Rocco Lacertosa, CEO of NYOHA, testifies at the Committee on Sanitation and Solid Waste Management hearing
CEO of the New York Oil Heating Association (NYOHA)
Hearing of the Committee on Sanitation and Solid Waste Management
Intro 1268 September 29, 2016
Good afternoon Chair Reynoso and Committee Members. My name is Rocco Lacertosa and I serve as the CEO of the New York Oil Heating Association, a 75-year-old trade association whose members, for the most part, are made up of family-owned heating oil distributors and terminal operators located throughout the City of New York. Thank you for the opportunity to testify today.
NYOHA has a strong track record of working closely with the City on numerous policy and operational issues including consumer protections and key environmental goals such as reducing sulfur content and increasing blends of bioheat which overwhelmingly passed at yesterday’s City Council hearing.
I want to be very clear. Our industry of honest, hardworking, small, medium large businesses from all five boroughs has a shared goal with the City of New York - to protect consumers from fraudulent business practices and to promote accountability in our industry. No one wants to see the bad actors weeded out as much as we do.
However, this bill would destroy good people and make it impossible for mom and pop union heating oil businesses to compete with global utilities. Placing an already heavily regulated industry under the BIC bureaucracy will regulate good actors out of business and will not accomplish our shared goal of punishing the bad actors - mostly fuel transport businesses - from undercutting legitimate companies and ripping off the public.
With Intro 1268, the City Council is giving enormous unchecked power to a single agency. The bill is strikingly broad. It focuses on redundant background checks, paperwork, fines, fees and bureaucracy – when we should be focusing on real enforcement.
I’d like to point out a few specific areas of the legislation that raise serious concerns in our view.
Our industry is highly regulated by 13 different City, State and Federal agencies including DCA, DCAS, and the US Transportation Security Administration, a division of the Department of Homeland Security, which administers the Transportation Worker Identification Credential, also known as a TWIC card. TWIC is a biometric ID for accessing secure fuel facilities and put in place after 9/11. A chart outlining all of these regulatory requirements is included in your packets.
Background checks and regulation are not what is missing. DCA used to have regular spot checks of trucks. But they haven't in many years. That is what allows the insidious practice of shorting to exist. We recommend that the City conduct spot checks in addition to other enforcement, rather than creating yet another layer of bureaucracy.
The DOI-BIC report released in November 2015 highlighted fuel transportation companies, as well as drivers, that engaged in various schemes to short customers. The fact that the thieves knew their trucks wouldn’t be spot checked, and only checked at a scheduled inspection allowed for fraudulent activity. DCA already performs a very stringent scheduled inspection at their facility. However, there are no random field inspections. Let’s tighten and enhance DCA and other existing regulations.
Furthermore, our industry is increasingly using new technology to monitor the integrity of fuel delivery. We should be looking at that technology and how it can be more widely implemented in a way that works for commercial and residential customers. You will hear more about that from some of the heating oil businesses here today.
The bill’s requirements will have far-reaching economic implications for the industry. Placing a massive financial burden on thousands of employees in the heating oil industry is unfair. We need only to look at other BIC regulated industries such as the Hunts Point Market for a preview of what may be in store for workers in the heating oil industry. According to a 2013 report by CBS News, included in your packets, advocacy groups such as LatinoJustice were forced to intervene on behalf of small businesses that were being excessively fined and routinely intimidated by agents, sometimes with guns drawn, at their place of work.
This bill would cripple small heating oil businesses. For example, the bill states that “all licensed dealers and deliverers shall maintain audited financial statements and records.” While larger heating oil dealers may conduct audits on a regular basis, audits are not common practice for small businesses because of their significant costs. Additionally, the compliance costs of this legislation and requirements like audited financials would provide an economic advantage to businesses located in Westchester, Nassau County or New Jersey that would not have such costly burdens.
Other aspects of the bill are strikingly subjective. With this bill, the City Council would be empowering an agency with the ability to deny applications and put small businesses out of business simply because BIC feels an individual does not have what it subjectively believes is “good character, honesty and integrity.”
Furthermore, the bill would empower BIC to regulate how businesses would bill their customers for deliveries. Companies have different billing systems making this logistically challenging. This overstepping of regulatory boundaries can have very negative consequences for small businesses. Overhauling operating procedures, fleet management or revamping computer billing systems is costly and cumbersome.
I would like to add that the legislation suggests that BIC would monitor and regulate “overcharging,” but the bill does not define overcharging. BIC stepping into the practice of regulating individual companies’ pricing decisions is highly troubling.
We need real enforcement - not burdensome red tape that will put good family-owned legitimate businesses out of business.
NYOHA members want to work with the City Council to aggressively fight fraud, but in a targeted, fair and actionable way. We welcome the opportunity for further conversation to discuss pragmatic and feasible ways that we can work together. Thank you.