October 18, 2007

WEITZMAN CALLS FOR TOWN SUPERVISORS TO ‘STEP-UP’
REVIEW OF SPECIAL DISTRICTS BUDGETS

Issues Fourth Water District Audit, Showing a Town-Run District
Has Fewer Abuses Than Commissioner-Run Districts

An audit of the East Meadow Water District, run by the Town of Hempstead, found areas in need of improvement, but not the same level of abusive practices found in commissioner-run districts, Nassau County Comptroller Howard Weitzman said today at a Mineola press conference.

“This is the fourth water district we have audited,” said Comptroller Weitzman.  “Our audit of the East Meadow district raised concerns, but not to the level of fraud, abuse and mismanagement we found in commissioner-run districts.”

Comptroller Weitzman also announced today that he has written to the supervisors of Nassau’s three towns – Hempstead, North Hempstead and Oyster Bay – to urge them to step up their scrutiny of special district budgets proposed by commissioners.

The letter to the supervisors follows a series of special district audits that found incidents of commissioners abusing their offices to line their pockets, rampant nepotism and violations of state law.  Comptroller Weitzman discussed the need for greater scrutiny of special districts.

“Last year I urged the Town Supervisors to do a full analysis of proposed budgets from all commissioner-run special districts and exercise their right to reduce spending where necessary, and I am repeating the plea again this year on behalf of the taxpayers,” Comptroller Weitzman said.  “Our audits have uncovered wasteful spending and even illegal acts in these commissioner-run districts.  The taxpayers deserve to have the Towns carefully review commissioners’ spending plans, and not simply rubber-stamp their budgets.”

There have been some improvements in town review of special district budgets since Comptroller Weitzman’s first such letter last year.  “This year, the Town of North Hempstead has engaged accounting services to review the proposed budgets; the Town of Oyster Bay has requested that each special district provide a policy on travel, cell phone use and automobile use; and the Town of Hempstead agreed for the first time that it had the authority to review the 2008 proposed district budgets.  I commend them for these actions,” Comptroller Weitzman said.

In his letter, Comptroller Weitzman suggested that the town supervisors scrutinize specific areas of proposed district budgets, such as:

• commissioner pay for undocumented meetings;
  
• the amount of surplus funds retained by the district and whether taxes could be lowered;
  
• the number of district vehicles necessary;
  
• employee time reporting procedures

• procurement practices and whether no-bid contracts are used

• district salary and benefit practices
  

Commissioner-run special tax districts make up 40 percent of town taxes paid by residents of unincorporated areas.  State law gives the towns the right to reduce proposed special district expenses, except for debt service.  

Major findings in the East Meadow audit include:

• Deficiencies in the recording of time and leave, payroll and overtime.
  
• Supervisors of the Town of Hempstead Water Department manually recorded administrative employees’ work hours without requiring that workers sign in and out.
  
• Adjustments to customer accounts were not adequately documented and approved.
  
• A lack of appropriate procedures to safeguard information systems. For example, some employees shared passwords and some employees kept their passwords taped to their desks in open view.
  

Over the last two years, Comptroller Weitzman has conducted a series of audits of special districts in Nassau’s three towns.  Previous audits have reviewed garbage districts in Hempstead, North Hempstead and Oyster Bay towns and the Great Neck Water Pollution Control District.  In June 2006, Weitzman organized the first-ever summit on Nassau’s special taxing districts at Hofstra University, attracting more than 400 officials, tax experts and interested citizens.  The county has also retained consultants to study how to make special district government in Nassau County more efficient.

Comptroller Weitzman also serves as a member of the New York State Commission on Local Government Efficiency, created by Governor Eliot Spitzer to address the problem on a statewide basis.  There are about 6,900 town special districts throughout New York State, in addition to the state’s 4,200 other local governments, all of which contribute to the state having the highest tax burden in the U.S.  The multiplicity of special districts adds hundreds of dollars to local property taxes throughout the state.

The Town of Hempstead Water Department provided approximately 6.5 billion gallons of water in 2006 to a population of approximately 121,000. Homeowners in the East Meadow district pay a combination of taxes and usage charges; a homeowner who used 100,000 gallons per year paid an average total charge of $151.  The water department’s cost of operations in 2006 was $13,134,258.

Audit Report - Town of Hempstead Dept. of Water and the East Meadow Water District (.pdf)

Comptroller Weitzman Urges Town Supervisors To Review Special Districts Budgets (.pdf)

Special District Budget Review (.pdf)

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