All things political: Hempstead: the Most Dysfunctional Town in America Part II of VI

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The Stonewalling Begins

Around the same time as the lawsuit, I invited Councilman Bruce Blakeman for coffee. I realized that a lawsuit was not the best way to start a working relationship; my hope was that one-on-one, we could share ideas that would help Hempstead residents. But Blakeman was hostile and defensive. He emphatically stated, “Gillen is suing me. I won’t work with her.”

“Don’t you want to help residents?” I asked.

He replied, “I don’t care, Gillen is suing me.”

After a few months of working at the Town, I suspected that most of the full-time staff had been instructed to follow Councilman Blakeman’s example. My emails and phone calls were rarely returned in a timely fashion, if at all. While everyone was cordial, the tension was palpable. Several of my co-workers, who were also trying to move initiatives forward, we’re often told by Town employees, “I am not allowed to speak with you.”

Refinancing Debt is a No-Brainer — Or Is It?

Still naive, and hoping to move initiatives forward, I tried to advance simple, good government policies, like refinancing the town’s high-interest outstanding debt. After a couple of months of work and expense to the town, the supervisor added refinancing debt to the town’s agenda for a meeting in March 2018. The Town Board tabled the resolution, even though it would have saved taxpayers $1.4 million in interest over the life of the almost $32 million in refinanced municipal bonds.

In an effort to save face, the Town Board, by partisan majority vote, replaced their long-time bond counsel and bond advisors with new ones and put out a press release stating that refinancing debt was a bad idea.

A March 6, 2018 Newsday article quoted Councilman Anthony D’Esposito: “I’m not sure where the administration got their crystal ball to determine the cost-benefit of refinancing more than a year from now, but we are basing our votes on actual fact.”

The “crystal ball” D’Esposito is referring to is actually a calculator. In fact, in 2016, the previous bond advisors sent several emails to the Town Comptroller, advising him to refinance the Town’s debt. There was even a final email plea from the same bond advisors late in 2017, before the new Trump tax laws changed, which would have enabled the Town to save over $5 million in interest!

Over the next 18 months, the town ended up quietly allowing about $110 million to be refinanced but lost well over $500,000 in interest savings by delaying the decision so that the newly elected Supervisor Gillen couldn’t get a quick win.

This was just the first of several initiatives that would be shot down by the Republican Town Board majority to the detriment of the taxpayers.

 

Tabling Another No-Brainer 

During May of 2018, I put the process in motion, with Supervisor Gillen’s full support, to create a foreclosure registry for the Town. At that time on Long Island, only the Village and Town of Babylon had such a registry.

After the 2008 financial crisis, real estate values across the nation plummeted, and homeowners had difficulty paying their mortgages. Banks sold their mortgages to loan servicing agencies, who in turn sold them over and over again, to the point where it became difficult to find out who was the originator of the mortgage.

When calls flooded into banks for mortgage modifications, many homeowners couldn’t get through, and when they did, they often couldn’t find the right person to talk to. From this chaos, a few enterprising start-ups formed foreclosure registry companies.

A foreclosure registry firm charges banks a fee on behalf of a municipality, and provides the address, entity name of the originator of the loan, and a contact person for the property, all from public information. The foreclosure registry firm receives about 20% of the town ordinance-initiated bank fee for its efforts, with the municipality receiving the balance.

The Town of Hempstead employees wouldn’t have had to do any work for the data, and the Town would literally just collect checks. For the Town of Hempstead, which has 5,000-6,000 homes in various states of foreclosure at any given time, the fees generated could easily top $3 million a year.

The data would be incredibly valuable in helping homeowners find points of contact if they were in default and help the town by locating clusters of homes in financial distress. The data would also provide the town a point of contact to maintain each property if it fell into disrepair, and an opportunity to handle blight in a proactive and expedient fashion.

Even with all the projections for town income and valuable data, the Republican Town Board majority voted to pull the foreclosure registry off the agenda. Though town law provides for the supervisor to set the budget, shortly after Supervisor Gillen took office, the Town of Hempstead Republican Board Majority passed an ordinance allowing them to table, indefinitely, any item on the board agenda.

When I raised the issue of the foreclosure registry at the following board meeting, Councilman Ed Ambrosino said, “We don’t need an infomercial for ProChamps,” the sole respondent to the Town’s Request for Proposals for the foreclosure registry.

By the way, when he made these comments, Mr. Ambrosino was under indictment for wire fraud and tax evasion. He was subsequently convicted of tax evasion. A few months after this meeting, a judge ruled Ambrosino must make financial restitution of the money he stole, pay back taxes, and spend six months in prison.

 

By Adam Haber

Former deputy chief of staff of Economic Development and Government Efficiency, Town of Hempstead

 

 

 

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