The Battery Park City Authority (BPCA) has doubled the dollar value of contracts that requires approval from its directors, but the board rejected a request by the Authority’s management team to increase this threshold, in some cases, to more than three times its original amount.
At the January 27 meeting of the Authority’s board, BPCA executives argued that they should be permitted to approve contracts valued at up to half a million dollars and that have a term of one year or less, without asking permission from the directors.
BPCA board member Hector Bastita (center): “We were all appointed to this board to carry out a responsibility. It just seems to me that I’m relinquishing some responsibility that I have concerns about.”
They also proposed that the trigger level for board review should be raised to $900,000 in cases where at three least bidders competed for a contract, and the management team selected the lowest priced among these. BPCA chair and chief executive officer Dennis Mehiel asked, “what happens with contracts between $250,000 and $500,000?”
Authority vice president for administration Benjamin Jones explained, “those contracts would not come to the board.”
BPCA vice president Benjamin Jones: “we have raised that threshold for contracts to $500,000 and above for the board.”
The BPCA’s newest board member, Hector Batista then observed, “it seems to me that the number is extremely high. I want to be careful that this is not being driven by us not having a quorum or the lack of board meetings. That, to me, is troubling.”
Mr. Batista’s concern may have been a reference to the fact that two seats on the BPCA’s seven-seat board are currently vacant, but State law requires a numerical majority of those seats, rather than a majority of current members, to approve major decisions. In practice, this translates into four votes (out of the current five members) being needed for approval of contracts.
In these circumstances, a single dissenting vote or recusal, in combination with one board member being absent, could prevent the Authority’s board from conducting business.
“Second, I am really concerned about the number,” Mr. Batista continued. “It’s a little too high. And third, I’m also concerned of the fact that the staff could approve one-year contracts and they would not come to us for any kind of action.”
Mr. Mehiel answered that, “a series of transactions sequentially that avoided a mandated control would be cause for termination of anybody or everybody who participated in such a scheme.” He added, “we’ve all run into it in our private lives,” but did not elaborate. “There needs to be a degree of confidence on the part of the board that we have the proper management scrutiny, controls and understanding to deal with a legitimate point that you raise,” Mr. Mehiel continued. “If we’re going to get into form over substance and people wanting to work around these protocols, that’s going to be very difficult as long as I’m here.”
But Mr. Batista pushed back: “When you have certain protocols, it allows for a comfort level. We were all appointed to this board to carry out a responsibility. It just seems to me that I’m relinquishing some responsibility that I have concerns about. I think the number is quite high.” He added, “I have some experience in this area. I’m concerned about the flexibility,” that the proposed move would delegate to the BPCA’s management team.
Another member of the Authority’s board, Donald Capoccia, observed, “my concern is that there now maybe won’t be as diligent an effort,” on the part of the Authority’s management to find the best value among competing bidders (rather than simply endorsing the lowest-price proposal), “if it’s known that if you go to the lowest bidder, it will go more smoothly.”
Mr. Batista then insisted, “I’m not prepared to vote on this. I am comfortable raising the threshold, but I will not vote on the second part,” which would have given BPCA management the power to approve contracts valued at up to $900,000.
Mr. Capoccia agreed that, “doubling the current threshold is reasonable, but going beyond that, I have concerns.”
At the conclusion of the discussion, the board agreed to raise to $500,000 the threshold that requires a board review of proposed contracts, but rejected the management team’s request for permission to sign off on contracts worth $900,000 when the lowest among three bidders is selected.
In a separate, but related development, Mr. Jones told the BPCA board that the Authority now has a formal procedure that requires a “vendor responsibility check,” before approving contracts. This is a process for verifying the finances and the integrity of companies that are being considered for major contracts. A check of section 163 of the New York State Finance Law indicates that this procedure has been legally required of State agencies since 2006.
Matthew Fenton