County officials are on the offensive over the latest state Comptroller's Office audit report criticizing the county's use of local development corporations (LDC's).
Late Friday, the county released a draft of the audit report, which specifically targets the county's use of Monroe Security and Safety Systems LDC to contract out upgrades to public-safety communications systems. It also released a statement responding to the audit, which it rightly points out is the third LDC-related audit in the past year.
"Mr. DiNapoli’s unnecessary reviews of successful public private partnerships suggest that he is hostile to utilizing the efficiency and ingenuity of the private sector to protect taxpayers and reduce the size of government," said Scott Adair, the county's chief financial officer. "The LDC model was actually established in law by New York State government to allow local governments to do exactly what Monroe County is doing right now — take on important projects, while achieving savings for taxpayers.”
The audit is highly critical of the county, and says that the process used to procure the contract favored a specific firm: Navitech. It says that the county appears to have had discussions with future beneficiaries of the contract about the used of an LDC as early as 2006. Navitech's chief operating officer is Stephen Gleason, a former finance director for the county. (The state Attorney General's Office is investigating the request for proposals process used to solicit bids and which resulted in Navitech's selection.)
The audit report says that the 20-year, $212 million contract — particularly $30.3 million in administrative and management fees — benefits "individuals with previous ties to the county."
The audit report says that the county will overpay by $39 million over the life of the contract. Adair and other county officials disagree on this point; they say it'll save taxpayers $10 million.
But the audit report makes few striking recommendations. Mainly, it recommends that the county follow accepted bidding and contracting procedures. It also says that the county "should not deliberately structure capital expenditures into long-term contracts as a means of reclassifying these expenses as operating expenditures, thus diminishing legislative oversight and public transparency."
Local Democrats have criticized Republican county administrations for transferring assets — including a parking garage, a power station, and county information technology — to LDC ownership. Their arguments mirror the audit's recommendation.
In its statement, the county says that it is preparing a formal response.