Intense questions about RIOC purchasing unsettled recent board meetings. We decided to dig deeper, see what we’d find in the weeds. It’s not a pretty picture. A secret garden, alright, but not one where you linger in peaceful meditation.
by David Stone
The Roosevelt Island Daily News
RIOC Purchasing in Three Easy Pieces
Legal and corporate rules govern public purchasing. Our concerns about how RIOC spends money collected from Roosevelt Islanders are longstanding. But until now, in the arena of New York government where corruption is as expert as it is common, our questions didn’t find willing ears.
Last year, though, new board members finally raised the same issues. The hostility this drew from existing board members and staff was a dead giveaway. They were hiding something.
Here, we’ll look at three controversial purchases that caught our attention.
Abel Bainnson Butz (ABB) and McManus Field
This deal has come up several times at board meetings, and because questions were not answered to the satisfaction of some board members, it has been tabled. It will no doubt it will reappear on the agenda for the next meeting on May 23rd.
On the surface, it’s pretty simple…
“The 2018 Octagon Sports Field Project scope of services for ABB included providing professional design services to repair and redevelop the field as well as all surrounding fixtures and facilities, including comfort stations, seating, security features, and lighting design. During the course of the project, design changes were requested by RIOC which resulted in ABB’s request for compensation.“
That’s how it’s described in a memo requesting approval for $150,000 authored by Mark Swanson, representing RIOC “owners representative,” LiRo.
But the contract involved work on designs for the Octagon Field, now better known as McManus Field, dating back to 2019, pre-COVID. In the request, none of the work is documented or clearly described, and board member Ben Fhala had other concerns.
Why had ABB waited until 2023 to invoice? The memo is repeatedly populated with statements like this: “Design Team did not request additional compensation for the separation of the projects at that time; however, ABB did submit a request for additional compensation at a later date…” But no one explains why.
Equally troubling was the absence of physical change orders. And there was something else disquieting. ABB asked RIOC for $290,898.40 for the services they rendered. Yet, they backed down to $150,000 in negotiating with RIOC.
Why?
While ABB may be due the whole $290K asked, they and RIOC are stalled because of sloppy business practices, the absence of documentation and rapid employee turnover.
Fhala’s questioning led to a request that the payment request be directed to a committee for further deliberation and documentation. On his motion, it was tabled.
Not So Fast: Swift Emergency Medical
Irregularities in RIOC purchasing for a COVID testing site have already led to at least one Inspector General investigation. The Daily completed a series concerning this but was stymied by RIOC’s refusal to release documents requested under freedom of information law.
Here’s what we do know, though, and why it’s concerning.
While the testing site opened in January 2021 – “The site has successfully operated for three months.” – no request for purchase approval appears before the board until April. By then, RIOC had already spent $204,500.00 and was asking for an extension bringing the total commitment up to $319,750.00.
$204K was far and away beyond the limit the administration, then led by Shelton Haynes, was authorized to spend. Yet – and this highlights the biggest part of the problems with RIOC purchasing – the board approved it unanimously, without a question.
Corporate boards, whether private, nonprofit or governmental, are supposed to, not just lead, but also maintain guardrails. RIOC’s board, for years, did neither. It was like bankers heading home for the weekend without locking the vault door or leaving a sentry.
Resident board members Howard Polivy and David Kraut remain from the board participating at the time. The two voting state board members with permanent seats vary in representation, but none of them did anything either, which hints at a whole other story about how loosely state tax dollars are tossed around.
Was public money spent wisely and legally? Was there any competition? Aren’t Roosevelt Islanders owed that much consideration before their cash goes out the door?
The MOU/OMNY/MTA/RIOC Shuffle
At a September 23rd, 2023 RIOC board meeting, Chief Counsel Gretchen Robinson requested board approval of a memorandum of understanding (MOU) deal bringing the OMNY fare collection system to the Roosevelt Island Tram. (A MOU is a form of contract when it includes intent and consideration, which this one did.)
Residents had asked for that for as long as OMNY existed, but reasonably, the MTA set up its own properties first.
Although Robinson’s memo boasted of improving the “…overall ridership experience,” it helped tourists more than residents, but there was a major plus. The MTA finally agreed on revenue sharing at the current fare level of $2.90. (MetroCards remain stuck at $2.00.)
And it was costly for RIOC.
“Other associated fees with the new system,” Robinson wrote, “will include a monthly fee of roughly $3,800, a one-time onboarding fee of $285,000, and costs associated with the new OMNY hardware…”
The $285K “onboarding fee” raised eyebrows, but something else should have raised them even higher.
“I recommend that the board authorize ratification of the MOU,” Robinson concluded…
But President/CEO Shelton J. Haynes had already signed the binding deal a month earlier, and OMNY had been active for three weeks.
In a bald demonstration of how slipshod board oversight had become, Haynes obligated the agency to a purchase far above the approved guidelines, but the board raised not a single objection. The members simply nodded “Yes” like cows lazily chewing hay in a summer pasture.
Was the purchase reasonable and fair? What justified a six-figure onboarding fee?
Quoting William Rose Benét completely out of context, “And now there is merely silence, silence, silence saying All we did not know.”
The Frightful Mess Known as RIOC Purchasing
No doubt RIOC’s new CFO Dhruvika Patel Amin will clean up RIOC’s shoddy, high-risk purchasing practices, but that doesn’t clean up the past. Public money has been viewed for too long by RIOC as fun money because there have not been enough guardrails.
For this extreme misconduct, needless to say, anyone participating should be shown the door, if Team Hochul has the guts to do it. And that includes resident board members Polivy and Kraut, both of whom failed their duties.
This story is not over as Fhala and other fresh board members have shown. The pace should hasten change – and retirements.
Rivercross and the Quiet Green Light
Rivercross privatization was enabled in 2010. This matters now because the same governance structures that allowed Rivercross to privatize without formal conflict controls are still in place. The same public authority oversees land leases, settlements, and redevelopment decisions that affect every resident on Roosevelt Island today.
