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Pol on LIPA salaries: 'Too many people being paid too much money and they failed to do the job'

LIPA workers set up a temporary transformer station

LIPA workers set up a temporary transformer station in the parking lot of the former Peninsula Hospital in the Arverne section of the Rockaways. (Nov. 5, 2012) Photo Credit: Charles Eckert

The Long Island Power Authority has had trouble getting electricity to flow, but the agency generates plenty of dollars for its employees' pockets.

Nearly half of LIPA's 101 employees were paid more than $100,000 during the state's 2012 fiscal year, which ended in March, according to a Newsday review of state pension records. Those 49 employees took home an average $147,800.

Agencywide, the average was $102,800.

Over the last decade, the percentage of LIPA employees getting six figures has grown. In 2003, only 28 employees, a third of the workforce, took in more than $100,000.

"I have not seen the level of performance from LIPA over the years that justifies those salaries," said Matthew Cordaro, chairman of Suffolk County's LIPA Oversight Committee.

Meanwhile, ratepayers saw the average yearly LIPA bill increase by $463 from 2001 to 2011, according to a state comptroller's report in October. The report also found that only 13 percent of public authority workers in the state and 8 percent of residents make more than $100,000.

LIPA's response to superstorm Sandy has been condemned as chaotic and ineffectual by angry customers and political leaders, but the question whether the public has been getting its money's worth from the agency predates the storm.

State Sen. Kenneth LaValle (R-Port Jefferson) helped pass legislation in January to bring greater supervision to LIPA, which operates with a high degree of self-governance for a public utility. The legislation, spurred in part by the utility's shaky response to Tropical Storm Irene last year, requires state regulators to review LIPA operations and issue a report.

LaValle said that work has begun. While he can't be certain what the report will say, LaValle summed up what he suspects it will find: "They had too many people being paid too much money and they failed to do the job."

Some top LIPA leaders have been getting more than $200,000 in yearly compensation, according to Newsday's review.

Five LIPA officials did so in the 2012 fiscal year, including chief operating officer Michael Hervey, who Tuesday night announced plans to resign next month. Also making more than $200,000 were LIPA general counsel Lynda Nicolino and agency vice presidents Herbert Hogue, who left LIPA at the end of last year, Bruce Germano and Paul DeCotis.

Hiring and compensation at LIPA is handled by its board of trustees, whose chairman is appointed by Gov. Andrew M. Cuomo. The current board chairman, Howard E. Steinberg, did not return an email and a phone call Wednesday seeking comment.

On Tuesday, Cuomo announced the formation of a commission with subpoena power and the authority to take testimony under oath that will investigate the performance of utilities across the state, including LIPA, an agency that the governor called "fatally flawed."

The utility, now under such harsh scrutiny, has been among the most generous public employers on Long Island.

In 2012, there were 67 public agencies on Long Island with between 75 and 200 employees that reported compensation to the state comptroller's pension system. Of the 67, LIPA had the second-highest average employee compensation, according to Newsday's review.

The Port Washington Police District was first, with an average of just over $117,000.

Cordaro, who in addition to being chairman of the oversight committee has been chief executive at three energy companies, said it's expected that LIPA employees would be well-paid.

Nationwide, public utility workers are frequently among the highest-paid state workers, he said. And they make far less than comparable private utility workers, Cordaro said.

Also contributing is the fact that LIPA is top-heavy by design, he said. The agency acts as a kind of management company that contracts the actual operations of the utility to a private entity, National Grid.

"They don't have any Indians," Cordaro said. "It's all chiefs."

Hervey made a comparable argument last month.

He said LIPA pay packages pale in comparison with private utilities' and that the LIPA management team is the equivalent of the executive suite at major utilities. Were LIPA to be judged by the full workforce -- including National Grid unionized workers -- the entire workforce would have a "normal pay distribution," compared with other state and private entities, he said.

For the sake of customers, Cordaro said the agency's operations and its approach to compensation need the skeptical attention from the outside that it seems to be getting.

"My problem is that it has taken so long and it has taken a disaster for people to get serious," Cordaro said.

With Mark Harrington


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