The First Step for the New Executive Director

It has been almost two months since the new executive director, Melanie Whinnery, started working at NYCERS. It is a good size organization with its own unique legal structure. Many of the employees have been there for over 30 years. In fact one employee has been working since Eisenhower was president. I suspect Ms. Whinnery is still trying to get her bearings.

She does, however, have to quickly come to grips with who she is going to have sitting in the office next to her. He or she will be her number two person at the agency. She needs someone who she can really trust, someone she has known for a long time, and someone who has had her back over that time. That means that person is not on staff at NYCERS. She needs to reach out to someone in Albany who she knows and can trust. This is not a position that needs a open search. This is about protecting your back.

This will be the most important decision she will make at NYCERS. Trust me, I know from experience. I got it right once and wrong the second time. You can not begin to imagine the havoc that the wrong choice will bring and there is definitely a lot of work to be done to straighten out the agency.

A word of caution: the current deputy executive director has a strong motive to see the new executive director fail and leave. In addition, if she remains in the number two spot, the current staff will know that nothing has changed.

NYCERS Website - New User Interface

On September 14, 2017, the new NYCERS executive director had her first Board of Trustees meeting. The two main items on the agenda were a welcome to the new executive director and a presentation by the communications director of the new user interface to the NYCERS website, www.nycers.org. The website has been in place since 2003. NYCERS recently updated the user interface to the website.

The new interface does not add any new content to the website. In fact, the retirement calculator function now creates a server error for pensioners. There was no reason to deny pensioners access to the calculator. You may or may not find the new interface more helpful than the old one but there is no new info on the site. Instead of putting more content in the box NYCERS chose to only change the the box.

I hope the executive director picked up on this smoke. She did pick up on the smoke surrounding the IT training contracts.

Let's see how she handles appointing a new deputy executive director. The placement notification for her position made it clear that the number two position was up for grabs. Mazza has just taken a $14K pay cut and has been passed over for the second time for the executive director's job. She might not want the new executive director to succeed.

Denial of Tier 4 Pension Rights and the New Executive Director

Last January I wrote about NYCERS’s effort to force certain new correction officers, sanitation workers and DA investigators into Tier 6 who had existing Tier 4 NYCERS memberships.

Based on current inquiries for help from such members NYCERS is continuing to violate these members’ constitutional rights.

I am absolutely certain that neither the police nor fire pension funds are following this illegal procedure.

On Tuesday, September 5th, the new executive director will start working at NYCERS. I assume she will join the NYCERS pension system. If she does, NYCERS will initially enroll her as a Tier 6 member. She also has an active Tier 4 membership with NYSLERS. She has the right to transfer that membership to NYCERS, if she chooses to do so.

If she does choose to to transfer her Tier 4 state membership, it will be very interesting to see whether NYCERS correctly switches her tier status back to Tier 4. NYCERS has provided no legal rational for its illegal actions in forcing existing Tier 4 members into Tier 6.

I wonder whether the NYCERS Trustees informed the new executive director of this issue?

Notes to the New Executive Director

With the new executive director starting after Labor Day, I thought I would share a few ideas from a former executive director.

1. Unlike NYSLERS, NYCERS has an independent administrative budget. This gives you tremendous resources to effectively run NYCERS. I recommend that you carefully read the enabling legislation which created the budgeting authority. See Chapter 593 of the Laws of 1996.

2. Even in the context of the state’s civil service laws, you have a great deal of flexibility in dealing with executive personnel decisions. There is a clear need to make radical changes in senior staff at NYCERS.

3. The budgeting law also provides you (via annual Board approval) with broad authority to enter directly into contracts for goods and services. You will quickly realize how helpful this is but it is a very sharp knife. Be careful.

4. The Board of Trustees is a direct descendent of the old Board of Estimate with three major unions thrown into the mix. It escaped the Supreme Court one person – one vote decision but not the permanent war between the Mayor and the Comptroller.

5. I recommend that you read my postings to get a detailed view of the organization that you are taking control of. You may not agree with everything I write but you will get concrete statements of facts. You will also find that the previous executive director left no paper trail of her decisions and actions while she was in charge of the agency.

6. The NYCERS web site needs a significant expansion of its content both with respect to general benefit information and detailed member/retiree historical data that NYCERS has in its massive computer files.

7. Current production reports are a sham and service levels are atrocious given the amount of money appropriated in the agency’s budget.

8. While the NYC Law Department is NYCERS’s statutory legal counsel, your personal expertise with NY pension law puts you in a strong position to insure members and retirees are treated correctly. In the last twelve years, NYCERS executive staff has taken a great deal of incorrect and mean spirited actions against members and retirees. I have written extensively about this in my NYCERS blog.

9. Personal plug: I run a successful pension and IT consulting firm and would be very interested in providing services to my old agency.

The New Executive Director

On Monday the Board of Trustees appointed a permanent executive director. Her name is Melanie Whinnery. She will start on September 5th. She currently works at NYSLERS

I am so very glad that the Trustees chose to give the NYCERS staff a break from the mayhem of the last 12 years. Lets hope this was a good decision.

Budget History at NYCERS

On April 23, 2017 the NYCERS Trustees adopted the FY-2018 Administrative Budget for the agency. It increased the payroll by $645,000 from $31.06M to $31.70 and the OTPS budget by $900,000 from $20.92m to $21.83M. The F/T head count was increased from 401 to 411. The P/T head count stayed at 35.

Interestingly, the Chair, John Adler, voted against the budget primarily because of the increase in the F/T head count. With the Comptroller's vote the increased head count was adopted. It is a hard budget rule that head count drives costs.

The table below charts out the history of the NYCERS admin budget back to 1986. That was before the 1996 passage of the “corpus funded” budget law.

The 1989 NYCERS budget was the high mark for the NYCERS budget while it was still part of the total city budget. As of July 1, 1996 NYCERS’s budget began to be funded through the assets of the system under the control of the trustees and it was no longer an item in the city's budget. The mayor and the comptroller each have a super vote on the budget resolution in so far as at least one of them needs to vote for the budget for it to be adopted.

In 1996, the non-loan agency head count was 154 F/T employees and 30 college aides. The total budget, both PS and OTPS, was $8.77M. The agency was on life support and the Mayor's Executive Budget had set the NYCERS head count at 146 for 1997.

From 1997 to 2005 with the help of "corpus funding" the agency's F/T staff increased from 154 to 342 along with the original 30 college aide positions. That was a radical increase of 186 positions. In addition in 2000, NYCERS moved into modern office space (133,000 sq. ft.) in downtown Brooklyn.

The NYCERS budget in 2006 had a F/T head count of 342 and a total budget of $34.94M, not including fringe benefit costs. FY-2006 was the last budget I prepared. At that point NYCERS was the best staffed agency in the city and the best funded. If necessary, NYCERS could have performed at a top level indefinitely without any increase in head count.

As of July 1, 2017 NYCERS will have a head count of 411. That is an increase of 69 people over the last 11 years. You would think NYCERS must be functioning flawlessly. It is not.

In 2015, I wrote a critical review of a IT upgrade that NYCERS was planning for the five year 2016-2020 budget cycle. The project is two years through the five year cycle with nothing much done. The only good thing is that the trustees have not let NYCERS spend the full $132M that the staff had requested.

Last year the previous executive director resigned. Adler and the trustees are now in the process of appointing/hiring a new executive director. Let us hope that they find an honest competent person for the position.

History of NYCERS Admin Budget 1987-2018

Fiscal Year	F/T Count	P/T Count	College Aides / Hourly	PS Budget	OTPS Budget	Total	% Increase
1986	205	0	30	$5,916,793	$1,423,743	$7,340,536
1987	203	0	30	$6,621,803	$1,881,300	$8,167,220	11.2%
1988	223	0	30	$6,621,803	$1,881,300	$8,503,103	4.11%
1989	243	0	30	$7,849,731	$1,932,351	$9,782,082	15.4%
1990	238	0	30	$8,284,883	$2,578,693	$10,863,576	11.06%
1991	229	0	30	$6,826,473	$2,475,205	$9,301,678	-14.38%
1992	225	0	30	$6,646,549	$2,216,262	$8,862,811	-4.72
1993	223	0	30	$6,858,991	$2,198,882	$9,057,873	2.20%
1994	194	0	30	$6,778,541	$2,183,101	$8,961,642	-1.06%
1995	167	0	30	$6,202,062	$2,080,504	$8,282,566	-7.58%
1996	154	0	30	$6,199,709	$2,573,715	$8,773,424	5.93%
1997	200	0	30
1998	230	0	30
1999	270	0	30
2000	290	0	30
2001	320	13	30
2002	320	13	30
2003	334	13	30
2004	334	13	30
2005	342	13	30	$19,737,687	$14851355	$34,589,042	288.6%
2006	342	13	30	$20,255,911	$14,683,855	$34,939,766	1.01%
2007	364	13	0	$22,616,783	$14,258,471	$36,875,254	5.54%
2008	371	13	0	$23,597,857	$17,259,313	$40,857,170	10.80%
2009	371	13	0	$25,189,842	18,208,861	$43,398,703	6.22%
2010	372	12	0	$26,046,827	$17,777,228	$43,824,055	0.98%
2011	372	12	0	$26,046,827	$18,492,228	$44,539,055	1.63%
2012	372	12	20	$25,756,827	$18,781,428	$44,538,255	0.00%
2013	380	5	30	$26,623,635	$17,951,822	$44,575,457	0.08%
2014	383	5	30	$26,813,635	$18,761,240	$45,574,875	2.24%
2015	392	5	30	$29,131,972	$18,154,572	$47,286,544	3.76%
2016	392	5	30	$30,233,989	$19,407,619	$49,641,608	4.98%
2017	401	5	30	$31,056,080	$20,916,796	$51,972,876	4.70%
2018	411	5	30	$31,701,410	$21,832,718	$53,534,128	3.00%

Deficits at Retirement

In 2000, the NYS Legislature passed a law which changed the contribution requirement for Tier 4 members of all public retirement systems in New York State.

Starting in 2000 any Tier 4 pension member who had earned 10 or more years of credited service no longer had to contribute the standard 3% payroll pension deduction. By 2012, just before the Tier 6 modification of Tier 4 removed the 10 year cutoff of the 3% contribution requirement, there were approximately 135,000 NYCERS Tier 4 members who were entitled to this 10 year cutoff.

This 10 year cutoff obliged NYCERS to confirm exactly when a Tier 4 member had earned 10 years of service. This was not just the member’s 10 year anniversary of joining NYCERS.

Specifically, this meant that NYCERS had to determine exactly when a member earned and paid for 10 years of service. In addition, NYCERS had to blend into this calculation any of the member’s prior service buyback applications. Buyback payments could be fully completed before the 10 year cut over occurred or they could overlap the 10 year boundary. In which case, the 10 year boundary was a moving target, since buyback service counted towards the 10 year service requirement after two years of membership service earned after joining NYCERS.

Needless to say this inspired a huge increase in early service buybacks. Four years of buyback purchased after the second year of membership could provide relief from paying four years of regular 3% contribution. Buying the service after completing the ten years of membership, however, would provide no added relief.

To automate this process I directed the IT staff to develop a required amount system that computed the required 3% contributions that each member needed to have on account at NYCERS to be credited with 10 years of service. This included all service that the member had worked as a member, transferred from another NYS system, or that the member had applied to purchase under the buyback law. The system also displays what the member has actually contributed at that point.

At the start of every year, driven by the service history system, a list of Tier 4 members were marked for review during the year as candidates for earning 10 years of service. As part of the review, staff would use the required contribution system to check whether the member had the needed contributions plus interest earned for the 10 year cutoff date. The system allowed for a request for any date. This enabled staff to hone in on the specific date that the 10 years was achieved.

This means that every Tier 4 member should have been checked for required contributions in or around his/her 10 year service date.

So why is NYCERS sending deficit letters to Tier 4 members after they have applied for retirement when they should all have been checked at their 10 year service date? We all know NYCERS must correct its errors. The question is why is NYCERS making the errors in the first place, especially for an agency that is so well funded?

Also why is it taking six to eight months as opposed to two or three months to produce option letters for new retirees? Forget about updating the old legacy IT systems. Thank god those systems are still working.

As far as notice and transparency, it is clear to me that the information from this and many other in-house systems should have been made available on the NYCERS website over the last 12 years.

Closing note: NYCERS will need an extremely bright experienced honest manager to fill the position of Executive Director. There are massive problems that have built up over the last 12 years that this person will have to correct.

A Word of Caution About Selecting the New NYCERS Executive Director

Just in case anyone is entertaining the thought of appointing Karen Mazza as the new executive director of NYCERS, including Mazza herself, let me refresh your memory about her illustrious career.

In 1990 I was appointed executive director at NYCERS after 17 years with the agency. In that position I had steady contact with the NYCERS Chair and other NYCERS trustees. At that time it was common for the Mayor to appoint the Finance Commissioner as the Chair of NYCERS.

In 1993 Mazza went to work for the Mayor's Pension Unit at the Finance Department. That unit supported the Commissioner with his/her duties as NYCERS Chair. In that position she worked for an attorney named Norm Rosner who was the Commissioner's alternate at the NYCERS Board. Rosner made it clear to me that Mazza was not an effective employee but gave no details. At the time I did not appreciate his insight into this woman. In hindsight, it is quite clear why he held her in such low esteem. She left Finance in 1994 and went to work at the Comptroller's Office.

In 1991 Leo Vallee and I began writing procedural descriptions for all newly passed pension legislation that impacted NYCERS. These write ups are still being used today. At that time NYCERS had an old time permanent staff lawyer who thought he was a brilliant legal writer. Unfortunately he was not. He was, however, honest.

In 1997, I hired Mazza as an administrative staff analyst. I was hoping we would get help with the analysis of the pension legislation along with other in-house legal issues. Because of the 1996 legislation giving NYCERS budgetary independence, I was legally prohibited from hiring lawyers in legal titles unless I had approval from the Law Department. The Law department was not about to give NYCERS that approval.

Unfortunately, Vallee and I had to continue writing the legislative descriptions because Mazza was also not able get the job done. This was a warning sign that Mazza was not an astute analytical attorney.

Falsifying Time Sheets

In 2000, Mazza gave birth to her second child. Also in 2000 we moved into the new office site in Brooklyn. She returned from maternity leave in late 2000. She returned to 8:00-3:45 work schedule. I worked a 9-5 schedule. Her new office had an open glass front as did all managers' offices and was twenty feet down the hall from my office. Whenever I passed her office I would be able to know whether she was in her office or she was on the phone. For the record she was on the phone almost every time I walked by.

In 2001, I began to notice that when I would arrive to work she was not in her office. I would eventually find her after 9:30 or later. She was one of the top three managers in the agency. Managers have a certain leeway with their schedules in that a manager can be make up time at the end of the day if he/she comes in late in the morning. She, however, was meticulous about dashing out the door at 3:45 hoping I would not see her.

One of my duties was to sign off on the time sheets of all of my direct reports which Mazza was. When I became aware of her absences at the beginning of the day, I started to closely cross check her time sheets with the days when I knew she was late and found that she was falsely recording her starting time as 8:00 when she very often was not arriving until 9:30 or later.

To double check what I had found, I examined the security system which records when all employees enter the working area of the office. Sure enough as another sign of her dishonesty, on the days that she was late she would make sure she did not swipe her security access card. She instead would tell the security guard on the front desk that she had forgotten her card and ask him to buzz her in through the security door. This meant that there was no trace in the security system of when she actually arrived.

I should have fired her at this point.

In retrospect, it was the worst mistake I made while running NYCERS. Foolishly I gave her a second chance. I spoke to her about what I had discovered. She tried to deny it. I told her it had to stop and that I would be closely monitoring her time sheets. From then on she knew I was watching her like a hawk. This was not a good situation.

In addition, in a regular weekly managers' meeting I made it very clear to the all managers that they had to swipe through security every day and if they forgot their card that they had to sign in with Security and mark their time. I got a few funny looks but Mazza knew I was talking about her.

Perjury and Fraud

Subsequently in early 2004 during the hiring process for a new HR director Mazza enabled Felita Baksh to falsify her writing sample which was crucial in my decision to appoint Baksh as the NYCERS HR director. This was in addition to the help that she gave Baksh with her resume.

As everyone at NYCERS has come to know, it is a law of nature that Baksh/Ramsami/DiLorenzo can not write a grammatically correct sentence never mind a two page essay. As a cruel twist of fate, the one HR staff member who unknowingly observed Mazza and Baksh rig the writing sample was eventually fired by Mazza and Baksh. This was after Conflict of Interest Board had fined Baksh for using this employee's credit card to buy furniture.

Later in 2004 Mazza conspired with the DOI investigator, Carol DeFreitas, who was investigating Baksh's appointment. DeFreitas was Martha Stark's "man" on staff at DOI. DeFreitas was literally her employee on assignment at DOI. I need not say anything more about Stark. Together Mazza and DeFreitas were able to supress any mention of Baksh's lying under oath or the false writing sample.

While one trustee forwarded the perjury charge to DOI, there was never any follow up.

Retaliation Against My Wife

After I was fired in March of 2005 Mazza was involved with creating trumped up charges against my wife which lead to her being demoted. Over the next ten years Mazza was a driving force behind placing my wife in position where she had no work assignments and ensuring that any attempt to give her work was blocked. In 2015 my wife had to resign because of health reasons. Over the ten years she had developed sever colitis and had a major heart attacked which almost killed her.

Just a Bad Lawyer

I previously mentioned that Mazza is a incompetent lawyer. In 2008 she was so unable to handle pension issues that she had NYCERS issue a $100K per year no-bid contract to a former law Department staffer to do her work. This went on for 4 or 5 years.

In 2008 Mazza lawyer began harassing the Tier 4 accident disability EMT retirees over the alleged gainful employment issue and forced then to enact legislation to override her incorrect interpretation of the disability statute. She also managed to deny a disabled EMT worker her rightful disability benefit.

When the Workers' Compensation Offset issue arose in 2012, she was in the fore front of crucifying Tier 3 retirees who were receiving disability benefits. Who can forget her words when she was cutting disabled pensioners' checks to $10 a month "we're trying to leave them with something in their pocket at the end of the month".

In 2006 NYCERS signed a lease for a disaster recovery site in Long Island City. Mazza handled the lease and all the the contracts for this fiasco. Ten years later the site still does not have a Certificate of Occupancy.

Closing Thought

D'Alessandro, the executive director, has been a nasty empty suit for eleven years at NYCERS. Now, in July, she appoints Mazza as Deputy Executive Director to fill the spot that opened up with the retirement of the person who held the position for ten years. Then two months later in September D'Alessandro announces her own retirement. What do you think is going on?