LIU AUDIT: MANAGEMENT OF 911 CALL CENTER PROJECT WAS INEFFECTIVE

-Absentee management led to delays, cost overruns and abandoned priorities –

  City Comptroller John C. Liu released an audit that found the Emergency Communications Transformation Program (ECTP) has suffered severe management flaws since its inception, resulting in a domino effect of delays and a billion dollars in cost overruns.

ECTP is now a billion dollars over budget, from an estimated $1.3 billion, to now an estimated $2.3 billion (City Capital Commitment plan, dated February 2012.) The project was scheduled to be completed in 2008. The latest figures released by Mayor Bloomberg now peg completion in 2015 - seven years behind schedule.

This audit, the first of two by Comptroller Liu’s office, identifies serious issues with the overall management of this important public safety project.  Auditors found an alarming lack of decision-making by City Hall which led to major technical missteps, the abandonment of a critical objective, and poor vendor performance.  Other findings show that the current project lacks a quality assurance monitor, and the newly created agency to oversee ECTP is ill-equipped for the job.

“Taxpayers are just tired of hearing about out-of-control projects involving expensive outside consultants,” Comptroller Liu said.  “This is unfortunately yet another example of massive waste and delay due to City management that was at best lackadaisical, and at worst, inept.  New cost constraints put in place by my office will help curb overruns, though they cannot turn back the clock or put already wasted dollars back in taxpayers’ pockets.”

Last year, 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. That contract, which was with Northrop Grumman for the PSAC #2 component of ECTP was restructured to clearly defined deliverables, with a cost revised down to $95 million.

Comptroller Liu’s office is currently in the process of auditing the HP contract for PSAC #1 (See history below).

HISTORY:

ECTP was initiated in 2004 to consolidate emergency communications (FDNY, NYPD, and EMS) within the City.  It is a multi-year, multi-agency undertaking that includes two separate Public Safety Answering Centers (PSAC#1 and PSAC#2). Oversight is delegated to DoITT.

Hewlett Packard was contracted to serve as project manager over PSAC#1 and #2 in 2005, with Northrop Grumman now serving as lead on PSAC#2 since January 2011.

AUDIT FINDINGS

COMMISSIONER’S EARLY WARNING WENT UNHEARD

City Hall disregarded early warnings from the agency in charge of the project. In April 2007, an internal memo from the then-DoITT Commissioner attempted to sound the alarm on ECTP by raising questions about the vendor’s poor management of subcontractors which led to questionable billings, incomplete status reports and schedules, and the lack of corporate oversight or quality assurance.

The Commissioner, with the support of NYPD and FDNY, recommended the contract be cancelled and re-bid.  However, City Hall disregarded this advice and instead placed the project under the supervision of a Deputy Mayor, who outlined a timeline to meet three goals for ECTP - none of which were met.

MANAGEMENT OF PROJECT INSUFFICIENT

Since its inception ECTP has been managed by an interagency governance structure. However, a May 2009 consultant report by the Gartner group, entitled “Lessons Learned,” outlined key deficiencies in this structure such as:

-          Lack of timely and effective decision making

-          Lack of a clearly defined strategy and direction

The Gartner report provides eleven pages of suggested changes in management and standards of operation to prevent the same problems from occurring in PSAC #2.

POOR MANAGEMENT LEAD TO PROJECT DELAYS

Technical problems with mission critical VESTA software, including the inability to keep up with NYC call volume, led to a three - year delay in the implementation of PSAC#1.

While both PSACs were expected to be operational by 2008, only PSAC#1 is complete.  At present time, the foundation and walls have been completed on PSAC#2, with Mayor Bloomberg recently stating that completion is now expected by 2015 – seven years past its estimated completion and 11 years after the project was announced.

ORIGINAL GOALS HAVE BEEN ABANDONED

One of the most crucial components of the original plan – a shared Computer Aided Dispatch (CAD) between FDNY, NYPD, and EMS scheduled to be completed in 2007, was never implemented and may never be fully established.  As a result of this failure in delivery, the NYPD portion of the CAD program has been moved from ECTP completely, resulting in additional expenditures.

MONITORING AGENCY 40 PERCENT UNDERSTAFFED

In 2010, the Mayor’s Office created the Office of Citywide Emergency Communications (OCEC) to be lead coordinator on the ECTP project.  However, the agency has been plagued by personnel changes and leadership problems since its creation. As of September 2011 the agency remained nearly 40 percent below targeted headcount.

NO CURRENT QUALITY ASSURANCE

In addition to the personnel gap in OCEC, the current project is progressing without any outside monitoring by a quality assurance expert.  Instead, DoITT plans on hiring “additional project managers and subject management experts on the program.” Liu’s auditors warned against this, stating that “going forward on PSAC#2 without an independent QA process could recreate all the deficiencies noted in this report.”

DoITT AGREES WITH AUDIT RECOMMENDATIONS

As a result of the audit DoITT has agreed to all recommendations in order to address the issues that have emerged concerning their ability to provide oversight on this project.

Liu credited Deputy Comptroller H. 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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Women's History Month Celebration 2012

  It was the First Lady of the Bronx who took center stage at Bronx Borough President Ruben Diaz's Women's History Month celebration Thursday. New York 1 reporter Roma Torre was the Mistress of Ceremony, and it was First Lady Hilds Diaz that greeted everyone. Ms. Diaz is employed by the Port Authority, called BP Diaz "Still Her Honey", and spoke of her mother who told her to "Get a good education, and marry a man who can do his own laundry". 
  BP Ruben Diaz Jr. then spoke, saying he could not be doing the things at borough hall without the women on his staff. He then thanked Deputy Borough President Aurilia Greene, Deputy Chief of Staff Carmela Price, Marlene Cintron of BOEDC, and Monica Major his Director of Education. Diaz then said that "As women go men go, and as women and men go so does society".
  Ruben Diaz Jr. is the 13th Bronx Borough President, and the youngest person elected to the position. BP Diaz proudly says that he and his wife Hilda were high school sweethearts, and have been together for over 20 years.
  The Honorees were Ms. Beatrice Castiglia-Castillo the founder of the Regional Aid for Interim Needs or better known as R.A.I.N. 95 year old Ms Castiglia-Castillo said that in 1957 she made a promise to god if she survived a tragic event. In 1964 she founded R.A.I.N. while working at a local hospital to provide home care services. She also joked about how the name came about as when asked in the beginning when asked what her company name was, she said that she looked outside at the rain coming down, giving it that name.
  Deputy Inspector Nilda Hofmann was the second honoree, and she said that she was born and raised in the Bronx, going to Bronx public schools. She spoke of how she rose through the ranks of the Police Department of become only one of five women precinct Commanders.
  The third honoree was Ms. Belkis Lora CEO/President of the Grand Slam Foundation. She said that her organization serves 300 children, and that she id very proud of her business. BP Diaz then spoke of the Little League Bronx championship game that was played last year at Yankee Stadium, saying that it was an idea that came from Ms. Lora.
  Ms. Roma Torre then gave the closing remarks.

Bronx Borough President is seated between his wife Hilda on the right, and Deputy BP Greene on the left

First Lady Hilda Diaz addressing the audience

From left to right is Deputy Inspector Nilda Hofmann, Ms. Betrice Castiglia-Castillo, BP Diaz, First Lady Hilda Diaz, Roma Torre of NY1, and Ms. Belkis Lora.

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What You Should Know By Senator Rev. Ruben Diaz

By Senator Rev. Rubén Díaz
32nd Senatorial District, Bronx County, New York 

   While speaking with State Senator José Peralta from Queens, I learned about a problem in which most of the Hispanic legislature, especially the leaders of Somos, have gotten into with the labor unions in New York State.
   As you know, Somos is an activity celebrated every year in Albany and coordinated by the Hispanic legislators in order to create a “Hispanic Agenda in favor of the Hispanic Community.”
   This activity, through all the years, has changed names from “Somos El Futuro” which in English means “We Are the Future” –  to “Somos Uno” which means “We Are One” – and now it is just plain “Somos” meaning “We Are.”
   When I came to Albany in 2002, I joined the group and started to participate in this activity every year.  I used to bring 17 buses filled with senior citizens to participate in what was called the “Senior Luncheon.”   But after noticing and becoming aware of how Somos has just become a tool of Assembly Speaker Sheldon Silver, and that every year they continued voting against the interests of our community in order to please Silver, I then decided not to participate, nor to be a member.
   Last year, as you already know, they all voted for a budget that was detrimental to our minority community: cutting services from senior citizens; cutting education services from our children; cutting close to $3 billion dollars from Medicaid, making it dangerous for members of our community to get sick and get decent healthcare; and forcing many not-for-profit organizations that serve our community to close their doors.  All this because they were so afraid of Speaker Silver and the Governor.
   This year, you should know, that one more time they went along with the Speaker and the Governor and voted to destroy pension funds for the working members of our community.
   According to Senator Peralta, those votes against pension funds have made every union in the State and the leaders of the labor movement so upset that they have decided not to participate nor  contribute funding to Somos.
    To me, dear reader, it is very unclear what Somos really means.  It could mean various things:
   “Somos: one thing in our community and another thing in Albany;”
   “Somos: the puppet of the Governor to help him balance the budget on the backs of the poor and needy;”
   “Somos: Hispanic only during re-election times;”
   “Somos: only in name.”
   This weekend the great leaders of our community will congregate in New York to celebrate the achievement of Somos.  I have to ask: What achievement and what Somos?
I am Senator Rev. Rubén Díaz and this is what you should know.

 

New York Magazine extols virtues of Kingsbridge

 

  Assemblyman Jeffrey Dinowitz applauds New York Magazine for its extremely positive article highlighting the Kingsbridge community’s real estate value, excellent business establishments, and neighborhood amenities.

  “I am extraordinarily pleased that New York Magazine has recognized the desirability and positive future of Kingsbridge.  I’ve been saying for a long time that so many great things are taking place in Kingsbridge and its future is bright.  The fact that the River Plaza shopping center has been such a huge success and the upcoming development of the Stella D’oro site and West 230^th Street and Broadway all indicate that there is much confidence in our Kingsbridge community.  Substantial business investment along the Broadway corridor, which I have advocated for many years, is a huge vote of confidence in Kingsbridge’s future,” said Assemblyman Dinowitz.

 

  You can check out the three page article in The New York Magazine here.

***New York State Democratic Committe Designates Gillibrand As Democratic Nomintee For US Senate***

 Chairman Jacobs: “Gillibrand Has Proven Herself To Be A Force in the U.S. Senate As An Effective Fighter for New York Families”

New York State Democratic Committee Chairman Jay Jacobs issued the following statement today after the Committee voted unanimously to officially designate Kirsten Gillibrand as the party’s nominee for re-election to the U.S. Senate:

"Senator Gillibrand has proven herself to be a force in the U.S. Senate as an extraordinarily effective fighter for all of New York's families. Whether passing the 9/11 Health Bill, strengthening our national security by repealing 'Don't Ask, Don't Tell', reforming Washington, giving our first responders the tools needed to save lives, or standing up for women's rights - Kirsten has been a true champion for New Yorkers.

“Senator Gillibrand has the right vision for how to grow our economy and strengthen the middle class rather than extend tax breaks for companies that ship jobs overseas. With her leadership, I know we will see more ‘Made in America’ products from our outstanding manufacturers all across New York State.

“I am proud to call Kirsten Gillibrand the Democratic nominee and look forward to six more years of her outstanding leadership in the U.S. Senate."

Senator Klein to MPAA: Let Teens See Teen Cyberbullying Documentary

Senator Jeffrey D. Klein, (D-Bronx/ Westchester), called upon the Motion Picture Association of America to reverse its decision to give a “R” rating to teen cyberbullying documentary, “Bully.”

The film follows three teens who have been the victims of cyberbullying and two families of children who have taken their own lives after being bullied. It had received a “R”, or “Restricted,” rating due to profanity that had been used during these attacks.

In a letter to the MPAA's Chairman and CEO, former U.S. Senator Chris Dodd, Senator Klein urged a PG-13 rating for the documentary, pointing out that its accounts of cyberbullying match those he has heard from children, parents and educators, across New York.

“The subject matter of this documentary matches the horror stories that have been coming out of virtually every corner of this state,” Senator Klein said. “Tragically, modern technology is being used as a weapon with potentially deadly consequences, and we need to do everything we can to raise awareness of this destructive behavior. I believe it is critically important that the MPAA reverse course, lower the rating, and allow this very important film to reach a wider audience.”

“Bully”  Director Lee Hirsch, said:  "I applaud Senator Klein for standing up for victims who have been bullied by lobbying the MPAA to reverse its decision of an "R" rating to "Bully". We need to make sure as many affected teens are able to see this film in its entirety to ensure the message of the film is not lost."

Senator Klein is also sponsoring legislation, (S.6132), that would update New York’s stalking, aggravated harassment and criminal impersonation laws to include cyberbullying. The legislation has bi-partisan support and 17 cosponsors.

He is also sponsoring the New York Cyberbullying Census, a first-ever study on cyberbullying in New York State. Children in Grades 3 to 12 are urged to participate by filling out an anonymous 12-question survey at www.nycyberbullycensus.com.

"Bully" is slated to be released on March 30.

 

COUNCIL PASSES BILL SPONSORED BY KOPPELL EXTENDING RENT STABILIZATION 

At its Stated Meeting on March 14, 2012, the Council passed a bill, co-sponsored by Council Member Oliver Koppell, that extends the rent stabilization laws from April 1, 2012 to April 1, 2015.  The rent stabilization laws regulate multiple dwellings containing six or more units built after February 1, 1947. 

The law was originally enacted in 1969 and set to expire in April 1, 1974.  However, the Council has extended it for three year periods from 1979 to 2009 on the basis that a “housing emergency continues to exist in New York City.”   A housing emergency is determined on the basis of the supply of housing accommodations, the condition of such accommodations and the need for continued regulation and control of residential rents.  A declaration of emergency may be made if the vacancy rate for all housing accommodations is not in excess of five percent. 

According to a survey conducted by the Department of Housing Preservation and Development    (HPD) for the period between February and May of 2011, the citywide rental vacancy rate is 3.12%  This  finding made it possible for the Council to declare that a “serious public emergency continues to exist in the housing of  a considerable number of persons within the City of New York and will continue to exist on and after April 1, 2012,” thereby providing legal justification for the extension of the rent stabilization Laws.

“Without rent regulation, many New Yorkers would be priced out of their apartments, leading to a crisis in homelessness and a large exodus from the city.  By enabling these individuals to remain in their homes, rent stabilization prevents this kind of mass dislocation,” Koppell said.          

KOPPELL NAMED LEGISLATOR OF THE YEAR BY MULTIPLE SCLEROSIS SOCIETY

Council Member Oliver Koppell was named “Legislator of the Year” by the Multiple Sclerosis Society New York City-Southern New York Chapter at its annual meeting on March 14, 2012, which took place during National MS Awareness Week, March 10th-18th.

 The New York City-Southern New York Chapter serves the 10,000 people living with MS in the five boroughs, Westchester, Putnam, Rockland, Orange and Sullivan Counties.  

The Annual Meeting provides an opportunity for the New York City-Southern New York Chapter to recognize supporters and volunteers for their outstanding achievements. Koppell, who is  Chair of the Committee on Mental Health, Mental Retardation, Alcoholism, Drug Abuse and Disability Services, was honored for  his advocacy  on behalf of the disabled community and, most particularly, for his  steadfast efforts, including the introduction of legislation, requiring that all future  New York City yellow cabs be wheelchair accessible. 

“I am gratified to receive this honor, Koppell said, and pleased that my efforts, as well as those  of the disability community, has played a part in the inclusion of wheelchair accessibility in the  new state taxi legislation

LIU: EDC SUBSIDIZES EMPTY JOB PROMISES

 Audit finds agency responsible for economic growth doles out a half-billion in tax breaks and benefits each year, but gave $318 million to companies that didn’t deliver the promised jobs.

 

City Comptroller John C. Liu today announced that an audit of the Industrial Development Agency (IDA) found striking deficiencies, which caused the agency to waste millions of taxpayer dollars on companies that did not live up to their agreements to create and retain jobs in the City.

The city’s Economic Development Corporation is responsible for the management, reporting, and oversight of the IDA’s tax breaks, tax-exempt bond sales, and other benefits for companies.  In return for these public benefits, most companies must agree to keep their existing jobs in New York City and/or create a specific number of new jobs.  The audit found that the EDC not only failed to properly evaluate the companies selected to receive public assistance, but also neglected to monitor them and terminate their benefits after they clearly couldn’t deliver the promised local economic boost.

Of the $497 million in tax breaks that 576 companies received under the IDA’s supervision, more than half — $318 million — went to 334 companies that failed to meet their job retention and creation obligations.  The IDA also failed to recover $16 million in benefits it handed out to companies that defaulted on their agreements. The audit, which was launched in July 2010, surveyed Fiscal Year 2009 — the most complete recent information available from the agency — and followed projects from their request for benefits to the current fiscal year.

“The EDC has enormous power to create and protect jobs, and yet it has handed out huge taxpayer subsidies with alarmingly spotty results,” Comptroller Liu said. “Jobs are needed more than ever, but we cannot afford to leave economic development to an EDC roll of the dice that throws around hundreds of millions and hopes for the best. Corporate subsidies must be used more sparingly and only be granted after careful and thorough assessment that the job creation and retention will be real.”

Flaws in Selection and Monitoring of Projects

The EDC selected projects for IDA benefits based on shaky promises of job creation.  The EDC not only failed to examine applicants’ financial plans to see if they were realistic, but also neglected to determine whether the promised jobs were, in fact, ultimately created. A close look at three projects, which received $250 million subsidies and tax-free bond issuances over the years, illustrated the flaws in the IDA’s project selection and oversight:

1) Bronx Parking Development Company, LLC, Bronx

The EDC did not see gaping holes in Bronx Parking’s financial plan before it approved $225 million in bond financing for the project.  Currently, Bronx Parking is at risk of defaulting on its bond payments and contrary to its agreement under the IDA benefits package to create 55 new jobs, Bronx Parking has lost six full-time jobs.  

Bronx Parking built 2,184 parking high-cost spaces adjacent to Yankee Stadium in the misguided belief parking demand would rise. 

The EDC relied on a questionable parking study commissioned by the applicant.  Furthermore, the EDC gave IDA benefits to Bronx Parking despite its parent company’s defaults on tax-exempt economic development bonds.

2) Wartburg Lutheran Nursing Home for the Aging and Wartburg Nursing Home, Inc., Brooklyn

The EDC approved $19 million in IDA tax-exempt bonds to finance this nursing home’s renovation in 2006 despite the fact that it had operating losses of $4.4 million. Wartburg completed millions in renovations and promptly notified the EDC that it was selling the facility in February 2008. 

3) Hollow Metal Factory Outlet Corp., Brooklyn

The EDC gave the company approximately $300,000 in IDA benefits to create 10 jobs over three years.  Nearly a decade later the company had hired just two people and ended its agreement in February 2009.  As a result, taxpayers subsidized the company for $148,000 per job.  The subsidies were approved even thought the company showed very low expectations for annual profits.

Failure to Stop and Recapture Benefits From Projects in Default:

When companies defaulted on their agreements, the EDC rarely used its power to swiftly terminate the contracts and recapture their taxpayer-funded benefits.  The EDC let five companies take more than $16 million in public benefits after they defaulted on their agreements in FY 2009.

·         EDC surrendered its right to recapture $14 million in tax and energy benefits from Bear Stearns and its successor company, JPMorgan Chase & Co. in Manhattan.
·         The EDC waived its right to collect $1.16 million from Baldor Specialty Foods in the Bronx.
·         EDC failed to retake more than $520,000 in Mortgage Recording Tax benefits given to Wartburg Nursing Home in Brooklyn after the facility had been sold.

Recommendations

The audit made seven recommendations to the EDC to strengthen the agency’s analysis of companies requesting IDA benefits, its monitoring of their progress, and its recapture of benefits from those that violate their agreements.  While the EDC disagreed with many of the recommendations, the agency deserves credit for its new five-year self-audit plan that it promises will annually examine 20% of the companies receiving benefits to determine if they are providing the jobs they promised and otherwise following their agreements.

Background

The city’s Economic Development Corporation is responsible for the management, reporting and oversight of the IDA’s tax breaks, tax-exempt bond sales, and other benefits for companies.  The IDA is governed by a 15-member board.  Nine members report to the Mayor and six members represent the Borough Presidents and the Comptroller.  Approval of public benefits requires approval from eight board members. In FY 2009, the EDC oversaw $497 million in IDA tax breaks for 576 projects.

Audit Scope

The audit surveyed the 576 projects under IDA supervision in FY 2009 and conducted further examinations into major projects from that list, including seven that defaulted, from their year of origination into the current fiscal year. 

Comptroller Liu credited Deputy Comptroller for Audit Tina Kim and the Audit Bureau for presenting the findings.  The latest audit report is available at: http://comptroller.nyc.gov/audits