Troubled District Council 37 faces $4.5 million in unexpected expenses this year – and needs to drastically slash spending so it doesn’t end up in the hole, officials said yesterday.
One reason: The city’s largest municipal union must spend $3 million to fix problems stemming from the Y2K computer bug before the close of 1999, administrator Lee Saunders said.
The union – which is conducting a probe into allegations of embezzlement and election fraud – will also spend $1.5 million on an almost yearlong internal audit.
The figures raise questions about exactly how much of DC 37’s assets have disappeared within the past few years. Four years ago, the union had about $22 million in the bank. Its filings with the U.S. Labor Department for 1997 show assets of $3.4 million. Last year, DC 37 ended $2.5 million in the black, according to one source.
That’s got some officials asking: What happened to the $2.5 million?
“Everyone’s wondering if all the spending and money loss was a lot worse than we all thought,” said another union member. “All anyone wants to know is, ‘Where did it go?'”
Saunders said the $2.5 million is secure and that he’s making every effort not to touch it.
The $4.5 million represents “one-time costs” the union won’t have to face again after this year, Saunders said.
“We’re talking to department and division heads, and we’re gonna make some tough decisions as to what we’re gonna cut” from their spending so they break even, Saunders said. He stressed that he wouldn’t touch programs that benefit the members.
The 120,000-member union has been plagued by a series of scandals in recent months, ranging from charges of kickbacks and outright theft to ballot-stuffing in the pattern-setting, 1996 citywide ratification vote over a new five-year contract.
Its executive director, Stanley Hill, was placed on unpaid leave two months ago after two top officials admitted they knew about the vote-rigging. He was replaced by Saunders.
On Wednesday, the executive board approved the first ethics code in DC 37’s 55-year history. It would set standards for the way the union hires contractors and vendors, officials said.
The code has to be voted on by the union delegates before it can take effect.
Also Wednesday, Saunders announced that any other votes on contracts will have independent oversight to avoid tampering.