Let's find a solution North Shore Sun Editorial
Here's a challenge for everyone who lives in or represents the Gordon Heights Fire District.
Forget about all the rhetoric. Ignore the finger-pointing. Block out, for a moment, every solution you've ever heard for solving the district's fire-tax issue and ask yourself this one question. Are Gordon Heights Fire District residents paying too much in fire taxes?
The answer, whether you're behind the district's dissolution movement or on its front lines when there's an emergency call, is sure to be the same: Yes.
Gordon Heights Fire District residents pay, in some instances, four or five times as much as residents in neighboring communities. The difference in fire taxes for some residents of the Gordon Heights Fire District and their neighbors in other districts is as much as $2,000 per year.
There is no denying that the district's residents pay an outrageously high amount in fire taxes. And yet it seems no one is willing to work together to find a solution.
We live in a town where committees are formed to discuss issues concerning feral cats and invasive species. How is it that we can't get all the interested parties together to find a real solution to what we all agree is a legitimate tax problem?
Here's what we propose:
Since fire districts are their own separate entity and are not governed by the town, county or the state, the representatives at all three levels of government -- Town Supervisor Brian Foley, Councilwoman Connie Kepert, County Executive Steve Levy, Legis. Kate Browning, Sen. Ken LaValle and Assemblywoman Patricia Eddington -- need to step up to help find a solution. If it's not any one of your problems in particular, that doesn't mean there's not a problem, it just means it's a problem for all of you to solve.
Don't just exchange phone calls on the matter, sit down at the table together. Invite the commissioners and fire chiefs of the Gordon Heights Fire Department along with members of the community who want to see the fire district dissolved to join you.
Have everyone lay out their concerns and ideas for a solution. Keep in mind the history of the district and what being a member of the department means to the men and women who serve the community, but don't lose sight of the real issue at hand: Gordon Heights fire taxes must be lowered.
Map out a course of action. Continue to let the public be heard and begin to achieve something on this front.
The residents of the Gordon Heights Fire District have a real gripe.
They should be heard. They should be helped.
Newsday.com
Fire districts put private lawyers on public payrolls
BY SANDRA PEDDIE AND EDEN LAIKIN.eden.laikin@newsday.com; sandra.peddie@newsday.com
July 27, 2008
When Gordon Heights residents mobilized to fight the high taxes they pay for fire service, they were stunned to discover that the fire district's attorney, William Glass, was on the payroll.
They complained that taxpayers in Long Island's most expensive fire district should not pay the Social Security and pension costs of a private attorney who had no office, filed no time sheets and had a private practice. Beginning in July 2007, they contacted one Brookhaven councilwoman, two county legislators and the state comptroller's office through e-mails, phone calls and meetings, demanding action be taken.
They got nowhere.
What residents did not know was that at the same time Glass was listed as an employee at Gordon Heights, records show he was also on the payrolls of six other fire districts, collecting health benefits through one and pension credits from all. It is this very practice that has come under the scrutiny of New York State Attorney General Andrew Cuomo in recent months, in the wake of Newsday's stories exposing the practice of private attorneys being listed as public employees at school and other districts.
In addition, Glass had retainer agreements - used by independent contractors, not employees - with all seven of the fire districts. While five of the districts did not pay Glass anything under those agreements, two paid him $25,393 in legal fees even as they were paying him as an employee. Beyond these seven districts, Glass has represented 20 other fire districts in his private practice.
Internal Revenue Service rules differentiate between employees and independent contractors because they are taxed differently. Someone is considered an employee if he or she maintains an office, files time sheets and reports to a supervisor, among other criteria. Independent contractors pay their Social Security taxes but are allowed to write off more business expenses. Employees pay half their Social Security taxes.
A year after residents first complained, little has changed for Glass. One fire district, East Marion, has removed him from the payroll, saying it was an error. The remaining six, including Gordon Heights, have continued their employment arrangements with him. In interviews, Glass said he sees nothing wrong with the practice, in large part because of his own legal research on the same issue.
Gordon Heights residents disagree. They pay an average of $1,500 a year for their fire service - more than four times the average fire district tax on Long Island, according to state and fire district records.
Civic activist Rosalie Hanson said it was "bad enough" that residents pay the highest fire taxes on Long Island, "but it only adds insult to injury to now learn that we are paying public pensions for private attorneys."
In spite of Newsday's stories, a rare public hearing into the issue and the unanimous passage of pension reform legislation last month by the State Legislature, records show that at least 14 special districts and one authority - small units of government that handle services such as water hookups and garbage pickups - are currently reporting private attorneys as public employees.
The measure, which Gov. David A. Paterson has said he will sign, specifically bars any attorney working for a school district or BOCES from being both an employee and an independent contractor. It does not specifically address lawyers working for other public entities, such as special districts. The proposed law would go into effect three months after Paterson signs it.
However, new regulations issued by state Comptroller Thomas DiNapoli state that any attorney, physician, engineer, architect, accountant or auditor who is engaged under a contract or any other agreement is presumed to be an independent contractor and not an employee.
Since 2002, records show, at least nine attorneys have collected more than $2 million in public salaries, plus 1099 payments. Those are used to pay independent contractors.
"Clearly, these guys are tone-deaf and not hearing the public outrage at this issue," said Nassau County Comptroller Howard Weitzman. "They don't want to hear about anybody abusing the system anymore."
Since March, six special districts have removed attorneys from their payrolls in the wake of the Newsday stories, but have allowed them to continue as consultants. Most of the districts have not sought repayment for benefits already paid out, records show.
A municipality has the option of seeking repayment for benefits paid improperly. Currently, for example, Weitzman is seeking repayment for health benefits and pension contributions paid on behalf of an attorney who was reported as a full-time Nassau County employee.
Defending themselves
Gordon Heights activists said they were frustrated at the lack of response when they complained about Glass being on the fire district payroll. County Legis. Jack Eddington (WF-Medford) and Brookhaven Councilwoman Constance Kepert said they told the residents last year the fire district was outside their jurisdiction. Legis. Kate Browning (D-Shirley) said she did not remember residents raising the issue with her.
Kepert said she did get the state comptroller to audit the fire district. That audit, released earlier this year, did not mention Glass' employment. And, residents said, they never got a response from the state comptroller's office. A spokesman for the comptroller, Dennis Tompkins, declined to explain why the office did not act, but said that auditors in the last week have been sent to every fire district that employs Glass.
Glass, and other lawyers interviewed for this story, argue that their arrangements are permissible under the law. One of the nine attorneys interviewed for this story, Frank D'Elia, who has been on the payrolls of two water districts and one sewer district at the same time, said, "I'm 72 years old. I'm not going to lose my mind over something that was perfectly acceptable years ago."
Glass also said he has done nothing improper. "In my opinion, it's a matter of form over substance," he said. He noted that he sought the arrangement in some cases to get the pension credits, adding that he does not see anything wrong with that.
"I live here, I pay taxes, too," said Glass, who lives in Port Jefferson. "Nothing I have found has changed my dealings and my way of doing business here."
He also said he reviewed his employment agreements with the fire districts and they had no problem with that. Two districts - Greenlawn and Setauket - confirmed that. The others did not return calls. He has been at Greenlawn since 1996. He started working at the other districts at different times in the past 10 years.
Reviewing payrolls
The issue of independent contractors reported as public employees in order to get pension and health benefits has been in the spotlight since February, after Newsday reported that five school districts falsely reported attorney Lawrence Reich as a full-time employee at the same time. That helped him secure an annual pension of nearly $62,000 and health benefits for life. In the aftermath of the stories the state revoked his pension.
Although school district attorneys have been the primary focus of state and federal investigations that followed the Newsday stories, both Cuomo and DiNapoli have said they are reviewing all attorneys on public payrolls statewide.
Cuomo's office recently sent letters to approximately 200 lawyers, accountants, doctors and civil engineers throughout the state seeking more detailed employment information.
"Systemic abuse in the public pension and benefits system has wasted millions of taxpayer dollars," Cuomo said last month, adding that his office is continuing and expanding its investigation.
Laura Mallay, executive director of Residents for Efficient Special Districts, a Nassau civic group, agreed.
"These examples of abuse of taxpayer money in this economy are just incredible," she said. "I have a hard time believing that this is legal. ..."
She added, "These guys have been doing this so long they just don't see the wrong in it."
The Issue
Why are private lawyers and other professionals, who are also paid as independent contractors, still on public payrolls and receiving health and/or pension benefits?
The Fix for School Districts
Legislation passed by both the State Senate and Assembly, which Gov. David A. Paterson has said he will sign, bars attorneys from serving as both employees and independent contractors simultaneously for school districts. It also requires all school districts and BOCES to report annually all lawyers who were hired and their employment status.
The Fix for Other Government Agencies
The state comptroller has issued new regulations, which closely follow existing Internal Revenue Service rules, delineating criteria used to determine whether someone is an employee. Among them are whether the person is directly supervised, submits time sheets and has set hours, a workplace and equipment provided by the employer. The comptroller's new regulations also state that any attorney, physician, engineer, architect, accountant or auditor who is engaged under a contract or any other agreement is presumed to be an independent contractor and not an employee.
The lawyers
A Newsday review of records found at least nine attorneys who have been treated as both employees and independent contractors of special districts or an authority. Five of the nine remain on payrolls, while also collecting additional legal fees. The rest have changed their status in various ways.
The lawyers are:
William Glass, 53, is currently on the payroll of the Gordon Heights, Greenlawn, Sayville, Bohemia, Southold and Setauket fire districts to attend board meetings and handle routine legal matters. He gets health and dental benefits through Setauket. He has represented about 20 other fire districts in his private practice. Glass said he relied on three state comptroller's opinions from the 1980s in deciding that his arrangement was legal. He said his 1099 payments were "a mistake." He said his employers wanted him to remain on the payroll.
* 2002-2008 salary $507,926
* 2002-2007 1099s $25,393
* Total: $533,319
Anthony Sabino, 61, started working for the Bethpage water district in 1991, while also working full time for Oyster Bay Town. From 1991 through 2002, pension records show, he was credited with working more than 365 days a year. In addition to collecting retainer fees and health benefits from the water district, the district has paid his Mineola law firm, Forchelli, Curto, Crowe, Deegan, Schwartz, Mineo & Cohn, $33,448 since December 2005. Sabino said in an interview that the district is saving money by paying him as an employee. He added that the district reviewed his case and still considers him an employee. District Commissioner William Ellinger confirmed that, but said the district plans to hire an outside law firm to review Sabino's status - Sabino's former law firm, Carman, Callahan & Ingham, of Farmingdale.
* 2002-2007 salary $232,929
* 2002-2006 1099s $72,664
Total $305,593
Anthony LaMarca, 68, has been reported as a full-time employee of the Oyster Bay water district since 1995. District officials say he was never full time. The district started reporting him as part time after the Newsday stories, according to Commissioner Robert McEvoy. In addition to salary and benefits, LaMarca collected 1099 payments. Although LaMarca has a private legal practice, he said he considers himself full time at the water district. He said he is waiting for a "definitive answer" from the state comptroller on his employment.
* 2002-2006 salary $148,883
* 2002-2006 1099s $29,920
Total $178,803
Frank D'Elia, 72, has been reported as an employee of three special districts since 1976, while also receiving retainer fees. The Port Washington water district removed him from the payroll in May and the Roslyn water district removed him in April. He remains on the payroll of the Port Washington water pollution control district, collecting both health benefits and pension credits. D'Elia said he was disappointed to be taken off the two payrolls, but added, "I'm 72 years old. I'm not going to lose my mind over something that was perfectly acceptable years ago."
* 2002-2006 salary $327,481
* 2002-2006 1099s $49,414
Total $376,895
Howard T. Hogan Jr., 63, has been collecting a pension of $15,898 since August 2005, for his years as an Oyster Bay Town councilman. Since 1989, the Locust Valley water district has paid him as both an employee and independent contractor. On March 31, the district removed him from the payroll, but kept him as a consultant, increasing his retainer by $15,000 to make up for the loss in health benefits, according to Superintendent Charles Savinetti. It is not seeking repayment for those benefits. Hogan said in an interview he had thought the arrangement was proper, but changed after learning it was not.
* 2002-2006 salary
0
* 2002-2006 1099s $80,000
Total $80,000
Nicholas DeSibio, 70, has been collecting a $65,945 pension since retiring from the Greater Atlantic Beach water reclamation district in July 2003. Records show that he remained an employee of the district, collecting dental benefits. He also continued receiving health insurance through the Island Park school district. The sewer district has changed his status to independent contractor and the school district stopped paying his health insurance. Neither has sought repayment, officials said. DeSibio declined to comment through his spokesman, Gary Lewi.
* 2002-2008 salary $232,908
* 2002-2007 1099s $94,272
Total $327,180
Walter P. Wagner, 52, was on the payroll of the Lido-Point Lookout fire district and also collecting thousands of dollars in retainer payments for 22 years, until January when the district decided to pay him a retainer only. Nassau County Civil Service records show he remained on the payroll at least through May 8, something the fire commissioners said was an error. Wagner has written to the state retirement system to ask whether he was entitled to the 3 1/2 years of pension credits he has accrued, but said in an interview he never received a reply.
* 2002-2007 salary $30,375
* 2002-2007 1099s $64,623
Total $94,998
John D. Morgan, 59, is the labor counsel for Sanitary District 2 in Baldwin. Records show he collected 1099 payments in 2003, but stopped after the Nassau County comptroller criticized the practice. Although he has no district office and files no time sheets, he gets health benefits as an employee. District Superintendent Robert Noble said the district is awaiting a ruling on whether Morgan can remain an employee. Morgan declined to comment.
* 2002-2006 salary $88,000
* 2003 1099 $4,971
Total $92,971
Patrick M. McKenna, 60, collected both salary and 1099 payments from 2000 through 2002 from the Nassau County Bridge Authority. The following year, the board stopped the 1099 payments, but continued paying him a salary, health and dental benefits, and pension credits. McKenna said in a statement that the arrangement complied with state law and state comptroller's office opinions.
* 2002-2007 salary $49,335
* 2000-2002 1099s $34,271
Total $83,606
* Salary figures are based on state pension records, and 1099 payments come from district records.
Making the case
After Newsday reported on Feb. 15 that five school districts falsely reported private attorney Lawrence Reich as a full-time employee at the same time - enabling him to get state pension and health benefits, state and federal investigators launched probes. Since then, there have been the following developments:
4,000 local governments statewide have received requests for documents from the New York State attorney general's office.
$935,000 has been returned to the state in settlements with the New York attorney general from lawyers and law firms.
12 pensions revoked by the New York State comptroller.
9 individuals have had some or all of their pension credits rescinded by the New York State comptroller.
2 memberships in the pension system have been suspended by the New York State comptroller.
60-0 was the vote in the State Senate passing pension reform legislation.
112-0 was the vote in the State Assembly on the same legislation. The legislation bars attorneys from serving as both employees and independent contractors of school districts and BOCES, which are now required to file annual reports on all attorneys.
100 letters have been sent by the New York State attorney general to attorneys, civil engineers, accountants and doctors on Long Island requesting information about their public and private employment histories.
24 federal subpoenas have been sent to Long Island school districts.
Copyright © 2008, Newsday Inc.
Newsday.com Editorial
Pricey fire district must go
Taxpayers in the most expensive district on the Island should get the vote they want and a chance at equitable rates
August 3, 2008
Among the obstacles to cutting through the thick tangle of special districts now choking Long Island, the apathy of those who live in them is second only to the stubborn grip on power of those who run them.
In the Gordon Heights Fire District, at least, some everyday citizens are trying to do something about it: dissolve a district that costs them more for fire protection than any other fire district on the Island, and let surrounding districts provide coverage at a much lower cost. If they succeed - and we should all be rooting for them - people may rise up in other districts and say: "If Gordon Heights can do it, we can do it."
First, the numbers. This is a tiny district, only 1.7 square miles, compared to an average of 9.2 square miles in the Town of Brookhaven. It has fewer than 900 homes and almost no commercial properties to help homeowners pay the property taxes for the district's costs.
As to those costs, State Comptroller Thomas DiNapoli issued an audit earlier this year criticizing the way the district controls how it spends its budget, now in excess of $1.5 million.
Add it all together - bloated budget paid for by a handful of homeowners - and the obvious result is crushing taxes. The average home in Gordon Heights pays $1,500 a year in fire district taxes. Many pay more than $2,000. Take a look at your tax bill. Unless you live in Gordon Heights, the cost of your fire protection is way less than that. In fact, the size of the bill in Gordon Heights is four times as big as the bill in the surrounding districts of Yaphank, Coram, Medford and Middle Island.
Worse, there are huge discrepancies even within Gordon Heights, because more than half of those in the Gordon Heights community pay their taxes to the surrounding fire districts.
The residents leading the dissolution drive have compared specific homes very close to one another and shown giant disparities. Take two homes, one served by the Medford district and the other by Gordon Heights, on the same road, about 130 house numbers apart. The Medford-served home pays $359.03 for fire protection, compared to $1,445 for the Gordon Heights-served home. In another case, for two homes just one street number apart in Middle Island, the two bills are $1,780.58 and $675.97.
By any reckoning, this is madness.
In 2006, residents of the community gathered signatures from homeowners representing more than 70 percent of the district's assessed valuation. State law only requires 50 percent. They presented the petitions to the Brookhaven Town Board, asking for a public hearing and a town board vote to dissolve the district.
But the town decided that the petitions were not in the proper form. Undeterred by the town's pusillanimity, they are gathering signatures again.
Here's one difference between then and now: Last year, after hearing testimony from the district's residents, the New York State Commission on Local Government Efficiency and Competitiveness wrote to the town, asking that it reconsider its rejection of the original petition. "Certainly this issue deserves a full and fair public hearing," the commission wrote.
And just last Sunday, Newsday's Sandra Peddie and Eden Laikin detailed how citizens had discovered that the fire district's lawyer, a contract employee, was actually on the payroll. That meant the district was paying his Social Security and pension costs.
It was no consolation to the Gordon Heights residents to learn that the lawyer was also on the payrolls of six other fire districts. The case of this lawyer did not change the basic reality of the district, but it did pour lemon juice on the wound.
On top of the town's inaction on the original petition, those who favor dissolution of the district have to cope with baseless charges of racism in this heavily African-American district. Though the district's commissioners are black, so are many of those seeking to dissolve the district.
It's not about race. It's about taxes. The debate should focus only on the best replacement for the district, a new one that would contract with the surrounding districts, or simply absorption into those districts.
So, once the signatures are gathered, the town should honor the will of the people, dissolve this district, and set a powerful precedent, for Long Island and the rest of the state.
Copyright © 2008, Newsday Inc.
