Reform NYCHA Governance and Oversight

Section 1. The opening paragraph of subdivision 4 of section 402 of the public housing law is designated paragraph a and three new paragraphs b, c and d are added to read as follows:

b. The chairman and the other members of the authority, including the additional tenant member, shall: (1) exercise direct oversight of the authority's chief executive officer or general manager and other managers or supervisors in the effective and ethical management of the authority; (2) understand, review and monitor the implementation of fundamental financial and management controls and operational decisions of the authority; (3) adopt a code of ethics for officers and employees of the authority consistent with section eight hundred six of the general municipal law; (4) perform each of their duties as board members, including but not limited to those imposed by this section, in good faith and with that degree of diligence, care and skill which an ordinarily prudent person in like position would use under similar circumstances, and may take into consideration the views and policies of any elected official or body, or other person and ultimately apply independent judgment in the best interest of the authority, its mission and the public. At the time that each member takes and subscribes his or her oath of office, or within sixty days after the effective date of this paragraph if the member has already taken and subscribed his or her oath of office, execute an acknowledgment, in a form consistent with the one prescribed by the New York independent authorities budget office established pursuant to title two of article one of the public authorities law in which the board member acknowledges that he or she understands his or her role, and fiduciary responsibilities as set forth in subparagraph four of this paragraph, and acknowledges that he or she under-

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD07554-01-7

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stands his or her duty of loyalty and care to the organization and commitment to the authority's mission and the public interest.

c. All board members, including the tenant member, shall participate in training approved by the inspector general of the authority regarding their legal, fiduciary, financial and ethical responsibilities as directors of an authority within one year of appointment to the board. Board members shall participate in such continuing training as may be required to remain informed of best practices, regulatory and statutory changes relating to the effective oversight of the management and financial activities of public corporations and to adhere to the highest standards of responsible governance.

d. Notwithstanding any laws to the contrary, the authority shall not, directly or indirectly, extend or maintain credit, arrange for the extension of credit, or renew an extension of credit, in the form of a personal loan to or for any officer, board member or employee of the authority.

§ 2. Section 402 of the public housing law is amended by adding eleven new subdivisions 10, 10-a, 11, 12, 13, 14, 15, 16, 17, 18 and 19 to read as follows:

10. Disposition of property. a. Definitions. For the purposes of this subdivision:

(1) "authorities budget office" shall mean the independent authorities budget office established pursuant to section four of the public authorities law.

(2) "city comptroller" shall mean the comptroller of the city of New York.

(3) "contracting officer" shall mean the officer or employee of the authority who shall be appointed by resolution of the board of the authority to be responsible for the disposition of property.

(4) "dispose", "disposition" or "disposal" shall mean the sale, lease or transfer of title or any other beneficial interest in personal or real property in accordance with paragraph c of this subdivision, and shall also include the demolition of real property.

(5) "mayor" shall mean the mayor of the city of New York.

(6) "property" shall mean personal property in excess of five thousand dollars in value, real property, and any inchoate or other interest in such property, to the extent that such interest may be conveyed to another person for any purpose, excluding an interest securing a loan or other financial obligation of another party.

b. Duties of the authority with respect to the disposal of property. (1) The authority shall adopt by resolution comprehensive guidelines which shall (a) detail the authority's operative policy and instructions regarding the use, awarding, monitoring and reporting of contracts for the disposal of property, and (b) designate a property management officer who shall be responsible for the authority's compliance with, and enforcement of, such guidelines. Such guidelines shall be consistent with, and shall require the authority's disposition activities to comply with this subdivision, the authority's enabling legislation and any other applicable federal laws and regulations for the disposal of property, except that such guidelines may be stricter than the provisions of this subdivision, the authority's enabling legislation and any other applicable federal laws and regulations for the disposal of property if the authority determines that additional safeguards are necessary to assure the integrity of its disposition activities. Guidelines approved by the authority shall be annually reviewed and approved by the board of the authority. On or before the thirty-first day of March in each year,

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the authority shall file with the authorities budget office a copy of the guidelines most recently reviewed and approved by the authority, including the name of the authority's designated property management officer. At the time of filing such guidelines with the authorities budget office, the authority shall also post such guidelines on the authority's internet website. Guidelines posted on the authority's internet website shall be maintained on such website at least until the procurement guidelines for the following year are posted on such website.

(2) The authority shall:

(a) maintain adequate inventory controls and accountability systems for all property under its control;

(b) periodically inventory such property to determine which property shall be disposed of; and

(c) produce a written report of such property in accordance with subparagraph three of this paragraph.

(3) (a) The authority shall publish, at least annually, a report listing all real property owned, controlled or operated by the authority. Such report shall include a list and full description of all property disposed of during such period. The report shall contain the price received by the authority and the name of the purchaser for all such property disposed of by the authority during such period.

(b) The authority shall deliver copies of such report to the independent authorities budget office, the mayor, the city comptroller, the New York city council and the state legislature.

c. Disposal of authority property. (1) Except as otherwise provided in this subdivision, the property management officer designated by the authority shall have supervision over the disposition of property of the authority.

(2) The custody and control of the property of the authority, pending its disposition, and the disposal of such property, shall be performed by the authority.

(3) Subject to subparagraph five of this paragraph, the authority may dispose of property for not less than the fair market value of such property by sale, lease, exchange, or transfer, for cash, credit, or other property, with or without warranty, and upon such other terms and conditions as the authority deems proper, provided that such terms and conditions are consistent with industry practices and are comparable to terms and conditions contained in similar agreements or contracts between and by private parties, and it may execute such documents for the transfer of title or other interest in property and take such other action as it deems necessary or proper to dispose of such property under the provisions of this subdivision provided, however, that no disposition of real property, or any interest in real property, shall be made unless an appraisal of the value of such property has been made by an independent appraiser and included in the record of the transaction, and, provided further, that no disposition of any other property, which because of its unique nature or the unique circumstances of the proposed transaction is not readily valued by reference to an active market for similar property, shall be made without a similar appraisal.

(4) (a) All disposals or contracts for disposal of property of the authority made or authorized by the authority shall be made after publicly advertising for bids except as provided in clause (c) of this subparagraph.

(b) Whenever public advertising for bids is required under clause (a) of this subparagraph:

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(i) the advertisement for bids shall be made at such time prior to the disposal or contract, through such methods, and on such terms and conditions as shall permit full and free competition consistent with the value and nature of the property;

(ii) all bids shall be publicly disclosed at the time and place stated in the advertisement; and

(iii) the award shall be made with reasonable promptness by notice to the responsible bidder whose bid, conforming to the invitation for bids, will be most advantageous to the authority, price and other factors considered; provided, that all bids may be rejected when it is in the public interest to do so.

(c) Disposals and contracts for disposal of property may be negotiated or made by public auction without regard to clauses (a) and (b) of this subparagraph but subject to obtaining such competition as is feasible under the circumstances, if:

(i) the personal property involved has qualities separate from the utilitarian purpose of such property, such as artistic quality, antiquity, historical significance, rarity, or other quality of similar effect, that would tend to increase its value, or if the personal property is to be sold in such quantity that, if it were disposed of under clauses (a) and (b) of this subparagraph, would adversely affect the state or local market for such property, and the estimated fair market value of such property and other satisfactory terms of disposal can be obtained by negotiation;

(ii) the fair market value of the property does not exceed fifty thousand dollars;

(iii) bid prices after advertising therefor are not reasonable, either as to all or some part of the property, or have not been independently arrived at in open competition;

(iv) the disposal will be to the state or any political subdivision, and the estimated fair market value of the property and other satisfactory terms of disposal are obtained by negotiation;

(v) under those circumstances permitted by subparagraph five of this paragraph; or

(vi) such action is otherwise authorized by law.

(d) (i) An explanatory statement shall be prepared of the circumstances of each disposal by negotiation of:

(A) any personal property which has an estimated fair market value in excess of fifty thousand dollars;

(B) any real property that has an estimated fair market value in excess of fifty thousand dollars;

(C) any real property disposed of at below fair market value or for a nominal price.

(ii) Each such statement shall be transmitted to the persons entitled to receive copies of the report required under paragraph b of this subdivision not less than ninety days in advance of such disposal, and a copy thereof shall be preserved in the files of the authority.

(5) (a) No property owned, leased or otherwise in the control of the authority may be sold, leased, or otherwise alienated for less than its fair market value except:

(i) if the purchaser, lessee or transferee is a government or other public entity, and the terms and conditions of the disposition require that the ownership and use of the asset will remain with the government or any other public entity; or

(ii) if the authority seeks to dispose of property for less than its fair market value to other than a governmental entity the authority

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shall provide written notification thereof to the mayor, the city comptroller, the state legislature and the New York city council.

(b) In the event a below fair market value property disposition is proposed, the following information must be provided to the mayor, the city comptroller, the state legislature and the New York city council and the general public:

(i) a full description of the property;

(ii) an appraisal of the fair market value of the property and any other information establishing the fair market value;

(iii) a description of the purpose of the disposition and a statement of the kind and amount of the benefit to the residents of the authority's housing resulting from the disposition, including but not limited to, the benefits, if any, to the communities in which the property is situated;