Tuesday, November 12, 2013

Dems call for local development corp reforms

Posted By on Tue, Nov 12, 2013 at 12:49 PM

UPDATED 4:50 P.M. — Republican Majority Leader Steve Tucciarello responded to Democrats' proposals during a press conference this afternoon. Tucciarello defended the county's use of local development corporations, saying that they are an efficient, cost-effective way to provide key county services, namely a communications system for first responders.

Tucciarello also said that legislators "can't resort to knee-jerk reactions" to the arrests, which could jeopardize the LDC's abilities to perform their given tasks.

"What I want to do is get all of the information and facts and make the best course of action," Tucciarello said.

He also said he's confident that attorney Dennis Vacco is doing an aggressive, thorough internal review of the LDC's.

Original post: County Legislature Democrats held a press conference this morning to lay out a package of eight reforms they say will help prevent malfeasance at county-affiliated local development corporations.

The state Attorney General's Office is investigating two county-linked LDC's, Upstate Telecommunications Corporation and Monroe Safety and Security Systems LDC. And an indictment made public last week alleges that four people connected to those LDC's were involved in a bid-rigging scheme. All have pleaded not guilty.

Among those charged are the founders of Navitech Services Corporation, John Maggio and Daniel Lynch. Navitech holds contracts to manage UTC and M3S. The indictment alleges that Maggio and Lynch used Navitech and a subcontractor, Treadstone Development Corporation, as part of a scheme to steal money from LDC projects. Lynch owns Treadstone and Maggio owns Navitech. 

The Democratic proposals are technical, and several deal with who approves changes to contracts with the LDC's. One of the proposals deals with how LDC board members are appointed.

Democrats said they've introduced most of the reforms before, including when the Legislature was debating the creation of M3S. Legislator Paul Haney said that if the county had passed the reforms four, five, or six years ago, the current LDC scandal might have been avoided.

Democrats are placing particular emphasis on the transfer of contracts from one company to another. Navitech got the UTC management contract through a transfer from Siemens Building Technologies. County Executive Maggie Brooks signed off on the transfer. Her approval was required because the initial contract with UTC was a county contract; UTC provides and update the county's information and office technology.

One of the Democrats' proposals would give the Legislature, not the county executive, the final say on contract transfers. Another proposal would require the same arrangement for any contract amendments. Currently, the Legislature must approve initial contracts with LDC's, but not amendments.

The other reforms:
  • Requiring new appointments to LDC boards to be confirmation by the Legislature;
  • Giving the Legislature majority and minority one appointment each to LDC boards (this already happens with the M3S board);
  • Requiring Legislature approval of all LDC budgets;
  • Requiring all LDC contracts and subcontracts to be filed with the Legislature clerk, along with information about the officers of companies receiving the contracts;
  • Requiring LDC's to file quarterly financial reports and annual financial statements with the Legislature clerk.

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