City Council Continues Review of Downtown Parking Regulations

Public parking in the downtown area must serve multiple — and sometimes conflicting — purposes. For businesses and restaurants, parking turnover and availability are critical. For residents, reasonably priced overnight options are needed. Customers of all kinds rightly demand safety and accessibility.

Earlier this year, the City, acting on the recommendations of the Business Improvement District and a Parking Task Force, adopted new regulations that, among other things, require 24-hour payment in off-street lots. While these changes have achieved some benefits, I have also received negative feedback, and I believe that additional changes are necessary.

The City will now work jointly with the BID to complete a more rigorous analysis of options, including a review of parking meter technology. To help inform this analysis, I drafted this memorandum and spreadsheet detailing one possible regulatory framework. As you will see, I recommend a more flexible approach that adjusts rates according to variable levels of demand.

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State Public Service Commission Sticks-It To Taxpayers & Residents

Despite vigorous opposition from local officials, the New York State Public Service Commission this month approved a huge 34% water rate hike in New Rochelle and neighboring communities, to be phased in over 4 years.

Though this is less than the 55% increase sought by United Water, it still represents an unfair added burden for residents of the region, especially during such difficult economic times. I lobbied the PSC personally, appearing before a public hearing in August, and contributed to extensive documentation presented by local officials opposing the proposed hike.

In addition to raising rates directly on consumers, United Water is also asking taxpayers to foot a bigger bill for fire hydrant access. The PSC approved an increase of almost 70% on hydrant fees over the next four years, putting further strain on our municipal budget.

Together with the other municipalities impacted by this wrong-headed decision, New Rochelle is now exploring options for addressing this matter.

Below is the statement I released on Oct. 14 in response to the decision. I trust that my frustration is evident:

This disgraceful decision is a slap in the face to the residents of our region. The PSC has shown complete indifference to the challenges facing struggling families and municipalities in this difficult economy.

Suez Environment, a French-based multi-national corporation, will now enjoy a windfall profit on the backs of hard-pressed local ratepayers. Meanwhile, a whopping increase in fire hydrant rental fees, which should have been eliminated entirely, will deal property taxpayers a double blow.

If the mission of the PSC is, in large part, to protect the interests of New Yorkers from monopolistic utilities, then it has failed utterly. Add the PSC to the list of dysfunctional Albany institutions in need of top-to-bottom reform.

New Rochelle intends to fully explore its options for relieving this new burden on our residents.

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National Analysis Illustrates Challenges Facing Cities

The difficult budget challenges confronting New Rochelle are not unique to our community, but instead reflect nation-wide economic conditions that affect cities coast-to-coast. This month, the National League of Cities released a report detailing the deteriorating fiscal health of municipalities. This report also received coverage in the New York Times.

In particular, the report notes that while revenues for many cities have been declining for the past four years, reduced property values are only just beginning to make an impact on property tax collections, putting further pressure on local budgets.

Of course, every city is unique, with local economic factors, decisions, and governing structures impacting both circumstances and options. By many standards, New Rochelle is faring better than our sister cities. Nonetheless, the wider perspective of the National League of Cities report is helpful when evaluating the conditions in New Rochelle.

I will have much more to say about this subject next month, following the release of the City Manager’s draft budget for 2011.

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Retiree Health Care Costs Pose Long-Term Challenge

Readers of the New York Times earlier this month would have noticed an article about the enormous long-term impact of providing retired public workers with health benefits. The scary number in the headline was $200 Billion. The Times also provided an info graphic detailing the per capita impacts for the largest cities in the state, with New Rochelle actually comparing rather favorably to our sister cities at about $3,000 per capita in unfunded future medical bills.

This is a real issue and a serious long-term challenge. Among other things, it highlights the importance of controlling health care costs and underlines the urgency of the health insurance reforms adopted by the federal government earlier this year.

Nonetheless, the article was a bit inflammatory, cautioning that “localities will be forced at some point to choose between paying their retirees’ medical costs and paying the investors who hold their bonds.” The truth is that these are known liabilities that will be paid out in budgets over the next several decades. This issue has emerged in the news because recent changes in government accounting standards have required the inclusion of this specific liability in annual financial statements from localities — meaning that the aggregate impact across the state is only now being quantified. And, of course, the recent recession and lingering economic downturn make even more worrisome the idea of rising health care costs stretching many years into the future.

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State Pension Contributions Increase Dramatically for 2011

New Rochelle was recently informed by New York State that the City’s annual contribution to the state pension fund will rise by about $2.5 million, nearly a 30% increase from 2010 (which had already absorbed a 24% increase from the year before).

The pension fund for public employees is guaranteed by the State Constitution. In years when investment income is minimal (or, as is the case recently, negative) local municipalities are forced to pick up the tab.

As you can see in the accompanying chart, New Rochelle’s pension contributions have increased over the past decade by 7,551%. That’s not a typo. Pension contributions accounted for only 0.2% of the City’s General Fund expenses in 2001. Next year, pension fund contributions of almost $10 million will account for an estimated 9.2% of the City’s general fund expenses.

Because even Albany recognizes how much pressure their mandate puts on local budgets, state law this year allows municipalities to defer part of the increase by borrowing against the pension fund itself. While not the City’s preferred method of budgeting, we may have little choice this year but to take advantage of this option.

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