Report On Saratoga County Government Documents Widespread Mismanagement And Related Legal Liabilities

In tempered and lawyerly prose the law firm Jones, Hacker, Murphy. LLP paints a picture of Saratoga County management as oblivious or indifferent to state law and acting unchecked beyond their legal authority. It describes bumbling administrators oblivious to the need for essential record keeping. It raises serious questions about the credibility of statements made by County Administrator Spencer Hellwig and Human Resources Director Margaret McNamara.

The report was commissioned by the County under pressure by a group of insurgent Supervisors. The report was delivered to the County on August 6 and distributed to the Supervisors on August 7. The document was drafted by the law firm as a “privileged and confidential document” and Supervisors were advised by Preston Allen, the Chairman of the Board, that it should remain internal until the Board decided otherwise.

At its August meeting the clique that has basically run the County as a fiefdom argued vigorously to withhold the report from the public. The County has a voting system where the votes of Supervisors from the more populated municipalities carry more weight. It became clear that the insurgents had the votes to approve its release and in the end the vote to release the report was unanimous.

In its executive summary the law firm warned:

The report confidentially discusses some potential exposures under the New York Labor Law, and it would be highly irresponsible for any one person, acting unilaterally, to break the privilege attached to this discussion without action by the board as a body.

External Report

Nevertheless, the report in its original and unredacted form was leaked. It has been circulated and this post is based on the full original report.

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In a subsequent post I will be discussing in detail the report’s specifics. They are really quite extraordinary, but for the purpose of this post, I will just summarize the findings.

On Sunday, March 15, 2020, County Administer Spencer Hellwig and Human Resource Director, Margaret McNamara convened a special meeting of department heads. At this meeting they announced that all employees operating on site (as compared to remotely) would be paid time and a half for their regular hours. Referencing New York State Municipal Law, the report asserts that “Neither the County Administrator nor the Human Resources Director had legal authority to announce additional compensation on March 15.”

The five member Covid 19 Oversight Group was created by resolution by the Board of Supervisors and empowered to determine staffing and wages independent of the Board. According to the report, this committee “…was a ‘public body’ within the meaning of the New York Open Meetings Law.” This meant that their meetings were required to be:

1. Open to the public
2. Properly noticed to the public
3. Contemporaneous minutes of the meetings were required

The report notes:

In fact, the meetings were held in private, and there are no minutes, or any other record, of business conducted during the meetings.

External Report

In fact, according to the report, all of the members of the committee told the investigator that they didn’t even keep any notes at the meetings.

[JK: In a later blog I will go into this in more detail but I wrote to all the members of the Board and their Attorney way back on April 1 that they were violating the Open Meetings Law to no avail.]

The Human Resources Director Margaret McNamara is considered to be a “County Officer” and “…as a matter of law, changes in her compensation require local law amendments subject to permissive referendum.” She along with quite a few others are considered “officers” and should not have received these time and a half raises because of their special status and yet checks were issued to these “officers.” Ms. McNamara asserted that her receiving the money was a clerical error but the investigator reported on evidence that raised doubts about her claim. She subsequently returned the money making the issue mute. As I will describe in a future post, the handling of her pay and her memory of events raised additional issues.

The COVID Oversight Group claimed that they decided to reverse the time-and-a-half payments at a meeting on March 19:

The group says it made the decision during a meeting on March 19, but there is no contemporaneous documentation of the decision, and the first public notice of it did not materialize until March 31. In the intervening period there were internal and external communications by some County personnel which are inconsistent, and justify confusion about whether this change was definitively adopted on March 19, or sometime later in the affected pay period. Some evidence strongly argues that this decision was not definitively reached until after March 19, or at the very least the decision remained largely unknown until well after March 19.

[Later in the paragraph]

Consequently, there is some risk of exposure to unpaid wage claims under the New York State Labor Law, by employees who might assert that they had already earned the extra pay for that period by the time the County announced that it was ending.

External Report

So the report appears skeptical of statements made by the members of the COVID Oversight Group. As the Group met in private and without minutes or notes the members of the group offered a variety of explanations meant to establish that they made the decision on March 19. The investigator found that many of these explanations did not stand up under scrutiny [JK: This will be explored further in a later post]. This takes on greater importance because if they did not advise employees that the policy had been discontinued they created serious legal liabilities for the County.

This issue is quite important. When they decided to reverse the decision and to recapture the money retroactively, they failed to follow New York State Labor Law which involved timely notices to employees and an appeal process. The failure to have followed these procedures makes the County particularly vulnerable. The investigator noted that many of the department heads claimed that they did not want the money. The problem is that no records were kept of any of this so it is unclear how many County employees have potential legal options to receive the recovered wages.

With a six year statute of limitations for employees to file claims for underpayment of wages, there is a lingering possibility aggrieved employees could assert claims for unpaid time and a half for the March 20-April 2 pay period. Margaret McNamara’s alleged oral notice of the change to the unions on or about March 19 is undocumented and too contestable for us to give it much credit for the purposes of mitigating potential liability.

External Report

As interesting as this general summary may be, it is the details of how management tried to explain all of this as compared to the record that makes really interesting reading.

It will take me a while to compile all of this as the reports runs some one hundred and eleven pages.

What it exposes is the utter ignorance by County Administrator Hellwig and, I assume, County Attorney Dorsey of New York State Law regarding the limits of authority of the County Administration. Aside from the ethics of open government, the failure to even keep proper records at all is simply stunning. There is also the issue of the Human Resources Director’s apparent ignorance of New York State Labor Law.

The overall impression this report creates is of a kind of small club of insiders that became untethered to the laws and management principles that insure the integrity of public institutions.

This blog has written a number of stories about past incidents of mismanagement and self dealing at the County. What this report exposes in terms of ineptitude is chilling. One has to wonder what a thorough audit of the County would uncover.