THE RECORDER
Amsterdam, NY
March 13, 2004

LETTER TO THE EDITOR

To the editor:

For the 4,650 access permit holders around Great Sacandaga Lake, it was a dream come true when New York State Comptroller Alan Hevesi recently dispatched a team of auditors to scrutinize the beleaguered Hudson River-Black River Regulating District. The district is now undergoing an expanded audit that will encompass accounting, budgeting and governance.

This audit could turn into the district's worst nightmare. Mr. Hevesi is no fan of independent state agencies that operate in the shadows outside the state budget process. In his view, many are guilty of widespread mismanagement, arrogance and unwarranted secrecy. Last month, he and Attorney General Eliot Spitzer called for legislation that would make such agencies more accountable and better governed. The regulating district, a public benefit corporation, is one of these shadow agencies.

Mr. Hevesi's auditors should have a field day at the regulating district. Its bumbling efforts at budgeting tumbled it into the public spotlight last September when it proposed to hike access permit fees by 500 to 1,000 percent. Forced to backtrack by public outrage over this attempted fleecing, it had to fill an $850,000 hole in this year's budget with surplus funds.

The district is now considering hiking its annual assessments on downstream beneficiaries, including hydro plants and municipalities. This may be an exercise in futility. Most of the district's income from downstream assessments comes from two companies, Niagara Mohawk and Reliant Resources, that claim they already are being overcharged. These multibillion-dollar firms, which have huge legal staffs, are litigating for sizable refunds.

This fiscal shell game should make access permit holders very uneasy. In an effort to identify additional lake beneficiaries that could be forced to pay an annual assessment, the district recently conducted a study that placed lake-area property owners at the top of the hit list. Why should we have to bail out the regulating district for its incompetence?

As for the district's board, one of its four directors has missed three of the past six board meetings, including the contentious public hearing in Northville last October. And two months ago, a property owner stumped it by asking to be shown the law that gives it the right to charge annual fees for access permits. We still await the answer. Clearly, Mr. Hevesi's troops have arrived not a second too soon.

Peter VanAvery,
Edinburg

LEADER-HERALD
Gloversville,NY
March 12, 2004

Improved oversight of lake operations sought by officials

By SCOTT DONNELLY, The Leader-Herald

ALBANY - A recent crackdown on hundreds of public agencies across the state has turned a spotlight on the Hudson River-Black River Regulating District.

"I was using the word audit, but they said the best way to classify it would be as an examination," said Richard Lefebvre, executive director of the district.

The "they" to which Lefebvre is referring is a team from the office of state Comptroller Alan G. Hevesi. The team arrived at the district's Albany office March 1, telling Lefebvre the examination would probably take about a month.

The regulating district, a public benefit corporation, is responsible for operations of the Great Sacandaga Lake.

And though the examination process only recently began, both district officials and critics of the district's operations agree the quest for improved accountability will only help improve the district's operations.

"The auditing team said it would conduct an audit similar to the audits they had conducted in the past, but there would be three additional areas of focus," Lefebvre said. "One would be on accounting practices, another would be on budgeting and another on governance."

Lefebvre said the audit has already prompted some changes in the governance policies of the district. At a meeting of the district's board on Monday, board members voted to establish a three-step process for adopting a budget, with all three steps taking place in a public forum.

Before Monday's vote, there was no such formal process for budget adoption, Lefebvre said.

Hevesi and state Attorney General Eliot Spitzer, in announcing the crackdown on public authorities statewide, cited "major cases of corruption, waste, mismanagement and other significant problems" as their inspiration.

According to a report from Hevesi, there are more than 640 public authorities in the state, and each of them is getting the same scrutiny as the regulating district.

"Authorities have made major contributions to New York, including building and expanding our transportation systems, our public universities and water systems," Hevesi said in a prepared statement announcing the initiative. "But authorities have become a semi-secret fourth branch of government with little or no accountability, and many have developed a culture of arrogance."

Signs of such problems in the regulating district were visible last year, according to Peter VanAvery of the Batchellerville Bridge Action Committee.

"That became evident in September, when [district officials] proposed the [access] permit fee increase without running it by the Governor's Office of Regulatory Reform," VanAvery said.

The access permits are purchased each year by residents along the 125-mile shoreline of the Great Sacandaga Lake. The shoreline itself is owned by the state and managed by the regulating district. The permits allow residents exclusive access to the shoreline in front of their properties.

The proposed September fee hike - as much as a 10-fold increase in some cases - and a subsequent public outcry resulted in the resignation of Lefebvre's predecessor, Willard Loveless.

The district decided against increasing the fees and froze them for the coming year.

"That was an utter disaster ... nearly 1,000 angry people turned out to vent their spleen at the district," VanAvery said.

In contrast to the way the district was run before the September access permit fee proposal, Lefebvre has made it a priority under his leadership to bring all district operations into the public light, he said.

"I'm not saying that we haven't done some things wrong," Lefebvre said Friday. "There was some public outcry in the fall, and I'm trying to right some of the things that were wrong."

In that vein, Lefebvre has asked the board to conduct an independent audit of the district's access permit system to discover the exact cost of operating the system and thereby come up with a fair fee schedule.

Though Lefebvre didn't know when that audit would be conducted, he said he is currently working to develop a "request for proposal" document that would start the bidding process by independent auditing agencies.

"I've only been here two months, but my past history on government - whether it's as a school board member or at the Adirondack Park Association - was to take moves to create predictability and transparency and thus, hopefully, win the confidence of the public relative to the comptroller's comments."

For VanAvery and other critics of the district, nothing short of a major overhaul will be acceptable.

"You have a district that's built on an antiquated foundation," he said. "It worked great in 1922 when it was founded, but it doesn't work now."

THE RECORDER
Amsterdam, NY
March 14, 2004

State comptroller now auditing regulating district

By CRAIG CLARK

Recorder News Staff

JOHNSTOWN - Over the last several months landowners around the Great Sacandaga Lake have made various calls for audits or reviews of the reservoir's governing authority.

Thanks to the state Comptroller's Office and the Pataki administration they just may be getting what they want.

The state Comptroller's Office began an audit of the Hudson River-Black River Regulating District early this month.

The start of the comptroller's audit came shortly after the district received a memo from the Pataki administration ordering the adoption of new procedures to improve management of their affairs and increase public confidence.

Late last month the Pataki administration sent a memo to 31 of the state's public authorities.

The Hudson River-Black River Regulating District was one of the public authorities to receive that memo, according to the district's executive director, Richard H. Lefebvre.

Lefebvre said the district must report back to the governor's office by May 14.

A spokesman with the state Comptroller's Office on Thursday said the audit that's currently ongoing at the district is just a routine audit. The spokesman said the audit is not directly tied to the Pataki administration's memo or to Comptroller Alan Hevesi's recently released report on public authority reform.

The governance of public authorities are however on Hevesi's agenda and apparently also has the attention of the Pataki administration as well.

"The comptroller has made no secret that he's making a priority of looking at public authorities," Dan Weiller, a spokesman with the comptroller's office said Thursday.

According to Lefebvre the audit team from the comptroller's office arrived at the district's Albany office March 1. Lefebvre said the audit will focus on three areas, accounting, budgeting and governance.

Governance is also the subject of the memo the district has received from Pataki's office.

Lefebvre addressed the memo at last week's Hudson River-Black River Regulating District board meeting in Johnstown.

In response to Pataki's directive, Lefebvre has proposed implementing a committee structure for the regulating district board.

"I would propose that this would allow for an interface between the board and the staff and also allow for individuals on the board to develop degrees of expertise in a specific area," Lefebvre said last week.

The executive director proposed the establishment of four committees: budget, operations, public relations and governance.

Under the proposal, each committee would consist of one board member plus the chairperson serving as ex-officio.

The board took no action on the proposal last week. The board is expected to discuss the idea more at its April meeting in Utica in time for the May 14 report that's due to the governor.

"Concerns regarding public authority operations are not new; many of the issues we are examining today have been discussed in a dozen or more reports issued by blue-ribbon committees, State agencies or the Legislature," the comptroller's February report on public authority reform states. "In these reports, public authorities have been referred to as the fourth branch of government and an underground government."

Public confidence in the regulating district has improved over the last several months since the board voted to suspend its proposal to drastically increase access permit fees on the Great Sacandaga and following the January appointment of Lefebvre as executive director.

Lefebvre who has referred to himself as a "stickler" for the state Opening Meetings Law and says the district has taken several steps to improve accountability including developing a clear budget adoption calendar and the proposal to institute a committee structure.

"Those are all indications of our becoming more and more predictable and more and more transparent," Lefebvre said last week.