Comptroller: NYRA on "very shaky financial ground"

[parsixfarms]

Originally Posted by pointman

NYRA is mandated by the bancruptcy court to have Getnick & Getnick oversee their operations, this is not a discretionary fee they are paying. Heffernan is really trying to say that they are getting a good deal considering that Getnick is working at 2001 rates and have voluntarily given them free work through credits and discounts during NYRA's toughest financial times, therefore justifying the fee schedule as a necessary and fair deal for NYRA. This really demonstrates the shoddy work by DiNapoli's office by questioning an expense without doing the work to understand why it is necessary.

Maybe I phrased my question wrong. I understand why Getnick & Getnick is there. That firm's hiring was a political sop to Spitzer as part of getting the franchise. My question is the following: now that their responsibilities as a court-appointed monitor are over, what exactly is it that they do to justify the high fees they are generating?

[pointman]

Originally Posted by parsixfarms

Maybe I phrased my question wrong. I understand why Getnick & Getnick is there. That firm's hiring was a political sop to Spitzer as part of getting the franchise. My question is the following: now that their responsibilities as a court-appointed monitor are over, what exactly is it that they do to justify the high fees they are generating?

Getnicks role is to serve as integrity counsel to help guide NYRA's management decisions which is both mandated by the State Racing and Wagering Law and the bancruptcy court. I agree that it seems like a waste at this point, but NYRA has no choice in the matter. Considering that NYRA is a different organization run by different people than when it went into bancruptcy, it is hard to see whay NYRA needs to pay $1.5 million in legal fees to ensure that they are spending their money properly. Note that DiNapoli's criticism is not that Getnick is getting paid for unnecessary services, but that he concludes that by NYRA paying a minimum monthly fee they are paying for hours where services are not actually rendered which is not true since NYRA is credited by Getnick for those hours in future months where the services rendered are above the minimum. Additionally, Heffernan points out that Getnick has given NYRA reduced rates and credits which would offset any hours which did not meet the monthly minimum which they would incur if they paid on as go basis.

What DiNapoli fails to recognize is that NYRA cannot choose the hours needed for this oversight which is why there is a minimum monthly fee as Getnick is required to be independent. Further, the period analyzed by DiNapoli was unfair since it excluded the Saratoga season which is when NYRA incurs the most billable hours. DiNapoli further misrepresented the figures as he failed to take into account that $450K of the $1.25 million figure DiNapoli used (of which $625K was actually paid during the 10 month period) was for services rendered prior to the analyzed period which NYRA owed to Getnick and Getnick allowed NYRA the additional time to pay them. Heffernan points out that during the 10 month period analyzed NYRA actually accrued $762K in billable hours, or $137K less than what they paid which completely defeats DiNapoli's ludicrous assertion that NYRA should pay on an actual billing hours incurred basis.

The most laughable portion of the report to me is that in paragraph 4 of the recommendations DiNapoli suggests that NYRA should cut the free transportation of horses between the NYRA tracks, a service which actually allows NYRA to get enough horses to put on the product that derives income. This statement in itself screams how clueless DiNapoli is with regard to the product he is criticising. In the very next paragraph, #5, DiNapoli suggests that NYRA needs to examine where their expenses deviate from industry practices. Ironically, the transportation of horses between related tracks owned by the same company is clearly an industry practice. What a joke.