LOCAL DEVELOPMENT CORPORATIONS ARE RIPE FOR MISMANAGEMENT; NEED FURTHER SCRUTINY BY PUBLIC AND MONROE COUNTY VOTERS

NAVITECH:  198 PARK AVE., ROCHESTER, N.Y.
INTERNATIONAL HEADQUARTERS FOR THE COMPANY
WHO HAD NO PREVIOUS CLIENTS AND RECEIVED THE BID
FOR 224 MILLION DOLLARS OF TAX PAYER FUNDS

Rochester, N.Y.--  Three cheers to Rochester’s hometown newspaper for shining a light on an issue that has been burning in the hearts of good government groups for almost a decade.

In today's Sunday edition, they have asked the right question: (Crux of issue: Are LDCs good policy?) but the truth is-- this is not a rhetorical question.

Could it be our county government uses LDC’s to funnel money to political associates and keep taxpayer dollars in the hands of just a few?  They do this all without the purview of tax-paying citizens and the County Legislature and at the same time, ignore local labor laws that govern municipalities. To say that creating LDC’s is ripe for mismanagement is an understatement.

It’s all very confusing to most objective observers and we say that is part of this diabolical deliberate master plan. All you have to do is follow the money and the intricate web of personalities that come and go on the boards of all these LDC’s.

For those who are interested, the well-connected list of GOP operatives who have benefited from public employment dollars and the creation of these LDCs reads like a Who’s Who of law firms, political appointees and local construction company giants. 

Are these LDC’s created for the greater good or are they just a mechanism to award contracts and our tax dollars to benefit the privileged few who toss donations to the current administration?  Has the prolific use of LDC's created a path for personal gain at the expense of the greater Rochester community?  The obvious lack of transparency should yield reasonable questions about how we do business in Monroe County.  Now more than ever, taxpayers should be asking themselves these important questions.

According to a news item from the ABC affiliate out of Rochester, N.Y., in 2009, the GOP majority led county legislature voted through a controversial deal to privatize its public safety and security systems. The county would create a development corporation (called M3SLDC) which would then sign a $224 million dollar deal with a new enterprise with no publicly known clients called “Navitech” to lease the equipment.

$224 million dollars is a lot of taxpayer money. Critics say it's being spent on an upgrade that will save only about $10 million dollars over the life of the 20 year contract. Interesting math, huh?

When this hubbub came about, it received little media attention. In 2009, the conversation whether or not such development corporations (LDC's) were acting responsibly came to light because they were not subject to open meeting laws required by all government entities. Even though LDC's distribute tax payer funds, the public had no direct knowledge of the actual business records of these newly created LDC’s.

In August of 2009, Navitech took over maintenance of the county's phone and computer equipment.

Navitech was selected from a field of 11 competing firms. Turns out it was the only one left standing-- the remaining 10 were rejected for various reasons.

Among the people involved in writing the bid that got Navitech the job was big time GOP political contributor John Perrone-- even though he was listed as a contractor that Navitech would hire. Illegal? Maybe not. Conflict of interest?  Probably.

Perrone at the time also had a business called American Security Consultants. According to press reports from WHAM-TV, his partner in that business is Bob Wiesner. Wiesner's name should sound familiar. He is the husband of Monroe County Executive Maggie Brooks.  Perrone currently serves as the Director of the Homeland Security Management Institute, an initiative of Monroe Community College.

One other note about Wiesner. The Navitech deal is set up by a three member board that will run the LDC. One of those people will be appointed by the Monroe County Water Authority. Bob Weisner is now the director of security for the Monroe County Water Authority.  Before this appointment, Wiesner was Director of Public Safety at Monroe Community College.

In addressing the potential for a troubling conflict of interest the county said that Perrone would receive no contracts from Navitech, presuming that would extend to the company he also shares with Bob Weisner. But how can taxpayers be certain? Remember that LDC's are not required to open their operations to public scrutiny, though many of them do.

Monroe County taxpayers do not know the focus of the state investigations now apparently underway. Both the Attorney General's office and the Comptroller's office have declined comment about the nature of their inquiries and probably won’t reveal their findings until after the November election.  That just might be too late for the voters of Monroe County to get the answers they deserve.

The entrance to the International HQ of Navitech
is a detached garage on the property of 198 Park Ave.
near Goodman Street.

This D&C article is a must read:

At its core, the state comptroller's audit of Monroe County's contract with Upstate Telecommunications Corp. questions the appropriateness of using local development corporations to perform public functions.

Local development corporations, or LDCs, are nonprofit organizations, in some cases legal charities, created ostensibly for economic development purposes.

But as they have proliferated in recent years, they have come under greater scrutiny by state officials and watchdog groups as vehicles for local governments to skirt procurement and transparency laws and take debt off their books.

More prevalent

The number of LDCs

But questions abound about whether they have saved any money at all.

Auditors found that the county could not provide documentation of savings from the UTC.



A top economist with the Center for Governmental Research in Rochester, which has studied LDCs using a grant from the League of Women Voters, said savings can be difficult to quantify.

"I don't know how you prove that something saves money like this," said CGR President Kent Gardner. (Editor's note:  This quote is revealing because CGR is widely known as a right-leaning political think tank.)

New York state Comptroller Thomas DiNapoli is pushing legislation to strengthen his office's oversight of LDCs, though it has so far only been introduced in the Assembly. Although LDCs spend local tax dollars, the comptroller has no authority to audit them, only local governments' relationships to them.

In addition, DiNapoli has proposed prohibiting local governments from leaning too heavily on a provision of the law governing LDCs that describes them as "lessening the burdens of government and acting in the public interest." The clause, which is used routinely in Monroe County and elsewhere, is "overly broad," DiNapoli argues.

The Authorities Budget Office, the state watchdog agency that oversees public authorities, has expanded its role to include oversight of LDCs.

The comptroller would also like contracts between local governments and LDCs be limited to five years.

"Are there problems going on with LDCs?" asked Michael Farrar, deputy director of the state Authorities Budget Office. "I think it's too early to tell the extent, although there have been a number of audits by the Comptroller's Office and good government groups and we've seen indications ourselves that, because there hasn't been a lot of oversight, there is at least the potential for things to go wrong."