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December 12, 2009
Paterson Signs Bill to Rein in State’s Free-Spending Public Authorities
The New York Times
By Nicholas Confessore
Governor David Paterson signs into law legislation to force public authorities, like the ESDC and the MTA, to act more responsibly. The sponsors of the bill were Assemblyman Richard Brodsky and State Senator Bill Perkins.
For the first time, board members of those authorities will have a legal obligation, known as a fiduciary duty, to protect the interests and mission of the authorities they supervise, rather than being beholden to the mayors, governors and legislative leaders who appoint them. The new law will require authorities to seek approval from the state comptroller for most contracts of over $1 million that are not competitively bid.
The Governor notes the incredible amount of debt being run up by authorities. Will he step up and do the promised review of the proposed Atlantic Yards project before it becomes an albatross for Brooklyn and the rest of New York State?
Mr. Paterson said that passing the law this year was crucial because of the state’s perilous fiscal condition, which the public authorities have added to with the enormous amount of debt they have taken on. Taxpayers have almost no say over that debt, but are ultimately responsible for it. Public authorities have between $140 billion and $150 billion in debt — significantly more than the state’s entire annual budget.
“Public authorities play a tremendous role in government,” Mr. Paterson said. “But for a very long period of time, they have operated really without any oversight and operated very much in the dark, and often have amassed crippling back-door financing that has threatened the stability of our economy.”
The MTA's part in delivering a sweetheart deal to developer Bruce Ratner is shown as an example of reckless behavior.
Under the new law, authorities, some of which have acquired significant and, in some cases, secret real estate holdings, will also face limits on the sale of real property. With some exceptions, authorities will no longer be allowed to sell real estate for below-market value, as the Metropolitan Transportation Authority did when it sold rights to build over railyards in Brooklyn to the developers of the Atlantic Yards project.
Posted by steve at December 12, 2009 6:43 AM