no line item for such an expense.
Swergold said the town already reviews Sanitary District 1-s budgets and has frequently sent them back for revisions so he fully supports the town-s efforts to continue to do so.
Weitzman urging Murray to study District 1-s expenditures comes as Gov. Eliot Spitzer has vowed to create a Commission on Local Government Efficiency to devise a plan to consolidate some of the 4,200 independent taxing districts statewide and to make the remaining districts more cost-efficient. Swergold said he supports the commission and hopes it will demonstrate how much the public benefits from having special districts that provide these unique services.
Deery said Murray supports exploring the consolidation of special districts but believes it should be up to the residents to decide if they want such a change to occur.
For further information on the audit of Sanitary District 1 log onto www.osc.state.ny.us/audits/allaudits/093007/05s69.pdf.
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