Cortland County Legislature
6:00 pm
Minutes of October 27, 2004 Special Session
Chairman Steve called the meeting to order at 6:00 pm and led the Salute to the Flag.
The Clerk called the roll and all members were recorded as present except Mr. Wern, recorded as absent.
Chairman Steve stated he would like this session to be handled with professional decorum and keep this non-personal. Chairman Steve said the purpose of this meeting is to review and take action upon the Report of Investigation into the Performance of the Office of the Treasurer.
Mr. Ross moved to table action on this report until after the State Comptroller’s Office has done their review at the end of this six months, seconded by Mr. Cornell. Mr. Allen asked for a roll call vote. Mr. Cornell stated he believes action on this report should be held up until after the election and the people of Cortland County have spoken.
Mrs. Brown stated she doesn’t believe taking action on this report would in any way be related to the referendum. Mrs. Brown commented the work of this committee was assigned by the Legislature and was to respond to the State Comptroller’s Report issued to the County.
Dr. DiGiovanni stated he agrees with Mrs. Brown and sees this as a completely separate issue from the proposition that has been put before the people. In some people’s minds it is difficult to keep the referendum proposition and this report separate. However they really are two different issues. The proposition is how we want government to be structured for efficient functioning and that is a theoretical question. What we did in committee with the authority of the Legislature as an investigative committee was to interview people who had something to add as far as what went wrong and why the items identified within the Comptroller’ Report as deficiencies occurred. This report is about a period and time covered in the State Comptroller’s Report and it is about the performance of the current Treasurer, it is not about whether we should have a Treasurer. These are separate issues and they should be dealt with separately.
Chairman Steve stated one of the most important things to talk about was that in the Comptroller’s Report, which the APAT report is a follow up of, it states clearly " The County Legislature did not provide adequate oversight over the County Treasurer’s operations. Although the Legislature was aware of the fact that the accounting records and related reports of the County Treasurer were deficient, they continued to accept the County Treasurer’s monthly financial reports without question. In addition, they agreed the reports did not provide useful financial information for them to utilize in making management decisions."
Chairman Steve stated that this committee was formed in response to the Comptroller’s Report, the whole process that would take place was discussed and a timeline was addressed at the very beginning that is reflected in previous minutes. Chairman Steve noted the vote was unanimous to appoint this committee to perform the charge given. Chairman Steve stated this report has already been released to the public and by not taking an action or by hindering the process it could be construed in many different ways. Chairman Steve referred to the letter that was received today from the Treasurer asking them to hold off this decision until after the election that contains many non-truths and stated that he does not want to see this continue. Chairman Steve stated the facts that have been brought forward will not change, the work that has been done has been concluded and the actions being recommended need to be put forward for action to be taken so this process can move on. Mr. Armstrong stated he feels delaying this vote for a week or two will give the Legislature more time to acquire all the information needed to make these decisions. Mr. Armstrong stated he thinks it’s inappropriate at this time to act on this report. Chairman Steve asked if there were any more comments.
Chairman Steve stated the motion that is being voted on is to table action on this report until after the State Comptroller’s Office has done their review at the end of six months and if this is tabled it would take a two-thirds vote to bring it back on the table. Chairman Steve requested the Clerk to call the roll. The motion FAILED with Mr. Armstrong, Mr. Cornell, Mr. McKee, Mr. Ross and Mr. Steger voting aye and Mr. Allen, Mr. Behrenfeld, Mrs. Breed, Mrs. Brown, Mr. Dafoe, Dr. DiGiovanni, Mr. Elston, Mr. Hartnett, Mr. Tagliente, Mrs. Tytler, Mr. Willcox, Ms. Wyant and Mr. Steve voting nay.
Chairman Steve stated the APAT Team was seated in front to be able to address questions from the body. Chairman Steve gave the floor to Dr. DiGiovanni, Chairman of the APAT Team.
Dr. DiGiovanni stated that the report from the APAT team cites failures of the Legislature regarding oversight of the Treasurer’s Office and to the extent they could, all of the legislature’s failure’s have been addressed at this point. Dr. DiGiovanni said the other concern were the many operational deficiencies within the Treasurer’s Office that needed to be addressed. He stated in June, this bipartisan committee was formed and charged with reviewing and addressing those areas of concern. The committee has been working since June until October hearing testimony, reviewing information and gathering facts and has been surprised and concerned with many of the details they have been made aware of. Dr. DiGiovanni stated the committee relied on sworn testimony and documents produced to make the conclusions and create the report that was presented to the full Legislature on October 21, 2004 with recommendations for actions to be taken.
Chairman Steve asked if there were any questions for the committee or any concerns that the committee has acted improperly or conducted themselves inappropriately as has been referred to in allegations made about and toward the committee in press releases. Chairman Steve stated now is the time for any of these concerns to be brought forward and discussed.
Mr. Elston stated he would like to compliment the committee and commend them for the fine job they have done while realizing it was not an easy one. Mr. Elston said he believes the report to be an honest assessment of what has happened and why.
Chairman Steve stated it is now time to act upon the recommendation of the APAT Team that the full Legislature vote on separate resolutions of censure of Treasurer Donald Ferris for each of the following:
On motion of Mrs. Brown, seconded by Mrs. Breed and adopted by a roll call vote with all members present voting aye, except Mr. Armstrong, Mr. Cornell, Mr. McKee, Mr. Ross and Mr. Steger voting nay, Motion No. 1 became Resolution No. 365-04: The Cortland County Treasurer, Donald F. Ferris, be censured for making false statements to the Budget and Finance Committee
Dr. DiGiovanni stated the reason committee has made this recommendation was in regard to testimony given by Deputy County Treasurer regarding discussions that occurred within the Finance Committee. The minutes of the Finance Committee meeting held on May 7, 2003 reflect Mr. Ferris stated the books were closed. Mrs. Kennedy testified to the APAT committee the books were not closed on that date, explaining closing the books is quite a detailed process and did not take place until June 2003. Mr. VanDee testified a few days after the May 2003 Finance meeting had taken place, he happened upon Mrs. Kennedy in the hall on the third floor. Upon making the statement to her that the books were closed she told him they were not closed and Mr. Ferris knew they were not when he had made the statement in committee.
Chairman Steve reminded everyone that they were voting on whether these actions actually did occur and that these votes were not personal or politically motivated.
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On motion of Dr. DiGiovanni, seconded by Mr. Elston and adopted by a roll call vote with all members voting aye except Mr. Armstrong, Mr. Cornell, Mr. McKee, Mr. Ross and Mr. Steger voting nay, Motion No. 2 became Resolution No. 366-04: The Cortland County Treasurer, Donald F. Ferris, be censured for failure to provide timely and accurate information to the Budget and Finance Committee
Dr. DiGiovanni stated this is in response to the State Comptrollers Audit finding that the Treasurer’s Office failed to provide timely and accurate information to not only the Finance Committee but also to department heads therefore hindering the work needing to be done because of lack of necessary information. The Finance Committee minutes reviewed for the last four years reflect that this has been and continues to be a concern without resolution. Dr. DiGiovanni said the State Comptroller’s Report Audit states "timely, sufficient and accurate information is essential to prepare budgets and reports for use by management to make informed financial decisions and monitor financial operations" and he isn’t sure how the Legislature can make this happen without cooperation from the Treasurer.
Mrs. Brown stated that over 2.3 million dollars were not entered in a report given to the Budget and Finance Committee in 2002, certain financial actions had not been recorded timely, and a monthly report given in 2003 was off by over 6 million dollars, this was not acceptable and did not allow the Legislature to be able to make wise decisions.
Mr. Tagliente stated the financial report by Mr. McNeilly was given to the Treasurer on October 28, 2003 for the year ending 2002 was not given to the Legislature until December 2003. Mr. Tagliente said the last Legislature in preparing the budget for 2004 had to raise taxes, lay off people and abolish positions which he is not sure would have been necessary had they been given the report and the financial information needed earlier as should have been done.
Mr. Armstrong asked the Budget and Finance Committee if it is receiving timely and accurate reports from the Treasurer. Mr. Behrenfeld stated they have been getting reports and they have just received one in the last few days but he hasn’t had a chance to review it. Mr. Behrenfeld stated as to the accuracy of these reports, he has no way of knowing what is coming up accurate and what is not.
Mrs. Breed stated the Budget and Finance committee was given a report by the Treasurer at the July meeting and when the accuracy of the report was questioned and Mr. Ferris was asked to sign it as to the accuracy, he refused.
Mr. Ross stated he is on Budget and Finance and Mr. Ferris has been submitting reports each month. Mr. Ross stated each time a report is brought to the committee, Mr. Ferris is told it needs to be done differently, he needs to add another column or add more information. Mr. Steve asked has this been going on for three years? Mr. Ross said he is talking about this year. Chairman Steve said this has been happening for three years and Mr. Ross has been on the committee. Chairman Steve asked shouldn’t the Treasurer have been able to provide accurate reports to the committee that does what they need them to do by now? Mr. Ross stated the Treasurer is trying to work with the committee.
Mr. Behrenfeld stated that when Mr. Ferris has come to committee and discussions happened with suggestions being made, the follow up is never done by the Treasurer. Mr. Behrenfeld stated with the communications lines that are available, he is easily accessible and Mr. Ferris never follows up or communicates with him, referring to this being a pattern that has been prevalent in the past and continues to this day.
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On motion of Mr. Allen, seconded by Mrs. Breed and adopted by a roll call vote with all members voting aye except Mr. Armstrong, Mr. Cornell, Mr. McKee, Mr. Ross and Mr. Steger voting nay, Motion No. 3 became Resolution No. 367-04: The Cortland County Treasurer, Donald F. Ferris, be censured for failure to properly function as a liaison in the independent auditing process as instructed by the Legislature
Dr. DiGiovanni stated the failure being cited is in regard to resolutions passed in 1999 and 2003 establishing the Treasurer, "Donald Ferris", as the liaison between the County and Mr. McNeilly, the independent auditor. The resolutions instruct Mr. Ferris to perform certain actions in relation to being the liaison including bringing an engagement letter to the County Attorney for approval and to the Chairman of the Legislature for signature.
There has been no engagement letter produced for the years 2000, 2001 and 2002. In 2003, there were specific actions that should have happened with the audit but did not. The Legislature should have helped to select the independent auditor, had meetings with him, and helped to write a corrective action plan, but did not. Management’s letters were received for the audits of 2000, 2002 and 2003, but none for 2001. Mr. Ferris did not set up a meeting with Mr. McNeilly to go over the financial report, which would have been when the management letter would have been reviewed. All of these are cited as evidence of his failure to carry out his responsibilities as liaison.
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On motion of Mr. Allen, seconded by Mrs. Brown and adopted by a roll call vote with all members voting aye except Mr. Armstrong, Mr. Cornell, Mr. McKee, Mr. Ross and Mr. Steger voting nay, Motion No. 4 became Resolution No. 368-04: The Cortland County Treasurer, Donald F. Ferris, be censured for usurping the authority of the County Attorney and the Chairman of the County Legislature, by illegally executing the contract for independent auditing service
Dr. DiGiovanni referred to the previous action taken. In both resolutions, the role of the Treasurer was to bring an engagement letter to the County Attorney for approval and then to the Chairman of the Legislature for signature to execute the contract. No engagement letter has been produced for the years 2000, 2001 and 2002. The engagement letter for 2003 was signed by the Treasurer instead of the Chairman of the Legislature and did not have approval by the County Attorney.
Chairman Steve stated the resolution also called for payment of the contracts to be made after completion of the work and not to be done in partial payments as was done with a $13,000. payment being made prior to the work being performed.
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On motion of Mrs. Brown, seconded by Mrs. Breed and adopted by a roll call vote with all members voting aye except Mr. Armstrong, Mr. Cornell, Mr. McKee, Mr. Ross and Mr. Steger voting nay, Motion No. 5 became Resolution No. 369-04: The Cortland County Treasurer, Donald F. Ferris, be censured for filing false reports to the State Comptroller’s Office
Dr. DiGiovanni stated this is in response to management letters of 2000 and 2002 prepared for the County by Mr. McNeilly which state that reports were filed with the State containing inaccurate information. During testimony by the Deputy Treasurer, Mrs. Kennedy, she stated that Mr. Ferris, upon returning from the Finance Committee meeting of September 4, 2002, directed her to file the AUD Report that day. When she told him that it was incorrect, she was directed to file it anyway. Dr. DiGiovanni stated this is significant in that whereas the reports for all the years were inaccurate, the report for 2001 was knowingly false.
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On motion of Mrs. Breed, seconded by Mrs. Brown and adopted by a roll call vote with all members voting aye except Mr. Armstrong, Mr. Cornell, Mr. McKee, Mr. Ross and Mr. Steger voting nay Motion No.6 became Resolution No. 370-04: The Cortland County Treasurer, Donald F. Ferris, be censured for instructing employees of the County to participate in filing false reports to the State Comptroller’s Office,
Dr. DiGiovanni stated this is directly related to the previous action regarding the directive given by the Treasurer to the Deputy Treasurer that regardless if the report was correct or not it needed to be filed with the State. Mrs. Kennedy testified that she felt she was asked to perform an unethical act.
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On motion of Mrs. Brown, seconded by Mr. Behrenfeld and adopted by a roll call vote with all members voting aye except Mr. Armstrong, Mr. Cornell, Mr. McKee, Mr. Ross and Mr. Steger voting nay Motion No. 7 became Resolution No. 371-04: The Cortland County Treasurer, Donald F. Ferris, be censured for causing unauthorized payment of County funds, just one day prior to her testimony before the APAT Committee, to the Deputy Treasurer, a management employee,
Dr. DiGiovanni stated the APAT team requested the Treasurer submit a Corrective Action Plan (CAP) in response to the State Comptroller’s Audit. The Treasurer submitted a CAP on July 14, 2004 and the plan included a request for forty hours of overtime pay to be paid to the Deputy Treasurer for extra hours of work to prepare reports. The CAP was deemed unacceptable by the APAT and the Treasurer was asked to submit a revised one. When the revised one was filed with the committee on August 11, 2004 the request for overtime had disappeared. Dr. DiGiovanni stated at the Budget and Finance meeting in October 2004, a resolution was introduced by the Treasurer to pay the Deputy Treasurer for the forty hours of overtime. There were many concerns that arose including that the Deputy Treasurer is a management position that is not entitled to overtime payments. Dr. DiGiovanni stated Chairman Steve made the committee aware that an unauthorized payment had already been paid to Mrs. Kennedy, approved by the Treasurer on August 5, 2004 on the day before she was to appear and testify at the APAT committee.
Chairman Steve stated the information was correct and referred to a previous resolution he sponsored and was approved to pay the Deputy Treasurer for extra work performed as a lump sum payment not as overtime. Chairman Steve stated he does not understand why the Treasurer did not know the procedure or follow the correct procedure acting upon this sooner seeing as the work had been done prior to April of this year. Chairman Steve stated just this week an override has occurred within the Treasurer’s Office allowing something to be paid outside of proper procedure as was the payment done to the auditor prior to the completion of the audit being completed.
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On motion of Mr. Allen, seconded by Mrs. Breed and adopted by a roll call vote with all members voting aye except Mr. Armstrong, Mr. Cornell, Mr. McKee, Mr. Ross and Mr. Steger voting nay Motion No. 8 became Resolution No. 372-04: The Cortland County Treasurer, Donald F. Ferris, be censured for the fact that through his failure to maintain timely and accurate financial data, he impeded the ability of the independent auditor to conduct timely audits.
Dr. DiGiovanni stated that it was the testimony by Mr. McNeilly that, because of failure to reconcile the books within the Treasurer’s Office, he as independent auditor had to delay the initiation of his audit from the customary start time of April or May until much later in the year, usually not begin until August. The financial information needed by the Legislature in preparing the budget for the following year was not available because of the late audits causing the Legislature to make decisions without adequate information.
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On motion of Mrs. Brown, seconded by Mr. Behrenfeld and adopted by a roll call vote with all members voting aye except Mr. Armstrong, Mr. Cornell, Mr. Elston, Mr. McKee, Mr. Ross and Mr. Steger voting nay Motion No. 9 became Resolution No. 373-04: The Cortland County Treasurer, Donald F. Ferris, be censured for the fact that he placed no performance reviews of Treasurer office employees in personnel files, thereby failing to hold poor performers accountable
Dr. DiGiovanni stated the Deputy Treasurer testified there was a known poor performer within the Treasure’s Office who had been there since the term of the previous Treasurer. The previous Treasurer had taken action and had worked with that person on corrective action. Her testimony stated that this person continues to perform below standard yet no action had been taken by the current Treasurer to address any of these concerns and nothing had been placed in any personnel files of any employee within the office.
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On motion of Mr. Allen, seconded by Mr. Behrenfeld and adopted by a roll call vote with all members voting aye except Mr. Armstrong, Mr. Cornell, Mr. McKee, Mr. Ross and Mr. Steger voting nay Motion No. 10 became Resolution No. 374-04: The Cortland County Treasurer, Donald F. Ferris, be censured for the fact that by his decision to promote multiple employees simultaneously, he created a situation in which a given person didn’t know his new job, and had to spend time training the person who had assumed his old job, to the detriment of efficient functioning of the Treasurer’s office.
Dr. DiGiovanni stated there was a time when multiple employees within the Treasurer’s Office were promoted to different positions concurrently, leading to employees being trained for their new position while simultaneously training another employee to perform their previous position. This created not only a hardship within the office but loss of productivity within the office and the committee believes this is an example of poor managerial oversight.
Chairman Steve stated he is very disappointed it has come to this. This Legislature is still trying to fix everything that it can be but it is apparent by the letter that was received just today that there is no accountability, there is no admission of any kind of problems, there is no remedy to fix any of the problems, and there is no cooperation. It is disappointing this was made so public but it is an elected position. It is difficult for myself or for this Legislature to respond to the non-factual statements that have been and are continuing to be made but we are going to move forward and we are starting to correct these issues. The Administrator was directed to prepare a fixed asset report and that has been done and we are compliant to date and are going to continue to fix the problems that need attention. That is our responsibility and that is what we were elected to do. The State law requires us and ultimately myself as Chairman of the Legislature to be responsible for this. The action is very difficult and that is recognized. This action has nothing to do with the person, it is all performance based so with that we need to move this forward and have discussion.
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On motion of Mrs. Brown, seconded by Mr. Allen and adopted by a roll call vote with Mr. Allen, Mr. Behrenfeld, Mrs. Breed, Mrs. Brown, Mr. Dafoe, Dr. DiGiovanni, Mr. Elston, Mr. Hartnett, Mr. Tagliente, Mrs. Tytler, Mr. Willcox, Ms. Wyant, and Mr. Steve voting aye and Mr. Armstrong, Mr. Cornell, Mr. McKee, Mr. Ross and Mr. Steger voting nay Motion No. 11 became Resolution No. 375-04: The APAT Committee concludes that the failures of the Treasurer cited in the report rise to the level of a violation of his oath of office and accordingly recommends that the full Legislature ask Mr. Ferris to resign.
Dr. DiGiovanni stated this has not been a pleasant process, this was not a process that he welcomed and he didn’t even want to be named Chairman of this committee. There has been very little that has been beneficial to him personally other than learning about certain processes but it came at a great personal cost: the cost in terms of the hours and hours that were spent pouring over the information, the hours that were spent here early on Friday mornings hearing testimony, time taken away from his family, and time taken away from his other Legislative responsibilities. Dr. DiGiovanni stated the bottom line is the Legislature failed and Mr. Ferris failed; the Legislature failed in their oversight of his office and the Treasurer failed in the oversight of his office. Oversight isn’t free; there are costs involved. Members of this committee paid the cost. They were willing to suffer the slings and an arrow to do the work that they felt was owed to the people of Cortland County. None of us is happy that this is where we are, but we realize that we are here not because of a predetermined objective to get here, not because there was any malice against Mr. Ferris (for whom I voted), but we are here because we heard sworn testimony, we reviewed the record and we asked questions, and this is what the record revealed. Dr. DiGiovanni said it is unfortunate that this is where we are, but we have a responsibility to the public to do the work on their behalf; that is why they elected us. No one said it would be easy and I don’t want sympathy, but I do resent the fact that as the team carried out its work, we remained professional and we did not respond publicly to the slander was leveled against us, insinuating we were some kind of conspiracy, we had a personal vendetta, or that this was politically motivated. Dr. DiGiovanni stated he can certainly state that in his estimation having been through this, it is a lot harder for a Legislator to hold someone within his own party accountable than it would be to hold someone in the other party accountable. It hasn’t been easy but we have done our work and he is proud of the other members of this Team. We did the best job we could do and are happy to stand by this report, not emotionally happy but happy in the sense of feeling no shame in having done the job that we were elected to do.
Mrs. Breed stated that the team did an enormous amount of work. She attended all but one of the meetings, sat through all the testimony and heard everything that they heard. The facts are here and unless you want to suggest that everyone that testified was lying to us then the facts are the facts and these are in the sworn testimony. Mrs. Breed stated that to assume that any of this is incorrect would be a great injustice because they did do this properly and the testimony was sworn testimony and she doesn’t believe that all the people that testified were lying.
Mr. Tagliente stated that he resents some of the letters to the editor plus a recent editorial that more or less threatened the members of the committee and the members that were voting to take this action. When he was elected as Legislator, he received a phone call from a Republican that said they had not been able to do very much on the Legislature and they would like to work as a non-partisan group and that is the way he has felt. If the people are not happy with what he thinks is a wrong and they want to fix it than so be it.
Chairman Steve stated it certainly would have been easier to walk away from this. He personally has tried many different venues and he would like to make them public at this point because he feels the frustration level has gone to that. He went to the Republican Committee and asked them for their help, direction and leadership and he was basically told if he didn’t do things there way and ignore it, his life would be miserable. Chairman Steve said he is sure that this is the right thing, he is sure that there are still serious issues and he still has concerns about the finances of this County which continue as of this date. Chairman Steve stated that if he is not record stating this then he is not accepting his responsibility, it is not political. He has not said anything negative, he has not been aggressive, he has been demanding and assertive. He has challenged everybody many times. He has had Legislators in his office asking questions and asking them to get answers and received nothing. Mr. Ferris in his last days of testimony was asked any other information he could provide other than what had been already provided and nothing came. We have seen this over and over even to the point that in the State Comptroller’s Report they had to write a response back to the County which has never been before because when the response was written by the Treasurer to the State, he denied that any of what had happened was his fault and we still get that to this day. Chairman Steve stated can we fix the problems, sure but if the other party is not willing there seems to be no other solution.
Chairman Steve commended the committee on their work knowing that this was hard work and not an easy assignment.
Chairman Steve stated Annual Session will begin at 10:00 am on November 8 and pictures will be taken after session.
The meeting was adjourned at 6:59 pm.