County lawmakers on a committee charged with overseeing the Ulster County Resource Recovery Agency say that they remained unaware of a State Comptroller’s Office audit of the agency, even as they discussed a deal expected to funnel millions of dollars in added revenue to the public benefit corporation.
The audit, which found fault with the RRA’s purchasing and sales practices, was released to the public earlier this month, just days after the Ulster County Legislature voted to approve a 2013 budget that included a controversial “flow control” provision. The proposal, pushed by County Executive Mike Hein, would require all trash haulers, public and private, in Ulster County to take their garbage to RRA disposal site in the Town of Ulster and pay tipping fees to the agency. Proponents of the measure say that the added business would allow the county to reduce or eliminate an annual “net service fee” levied on taxpayers to make up shortfalls in the RRA budget. Last year, the net service fee totaled $1.54 million.
Flow control faced opposition from private trash haulers, who believed the new regulations would push up their operating expenses, as well as skeptics, who doubted it would eliminate the need for taxpayer subsidies.
Flow control found support, however, on the Ulster County Legislature’s Environmental, Energy and Technology Committee where Chairman Carl Belfiglio said he had advocated for the new rules since July. But, according to Belfiglio and committee Co-Chair Tracey Bartels, despite hours of discussions with RRA officials about the details of flow control and agency operations, the fact that the agency had come in for criticism from the State Comptroller’s Office was never mentioned. In fact, Bartels and Belfiglio said, they were unaware that the audit had taken place until the report was released — despite the fact that RRA officials received a draft of the report and submitted an official reply to the criticisms back in August. RRA board member Charlie Landi said that the agency had opted to wait for the final draft of the report before discussing the probe with lawmakers.
“We had no idea what the particulars were going to be,” said Landi. “After we got the results, we sent in the corrective action plan and waited to see what transpired.”
Didn’t follow own policies
The particulars contained in the audit included critiques of the way the agency, which as a public benefit corporation operates under different rules than government entities, handled a number of activities, including gas purchases, landfill fees and the sale of recyclables. The audit, which examined RRA records between January 1, 2010 to October 11 2011 found that during that period more than half of the agency’s $16.7 million in purchases did not conform to RRA’s internal policies. In particular, the report found, the agency paid $4.6 million to a Western New York landfill, Seneca Meadows, and another $3.1 million on fuel for private contractors to haul waste 236 miles to the site without looking for a closer or cheaper disposal facility. The report also found fault with RRA’s procedure for selling recyclables, an enterprise which netted the agency $1.1 million during the audit period. According to the audit, rather than seeking the best price through an open competitive process, RRA officials usually relied on a few select private brokers to purchase the scrap. The audit also found that RRA officials had hired and paid $388,515 to a waste hauling contractor who lacked the proper equipment and was later found to lack proper insurance coverage for the job.
In an official response to the audit dated August 24, RRA officials largely defended their handling of agency operations, noting that the actions criticized in the audit did not violate state law governing public authorities. In the case of the five-year contract with the Seneca Meadows landfill, for example, RRA officials argued that they had done business with the site since 1999 and had yet to find a cheaper alternative despite “extensive reviews.” The reply also claimed that the agency was able to obtain higher prices by making one-off deals with recyclables brokers rather than entering into a fixed-price contract following a competitive bidding process. Despite the official defense of the agency’s procedures, Landi said that he believed the audit would spur reforms in purchasing policy.
“We are not happy and we are going to be making changes in our purchasing policy,” said Landi. “At this point in time that’s all we can really do.”
Why didn’t you tell us?
Belfiglio and Bartels both said they were less troubled by the audit’s findings than by RRA officials’ failure to apprise them of the investigation. Both lawmakers noted that RRA Executive Director Timothy Rose and a majority of the board were not with the agency during the audit period and both said nothing in the audit had caused them to rethink their support for flow control. But Bartels said she was shocked that she and fellow committee members had been kept in the dark about the audit.
“From my perspective, the communication [with RRA officials] had been what I thought to be pretty open,” said Bartels. “Needless to say I was disappointed that it was never brought to the legislature’s attention.”
That lack of communication, the lawmakers said, is likely to add impetus to push to enhance legislative oversight of the agency. County lawmakers, Bartels said, are poised to pass on a home-rule resolution to their state counterparts seeking to reverse a current law that bans elected officials from serving on the RRA board. Belfiglio said that options on the table included replacing the current five-member board or expanding the board to create new seats, at least one of which would be filled by a county legislator. The change, Belfiglio said, would allow for better communication between the county and the RRA and ensure that taxpayers had a representative at the agency.
“The RRA board is appointed by the legislature, but they’re not accountable to the taxpayers, they’re responsibility is just for the agency,” said Belfiglio. “I think that needs to change.”
RRA Executive Director Timothy Rose did not return calls for comment.