WHITE PLAINS CITIZENETREPORTER 3,374,995 VISITS IN ONE YEAR—65,000 VISITS A WEEK BY 985,281 VISITORS

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WPCNR QUILL & EYESHADE. By John F. Bailey. October 2, 2008 UPDATED 4 PM EDT with Labor Statistics: The New York State Department of Labor  is not seeing the layoffs predicted for Wall Street appearing yet in significant numbers in the Department filings for unemployment, according to the Department’s Communications Office.

 “There is a little upswing, but we are not seeing numbers being predicted. Not yet.  Do not forget when some Wall Street personnel were laid off  they were greeted on the street with billboards saying we’ll hire you. They immediately got other jobs. If they do not apply for unemployment benefits, we do not count them,” stated Chris Perhan of the state Labor Department Communications.

If terminations increase as expected, they will add to the financial burdens of companies making the layoffs, Ms. Perhan said. The way unemployment benefits are funded is through assessments on state employers and employees. When a person is let go,  she said, the employer’s Federal Unemployment Tax Assessment increases the next year, for each person terminated. The new assessment is usually given to the employer in the spring of the year.

 One could see a scenario where layoffs would be held off until January, to avoid FUETA increases until 2010, by  which time things might turn around. This advantage might be  a reason why the beginning of predicted unemployments have not escalated. Any layoffs will add to company’s burdens, but of course, but not to the extent of carrying the employees on payroll now if an employer cannot afford to.

Perhan said the percentage of payroll the employer usual pays is determined by a “floor” or minimum FUETA assessment, and is raised according to the number of employees the firm let go the previous year. She reports the FUETA rate for 2008 is 6.2%. Employers must pay 6.2% of the first  $7,000 in salary per employee, and that holds through December, 2008. She had no estimate at this time as to what any increased assessment would amount to per employee by next spring. She could not give a figure for how much the rate goes up per number of firings. 

The Comptroller’s Office this week not only predicted the job losses, but also stated business taxes wre down $366 Million year to year from last year, while personal income tax collection for the first six months of 08-09 were $2.7 Billion higher, but was slowing. The Comptroller’s office noted Wall Street Bonuses on which the state collects taxes expected to be 50% lower amounting to only $16 Billion.

On September 18, a State Labor Department news release stated New York State’s private sector employment increased over the month by 3,000, or less than 0.1 percent, to 7,261,200 (seasonally adjusted) in August 2008.

In addition, New York State’s unemployment rate, after seasonal adjustment, increased from 5.2 percent in July 2008 to 5.8 percent in August 2008 — its highest level since June 2004. New York City’s seasonally adjusted unemployment rate was 5.8 percent in August 2008, up from 5.0 percent in July 2008. The rate in the balance of the state outside of New York City also rose over this span, from 5.3 percent in July to 5.7 percent in August 2008.

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WPCNR QUILL & EYESHADE. By John F. Bailey. Interview with City Executive Oficer, Paul Wood. October 1, 2008: Paul Wood held an exclusive interview with WPCNR this afternoon to give details on the city financial position after the first quarter. He assured the city that city financial borrowing planned for the year had been completed before the present runup in interest rates and slowdown in lending. Though the city has spoken with its underwriters on the matter of financing, he said it was too early to tell the effect on 2009-2010 issues until “the turbulence” substides.

Paul Wood, City Executive Officer confirmed WPCNR’s sales tax projection this morning that  the city was expecting $13 Million in Sales Tax in the till in the First Quarter, based on the ¼% sales tax increase. He attributed the sustained sales tax performance in the first quarter to White Plains “diverse” selection of retail outlets, saying other communities had told him White Plains was “sucking away” shoppers from their shopping centers.

He said that the Mayor was meeting with Department heads as he does every year with no objective to cut across the board but to achieve savings if possible. He said on going expenditures were running “slightly under” budget. It’s not unusual to pull in department heads at midyear, we’re just doing it a little bit early because of what’s going on. We do it every year to see if there are certain items they can do with out. It’s more of a priority because of the ($400,000)  cut  (the council made) in the Reserve for Financing.They cut the reserve by a point. We’re looking at rolling stock, any area where we can do things differently. We have a hiring freeze on.”

Asked if the city departments were under budget, Wood said “A majority of them are, at this point. You have to remember we’re entering a point when you have to do more with less. We have 7,000 more residents here, more people coming into the city.”

Calling in the Council Early This Year

He said that Common Council members had contacted the Mayor’s office “showing their support and concern,” but said none had offered policy suggestions on budget cutting. Wood said given the turmoil of the economy outside White Plains, that the Mayor would bring the Common Council together earlier this year, possibly in November after elections to give them the opportunity to see where the city stood and for them to give early input into  2009-2010 budget.

Holding Inflation Line the Goal.

 Wood said it was the Mayor’s goal to hold the city budget to the present inflation rate, 5% (the Consumer Price Index).

Wood said the city was not facing threats to the budget from within, but from the loss of income from the state. He said he anticipated a cut in the city’s AIM  (Aid & Incentives for Municipalities) funding from the state of $5 Million, which the city would not know until April when the budget will be presented to the Common Council. Wood said there might be other effects or mandates that the state might decide to level on cities.

The city has already presented its revised 2009-2010 projected budget to AIM and Wood said he would be sending that to WPCNR. Wood alluded to energy costs as being up, though expenditures as a whole were running slightly under budget. He said he would get an analysis for WPCNR of how much city energy costs had grown.

Union talks situation.

On the negotiation of the union contracts for police, fire, teamsters and CSEA, Wood said he could not comment. He said he felt the six year settlement Westchester County had recently announced with its Civil Service Employees Union was not a good model for any settlement in these times. Asked how the Mayor felt about the City School District and its teachers union agreement to negotiate a 2 year contract (though not settled yet), Wood said it (a shorter term contract until “things settled down” made sense in these uncertain times. He said the unions were very aware of the troubled times in talks so far.

Commenting on the school district 2-year teacher contract being negotiated, Wood observed, “I think a two year contract kind of makes sense, they’re saying here’s where they are, obviously this is a difficult year for everybody, let’s take  two years and see where we are after that. I don’t think the 6 year county contract with the CSEA was a very smart thing. I’m really pleased with the tone (of the unions) they obviously are in touch with the situation the city is in and we appreciate there efforts in providing extra services despite the interest in demand. We’re respectful of one another and very hopeful that will come to a somewhat reasonable solution to settle in the midst of this turbulence.”

Wood said length of contract was being explored with the unions

Captial Projects Funded in Summer. No Bond Issues going out Now.

On the city ability to float municipal bonds in the current market, Wood said the city had already gone out for its municipal bond needs prior to the current credit crunch.  The city, Wood said, had not withdrawn any issues they were planning to put out on the market and did not anticipate any for the next six months. The school district, conversely is looking at a $16 Million in bonding to complete their $66 Million Construction Project, $50 Million of which has already been marketed successfully, plus another $8 Million in certiorari payments.

New Certiorari Filings Threaten finances. May Require City to Bond for Settlements.

Asked if previously successful commericial property owners who have been granted certioraris about five years ago had refilled for more certioraris due to this year’s dramtic drop in the “Equalization Rate.” Wood said the city has seen the number of certiorari cases jump up over 300. Wood said the judges in order to unclutter the certiorari crunch in the court system have shown a tendency to rule quickly in favor of certiorari filers, Wood explained, “forcing us to settle more cases than we’d like.”

Wood disclosed that the city is looking at continuing a process started this year of payinc certioraris on installments with the winning plaintiffs and bonding for the certiorari payments, a process the school district used last year and intends to use again in 2009.

LCOR Financing Found

Wood confirmed Ms. Malmud’s understanding that the LCOR  55 Bank Street 80-20 Affordable Housing project has received a commitment for financing. “That’s what we’ve been told,” Wood said, saying that LCOR financing has in the past been supported by the California Teachers Retirement Fund. But, he did not know whether that fund was the source of the financing.

Asked if LCOR was proceeding with the project, drawing up site plans for submission to the council in January, Wood said ” Yes, they default if they don’t submit those drawings.”

Asked if LCOR had indicated they were no longer interested in the project, Wood said “No.”

Kensington Assisted Living nears HUD Approval.

On another ongoing city development, the Kensington assisted living project for which the city built a $19 Million Municipal Parking Garage (with space to be leased to White Plains Hospital  for parking, Wood reported  “That’s still moving forward. We spoke to them this weekend they said HUD may actually approve their request much more quickly than anticipated. These projects are assets that someone will want. There isn’t a lot of  risk out there but there are investors looking to put money into projects where performance has occurred. Look at Robert Weisz, he had no trouble financing the first new White Plains office building in 20 years.)

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WPCNR CITY HALL CIRCUIT. By John F. Bailey. September 30, 2008 UPDATED 12 Noon EDT, October 1, 2008. UPDATED 1:10 PM:  The city issued a news release  Tuesday declaring the sales tax collections by the city have started well and are meeting the expectations for July, August and September (WPCNR-estimated as $12.4M)  as of last week. The news release states that  Mayor Joseph Delfino is conducting meetings with city department heads to look at “creative ways to save expenses and maintain the level of service White Plains residents are accustomed”

WPCNR asked the senior Councilpersons Rita Malmud and Council President Benjamin Boykin last week if they felt the city should be looking at budget cuts for the present year in light of dire revenue shortfalls in the state. Neither responded.  WPCNR  repeated the questions after receiving today’s release as to whether they or any other councilpersons wanted  to be in on the meetings, had positions on spending cuts. Ms. Malmud finally responded Tuesday evening and WPCNR awaits Councilman Boykin’s response. As of noon, Councilman Boyking has not responded.

In today’s New York Times, a front-page article notes that muncipalities across the country are having difficulties finding financing for key projects, requiring many to cut back projects, and in New York City having to offer a higher rate of return on bonds costing the municpality more in interest payments. This raises the spectre that White Plains and the White Plains City School District will be facing higher debt service on any new issues in the future. You may read the Times report at http://www.nytimes.com/2008/10/01/business/01muni.html?_r=1&adxnnl=1&oref=slogin&ref=todayspaper&adxnnlx=1222876866-4HQ0uOmCqBKyIxM0R/80uQ

In the absence of city response to questions on how city obligations to the state pension fund might be affected by the market downtown, WPCNR spoke with Robert When of the State Comptroller’s Press who told WPCNR moments ago that there will not be an increase in state pension contributions for municipalities in 2009-10, however the market downturn in 2008, may be reflected in city pension fund obligations in the 2011-12 budget year — two years down the road. The lagtime, he said is that the Comptroller’s office has smoothed out contributions, establishing a floor contribution for all municipalities (4.5% of salaries) since 2003.

Ms. Malmud responded this evening  to that question by saying that the Budget and Management Committee will be meeting shortly.

Mr. Boykin the Chair of the Budget and Management Committee asked last week if he was going to convene his committee soon in light of the state revenue shortfalls widely lamented by Governor David Patterson, has not responded yet. We await Mr. Boykin, the Council President’s thoughts on city financial policy.

Malmud in a statement wrote “Budget issues will be first examined by the Budget and Management Committee.  I expect them to meet shortly. The Mayor has not sent me the press release you mentioned nor informed me of any planned review of department budget cuts.”

This would indicate that the Mayor had not invited key councilpersons to give input in a bipartisan fashion, or conversely, Ms. Malmud at least, nor any other councilperson had expressed concern about city spending to the Mayor.

WPCNR asked Ms. Malmud if she had any policy suggestions on how the city should approach the police, fire, teamster and Civil Service Employees Union contracts that expire this June.  

Malmud  wrote, “According to NYS law, only the Mayor can negotiate such settlements.  The Mayor has not chosen to consult with us on this matter.”

WPCNR asked Ms. Malmud about the possibility of the city financing the stalled LCOR affordable housing project at 55 Bank Street or borrowing for city municipal improvements now as possibly being attractive to the market, Malmud  issued this comment:

 “The whole national economy and lending framework is in a major state of flux now.  Although White Plains has an excellent credit history, we will be impacted by national economic and lending issues. In another week or two, we should have a better idea of what direction those national issues are heading and the likely impact on us.”

Project Money Issues

Ms. Malmud asked about  the Horton’s Mill request for the city to cover their cost overruns since the county has refused to do so said  did not indicate how the council feeling on the Horton’s Mill request, though at the time, the council acted reluctant to pay the $581,140 dollars.

Regarding the stymied LCOR project, Malmud rejected the notion that LCOR was going to ask the Urban Renewal Agency to finance the project, a $320 Million project, which the council approved being built in stages last month

She explained, “LCOR – To my knowledge, LCOR has not asked the City to finance their project and have stated that they already have financing in place for 55 Bank Street.”

On several sensitive budget projects, Ms. Malmud wrote these comments:

“ Mortgage tax revenue – has already been estimated for this current fiscal year ($4.1M).  We have many months to go before we can determine whether that is an accurate estimate.”

“Pension fund contributions “demanded by the state” – is entirely up to the state and White Plains will respond as is “demanded.”

WPCNR since speaking with Ms. Malmud, has learned from the State Comptroller’s Office that the city pension fund contributon for 2009-2010 is actually down, a bit of good news, and will not be affected or reflect stock market declines of 2008 until the city’s 2011-2012 Budget year.

Asked to clarify whether she wanted the city to cut, had suggestions as to how to cut, or  was leaving all spending adjustments to the Mayor, and any thoughts on what  general objectives (length, benefit adjustments, increase targets)  the union contracts ($100 Million of the $161.5 City budget this year) might achieve, Ms. Malmud declined to comment.

WPCNR is waiting for the city to comment on the mortgage tax trend, the effects of the current credit markets on city municipal offerings,  and of course, WPCNR awaits Councilman Boykin’s take on what matters he sees the Budget and Management Committee taking up in regards to current budget cuts,  when his committee is going to meet, and of course the looming 2009-2010 Budget.

In today’s New York Times, a front-page article notes that muncipalities across the country are having difficulties finding financing for key projects, requiring many to cut back projects, and in New York City having to offer a higher rate of return on bonds costing the municpality more in interest payments. This raises the spectre that White Plains and the White Plains City School District will be facing higher debt service on any new issues in the future. You may read the Times report at http://www.nytimes.com/2008/10/01/business/01muni.html?_r=1&adxnnl=1&oref=slogin&ref=todayspaper&adxnnlx=1222876866-4HQ0uOmCqBKyIxM0R/80uQ

Decade of Growth

It pointed out that the property tax base has grown with 7,000 new residents, most of whom are condominium owners. City Hall notes the residential tax base has been increased and the commercial tax base has increased more. The office vacancy rate has declined from 34% to the point where Robert Weisz of the RGW Group is planning to build the first new office building in the city in 20 years (at 1133 Westchester Avenue.)

The release reports real value property in the city, residential and commercial has grown from an estimated $4 Billion in 1999 to $11 Billion as of July 1. The city blames “the bizarre formula” of the New York Equalization Rate for the city being “inundated” with commercial tax reductions.

Retail Growth the news release reports, brought about by the Mayor’s Economic Development Plans has created a “boom in the retail base, making it much more diverse.” The report says “vacant stores are filled with a thriving business that continues to do well. As late as last week we are being told that our sales tax numbers are still holding steady.”

Sales Tax Solid

WPCNR notes that with the ¼% increase in the sales tax enacted, that would mean the first quarter is projected to be about $13 Million, when the current 5.3% inflation rate is applied and the extra ¼% sales tax increae is figured in. (Last year the city received $10,917,000 in the first quarter with a 2 cent sales tax which was increased to 2-1/4 cents.)

 Now if the city is equaling that $10.9 Million pace of last year,  then the economy may be hurting the city sales tax handle. The rationale for this being the city should get a 5% lift from inflation, plus a 12% lift from the extra ¼% sales tax  as well as the sales tax, if sales are steady.

The city commented on the failure to get more in sales tax than Albany than it did, writing “in order to relieve property tax payers of any additional burdens the Mayor proposed a half percent sales tax increase. This was cut to a quarter percent by Assemblyman Adam Bradley and the Democratic Common Council,” the release said.

The release also noted, that the Mayor “voted against this year’s budget because of the Council’s cuts to the reserve for financing. This is the very fund the city relies on during turbulent times.”

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WPCNR CITY HALL CIRCUIT. By John F. Bailey. September 28, 2008 UPDATED  11:59 A.M.: On a day when the Dow Jones Industrial Average declined 777 points, the  largest decline in the market since 1987, and when inflation is taken into account, almost equaling the dollar value lost  in one day  that was lost by investors in the five days of the 1929 Stock Market Crash, (October 24 through October 29),  the City of White Plains which has budgeted about $1.5 Million in interest income into the 2008-2009 budget of $161 Million, said the city funds investments appear in good shape at this time.

Monday,  White Plains Chief Financial Officer, Gina Cuneo-Harwood issued this statement: “There has been no changes in the Federal Fund Rates since May and the money is coming in as expected.  It is too early to tell what might happen.”

“Bailout Monday,” the day when congress was supposed to “bail out” the financial crisis of the last two months,  but did not,  is being called the largest one session decline in the history of the Index,  but it is equal only in decline when dollar value is considered. 

WPCNR notes that Monday’s  stock market decline  almost equals the 1929 Black Tuesday crash when inflation is taken into context.  The stock market lost $1.1 Trillion in stock value on Bailout Monday, roughly the outer limits of what the bailout was predicted to require.

The $1.1 Trillion loss in vallue is 10 times the  5-day beating  started by the  October 24 through October 29, 1929  Black Tuesday, 79 years ago,  when the stock market, declined  69 points  from 299.6 to 230.7. That precipitated a decline in value by November of 1929 of $100 Billion 1929 Dollars.

Today, that $100 Billion in losses experienced in five days 79 years ago is equivalent when 79 years of inflation is taken into account  to $1.2 Trillion in 2008 dollars. That is just just 100 Million more than the trillion-one lost yesterday in the stock market.

Mortgage tax, the county has previously disclosed and reported by WPCNR first two months ago, is down 30%.  The County budgeted $28 Million in mortgage tax in 2008. The City of White Plains budgeted  approximately $4 Million in mortgage tax.

Decline in projected figures affect the city in this way, according to the city’s previous Executive Officer, George Gretsas: for every million dollars of revenue decrease, the property tax would have to be increased 3% to make up the difference.

Sales tax figures for the first quarter are not in yet and are expected within the first 10 days of October. The City has budgeted $45 Million in sales tax, and expects to easily clear that in 2008-2009 due to the 1/4% increase in the city sales tax to 8-1/8 per cent, expected to add $5.6 Million to the city sales tax revenues. However, most of that $5.6 million surplus from the 1/4%  would be spent in the expected settlements to police, fire, teamsters and Civil Service Employees, if as expected wage increases of  4-1/2 to 5% are demanded and granted by the city.

The City, anticipating possible sales tax shortfalls due to a sluggish economy last fall had pushed the Democrat-controlled council and Assemblyman Adam Bradley for a 1/2% increase in the sales tax giving the city a base. That was denied by the Democratic Council, and Mr. Bradley was sent to Albany to request only a 1/4% increase.

The two senior members of the Common Council, Rita Malmud and Council President Benjamin Boykin have so far not replied to WPCNR’s question of whether the Common Council will convene and call for a look at current expenses with the Mayor to save more money out of the current 2008-2009 budget over the next three quarters of this fiscal year.

The School District is closed Tuesday, and WPCNR will be asking them Wednesday if they are contemplating going out early for municipal bond offerings, now gaining in attraction. (The School District needs to bond $16 Million to complete its construction projects and approximately  $10 Million for possible certioraris.) The question has already been posed to the city.

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WPCNR Tin Cup Alley. (Satire) September 27, 2008: It’s too bad one of our famous crooners was not exumed in time  to sing this song penned by a former investment banker now turned composer as the opening act for  Monday morning’s Presidential address on the reaching of an agreement on the Bail-out now termed the “Buy-In.” President Bush could have used some backup, as he appeared alone this morning to read a statement.

Those silver tongues in my ear
Seductive promises to save my egg
Relieves me of my fear I’ll have to beg
Its ConcressCraft

I’ve got no defense for the logic of it
The losses are too deep for it,
Why save the  foreclosed with cash common sense

When the rich can’t hang on to their cents?

Cause it’s Congresscraft, clever Congresscraft
Although, I know, it’s strictly daft

When they stir up the worry in me
My insecurity and trust pour out and
I want Ben and Henry’s Buyout

It’s such an tried-and-true pitch
But one we can’t switch
Cause there’s no smarter congress than you.

 (Shout-out–Frank Style:)

Ring a Ding Ding that Opening Bell, Baby.  Let’s Buy! Let’s BUYYYYYYY!

Those promises of prosperity
To bring things back the way they used to be
Unzipping credit like a cocktail dress
It’s Congresscraft! To get us out of this money mess

And I’ve got no defense for it!

Those shapely downturn curves too steep not to do it

What would common sense do?

Telling banks and lenders to lend again

What would Vladimir Putin do?

Cause it’s CongressCraft,  sly CongressCraft
Although, I know, it’s strictly temporary

A Hail Mary pass for the economy…

When I see my banks change names every day or two

My portfolio, Keough and IRA too,

 Says yes , oh baby, yes indeed in me
Proceed with what you’re leading me to

It’s such a series of sucker plays
To bring back glory days
Cause Congress knows better than you

(Shout-Out,Frank style:) 

Look Out Old America’s Back in Town!

Those persuasive prognoses of doom
Those earnest sincere stares of gloom

That strip away my skeptic’s rationale
It’s Congresscraft!

And Ive got no choice but to believe it
The bleat is too blatent for it
What good would deliberate thinking about it do?

Cause it’s Congresscraft, clever Congresscraft
And although, I know, it’s just a bail-out

And a new massive bureaucracy

When congress says we have to save the rich’s money
Before they save mine, my heart says yes  but
Don’t forget about me with what you’re intending to do

It’s such a Wall Street pitch
Like old Bait and Switch
Cause there’s no smoother congress than you

 (Frank style shout out:)

America’s Skies are like Betty Davis Eyes Again, baby!

It’s not a buy-out, it’s a buy-in
As America comes back again
It’s such a sexy scene, buying living high again!
( Frank “aside”)

Look at me baby, I’m spending, I’m spending again already!)

It’s  Congresscraft

And Ive got to go through with it
The smell of money’s too close not to do it
What good would letting conmen go broke do?

Because it’s Congresscraft, forgiving Congresscraft
And although, I know, it’s strictly ballyhoo

When Barney, Nancy, Chris and Chuck arouse the patriot in me
My American heart and my IRA and Keough

Says save my dough please
Proceed with the credit ease

It’s such an old razzle-dazzle
Full of pizzazz and palaver
Cause there’s no greater razzler-dazzler than you.

(Shout Out: Frank Style)

How’s your Bonuses this morning Wall Street? Save a Golden Parachute for me will ya?

Those fingers on my house.
The refusals to renegotiate
I forget all about
It’s Congresscraft!

And I’ve got no problem with it
The guilt is too intense for it

It’s all my fault for not paying my debt,

You wanted me to take,making me bereft,
What good would jailing the Wall Street crowd do?

It’s Congresscraft, forgiving Congresscraft
Although, I know, it’s strictly unpatriotic

When you arouse the anger in me
My heart says you’re peddling a false dream
Stop the Congresscraft before it’s too late

It’s time to recognize this sanctimonious cope

One that depends on a false hope
Cause there’s no less informed congress than you.

 (Final Shout out:)

Is America back yet?