More on Ethical Practices in Croton's Government

This letter was published in the Gazette on March 1, 2018. See the previous letter on this topic here.


To the Editor:
The subject of Ms. Gallelli being paid for writing the Village newsletter has been a controversial matter in Croton for many years, and has been a matter of public discussion for more than 10 years.

My letter was in response to the narrow issue of a recent Village Board resolution and subsequent discussion in the Gazette, but since Mr. Masur (The Gazette, week of Feb 22/28) wishes to discuss the 14 year backstory I will address Mr. Masur’s points at this time. 

Mr. Masur is correct that Ms. Gallelli was the sole author of the newsletter for 14 years, and that this continued across the tenures of three Village Managers. But as I stated in my original letter (The Gazette, week of February 8/14—see below) this does not mean that the practice was compliant with Village Code nor that the practice should continue.

Mr. Masur says that “the Village owes Ms. Gallelli our respect and gratitude.” The taxpayers of Croton expressed that “gratitude” in the form of a check. At roughly $4,000 per year for 14 years (plus $3,000 per annum for the years as an elected official), I would say that Ms. Gallelli should not be complaining about a lack of taxpayer “gratitude.” If Ms. Gallelli feels that she is not given sufficient honor and acclaim for her efforts by the residents of Croton, then she should reconsider why she is a politician.

Mr. Masur complains about “continued libelous attacks on her character for political leverage.” 

If Mr. Masur or Ms. Gallelli feel that mere discussion of a municipal official’s compensation is “libelous” they might want to consider that Ms. Gallelli is—at least by titled position—a public servant. Failing that, Mr. Masur and Ms. Gallelli have their recourse and I urge them to pursue it in the appropriate judicial venue. Since the days of John Peter Zenger, New York politicians have tried to intimidate the citizens and the media. I am grateful for this newspaper and the online outlets which give the residents of Croton a forum for speech.

A few months ago there was an article in this newspaper, and a subsequent letter from Amy Ferrara. I disagreed with the article and the letter, and wrote in response to that. Such action is hardly continuous nor is it for “political leverage.”

In fact one of the earliest public criticisms of the payments to Ms. Gallelli were from a loyal member of Mr. Masur’s own (Democrat) organization. Those comments were prompted by a comment at the Village Board meeting of June 18, 2007 by a (Republican) resident suggesting that Ms. Gallelli include a particular item in her next Village newsletter. This prompted an inquiry by a (Democrat) resident who uncovered the details of payments which had been going on for 5 years at that point. 

For many residents, the first time they heard of the payments to Ms. Gallelli was on July 2, 2007 when the blog authored by the (Democrat) resident posted a tart comment wondering whether there had been any competitive bidding process and whether there were other “sweetheart” deals undisclosed to the public.

By 2010, the Village briefly attempted to go “green” with online publication commencing with the June issue: the Village would only print a limited run for distribution at the Library and Municipal Building. Estimated printing and postage savings were $12,000 per year. This is an often overlooked aspect of the newsletter: the environmental damage and distribution costs of hard-copy media. At the time, this change was viewed favorably by the same local (Democrat) blogger who authored the 2007 criticism of Ms. Gallelli’s compensation.

When a payment practice is a matter of public controversy for more than a decade and is condemned by Croton taxpayers of all political stripes, the time for change is long past-due. That is what was finally done on November 20, 2017 with passage of the Board of Trustees resolution by a vote of 4-1. 

Mr. Masur makes much of the period from 2002 through 2006, and his observation does highlight the narrow scope of the 2017 Board resolution. I would have liked to see a broader scope, but the resolution does prevent recurrence of the 2006 through 2016 situation and that is better than doing nothing. 

One key point which was never addressed by either Mr. Masur or Ms. Gallelli is the applicability of Village Code chapter 54. This omission is as understandable as it is telling: even after 14 years the classification(s) of those tens of thousands of dollars in payments remains unclear. Apart from possible violation of Village Code, classification of both pecuniary benefit and hours expended would affect the treatment of Ms. Gallelli under the NYSLRS pension formula. 

Mr. Masur says that there could never be any political spin to the newsletter because each issue was reviewed by the Village Manager. This implies that for those 14 years Ms. Gallelli either acted as an independent contractor or as a Village non-elected employee (in addition to being a paid elected official for 10 of those years).

Mr. Masur’s letter is to my knowledge the first time that anyone has claimed that for 14 years the Village Manager reviewed each newsletter prior to publication. Even if Mr. Masur is correct in his implication, most of us in Croton are aware that the Village Manager serves at the pleasure of the Board. More to the point, the Village Manager is aware of that fact. 

At one point, a village resident (a registered Democrat) asked Ms. Gallelli whether the “Got a Question?” feature of the Newsletter was based on actual resident questions. After a cagy response from Ms. Gallelli, the resident FOILed and the official response of the Village FOIL officer was that there was nothing responsive to the FOIL request—in other words, Ms. Gallelli was astroturfing: no actual questions had been submitted to the Village for answer in the newsletter.

In November 2015 every household in the Village received the newsletter with an above-the-fold “Got a Question?” segment discussing how “many residents” were still “understandably unhappy” with Verizon for a decision made 5 years previously.

But since cessation of FiOS expansion had been announced in 2010, why after 5 years was it suddenly so important to make sure that municipal tax money and resources were used to denounce a specific company 4 days before a Village election?

In fact, has the Village of Croton-on-Hudson ever before or since sent a Village-wide mailing to denounce a specific company?

For those who did not live in Croton at the time, I would point out that the arrival of the newsletter occurred 4 days before Election Day, and one of the challengers was a well-liked Croton resident who is a Verizon executive. At the time, Verizon had 178,000 employees and the Croton resident had nothing to do with the FiOS rollout.

No doubt Mr. Masur and Ms. Gallelli would claim that it was simply coincidence, and perhaps it was all just due to Ms. Gallelli being 5 years behind in clearing out her inbox. I was not aware until Mr. Masur’s letter this month that for 14 years the Village Manager was personally involved in a formal review “process” but based on Mr. Masur’s new information I am less certain of my previous view that the current Village Manager is “non-political.” 

I understand that as a Croton political boss, Mr. Masur is privy to more knowledge of the “process” than the rest of us here in Croton, and so it would have been helpful if Mr. Masur had disclosed back in 2015 that the Village Manager had—personally and after a review “process”—approved this inappropriate political use of municipal resources.

There is a sharp distinction between what individuals and political groups do versus what is done by the municipality; it is that distinction which separates Village Hall from Tammany Hall.

My letter in this newspaper a few weeks ago was addressed to the positive ethical standard that was set by that 4-1 Board resolution vote of November 2017. After reading Mr. Masur’s new information it appears that the resolution was more necessary than we residents knew at the time.

Paul Steinberg

Croton’s 120th Anniversary

Today marks the 120th anniversary of the incorporation of the Village of Croton-on-Hudson, which took place on February 12, 1898.

The Manual of Westchester County, published the same year, noted that a special election was held “on the question of incorporation” and “the electors of that locality . . . cast seventy-four (74) votes in favor of the proposition and twenty-one (21) votes against.” Croton’s population at the time of incorporation was 1,244 people. Today, it is more than 8,000.

Brickmaking was still a major industry in the village and the construction of New Croton Dam, which began in 1892, had finally reached the point where the Croton River had been diverted around the construction site, 1,821,400 cubic yards of earth and 400,250 cubic yards of rock had been excavated and the immense foundation was finally being laid.

Learn more at the blog Croton: History & Mysteries.

 Riverside Avenue in the early 1900s.

Riverside Avenue in the early 1900s.

Ethical Practices in Croton’s Government

This letter was published in the Gazette on February 8, 2018.

To the Editor:
New York is a phenomenally corrupt state, and as Governor Cuomo prepares to stand for re-election he is under fire for not doing enough to effectuate his pledge to clean up Albany.

But as even the Cuomo-unfriendly New York Post has noted, many of Governor Cuomo’s reform proposals have been blocked by Republican members of the legislature. The lax standards for ethics benefit the self-interest of both parties in Albany, and that is unfortunate.

What is equally unfortunate is the editorial stance of The Gazette (Nov. 30-Jan. 6 issue: “Outgoing Croton administration changes ‘compensation’ policy”), and the subsequent echo of that stance by Amy Ferrara (Gazette, Jan 18-24), when the Village of Croton took steps to ensure high ethical practices in Croton’s government.

The resolution which passed on November 20, 2017 regarding Board of Trustees’ compensation is available on the Village website, as is a video of the Board discussing the resolution.

At no point during the discussion does anybody discuss Ann Gallelli, nor does the resolution say anything about Ms. Gallelli.

The language of the resolution is clear, and it references both the statutory and ethical rationale for the resolution. Neither of those matters were addressed by the Gazette article, nor were they addressed by Ms. Ferrara.

There was a tradition in Croton that the Village newsletter was a patronage stipend given to a Trustee. Arguably that was always in violation of Chapter 54 of the Village Code, and certainly it was one of those “traditions” that needed to be changed to comply with the existing law.

You might disagree with Mayor Dr. Schmidt’s handling of the newsletter, but there is no disagreement that he led by example: taking the newsletter out of the political patronage trough and directing that the Village Manager handle the matter in a non-political manner.

For 2 years, Dr. Schmidt left the production of the newsletter to be done by the Village staff. This practice not only saved money, but it also removed even the perception of politicization of this municipal resource.

That is not “petty vindictiveness,” it is ethical stewardship that respects the citizens of Croton and our inclusive representative democracy.

Nobody from Croton United ever got any pecuniary benefit from the newsletter, nobody from Croton United ever got state pension credit for production of the newsletter, and nobody from Croton United ever used the newsletter to bash their electoral opponents nor their electoral opponents’ respective employers.

Dr. Schmidt’s position on public service as a privilege and not an opportunity for personal gain is well known and longstanding. That is what he did with the newsletter.

To suggest (as the Gazette article does) that this position was “specifically” directed at a particular individual is to ignore both the precedent which Dr. Schmidt set and also the black letter language of the resolution. The resolution applies equally to all individuals, just as Chapter 54 applies to all individuals serving on the Board of Trustees.

Have we become so cynical that we prefer to believe that Dr. Schmidt and Trustees Pugh, Anderson, and Walsh were acting out of hidden spite rather than acting in what they honestly believed to be the public interest?

The resolution passed 4-1, and even Ms. Gallelli explicitly stated that her grounds for opposing the resolution were procedural and not substantive. In fact during public colloquy with Mr. Walsh, Ms. Gallelli said she was not taking a position whether the resolution was substantively objectionable. The municipality is not preventing anybody from publishing a newsletter.

In 2018 anybody can set up a website or Facebook page and reach a global audience with negligible to zero cost. And anybody can write to their heart’s content and email their views at no cost whatsoever.

All of us have a right to express our viewpoint. What we don’t have is a right to force the taxpayers of Croton pay for that expression nor to lend the imprimatur of the municipality to our personal expression.

The Village newsletter is now being produced under the supervision of the non-political Village Manager, and that is a step forward into a new age of ethical and transparent governance.

Albany could take a lesson from Croton: stop working backwards from the “What’s in it for my party!” demand and instead start working forward from the “What’s the right thing to do?” perspective.

All of us have a role not simply in changing the current climate of political ethics, but also in supporting and advocating for written policies that foster good government. Just because politicians have always done a particular practice does not mean that we as citizens should not make a change for the better.

Paul Steinberg

Community Choice Aggregation

This letter was published in the Gazette on December 9, 2017.

To the Editor: 
Despite several years of public discussion, some politicians in Croton continue to make false and misleading statements about residential electricity purchasing and “green” energy.

Most recently, the article in the November 9 Gazette made statements regarding “Community Choice Aggregation” (“CCA”) and electric usage which are not entirely correct.

CCA is a type of “Energy Service Company” (ESCO).

These have existed for 20 years in New York State, and any consumer (except those on low-income energy assistance programs) may choose an ESCO. Con Ed itself shed the generation side of the business and is now an energy network operator.

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CCA is a sub-group of the ESCO universe. The distinction is that unlike a normal ESCO where you affirmatively choose to have a particular company supply your electricity, the government forces you into the CCA unless you affirmatively take action in writing to use a different company.

The Gazette quote about the savings from CCA being “speculative” is correct insofar as the projections from Sustainable Westchester (SW), whose electricity affiliate is now known as Westchester Power, were purely guesswork back in 2015.

But it is also true that the calendar year 2016 “savings” of $26 now being claimed by Westchester Power is misleading insofar as Westchester Power compares a market-rate product (kWh purchased from Con Ed) to a tax-preferenced product (kWh purchased from an ESCO). 

Any ESCO should be cheaper for a consumer than the regular Con Ed rate. This is due to the fact that ESCOs are subsidized pursuant to NY Tax Law 1105-C.

That law was passed in 2000 to override a 1999 ruling from the NYS Department of Taxation and Finance which taxed ESCOs the same way as Con Ed. Legislators wanted to stimulate electric choice.

The 1105-C tax subsidy has grown from $30M in 2001 to $118M today, without evidence that the subsidy has resulted in increased competition, reduced retail price, or reduced carbon output.

That $118M is going to grow exponentially as the entire customer base is pushed into CCAs, and it already results in a regressive tax burden as consumers living in large private houses benefit most from the tax exemption.

In addition there is empirical research showing that the tax exemption is resulting in higher prices to consumers, since ESCOs can sell for a higher price and still undercut Con Ed since ESCOs don’t charge sales tax.

As a result, there is now a bill pending in the NY Senate which would eliminate the tax exemption.

The thought is that the ESCOs are getting windfall profits (Westchester Power netted $223k on $393k gross in just the first 8 months of operation) by not passing along the tax breaks to their consumers, and that repeal of 1105-C will result in lower cost to electricity consumers.

Whether this is objectively true is a separate issue, but the perception (and politicians salivating over getting an additional $118M in revenue) is driving introduction of repeal legislation in Albany.

No doubt Westchester Power and other beneficiaries of the tax subsidy will be lobbying heavily to stay on the gravy train, but as CCAs start to see the millions roll in they are going to become increasingly attractive targets to legislators.

Most of the “savings” claimed by CCA advocates don’t actually come from any bulk buying power, the “savings” come from use of a tax subsidy which any consumer can get by selecting an ESCO. In fact, it is sometimes cheaper for a Croton resident to get electricity directly thru an ESCO than thru the SW (now Westchester Power) CCA program.

The SW program used Con Edison’s ESCO subsidiary. Due to collapsing margins in the wholesale market, Con Ed sold that subsidiary to what is now called Constellation. (The wholesale electric market entails significant pricing risk which can be offset by hedging on the futures markets, but it is not clear as to the exposure of SW/WP nor any risk mitigation efforts in place).

For much of 2017, you could sign up with Constellation at a price slightly above SW’s rate but you also got a $50 cash-back card, which meant that for most households the individual ESCO price was slightly better than the “bulk buying” SW price.

The original SW CCA price was 7.38 cents for regular and 7.68 cents for “green.” As of May 2017 those rates increased by 0.32 cents due to state-mandated taxes to subsidize nuclear power plants and infrastructure development.

The current Constellation rate to lock in for 36 months is 7.59 cents. The Con Ed non-contract rate for October was 8.30 cents with an adjusted rate of 8.80 cents.

In short, it is misleading to say that savings are “speculative” because an apples-to-apples comparison is always going to result in an ESCO being cheaper than remaining on Con Ed. That has nothing to do with any savvy negotiating by the CCA but rather due to a built-in tax break resulting from a statutory override of otherwise-applicable NYS law.

Parenthetically, lower electric cost can result in increased environmental damage. A study in the current issue of Science Advances documents a global surge in electricity use and light pollution as LED lighting has made it less costly to light outdoor areas.

I also object to the Gazette statement that SW offers residents “the opportunity to buy their power from 100 percent renewable resources.” Apart from the fact that individual residents can sign up right now to get energy from the same provider as SW, there is the inaccurate assertion of fact regarding “100 percent renewable” electricity.

I doubt that this is even possible with current technology, and I don’t see any support for this statement with regard to Westchester Power.

SW/WP is touted with the implication that you can leave your house lights burning bright and still reduce your carbon footprint because you are using “green” power. That may be true, but the SW proponents don’t tell us how that is possible.

In fact, it appears from Westchester Power statements that they are not using 100% renewable power but rather are buying Renewable Energy Credits (“RECs”) and that is a vastly different concept.

RECs may have zero impact on carbon reduction and in fact may result in an increase in carbon output. It is for this reason that many environmental progressives oppose the current REC marketing hype.

This lack of efficacy is because of how most RECs work; not all RECs are created equal. Most people don’t know the difference between types of RECs.

Mr. Pugh has experience with the energy markets (as noted in the Gazette article) and Ms. Horowitz has advocated extensively for Sustainable Westchester since 2015. It is all the more troubling when politicians who have researched the issue (and SW/WP) try to mislead the residents of Croton.

An REC is the modern version of buying an indulgence to expunge the sin of carbon gluttony, and it is customarily every bit as worthless as a medieval indulgence. There are RECs that have a meaningful impact, but they are very expensive and hence rarely purchased by “green” power ESCOs.

The typical consumer with “green” power pays a premium, but her lightbulb is powered by the same “dirty” legacy power generation as her neighbor who uses Con Ed.

The only difference is that the “green” consumer pays extra to a company which takes some of that premium to purchase an REC. So the company might go to the operator of a wind turbine in the California desert and pay the turbine operator for putting a megawatt into the electric grid.

In theory, this will “offset” the Croton resident’s use of a dirty kilowatt. Common sense has led economists and environmentalists to therefore question whether “green” power which merely buys RECs is a waste of money.

The typical rebuttal is that while purchase of an REC doesn’t actually reduce current carbon output, it incentivizes development of new renewable resources.

However, most RECs are very cheap (Colorado even had negative price RECs a few years ago!) and therefore are not a factor in new projects: government subsidies, tax incentives, and regulatory mandates are the dispositive factors.

In 2013, peer-reviewed journal Sustainable Energy noted that voluntary-market RECs are discounted to zero by wind power developers unless they are reliable and for a duration of more than 3 years. This suggests a productive solution: only buy RECs that make a difference.

Some types of RECs work, commonly in cases where the REC parameters are set by regulators as part of a statewide goal of reducing carbon output.

Such “compliance” RECs are mandated by state Renewable Portfolio Standard (“RPS”) regulations. Those are structured in such a way as to effectuate reduction in carbon output.

But RECs that actually make a difference are expensive. That is why you see “green” ESCOs such as Westchester Power telling you how many RECs they have purchased but providing no details on the type or cost of those RECs.

Publicity releases putting stress on the raw number of RECs purchased rather than the nature of the RECs purchased is a big red flag when someone tries to get you to pay a premium price for “green” energy. 

CCA “green” energy is pitched as a painless, cost-free way to save the planet. The truth is that it is at best virtue-signaling and at worst it damages the planet: When we think that being energy-efficient has no environmental benefit since we are 100% “green” there is no incentive to reduce kWh usage. 

I have a house which is pushing the century mark. It has taken years of work to replace old appliances with Energy Star models, install new lights, and weatherize the windows and attic. It is not cost-free and it requires work.

But I have made great progress in reducing monthly kWh usage, and while the gas usage is more difficult given Croton winters I have managed to make some headway on that and found that a modest investment in sweaters and attic insulation is quite carbon-friendly.

Beware when people in Croton (especially politicians) speak in vague generalities about how CCA will save the planet while saving you bucketloads of money.

When you hear the talk about how brilliant the folks at SW are in using “bulk” purchasing power to save money, ask about 1105-C and what happens if taxpayers are not compelled to subsidize ESCOs anymore.

When you hear about saving the planet, ask them to tell you in detail about what type of RECs they are going to buy, at what price, and how the RECs will actually reduce carbon output rather than be a giveaway to existing generator companies.

Most importantly, when politicians tell you that your home is going to run on 100% renewable energy, understand that with current technology this is almost certainly an outright lie.

Eventually “100% renewable” may be possible (such as with the massive lithium ion battery being tested in South Australia), but we live in 2017 and need to be honest with ourselves about the current state of science.

Fossil fuel usage is a critical environmental concern. As with most intractable problems, resolution requires hard choices and sacrifice.

If Croton politicians or Croton residents actually wish to reduce carbon output, they can demand that their CCA purchases fund new renewable energy (“forward” RECs) or at minimum that they are paying for RECs that actually reduce carbon output (RECs that are “additional”).

Demand details, and don’t fall for a sales pitch long on environmental platitudes but short on specifics.

Sanctimonious politically-correct virtue signaling makes us feel superior and noble, but it does not solve the very real problem our planet is facing.

Paul Steinberg

Resolution Prohibiting Additional Compensation for Village Trustees

Last night—during our final board meeting—we adopted a policy stating that “no member of the Board of Trustees may, during their elected or appointed term of office, collect any salary or other compensation from the Village of Croton-on-Hudson arising from any paid employment for work that falls outside of the scope of the duties of members of the Board of Trustees.”

We proposed this policy for the same reason we adopted a policy to stop the practice of using personal email accounts to conduct official village business. Sections of both NYS General Municipal Law and the Village Code recognize that there are rules of ethical conduct for public officers and employees which must be observed if a high degree of moral conduct is to be obtained and if public confidence is to be maintained in our unit of local government. We believe this resolution furthers these aims.

We're Still United

We want to let our many supporters know that Croton United will continue as an organization—committed to our core values of honesty, openness, integrity, fiscal responsibility and nonpartisanship. Our mission will be to keep residents informed and engaged in our village government and community.