Rate Payer Elected Board

August 6, 2011 

Memo to LIPA Oversight Committee Members

From: Irving Like

Please consider whether these facts, further support the re-creation of LIPA as a rate payer elected board.

The legislature which established LIPA called for 21 rate payer districts, as a means of assuring that the voices of all the rate payer, voting in periodic elections,  would be directly heard, through multiple districts fairly drawn on the principle of one rate payer, one vote.

That goal was undermined when subsequent legislation repealed those provisions, and provided for the appointment of the LIPA trustees.

The current appointed LIPA board, while composed of professionals and business people, whose qualifications, I am not questioning,  consists of 13 members- 9 of whom reside in Nassau County, and 4 in Suffolk County.

It would not surprise me, but I have not checked it, if  most of LIPA’s executive staff, is also composed of persons other than from Suffolk County

None of the LIPA trustees is directly accountable to, and elected by the rate payers of the community in which he or she resides. Each trustee votes primarily, based  on the input received from the LIPA staff, and not from direct contact with the rate payers, Thus the Trustee’s actions, however well-intentioned,  may or not be what the rate payers in the trustee’s community, or any other community wants.

Moreover,  since 9 of the LIPA trustees reside in Nassau County,  a pro-Nassau County bias may dominate,  if the interests of Nassau County and Suffolk County rate payers conflict, as they surely did in a huge way, when during 2000,  litigation revealed that LIPA Chairman Kessel, with the acquiescence of the appointed board,  gave Nassau County, $50 million in
unauthorized gifts, and to date, LIPA refuses to settle that litigation  on fair terms.

The LIPA board’s unfair and unequal  representation,  is  unconscionable and of major concern, because of the opportunities it creates for  LIPA’s abuse of, and ineffective use of  its powers, and for its failure to perform its obligations as a fiduciary, accountable to, and  truly and fairly representative of the interests of all its rate payers.

LIPA’s 2011 budget is $3,660 billion. Suffolk County’s 2011 operating budget is $2.71 billion; its proposed capital budget is $107,635, 260 for the period 2012-2014; Nassau County’s 2011 proposed budget is $3,227,732,415.

Thus LIPA’s budget is greater than either the Suffolk County or Nassau
County budget. Yet whereas the budgets of each county are arrived at after a process of debate between elected  County Legislators, and an elected County Executive, the LIPA budget is fashioned by 13 appointed directors, 9 of whom are from Nassau County.

It makes no sense, to give LIPA, such enormous  power over the citizens of Long Island,  and in particular when the exercise of that power will shape their future for decades to come, and allow that power to be exercised by persons who are not directly elected and accountable to them.


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