GOVERNOR PATERSON AND LEGISLATIVE LEADERS ANNOUNCE AGREEMENT ON PUBLIC AUTHORITIES REFORM LEGISLATION 

Governor’s Program Bill Establishes Independent Budget Office to Improve Oversight; Sets Higher Standard for Authorities’ Operational Transparency

Agreement Protects Authorities’ Ability to Promote Economic Development

Governor David A. Paterson and Legislative Leaders today announced an agreement on legislation to reform New York’s public authorities. The measures include the creation of an independent Authorities Budget Office with expanded regulatory responsibilities and subpoena power to improve the oversight of authority operations. The New York State Comptroller will also be empowered to review certain noncompetitively procured contracts for more than $1 million. The reforms, while raising transparency standards, will maintain the authorities’ ability to promote economic development.

“For too long, public authorities have operated in the dark, under little or no public scrutiny. Today, we turn the lights on,” Governor Paterson said. “The reforms will ensure that authorities have an independent auditor to examine how they operate and that they best serve the interest of the public. While achieving greater oversight, we also preserve and even enhance the authorities’ critical powers to promote economic development throughout the State. The people of New York deserve to know that their government is operating transparently and effectively. I thank my partners in government for working to finalize these significant reforms.”

The reform legislation will:

• Establish the creation of an independent Authorities Budget Office to oversee authority operations;
• Allow for Comptroller review of certain noncompetitively procured contracts for more than $1 million;
• Mandate enhanced financial reporting, mission statements and measurement reports by public authorities, so that the State and the public know what authorities are doing, as well as their financial condition;
• Strengthen the rules governing the disposal of property by public authorities to prevent the give-away of public property to private developers;
• Strengthen the rules governing contact between lobbyists and employees of public authorities;
• Regulate the formation of subsidiary corporations and the issuance of debt by subsidiaries in order to place limits on the amount of debt issued by those corporations;
• Require board members of a public authority to perform their duties in good faith, in the best interest of the authority, its mission and the public in order to ensure that public authorities act responsibly; and
• Create a Whistleblower Access and Assistance Program to protect those individuals who report wrongdoing.

A number of cases of misconduct at public authorities that occurred earlier in the decade made it clear that many of these entities were operating without adequate accountability mechanisms. A public outcry led to the passage of the Public Authority Accountability Act, which Governor Paterson helped push through as Senate Minority Leader in 2005. Soon after passage, though, the Commission on Public Authority Reform found that the 2005 law, while a good foundation for greater oversight, did not go far enough. Many of the Commission’s suggestions were included in the Governor’s program bill and in those that passed the Senate and Assembly earlier this year.

Ira Millstein, who led the Commission on Public Authority Reform, said: “I congratulate the Governor and the Legislature for having agreed to this historic legislation, which will benefit the citizens of the State of New York. I do so on behalf of all those who have worked so hard over the years to bring this legislation into being.”