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WPCNR QUILL & EYESHADE. By John F. Bailey. March 19, 2009.: Acting Budget Director David Birdsall told the Mayor’s Budget and Management Committee last night that he had cut $3.3 Million from the 2008-2009 budget, of which $2 Million in cuts might be “rolled over” into the 2009-2010 budget. Birdsall told White Plains Week’s Peter Katz and this reporter, the city fund balance remained at $28 Million of which $12.5 Million was unappropriated.
Mayor Calls his Budget and Management Advisory Committee to order.
The Mayor explained to his Budget and Management Advisory Committee that an anticipated $9 Million shortfall in revenues in the current year might have to be made up for by dipping into this fund balance. He used this to persuade the Budget Committee to recommend an increase in the city sales tax by another ¼%; approval for a city industrial development agency; separate tax rates for commercial and residential properties, and speed-up in payments of mortgage taxes from the county to the city to quarterly, rather than every six months.
The Committee declined to endorse leasing of the city Galleria and Library garages until details on the lease plans (expected to bring $9 Million to $15 Million in upfront lease money for use in next year’s budget, effectively replacing the $9 Million expected in lost revenues if present economic conditions continue as they are.
Readers should note that lost revenues from sales taxes, mortgage taxes, a virtual stop to all development in the city, as well as certiorari drains, if continued into next fall and winter would create a similar budget shortfall in the 2009-10 budget if the budget remains at the $161.7 Million level.
If the city raises it to provide for union contracts and services as usual – possibly to $165 Million or as high as $168 Million they would have to replace at least $6 to $9 Million in lost revenue with a tax increase of some sort. It should be noted this is WPCNR’s rough estimate since the effect of this year’s shortfall on the size of next year’s budget due in 18 days was not discussed other than the Mayor’s exasperated comment, “We are in deep doo-doo.”
In a 7-1 vote, Chairman Benjamin Boykin agreed with the Committee’s endorsing the IDA, separate tax rate proposal, but refused to support the sales tax until he saw the 2009-2010 budget, now presumably close to going to the printer, which will be delivered to the Common Council April 6. At no point during the meeting was the total of the new budget or any of its details discussed with the committee.
During the 2-1/2 hour meeting, the Mayor’s financial persons did not indicate the effects of the decline assessments on taxes. They did not point out budget scenarios that showcased possible union settlements (even with the firefighters union in attendance). They did not spell out “what ifs?”
Interestingly, no member of the budget committee asked for any information on what those effects might be.
The Budget Committee consisting of Pat Austin, Chair (Councilman) Benajamin Boykin Larry Delgado, David Corcoran, Councilman Glen Hockley, Joe Lenchner, Eleanor McDonald, and Tim Sheehan, had not been pre-briefed and were handed out documents on the present budget situation at the beginning of the meeting. Joe Lenchner noted the committee had not met in more than a year and asked “What have we done wrong?”
Benjamin Boykin volunteered he had tried to have the Budget Committee attend the October 23 meeting of the Common Council when the budget was discussed. Austin asked was the Committee invited. The Mayor said no, because in addition to the budget other council business was being discussed.
The Mayor said he convened the Budget Committee to inform them on the state of the budget and the situation the city was in, prior to presentation of the budget April 6, because, he charged there had been much misinformation published in the press without specifying the media involved and the specific errors.
The Mayor introduced Gina Cuneo-Harwood, the Commissioner of Finance who explained the $9.3 Million deficit in revenues the city was expecting to face by the end of the current fiscal year. She said this deficit did not show in the first quarter numbers, though the city expected numbers to decline given the stock market collapse in September. Even though the city was $1.1 Million better than 2007 in September 2008, Harwood said by the end of December the city was down $4.5 Million in revenues.
Harwood said though the city first quarter numbers were on target, they were worried about the next quarter: “We did say as much as we could say what we knew. We didn’t really see that until the second quarter.”
Harwood said the loss of Fortunoff is another factor darkening the city sales tax outlook the rest of the year. Paul Wood, City Executive Officer volunteered there were suitors for the Fortunoff, Circuit City and Filene’s Basement space, but declined to name them. Mayor Delfino said this proved that “White Plains was still a hot city and the right place to be.”
Harwood noted that retail sales were down 3.9% in the city through the first half. She said though the market seemed better, that city sales were being hurt by the frozen credit market. She said: “I don’t see it getting better. The whole thing is the bankers lending money. They are not making loans unless persons have credit scores of 750 and above. A lot of people are having their home equities (credit lines based on value of their homes) shut down. Credit has to ease. People need credit to buy cars, improve their homes.”
Mr. Birdsall, Acting Budget Director, was introduced by the Mayor and said the city had cut expenses by putting in a hiring freeze in October, and reducing part-time positions, saving $3.3 Million expenses.
He said the city has left 40 positions vacant (by observing the hiring freeze, without specifying what those positions were). He said the city had eliminated 54 part-time positions at the Library, Youth Bureau and Department of Recreation and Parks, reducing some big car purchases. He did not give an itemized list of the personnel positions or the expenditure cuts to the committee.
The Mayor took most of the meeting to deliver an unrelenting crusade for the need for the city to have its own IDA, an additional ¼% sales tax passed, two separate rates for residential and commercial properties, and speeded up collections of mortgage taxes to a quarterly basis.
“We all said the train was coming from, where we saw reductions in revenues, and reductions in expenditures, and we’ll have to use our (fund) balance this year. We are dangerously close to losing our fund balance.”
“Building Permits are down to nothing. We have to find sources of revenue.”
“The County IDA has $15,760,000 of our assessments….Where in Heaven do we get any money to protect our citizens (from tax increases) and our loyal employees?”
The Mayor said the city has gained 7,000 new residents in 8 years, and the city is doing “a great job with less people (employees).” He said the city has asked commissioners to identify cuts to employ in the next budget (without specifying what the cuts were).
The Mayor said Assemblyperson Amy Paulin had received his request for a city IDA and she had put it into committee, but the Mayor said he hoped she would “fight for it,” and not just let it lie in committee. He told the Budget Committee that was why he wanted the council to pass a home rule request.
On the ¼% sales tax, he filibustered on, rhetorically, “who’s against it? No one’s against it. It should be a no brainer (for the Council and the Legisature). (Not doing it) means $3 Million in (budget) cuts and (costs) $6 Million in revenue.”
He dryly commented on the need for the two separate taxation rates: “More tax certs come in every single day. They quadrupled (in January).
He returned to the sales tax: “We’re working hard for our taxpayers and our employees is that wrong to do that?”
Glen Hockley joined the Mayor, with three representatives of the White Plains Fire Fighters looking on, saying “I’m for it (the sales tax). The city is a living organ that needs to be fed. The city needs to have fuel.”
Benjamin Boykin expressed some intelligence from his discussions with Albany, saying Assemblyperson Paulin reintroduced the IDA, but didn’t expect it to get out of committee. He said the feeling on the part of the state legislature from speaking with Assemblyman Adam Bradley was that the legislature was pushing for cities to do a “revaluation” of all property, a “reval,” rather than than establishing separate commercial and residential tax rates for individual cities like White Plains.
The Mayor blustered, “You have to try! You have to think it’s possible.” He lamented the problems cities face in seeking help from Albany: “It’s endemic. Cities are without support of all levels of government. Why wouldn’t you do it?”
Lenchner observed, “It’s politics.”
The Mayor said he needed a resolution of home rule request from the Common Council on the matters of the IDA, the sales tax, the separate property tax rates request, and the possible lease of garages to bring in immediate and continuing stable revenue and hoped the Budget Committee would endorse those concepts. “Otherwise, (if the Common Council declines), I’m not going to waste my time (lobbying Albany).”
Glen Hockley said he wanted the Budget Committee to vote on its recommendations, not simply voice a “consensus.” The Committee agreed to this and voted in favor to recommend, at this time, seeking the extra ¼% in sales tax, the IDA, and the two separate tax rates for commercial and residential properties. They declined to endorse the lease of the garages proposal, the details of which Commissioner of Planning Susan Habel said she was going to tell them about, but the direction of the meeting did not allow for the time to do that.
The Garage Leasing Option Play
WPCNR readers will recall the Common Council was told of this plan in Executive Session, and one Common Councilperson leaked the information to the Journal News, violating the Executive Session rules of secrecy, and another councilperson took a position on it in print (Tom Roach) suggesting he was not in favor of any more one-shots.
Paul Wood told WPCNR that there were no deadlines attached to any of the offers extended by parking facility operators (one of whom is Central Parking Systems, the nation’s largest parking facility operator), to lease the Galleria and Library garages from the city, with the possibility of a large upfront advance fee ($9 Million to $15 Million). Wood said, though, one party who was interested had pulled out after the council showed a lack of enthusiasm.
