LIU PROPOSES ‘THE PEOPLE’S BUDGET’

 City Comptroller John C. Liu today unveiled his plan to revamp the City’s budget process and put an end to the annual song and dance of threatened cuts and restorations that distract from the real issues that New Yorkers care about — good schools, safe streets, and reliable jobs.  Comptroller Liu presented the highlights of his proposal in a speech before the Association for a Better New York.

“Every year New Yorkers are subjected to an orchestrated song and dance that their libraries or fire companies or childcare programs are going to be cut, and while they’re distracted, the Mayor quietly pushes through the other 99 percent of the budget.  And every year, when the music stops, the threatened services are miraculously restored,” Comptroller Liu said.  “It’s time to stop dancing and create a budget that is of the people, by the people, and for the people — a budget that reflects the people’s dream for better schools, safer neighborhoods, and solid jobs.  The way things are right now, The New York City Dream is under attack.” 

The People’s Budget, a comprehensive four-year plan, includes revenue generation and cost savings proposals that produce nearly $15 billion in new resources that can be redirected toward tax relief and new investments.  The investments in communities, schools, and housing would also create a significant economic benefit in the form of more than 35,000 jobs.

People and Community Priorities

·         Provide universal pre-school and pre-kindergarten for 3-4 year olds

·         Hire 5,000 uniformed police officers, to bring ranks to 40,000

·         Create 100,000 units of affordable housing

·         Keep libraries open 7 days a week, with extended hours

·         Offer housing vouchers to homeless families

·         Expand after school programs

Tax Relief

·         Personal Income Tax reform to lower taxes for 99% of New York City filers

·         Eliminate the General Corporation Tax for 240,000 businesses with an annual tax bill  of less than $5,000

·         Eliminate the Unincorporated Business Tax for 25,000 businesses that make less than $250,000 in annual income

Annual Revenue Generation (FY2014)

·         Personal Income Tax reform would bring in more than $1.2 billion from the City’s top 1 percent of filers making more than $500,000

·         Tolls for non-New York City residents on the East and Harlem River bridges would raise $410 million

·         Eliminating the insurance industry’s exemption from the General Corporation Tax would raise $310 million

Annual Cost Savings (FY2014)

·         Bring IT work in-house to save the City $73 million

·         Collect $150 million more in Medicaid reimbursements

·         Charge charter schools to use City facilities, yielding $80 million

The details of Comptroller Liu’s People’s Budget can be downloaded here: www.comptroller.nyc.gov

 

 

 

LIU ON FAST-FOOD WORKERS’ WALKOUT

  City Comptroller John C. Liu stated the following today on the walkout by fast-food workers:

“If we are serious about rebuilding our City’s middle class, we need to help the working poor climb out of poverty. The fast-food workers who are striking today, and all working poor who are toiling at or close to the minimum wage of $7.25 an hour, need a raise – now. With the City’s high cost of living, the effective minimum wage here is less than $4, the lowest in the country. Last year, I proposed raising the City’s minimum wage to $11.50 an hour – $11.50 is the hourly wage that would lift a worker out of poverty. This is simple justice and what New York needs – now.”

 

Visit www.comptroller.nyc.gov for the latest news, events and initiatives.

Follow Comptroller Liu on Twitter. To receive Twitter updates via text message,

text “follow johncliu” to 40404.

 View the latest Comptroller’s office videos on YouTube.

 

ADMINISTRATION FOR CHILDREN’S SERVICES RFP HAS BEEN A DISASTER

Comptroller’s office will register more than 200 ACS contract extensions to ensure existing childcare programs remain in place for over 40,000 children   

   City Comptroller John C. Liu today called on the Administration for Children’s Services (ACS) to reassess its EarlyLearn NYC Request for Proposal (RFP) process.  The EarlyLearn NYC initiative was designed to, according to the agency, “merge childcare and early education into a single, seamless system.”

In May, following an RFP process, ACS announced new contract awards for the EarlyLearn NYC initiative which was scheduled to begin on September 1, 2012. Following an outcry from numerous well-established childcare vendors who responded to the agency’s RFP process, ACS began submitting requests to the Comptroller’s office to extend the existing childcare contracts scheduled to expire this month. These contracts have now been extended for up to one year.

“While the EarlyLearn NYC initiative may be well intentioned, the RFP process has been, by too many accounts, a disaster. It has also caused a tremendous amount of unnecessary anxiety for parents, children, and service providers,” Comptroller Liu said. “It is unfair to put parents through the stress of not knowing how long the doors of their childcare provider will remain open. ACS should use the twelve months provided under the contract extensions to conduct a comprehensive review of the EarlyLearn NYC RFP.”

“City Hall is taking some of the best programs in the country and throwing them out the window. You have to fear for our kids’ futures if we lose centers like these,” said Public Advocate Bill de Blasio. “If this were really about the merits, the City would have never made these decisions. The Comptroller is absolutely right to extend these contracts given the serious concerns with this RFP process.”

“Several centers in my district will be closed as a result of the EarlyLearn RFP and many others have been significantly downsized as slots have been diverted to lesser known centers in and around the community,” said City Council Member Letitia James.  “The citywide effect is even more detrimental. Mayor Bloomberg's proposed city budget slashes more than 47,000 low-income and working-class children from subsidized daycare, Head Start and afterschool programs. About 6,500 children will be left without a slot come this November as a result of Early Learn. I believe something is extremely wrong with this picture and it is our time now to stand up and say enough is enough.”

To date, the Comptroller’s Office has received 35 contract extensions from ACS and expects to receive nearly 200 more before the looming expiration deadline. In order to ensure stability in childcare for more than 40,000 children throughout the City, Comptroller Liu’s Bureau of Contract Administration will work to swiftly register these extensions. 

This blunder echoes a similar incident at ACS in 2010, when the agency rescinded awards worth $470 million for a group of more than 60 foster care nonprofits because of mistakes made when the contracts were evaluated.

Due to the importance of early childhood education and the serious issues raised regarding the EarlyLearn NYC RFP, Comptroller Liu will be exploring the possibility of auditing whether ACS has abided by all applicable procurement guidelines.

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LIU IDENTIFIES EXTRA $100 MILLION FOR FY 2013 CITY BUDGET

-Additional funds available to provide budgetary relief -  

  Due to the $997 million General Obligation bond refinancing set to be finalized on June 7^th and lower than expected interest rates for the current year, the City will gain more than $100 million in additional funds to help close gaps in the Fiscal Year 2013 budget, according to City Comptroller John C. Liu.

Liu will provide the information, which has not yet been included in the Mayor’s Executive Budget, today when he testifies before the City Council Finance Committee.

Comptroller Liu said that lower than expected interest rates will yield $33.6 million in savings which could be rolled over to FY 2013; while the  refinancing, which was announced on May 23^rd by the Comptroller’s Office and Mayor’s Office of Management and Budget, would produce savings of $67.8 million in FY 2013 and  $68.9 million for Fiscal Year 2014.

“By successfully navigating the bond market, we have been able to save more than $100 million which can now be used to provide budgetary relief,” Comptroller Liu said.  “As our national and local economies remain fragile and we are facing a number of risks to the City’s bottom line, we must continue to aggressively identify savings and recoup every single dollar the City is rightfully owed.”

Comptroller Liu also reiterated his call for the City to recoup as much as $163 million from Hewlett Packard as a result of overbilling and underperforming on the contract to upgrade the City’s 911 call system, which was uncovered as a result of a recent audit.

Some other aspects of Liu’s testimony and budget report, which can be found at http://www.comptroller.nyc.gov/bureaus/bud/budget_reports.shtm include:

·         The budget relies heavily on one-shots to close the gap, specifically an estimated $1 billion for the sale of taxi medallions that may not materialize

·         The settlement from CityTime and $1 billion in funds from the Retiree Health Benefit Trust are being used to close gaps

·         Events outside the City’s control such as the Eurozone or a stalemate in Washington D.C. should spur the City to institute a Capital Acceleration plan to foster job growth and address  the high unemployment rate

·         The potential cost as a result of City Hall’s failed negotiations with the United Federation of Teachers and Council of School Supervisors and Administrators could be as high as $2.5 billion in FY 2013

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LIU: MISMANAGEMENT OF 911 UPGRADE PICKED TAXPAYERS’ POCKETS

  

 Findings of possible fraud referred to Manhattan DA; City should recoup as much as $163 million for wasteful project. 

  According to an audit released today by City Comptroller John C. Liu, the contractor selected to streamline the City’s vital 911 call system was unqualified and so poorly monitored that it was able to overbill taxpayers by as much as $163 million. Because of the severity of the findings and potential for fraud in both the vendor selection and billing processes, Comptroller Liu has referred the matter to the Manhattan District Attorney’s Office for further review.

This follows a previous audit released by Comptroller Liu in March that found the Emergency Communications Transformation Program (ECTP) had only one component up and running, was seven years behind schedule, and a billion dollars over budget.

Today’s audit found that severe mismanagement by DoITT has resulted in the City taxpayers not getting what they paid for. In fact, the systems integration portion of the much needed 911 upgrade could cost an additional $362 million, with taxpayers entitled to as much as $163 million in restitution.

“We have long feared that CityTime was not an isolated incident, and unfortunately what we have learned today is that our fear has become a reality,” Comptroller Liu said.  “With one month to go before the City’s budget is ratified, and with devastating cuts on the table, taxpayers should be outraged at the fleecing that transpired under City Hall’s watch.”

The audit uncovered a lengthy series of missteps, starting with the selection of an unqualified company as lead contractor and continuing throughout the life of the ongoing project.

Some of the most egregious findings include:

•       Hewlett Packard (HP) was unqualified because it failed to meet DoITT’s minimum technical requirements for selection and should have not been hired as lead contractor on the project, calling into question the solicitation process and resulting in delays and cost overruns;
•       DoITT allowed HP to drastically mark up subcontractor bills resulting in questionable billing;
•       Project consultants were unqualified and billed at higher rates than allowed;
•       Despite numerous failures and unsatisfactory reviews, City Hall failed to assess any damages against HP, in accordance with the contract.

"As the end users of the info produced by the UCT, fire officers have known right from the beginning that the system did not function,” said Uniformed Fire Officers Association President Al Hagan. “Fire officers refer to UCT as "U Can't Tell", because we never knew whether the information we were getting was accurate. Now, thanks to the diligent work of the Comptroller's office, we know we were overcharged for a shoddy system."

“It appears that we have another large billing overcharge like CityTime. It is not enough to just recover our losses after an audit; we need better oversight from the beginning to keep the City from becoming easy pickings,” said City Council Member Gale Brewer.

AUDIT FINDINGS

DoITT Hired an Unqualified Contractor

In 2004, the City received two proposals from iXP Corporation and Hewlett Packard for the systems integration portion of ECTP.  iXP passed the test for the required technical standard and was selected. However, the company unexpectedly withdrew its proposal and rather than re-soliciting the contract, DoITT selected HP, which had twice failed to meet the minimum technical score to manage and complete the project. In addition, iXP was hired by HP as a subcontractor on the project, which raised suspicion.

DoITT justified awarding the contract to HP by stating that the company had stellar recommendations from the NYPD and the US Air Force, and was at the time contracted to perform CAD system upgrades at NYPD.  Furthermore, DoITT stated that re-soliciting the contract would delay the important project. Both explanations have proven hollow.

In fact, DoITT had no record of NYPD or Air Force recommendations. Furthermore, as far back as 2004 — before the project was solicited — the NYPD gave HP an unsatisfactory review on the quality and timeliness of HP’s performance in a VENDEX performance evaluation.

It also turns out that HP paid the NYPD a $33 million settlement in 2008 for failing to deliver the very CAD system that served in part as justification for their selection on ECTP.

Finally, DoITT stated that it selected HP, instead of soliciting additional applicants, in order to avoid delays.  Nevertheless, the ECTP project is seven years behind schedule, incomplete, and $1 billion over budget, according to Comptroller Liu’s March audit.

Poor oversight and failure to deliver resulted in cost overruns

HP was selected as lead vendor to complete three major components of the ECTP system integration, under a contract that was not to exceed $380 million.  Although HP failed to deliver two of the three components (a unified-CAD and PSAC 2), the estimated cost for the completion of PSAC 1 is $346 million.

In addition, the City has had to engage a second vendor, Northrop Grumman, to complete what HP has failed to do, driving the systems integration costs to $632 million.

There is no disputing the fact that HP has failed to deliver what they were contracted for.  This failure is due to a lack of oversight on behalf of the City and has resulted in another IT project drastically increasing in cost.

City Hall’s free pass to HP cost taxpayers $113 million

Despite documented dissatisfaction with HP’s failure to deliver on the ECTP project, DoITT paid the company $113 million during the first three years of the contract. City Hall refused to heed warnings from high-level agency commissioners and made no effort to recoup expended funds after HP was found to be unsatisfactory, in accordance with the contract.

In 2007, the then-DoITT Commissioner in conjunction with NYPD and FDNY officials, wrote to the then-Deputy Mayor and outlined numerous problems with HP and recommended termination. No action was taken.

In 2008, DoITT stated HP “needs improvement” or was “unsatisfactory” in response to all 20 questions on a VENDEX performance evaluation. And in 2009, a “Lessons Learned” report by the quality assurance
monitor found the same issues within the same time frame.

In the face of the striking failures by HP, the City failed to assess damages to the company, instead City Hall stood idly by and took no action.

Project consultants were unqualified and overbilled the City by an additional $50 million

DoITT and HP did not properly ensure that project consultants were qualified for their titles, that hours were billed appropriately and accurately, and that timesheets were approved in a timely manner.  As a result DoITT should move to recoup as much as $50 million for questionable timesheets (in addition to the aforementioned $113 million).

Billing errors included:

•       13 consultants were overpaid $1.5 million during the audit period. HP billed eight consultants at a higher paying title than they were working at and an additional five consultants were not qualified for their titles.  Auditors were unable to determine if an additional 71 consultants were qualified and paid appropriately
•       3 consultants who were qualified to be administrative staff were billed as Project Managers or Project Analysts (Engineers) for $396,000.
•       HP billed the City at a rate of $192 per hour for non-allowable tasks such as opening the door for visitors and handling restroom garbage.
•       Consultants submitted electronic timesheets indicating work was reported prior to actually performing the work, sometimes as far as a month ahead.

DoITT’s contract management drove up costs

DoITT’s poor management of HP and heavy reliance on subcontractors drove up costs and allowed the lead vendor to take advantage of taxpayers. For example:

•       HP was allowed to bill DoITT for the cost of leasing a management office, including payments for rent, City taxes, coffee, paper, postage, and office supplies
•       DoITT never reduced the contract amount when it was clear that HP could not finish all three components of the project
•       DoITT allowed HP to bill between 9 and 195 percent mark ups for subcontracted services  and allowed HP to change the payment structure on 8 contract components from deliverable (paid upon completion) to time and material (hourly), thus incentivizing additional billing delays

The audit also noted that there were lengthy delays in timesheet approval by HP, ranging from two to 885 days and that more than half waited two months or more for approval.  As a result of egregious timesheet errors HP may have overbilled the City as much as $106 million.  Of this $106 million, $56 million is included in the previously mentioned $113 million.  The remaining $50 million is for work billed after 2008.

As a result of the audit, Comptroller Liu’s office made 11 recommendations to DoITT, of which the agency agreed to four.  Because of the severity of these findings, and potential for fraud in both vendor selection and billing processes, Comptroller Liu has referred the matter to the Manhattan District Attorney’s Office for further review.

Comptroller Liu credited Deputy Comptroller for Audits Tina Kim and her team for their hard work on the report, which can be found here:
http://www.comptroller.nyc.gov/bureaus/audit/audits_2012/06-30-12_FM11-107A.shtm


Background:

The Emergency Communications Transformation Program (ECTP) was initiated in 2004 to transform and consolidate the City‘s 911 Emergency Dispatch System. The objective of the ECTP is to centralize and integrate the call-taking and dispatch operations between the New York Police Department (NYPD) and Fire Department of New York (FDNY), including its Emergency Medical Dispatch (EMD) division, into two fully integrated Public Safety Answering Centers (PSAC 1 and PSAC 2) equipped with state-of-the-art hardware and software communications systems.

On April 1, 2005, the Department of Information Technology and Telecommunications (DoITT) contracted with Hewlett-Packard Company (HP) as system integrator for the ECTP. The contract includes, but is not limited to, development for PSAC facilities, organizational transformation of the call-taking process, application integration for all Computer-Aided Dispatch (CAD) systems and the Automated Vehicle Location (AVL) system, and the communication infrastructure supporting the ECTP.

Comptroller Liu’s audit examined the awarding, management, and billing of the Department of Information Technology and Telecommunications’ $380 million contract with Hewlett Packard (HP) to conduct work on
ECTP. The audit reviewed the contract records over five years, from its awarding in 2005 through 2010.


Comptroller Liu has put strict payment requirements in place for the City’s second systems integration contract to complete this important project to ensure that this is not repeated:
http://www.comptroller.nyc.gov/press/2011_releases/PR11-03-025.shtm

In March, Comptroller Liu announced audit findings on the overall project management of ECTP by DoITT.  This report addresses a more detailed facet of that management, DoITT’s contract with HP.  The March audit can be found at:
http://www.comptroller.nyc.gov/press/2012_releases/pr12-03-026.shtm

On May 14th a delegation of Congressional representatives sent a letter to the Comptroller General of the United States, requesting an investigation into Mayor Bloomberg’s lack of oversight of spending on private contractors funded by the City of New York with help from federal funds.

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LIU REPORT: NYC’S INCOME GAP TWICE THE NATIONAL AVERAGE

Top 1% Takes One-Third of NYC’s Income

City Comptroller John C. Liu today released a report that details the income disparity in New York City. The study found that the top 1% of income tax filers receive one-third of all City personal income, a share that is almost twice the national average.

“Such a wide income gap has financial consequences for the City,” Comptroller Liu said.  “Income inequality can weaken or destabilize the local tax base, reinforce patterns of racial and economic segregation, and undermine the vibrant social, cultural, and economic mix that is the foundation of New York City’s identity. It also threatens the very fragile economic recovery we are now experiencing.”

The report found that New York City tax filers in the top 1% accounted for 32.5% of the City’s entire reported income in 2009, based on the most recent micro-data available from the New York State Department of Taxation and Finance. By comparison, the top 1% across the U.S. accounted for 16.9% of income.

The income gap is further highlighted by the concentration of income among the very wealthiest. The most affluent 15,000 New York City households (the top 0.5% of filers) took in 26.7% of the City’s income.  The top 2,000 households (the top 0.05% of filers) accounted for 18.9% of all income reported in the City.

Unequal gains in good years

The top 1% of earners ended the past decade with an average income of $2.2 million, the same level at which they started in 2000. This reflects the volatile nature of investment income earned by the ultra-wealthy. However, the gains made by these top filers in the boom years (2003-2007) illustrate the speed with which income disparity grew in New York City.

During the good years, New Yorkers in the 99% of income earners made gradual gains that raised their average annual income from $41,000 to $50,000.  In those same years, the income of the top 1% skyrocketed, more than doubling from $1.5 million to $3.9 million. From 2007 to 2007, 66% of the income growth citywide went to the top 1% of tax filers.

“We must not repeat the pattern of the last decade when a few gathered enormous wealth, while the vast majority of New York families were left behind or saw very modest gains,” Comptroller Liu said.

Background

“Income Inequality in New York City” was produced from research by the Comptroller’s economic advisory team led by Dr. Frank Braconi, Chief Economist in the NYC Comptroller’s Office. 

Download the full report here: http://www.comptroller.nyc.gov/bureaus/cac/pdf/NYC_IncomeInequality_v17.pdf
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LIU STATEMENT ON PROPOSED REFORMS TO STOP AND FRISK

 

  City Comptroller John C. Liu stated the following in response to questions about proposed police reforms to stop and frisk:

“The stop and frisk policy doesn’t need to be reformed, it needs to be abolished. Remedies such as training videos and informational cards are inadequate band-aids. It’s time to end this divisive and ill-conceived tactic.

“According to reports, New Yorkers were stopped and frisked by police  nearly 700,000 times last year – almost all of those targeted were innocent of any crime, and almost all of them were Black or Latino. It’s just impossible to say stop and frisk is not racial profiling,
and continuation of this practice not only violates the department ban against racial profiling but raises civil rights questions. It also poses a potential financial liability to the City, as evidenced by rising claims against the NYPD and the federal judge’s ruling allowing class-action status in a stop and frisk lawsuit. It’s time to stop ‘stop and frisk’.”


Background:

•       According to preliminary statistics, there were 2,241 new civil  rights claims filed against the NYPD in Fiscal Year 2011, up 23 percent from the 1,826 claims filed in FY 2010.

•       Overall, 8,913 claims were filed against the NYPD in FY 2011  (including personal injury and property damage), an historic high.

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LIU STATEMENT ON CITY UNEMPLOYMENT RATE

 

  City Comptroller John C. Liu stated the following in response to questions about new unemployment figures:

“Although today’s labor market report shows a record number of jobs in  the city, the unemployment rate remains at an unacceptable 9.5 percent and continues to disproportionately impact minorities and young people.  We must find ways to create jobs for the 345,000 unemployed
New Yorkers who cannot wait years for the recovery to filter down to them.

“My office has put forth a Capital Acceleration Plan which would  create 15,000 jobs and enhance our City’s infrastructure; all the while saving taxpayers money in the long-run. As the City Council and Mayor’s Office negotiate the upcoming budget, we are calling for the inclusion of this plan in order to put New Yorkers back to work as quickly as possible and revive the City’s ailing construction industry.”

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LIU: TUTORING FIRM OWES CITY $850,000 FOR BAD BILLING

 Audit Raises Serious Concerns over Dubious Timesheets

 

  City Comptroller John C. Liu today announced that an audit of Champion Learning Center, a tutoring company in contract with the Department of Education, uncovered questionable payments for dubious bills.

Many of the submitted attendance sheets that the DOE paid did not have the required documents that would prove a student was in fact tutored. An additional set of payments went to tutoring services supposedly performed between midnight and 5 a.m.

“Taxpayers can’t afford to write multi-million dollar blank checks for tutoring services that may not have taken place,” Comptroller Liu said.   “The DOE’s lack of oversight not only shows serious mismanagement, but may have also enabled fraudulent billings.  Every education dollar wasted robs students of the education they deserve. DOE should investigate these billings and recover all the money the City is owed. Doing so will send a clear message to companies that do business with the City that New Yorkers will not be taken for a ride.”

Under the federal No Child Left Behind Act, eligible students enrolled in schools in need of improvement are provided free tutoring to improve their education and performance on state academic standards and assessments.  Champion Learning Center was one of 52 state-approved tutoring providers during School Year 2009-2010.  Champion entered into a $40 million contract with DOE to offer tutoring services, primarily in students’ homes, from September 1, 2009 through August 31, 2012.

The audit found that Champion lacked adequate controls and failed to live up to key provisions of its contract.  Champion’s management weaknesses were compounded by DOE’s inadequate oversight. Ultimately, Champion billed and was paid by DOE for tutoring services for which there was inadequate or questionable documentation.

The findings raised questions about the accuracy of the overall billing for tutoring services that Champion submitted to the DOE.

Timesheets show tutoring at barred or impossible hours

During school years 2009-2010 and 2010-2011, Champion billed the DOE and was paid $836,254 for services reportedly provided during hours in which it was not allowed to tutor or at odd times (midnight to 5 a.m.). The billing for these hours could signal fraud. 

The DOE agreed with the audit’s recommendation that it recoup the $836,254. The agency has since changed its billing portal for vendors to prevent them from submitting requests for payment for services during school hours or the middle of the night.

Billing documentation lacking or missing

DOE paid Champion for tutoring services without adequate evidence that the services were, in fact, provided.  Auditors examined a random sample of 164 attendance sheets cards paid by the DOE and determined that 10% (16 of 164) did not contain the tutor’s name or signature as required and 47% (77 of 164) were not signed by the supervisor as required. The audit also reviewed records for tutoring services for 76 students and found that of the total $151,435 the DOE spent, $22,525 (15%) covered 322 hours of work that did not have adequate attendance sheets.

DOE agreed with the recommendation that it investigate and, if warranted, recoup the total of $22,525 for payments that were not supported by attendance sheets.

Champion agreed with the audit’s recommendations that the company strengthen its internal controls to ensure that attendance sheets are properly reviewed and include the required signatures.

Liu credited Deputy Comptroller Tina Kim and the Bureau of Audit for their work on this report.  The full audit can be found at www.comptroller.nyc.gov.

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LIU STATEMENT ON MAYOR’S OFFICE RELEASE OF 911 CALL SYSTEM CONSULTANT REPORT

  City Comptroller John C. Liu today issued the following statement on the decision by the Mayor’s Office to disclose, after delaying, the partial contents of a taxpayer funded consultant report on the City’s 911 call system upgrade:

“It’s sadly ironic that the City hired an expensive outside consultant to review the work of other expensive outside consultants. This report is not only a waste of more taxpayer dollars, but seems to be duplicative of what my auditors have already found.  My audit team is currently finalizing our second report on this project, which will delve further into issues regarding the financial management of this important initiative. We will review the details of what is being released today but it won’t change the fact that City Hall has consistently shirked its responsibility to properly manage IT projects during the past decade, which has resulted in fraud, cost overruns and massive completion delays.” 

Background:

Comptroller Liu recently released a year-long audit which detailed massive mismanagement, seven years of delays, and one billion dollars in costs overruns in the upgrade of the 911 system. The report is available at www.comptroller.nyc.gov/bureaus/audit/audits_2012/3-20-12_7A11-104.shtm

In addition, Liu’s office is currently finalizing a second report on the Emergency Communications Transformation Program (ECTP) which delves further into the financial aspects associated with the project. The audit will be released in the coming weeks.

In December 2010, Comptroller Liu’s office rejected the New York City Department of Information Technology and Telecommunications’ (DoITT) request for a $286 million contract for ill-defined services based on hourly consulting fees for ECTP. That contract, which was with Northrop Grumman, was restructured to clearly defined deliverables, with a cost revised down to $95 million.

In a related report, Liu released an audit on the Fire Department’s reporting of response times in the Mayor’s Management Report, which found discrepancies in the calculation and reporting of emergency response times. Link to the report: www.comptroller.nyc.gov/bureaus/audit/audits_2011/10-19-11_MH10-139A.shtm

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LIU PUTS BRAKES ON “TAXI OF TOMORROW” UNTIL VEHICLES ARE WHEELCHAIR ACCESSIBLE

Taxi Contract Violates Civil Rights and Is Dead on Arrival Until It Meets Requirements of Americans With Disabilities Act

 

NEW YORK, NY – City Comptroller John C. Liu today called on Mayor Michael Bloomberg to modify the proposed “Taxi of Tomorrow” agreement before sending the contract to the Comptroller’s Office for approval as required by the City Charter.  Comptroller Liu vowed to reject the agreement, until New York’s entire taxi fleet follows in the footsteps of cities like London and makes all cabs wheelchair accessible.

“The new contract for taxis presents us with a historic opportunity to right a wrong that New Yorkers with disabilities have been fighting to achieve for nearly two decades,” Comptroller Liu said.  “Requiring cabs to have independent passenger climate controls is nice, but when you fail to make them accessible to a growing number of New Yorkers, it’s not just a slap in the face, it’s illegal.  We will send back any plan that does not uphold the civil rights demanded by the Americans with Disabilities Act.”

New York City’s 13,000 yellow cabs are famous, but for individuals with disabilities they represent the frustration of a separate and unequal transportation system.  Just 231, less than 2%, of City taxis are wheelchair accessible.  Although the City controls the sale of taxi medallions, it has failed to require that all taxis be accessible to wheelchairs.

“With the Taxi of Tomorrow, Mayor Bloomberg had the opportunity to transform the way New Yorkers get around the city whether they’re on two feet or four wheels,” said Assembly Member Micah Kellner.  “Sadly, his choice for the Taxi of Tomorrow – the Nissan NV-200 – will be remembered as the Cathy Black of taxis. The Mayor should scrap his contract with Nissan and commit to making every taxi accessible to people with disabilities.”

“The Taxi of Tomorrow contract should be rejected,” said City Councilmember Oliver Koppell. “The contract includes terms that, in my view, violate the Americans With Disabilities Act and the Equal Protection Clause of the U.S. Constitution.  The City has a responsibility to come down on the side of civil rights.”

“The Mayor and Taxi and Limousine Commissioner have chosen to deny access to new taxis to wheelchair users and require only some to be accessible,” said James Weisman, SVP and General Counsel United Spinal Association.  “They would force wheelchair users to depend on a dispatch system instead of being able to hail any cab like all other New Yorkers and visitors.”

In December 2011, a federal court ruled that the City, through its Taxi and Limousine Commission, was in violation of the ADA.   Recent proposals have failed to directly address this violation of civil rights.  A proposal for a separate dispatch system for passengers using wheelchairs, for example, fails to address the underlying problem — there are not enough wheelchair accessible taxis in the City.

“The so-called “Taxi of Tomorrow” is really the taxi of yesterday,” said Edith Prentiss, Chair of the Taxis for All Campaign.  “It rolls us back to the days before the Americans With Disabilities Act became federal law, two decades ago.”

Making the City’s taxi fleet wheelchair accessible is not just a civil rights issue, but is also simple common sense.  Expanding access to taxis would reduce the financial stress on the MTA’s Access-A-Ride program.

“Let’s face it, anyone could find themselves in a wheelchair tomorrow,” said Comptroller Liu.  “We should do everything possible to ensure that New York City’s iconic yellow cab does not become a symbol of exclusion by telling wheelchair users ‘find another ride.’ That’s not what New York City is about.”

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TEXT IN FULL OF COMPTROLLER LIU’S LETTER TO MAYOR BLOOMBERG:

 

May 2, 2012

Honorable Michael R. Bloomberg

Mayor

City Hall

New York, NY  10007

Dear Mayor Bloomberg:

The New York City Charter (“Charter”) requires that all contracts or agreements executed pursuant to the Charter or other laws are registered by the New York City Comptroller’s Office (“Comptroller’s Office”).  The Comptroller’s Office understands that the New York City Taxi and Limousine Commission (“TLC”) and Nissan have entered into a contract to provide  the “Taxi of Tomorrow” for use on New York City streets by taxi medallion owners. 

On December 23, 2011 a federal court held that the City, through TLC, was in violation of Title II of the Americans with Disabilities Act (“ADA”), which prohibits discrimination in governmental activities.  The court further held that TLC was not providing meaningful taxicab access to disabled people who required wheelchairs, and that the lack of access was a direct result of TLC’s pervasive policies, practices, and regulations of taxicabs in the City.

The court also required TLC to propose a comprehensive plan describing how it would provide meaningful access to wheelchair users, including targeted goals and standards, as well as measurable results.  The court further ordered that until TLC proposed such a plan, all new taxi medallions sold must be for wheelchair accessible vehicles.  It should be noted that “meaningful access” was defined, not as a Utopian goal or a political promise, but as a basic civil right for those with disabilities. 

Moreover, the United States Department of Transportation has mandated that vans seating less than eight people are required to be accessible. The "Taxi of Tomorrow" does not meet this requirement.

Based on the TLC’s website, the “Taxi of Tomorrow” design lists a number of features; however, wheelchair accessibility is not one of them.  We understand that the City is cobbling together a dispatch system and a plan to retrofit Nissan NV200 taxicabs to make them wheelchair accessible in an attempt to comply with the federal court ruling.  However, without a comprehensive plan to provide meaningful access it is clear that any contract to provide a “Taxi of Tomorrow” that is not accessible to the estimated 60,000 New Yorkers who use wheelchairs would violate the ADA and the federal court’s decision.

The City should take immediate steps to modify the contract so that the entire “Taxi of Tomorrow” fleet is wheelchair accessible.  New York City ought to be a leader, not a follower, on this important civil rights issue.

Sincerely, 

John C. Liu

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COMPTROLLER LIU STATEMENT ON MAYORAL VETO OF PREVAILING WAGE BILL 

   City Comptroller John C. Liu issued the following statement about the Mayor’s veto of the Prevailing Wage Bill:

  “As a City employee the Mayor continues to ignore the widening wealth gap within the five boroughs. In opposing these bills, he is sending the wrong message, that our scarce taxpayer resources are better spent on lining the pockets of wealthy corporate executives rather than creating fair-paying jobs to support working families and the communities in which they live.  Needless to say, my office looks forward to the Council overriding these vetoes, and to continuing to enforce Prevailing Wage Laws, which help promote equality and fairness in our City.” 

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FIX THE FLEET OF FLOATING LEMONS OR LET’S RECOUP OUR MONEY

 $142 million and counting… New Staten Island ferry boats unreliable and budget-busting

 

 

  City Comptroller John C. Liu today joined with State Senator Diane Savino, State Assemblyman Matthew Titone, City Council Member Debi Rose and the Staten Island Ferry Riders Committee to call for better management and oversight by the NYC Department of Transportation (DOT) over the repair and maintenance of the new Staten Island Ferry boats.  The “Molinari Class” vessels were put into service in 2005 and 2006 but have been chronically out of service and generated significant cost overruns.
   The $139 million “Molinari Class” ferry boats have had a long history of problems. In fact, one of the three ferries is currently dry docked in Norfolk, Virginia and has been out of service since December. After months of unsuccessful repair work to the boat, the DOT recently demanded $9.5 million in “emergency contract” funding to attempt to fix persistent problems with the fleet.

   Liu's office rejected the request, noting that the DOT could not  provide assurance that the work and $9.5 million would finally fix the longstanding problems. Last week, Liu's office signed off on a $3.2 million emergency contract so that work can proceed quickly on the ferry that is currently dry docked. If in fact the work on that ferry boat is completed successfully, the DOT will follow normal procurement procedures for funding the repairs to the other two ferry boats.  If the repairs fail once again, Liu will explore options to recoup funds associated with the boats’ failures.

   “The ferry is an icon of New York as well as a daily necessity for the  Island’s residents. It's appalling that the highly-touted new ferry boats are still saddled with defects and more troubling that the DOT has no clear solution for resolving these longstanding problems,” Comptroller Liu said. “We will greenlight contracts and funding but in a way that maximizes service for Staten Islanders without giving blank checks to the DOT. The DOT can and must do better with the ferry.”

  State Senator Diane Savino noted, “As a Staten Islander, a ferry rider  and as a member of the Taskforce on State Governmental Efficiency, I want to thank Comptroller Liu for bringing this issue to the forefront. Taxpayers put their trust in government and we should honor that trust by shining a light on obvious waste; these boats were supposed to be the best in cutting edge technology, we paid for the best so we shouldn't accept anything less.”

  “Clearly the city was sold a bill of goods that does not live up to  anyone’s expectations. Since the taxpayers are now stuck with footing the bill for these repairs, the City needs to take every step
necessary to ensure full reimbursement from the manufacturer for this failed investment,” said State Assemblyman Matthew Titone. “It’s the only fair solution, not only for the residents of Staten Island but the City as a whole.”

Background:

  In 2001, the City awarded a contract worth $119 million to Manitowoc  Marine group, Inc. for the construction of three new ferry boats to replace the existing fleet of “Kennedy Class” ferries, which date back
to 1965. The contract ultimately cost $139 million and the three newly purchased ferries (Sen. John J. Marchi, Spirit of America, and Guy V. Molinari) were placed into service between 2005 and 2006.  Since being placed into service, all three boats have experienced problems with their propulsion systems (drives), causing DOT to classify the problem as “systemic.” Currently only two of the boats are in service, with the Sen. John J. Marchi resting in dry dock in Norfolk, Virginia after being taken out of service in December, when Ansaldo Sistemi Industriali, the drives’ original manufacturer, failed in its attempts to fix the problems.

The DOT then demanded that Liu’s office approve an “emergency  contract” with Siemens Industry for $9.5 million for work on three ferry boats.

In its request, DOT stated:

  “For over a month and a half, the ASI technical representatives  surveyed and inspected equipment, collected and analyzed data and participated in numerous dock and sea trials. Thus far, they have been
unable to identify the root cause of the problem or provide recommended solutions. The drives have failed before, as have replacement parts, and it is clear that ASI is unable to support its own equipment to a level required for reliable operation of this vital equipment.”

  “Only Siemens Industry has the knowledge to quickly provide drives and  related equipment that can be easily integrated with its software and plant management.”

  When DOT failed to provide specifics for the contract funding, Liu’s office rejected the request, questioning why it was deemed an emergency when the agency had clearly known about these problems for quite some time.  Subsequently, a series of meetings took place between the DOT and Comptroller’s office, where DOT failed to explain the reasoning for requesting $9.5 million all at once, nor could the agency provide guarantees that a solution would be reached.

  Liu’s office approved last week the funding request for $3.2 million  to address the problems on one of the boats – the ferry that sits in dry dock in Norfolk, Virginia.

  If in fact Siemens can fix the boat, then DOT will have to go through standard procurement procedures in order to obtain additional funds.

  Since the “Molinari Class” of vessels was placed into service in 2005  and 2006, they have regularly experienced problems.  Before he was elected to the Office of City Comptroller, Liu chaired the City
Council Transportation committee where he convened several public hearings about the Staten Island Ferry.

  In one 2009 hearing, he questioned DOT on the boats’ performance.  During that hearing it was discovered that the DOT knew of persistent problems since the boats were placed into service, had no plan to rectify those problems, and were not exploring options for holding the manufacturer liable.

  Ferries undergo strict safety evaluations by a host of regulatory agencies before they are placed into service, ensuring their safety.

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LIU: PARKS S DEPARTMENT DROPPED THE BALL AT TROUBLED ATHLETIC CLUB

 

An audit released today by City Comptroller John C. Liu found that the Parks Department failed to ensure the correction of serious problems at a Brooklyn athletic club that were identified in an audit released three years ago.  The Parks Department gave a private company, Fitmar Management, the concession to manage the Paerdegat Athletic Club in Brooklyn and collect revenue there, but did not enforce the agreement to ensure the company corrected longstanding financial and sanitary problems.

“The Parks Department can and should do more to monitor the operations  of its concessionaires, especially when the facility serves our youth,” Comptroller Liu said.  “These problems should have been corrected a long time ago.”

The Comptroller’s Office routinely follows up on the subjects of  previous audits.  The audit released today found the Parks Department and Fitmar Management enacted just two of 22 recommendations from a 2009 audit conducted under then City Comptroller William C. Thompson, Jr.

Troubled Finances
Since 2009 the Parks Department continued to accept questionable financial records from its concessionaire, which underreported its gross receipts for 2011 by at least $123,369..  Fitmar and the Parks Department also failed to take any action on a 2009 recommendation that the company estimate how much revenue was lost to the City from employee theft.  In addition, as of February 10, 2012, the company owes the City $177,736 in unpaid license fees and late charges.

The company did not record or report to the Parks Department revenue  from special events. Fitmar could not provide auditors with contracts for all its special events, and stated that special events were not held at the Athletic Club, despite hosting three dance parties there between July and September 2011.

Health Code Violations, Potentially Hazardous Conditions    

The Parks Department’s license agreement with the company requires it to maintain the facility in a “first class condition.”  The 2009 audit, among “unsafe and unsanitary conditions,” found mushrooms growing out from under the indoor track at the Athletic Club.  More recently, the Department of Health found “evidence of mice or live mice present in the facility’s food and/or non-food areas” during inspections in July and August 2011.

During site visits, auditors observed exposed metal edges in a children’s play area, torn gymnastic mats, and filthy carpeting.

For its licensed children’s programs, Fitmar also did not conduct background checks on all its employees as required by state law.

2012 Audit Recommendations
•       The Parks Department should require Fitmar to immediately pay $177,736 in outstanding license fees and late charges.
•       The Parks Department should terminate its agreement with Fitmar.

Response
The Parks Department and Fitmar agreed with most of the audit’s findings. Parks further stated that it informed Fitmar of its intent to re-solicit the concession to run the Paerdegat Athletic Club and required that Fitmar pay the $177,736 in outstanding fees.

Background
The Parks Department signed a 20-year agreement with Fitmar to run and maintain an athletic facility with two snack bars at Paerdegat Athletic Club on December 11, 2004.

On September 24, 2009, the Comptroller’s office released an audit of the management and oversight of Paerdegat Athletic from 2005 through 2007, which made 22 recommendations.  The latest audit was launched in June 2011 to determine whether the Parks Department and Fitmar enacted those recommendations.

Liu credited Deputy Comptroller Tina Kim and the Bureau of Audit for  their work on this report.  The full audit can be found at www.comptroller.nyc.gov

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