Another Blown Opportunity to Save Taxpayers Money
Taxpayers should be most infuriated about the blown opportunity to save them a combined $25 million per year in natural gas costs — about $140 per account.
National Grid makes its money on charging a fee set by the Public Service Commission for the transportation of Natural Gas. It purchases its supply of gas on the open market, passes it on to consumers at cost, and doesn’t care if consumers use a third party instead.
The town had the opportunity at the Dec. 10, 2019 board meeting to be the first municipality in the Northeast to run a Community Choice Aggregation.
A third party would have supplied discounted natural gas through a transparent bidding process to Hempstead’s 174,000 National Grid accounts, saving about 10 percent or more on resident’s monthly bills.
The town had passed an ordinance allowing for a CCA several months ago, and former Councilwoman Erin King Sweeney even said at a board meeting, “This is a good idea!” Alas, this is one more initiative tabled by the Town Board, indefinitely, and with no explanation.
Concessions to Concessionaires
Here’s one well-kept secret: Hempstead’s “Concessionaire License Agreement for Various Parks” was awarded to Butch Yamali, the owner of Dover Gourmet Corp., (which also runs the town-owned Malibu Beach Club) for the ludicrously low fee of $18,000.
This bargain is made sweeter by a $2,000 annual credit for maintaining exhaust and fire suppression equipment at the 13 concession locations.
The contract isn’t clear, but the credit may apply for each location, bringing Dover Gourmet’s annual fee to $0 — or lower. Through this agreement, Dover Gourmet also gets to operate close to 50 vending machines throughout Hempstead.
Interestingly enough, the U.S. Attorney’s office is investigating Dover Gourmet Corp., and the Nassau County District Attorney recently raided the town’s Building Department.
The Future Is Bleak
The initiatives described above are just the ones I worked on. There are more than a dozen other initiatives Supervisor Gillen and her staff tried to push through that were thwarted by the Town Board’s Republican majority.
My own rough estimate is that the Town is squandering about $20 million a year in inefficiencies and lost revenue opportunities. This represents a significant chunk of Hempstead’s 2019 $432 million budget.
An additional $25 million a year is lost to taxpayers from the missed opportunity to save on their National Grid bills.
That $20 million is quite possibly much higher. Hempstead has a well-earned reputation for being a tough place to do business: several companies have told me straight out they’ve given up bidding for contracts.
There’s too little transparency in the bidding process, too much delay in decision-making and payment. (Siemens won the EPC bid but wasted six figures preparing for a contract that would never be awarded.)
We’re already seeing how less competition means higher prices for taxpayers: after going out to bid twice for a $1.15 million streetscaping project, Hempstead received only one bid, when a project like that should receive half a dozen.
Despite all this malfeasance, this past November, the town’s residents elected a new Republican supervisor, Don Clavin, the town’s former Receiver of Taxes.
I hope Mr. Clavin acts independently to benefit Hempstead residents. But I’m not optimistic.
In my 30-plus-year career in finance, real estate, and government, I’ve never seen an organization run as badly as the Town of Hempstead. I have little evidence that Town of Hempstead Republicans have the ability or desire to run the Town properly.
Adam Haber is the former Deputy Chief of Staff of Economic Development and Government Efficiency, Town of Hempstead.
