Recommended Changes Would 'Gut' Authority Reform Bill, N.Y. Lawmakers Say

New York Gov. David Paterson's legal counsel recommended changes to a public authority reform bill that the bill's sponsors yesterday said would "gut" it.

The bill, which Assemblyman Richard Brodsky, D-Westchester, got the Legislature to approve, makes long-sought changes to how public authorities operate and how they are overseen by the state. But Paterson is reportedly ready to veto the bill and yesterday Brodsky released a letter from Paterson's counsel, Peter Kiernan, that listed objections to key provisions in the bill, including one he said could affect authority bonds.

Kiernan makes recommendations that would "gut authority reform and leave the system largely in its current, failed state," Brodsky said in a letter to the governor in response to Kiernan's letter. State Sen. Bill Perkins, D-Manhattan, who like Brodsky chairs a committee on public authorities, also signed the letter.

The bill's measures were needed to "cure a system that was rife with exploding debt, favoritism, interference from outside public and private forces, inefficiency, and failure," Perkins and Brodsky wrote.

One of the bill's provisions would require that an authority get approval from the state comptroller's office for contracts over $1 million. Kiernan wrote that this should be taken out of the bill because it could interfere with state bond covenants, such as a covenant not to interfere with the Metropolitan Transportation Authority's promise to bondholders to keep its revenue-producing assets in a state of good repair.

"The introduction of a possible comptroller veto into the MTA contract process could imply to the finance community that MTA would no longer have ultimate control over its ability to enter into contracts necessary to fulfill this promise," Kiernan wrote.

Kiernan also raised objections to the bill's authorization of subpoena power by an independent authorities budget office, a requirement that authority property be sold at fair market value, and establishment of fiduciary duties for authority board members.

Brodsky has argued that public authorities are not extensions of the executive branch and should be independent. Kiernan took a different view, writing that requiring board members to be "truly independent" of the officials who appointed them would "effectively silence elected officials' voices on board decisions" and could "impede the development of important statewide and cross-authority initiatives."