Town official created post-retirement job for herself, records show

A Hempstead Town commissioner signed a contract in 2017 that created post-retirement jobs for her and two coworkers in the town agency where they had worked, according to town records and interviews with town officials.

Ana-Maria Hurtado, former commissioner of Hempstead’s Department of Occupational Resources, signed the two-year contract in March 2017 with Alcott HR, a human resources outsourcing company, to provide extra staff to the department.

Hurtado retired that July and became an Alcott employee four days later, according to the contract, payroll records and town officials.

The contract stipulated that the federally funded Hempstead department, known as DOOR, would select which employees Alcott hired to work in the department. The employees selected included Hurtado and retired agency officials Scott Surkis and Edward Kenny, said the current commissioner, Gregory Becker.

The department runs the HempsteadWorks Career Center, which provides counseling and training to local job seekers. It has contracted with Alcott since 1993, Alcott co-founder Barry Shorten said.

From the beginning of the 2017 contract through May 13, the three retired officials received $407,300 for their work as Alcott contractors in the department, according to an email from Alcott to the town obtained by Newsday through a Freedom of Information request.

Hempstead Town Supervisor Laura Gillen, who took office after the contract was signed, criticized the agreement in an interview.

"The commissioner of DOOR negotiated a contract purportedly on behalf of the town to secure a benefit for herself. I don't think, under anyone's standard of ethics, that is an ethical thing to do," Gillen said.

Hurtado, who also serves as the director of the Town of Hempstead/City of Long Beach Local Workforce Development Board, did not respond to requests for comment. Kenny and Surkis did not respond to requests for comment.

In the 2017-2018 program year, the first year of the contract, the department's federal funding decreased and it projected the first deficit in its history, prompting the town to provide the agency $300,000 in town funds, according to budgets and town officials. 

The contract with Alcott, which has offices in Farmingdale, cost the department $474,700 that year, and is expected to cost $411,900 in 2018-2019, budgets show. 

The department's contracts typically have not gone before the town board, and its spending has not been subject to oversight, because it is federally funded, officials said.

While federal funding has rebounded, the department is also projecting a $115,000 deficit in the 2018-2019 program year, which ends June 30, records show. Its budget this year is $5.2 million.

The town board on Tuesday is set to vote on extending the Alcott contract, which expires June 30, through August, a board resolution shows.

Becker, a former Republican state assemblyman, said the 2017 contract was “reasonable and necessary,” and “the office might have ceased to function” without the "institutional knowledge" of Hurtado, Kenny and Surkis, had they stopped working for the department after retiring.

Erin King Sweeney, Republican majority leader on the Hempstead Town Board, said town officials "have to be more conscious of the [department's] budget and operate more efficiently."

The department was established in 1978, the same year Hurtado started working for the town, according to the department’s website and town payroll records. Its office on Clinton Street in Hempstead served more than 9,000 job seekers in the first year of the Alcott contract, Becker said.

In 2018, the department had 18 staffers, payroll records show. Ten Alcott workers also work for the department, Becker said.

In 2016, her last full year as commissioner, Hurtado was paid $150,600, payrolls show.

A procurement committee convened in early 2017 to review responses to the department's requests for proposals for extra staffing, Becker said.

“Staff leasing has continued to be a productive means of responding to new and revised legislation, federal and state policy changes and the implementation of grants. It allows for flexibility, so that depending on program needs and budgetary constraints, staff schedules may be adjusted,” Becker said.

The committee consisted of Hurtado, Kenny, Surkis and Becker, with Kenny and Surkis recusing themselves, Becker said. Kenny, the department's planner, and Surkis, its fiscal manager, had retired from the town on the same day in November 2016 after serving in the department for decades. They were hired by Alcott days later on a prior contract with the department, town payrolls and information provided by the Gillen administration shows.

Alcott was the sole applicant, Becker said. 

Hurtado, Alcott's then-president Louis Basso, and an auditor in the Occupational Resources Department signed the contract, a copy provided by the Gillen administration shows.

The contract stipulated: "Both parties agree to prohibit employees from using their positions for a purpose that is or gives the appearance of, being motivated by a desire for private gain."

In an email to Gillen’s deputy chief of staff Rebecca Sinclair obtained by Newsday through a Freedom of Information request, Alcott human resources compliance specialist Jose Santiago wrote: “the new hire paperwork is submitted to Alcott by [Ana-]Maria Hurtado.”

Shorten, of Alcott, described the contract with the department as “a miniscule part of our business." The company has 6,000 employees nationwide, he said.

Becker said department officials first became aware of possible "budget issues" in April 2016, 11 months before Hurtado signed the most recent Alcott contract. 

Funding from the federal Workforce Innovation and Opportunity Act, which provides the bulk of the department's revenue, dropped from $3.5 million in program year 2016 to $3.2 million in 2017, but rose to $3.6 million in 2018, according to figures provided by Becker.

The department cut payroll in response to the budget crunch, he said, but its costs nevertheless exceeded funding in 2017-2018, the first year of the current Alcott contract.

Gillen said she objects to covering the department's expenses without greater town board oversight of the agency. The board appoints the department's commissioner and deputy commissioner.

"The taxpayers are not supposed to be funding this department, it's supposed to operate within the confines of the federally allocated funds, as it has done for 40 years," she said.

Becker said the town had covered the department's expenses previously. The town paid the agency's rent for five years in the 1980s, he said.

“The ultimate responsibility for these federal grants lies with the Town, with DOOR acting as its fiscal agent.  Consequently, the local government has a responsibility to fill any budgetary gaps," he said.

The town board in June 2018 voted to amend Hempstead's code to enable the department to receive town funding, and then voted in September to provide it $762,900 to cover retirement payouts from 2016 and 2017. Those payouts included $121,200 for Hurtado, $206,400 for Kenny and $241,700 for Surkis, according to the Gillen administration.

The department has typically covered such payouts with its federal funding, but due to the deficit, the town provided the funding, Sinclair said.

The three retirees also receive pensions that range from $7,000 to $10,200 a month, said Tania Lopez, a spokeswoman for the Office of the New York State Comptroller.

Becker said Hurtado agreed to stay on for two and a half years after her retirement to ensure a smooth transition in the department. Her responsibilities include budget and administration oversight, Becker said. Kenny and Surkis are training their replacements, he said.

In September 2018, Becker signed a contract extension with Alcott through June 2021. The Gillen administration said the extension violated town procurement rules and the town will put out a new RFP for staff leasing for the department.