More cuts coming for state's ARCs

By: James M. Odato

If you work for one of the 49 organizations within the New York ARC network, the state budget adopted last week will affect your job. And it could result in the freezing or cutting of salaries of ARC executives, many of whom are compensated beyond Gov. Andrew Cuomo's comfort level.

Indeed, several executives of ARCs, formerly known as Association for Retarded Citizens, are paid well above the $199,000 threshold Cuomo has set under restrictions that take effect in July, according to new regulations posted on the Division of Criminal Justice Services website a few days before the budget was passed. Many more are paid a salary above the $136,000 earned by Office for People With Developmental Disabilities Commissioner Courtney Burke.

The governor's order calls on the Budget Division to oversee nonprofit administrative expenses. Penalties such as suspension or denial of funds could be levied if nonprofits overpay their executives, although waivers will be considered.

The governor's limits on administrative expenses arrive as the new budget takes effect. It calls for $90 million in reduced state funding for ARCs and other service providers who help developmentally disabled people. (The cut is matched by another $90 million lost from the federal government.) The Cuomo administration pared funding because of sharply reduce reimbursement rates set by the federal government.

Asked how these nonprofits are to manage with $180 million less, the Budget Division's spokesman Morris Peters said the organizations will need to look at their expenses.

"The savings will be implemented following consultation with a workgroup of relevant parties," he said. The goal is "to generate savings via reduced administrative costs, enhanced audit recoveries, and improved program efficiencies."

Ben Golden, director of government affairs for NYSARC Inc., the parent company of the statewide string of ARCs, said most chapters — whose combined budgets total $1.7 billion— have cut all they can: "The money's just not there anymore."

State expectations of further retrenchment also follow Cuomo's push for consolidation of governments and school districts.

Golden said the ARCs are investigating ways to share services, particularly backroom operations, and some mergers could be explored to reduce administrative overhead.

His organization, he said, will cooperate. NYSARC head Mark Brandt, whose compensation included $220,171 in base pay and another $67,773 in additional income for 2011, has supported Cuomo's executive salary initiative.

Many countywide ARC chapters' executives are approaching the Cuomo limit. Others have blown through it: New York City's chapter paid top officer Michael Goldfarb $664,157 (including $498,779 in base pay) and Associate Executive Director Robert C. Gundersen $666,444 (including $489,434 in supplemental retirement benefits) in 2011. Eight others at the chapter exceeded Cuomo's cap that year by more than $150,000 each.

"We understand this is a sensitive issue," said Golden. "When it comes time to ask for a waiver or comply with that, we will certainly do that."

Some mergers have been accomplished. Ulster and Greene counties now have one chapter, and the Warren-Washington ARC merged with Albany's.

Longtime administrator of the Saratoga chapter of ARC Valerie Muratori said the organizations need top-notch managers to create and implement programs with receding revenues. And the groups need good fund-raisers to tap charitable donors as well.

In the past year, Muratori said, she has had to eliminate 40 positions, from maintenance workers to managers, because of shrinking public aid. She manages 550 workers who provide services to 800 people. Her pay, after beginning at the organization at the ground level in 1983, is $150,669, plus $15,210 for the use of a car. "I do believe there is a feeling on the part of certain state officials that there should be fewer providers in our field and there should be some evaluation on the numbers of organizations providing our services," she said.

All of the organizations will receive 4.5 percent less than last year. For Saratoga's ARC, that is about a $1 million cut.

"One of my concerns is that you really want people to work in this field," Muratori said. "You want people who enjoy working directly with people with developmental disabilities, and you also want people who have the skill sets to create services, design services and manage them and come into the field and be leaders."

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