Accountability 101, Part 4: A Clean Process is the First Step Towards a 'Clean Site'

During our October 17th radio appearance, WGVA morning host Ted Baker presented us with a riddle: “How many Councils does it take to tear down an old gas station?” You can hear how we answered by clicking on this radio archive link; essentially, we said it only takes one Council acting in good faith, in the public eye, and with adequate funding to implement its decision, no matter which way it were to come down on the issue.

The City has itself to blame for the mess. As we’ve explained here, in a series of posts on the topic over several months the “quagmire” the current Council finds itself in is a function of three things:

1. Making a back room deal with a developer;
2. Acquiring property without adequate public disclosure; and
3. Trying to create a process that fits a predetermined outcome.

Council acquired the building willfully-- through an active petition, not merely through tax default action, as many still wrongly believe-- to make good on a back room deal. The old gas station had been sitting there for years, unused and with taxes unpaid, but a federal income tax lien in the property allowed the City to avoid taking possession of it and incurring responsibility for environmental clean up.

It was one of those buildings which brought passerbys to say, “I wish they’d do something with that before it’s too late,” but the federal government had more pressing matters and just let the building languish.

Then, sometime around 2002, a budding arts development group (the Geneva Arts Development Council) decided that the building would be a great ticket area and lobby for the imagined performing arts center they contemplated building on the land between 305 Main Street and the Smith Opera House.

A series of small group meetings with various local leaders-- including Chris Iversen, Carl Fribolin, Alaine Espenscheid, Rich Rising, Clark Cannon, and Bob Schick—took place to discuss acquisition of the vacant building. The arts group had limited resources and didn’t want to spend money paying off all of the liens on the property. They wanted to save their money for the renovation of the property. So, they asked the City to petition the federal government to discharge the liens and allow the City to retake the property based on its very delinquent property taxes.

At the time, the City Manager told Council about a report from Fire Chief Ralph DeBolt stating that the underground storage tanks on the site had been removed and/or filled in. City Manager Rich Rising also said that the Director of Public Works, Gordy Eddington, had gotten some ‘preliminary estimates’ on the site cleanup and, therefore, Council was told by Rising, any environmental liability on the site was “very small.” It was so small, he said, that the arts group would provide the City up to $50,000, which conceivably would more than cover the City’s clean up expense-- as long as the City conveyed the building and the clean land around it, to the arts group for $1.

However, consultants hired by the arts group to do a feasibilty study for the performing arts facility concluded that the facility wouldn’t be viable (you can read their report here) and would actually drain resources from the existing Smith Opera House, putting that landmark building in jeopardy. Unfortunately, Council did not heed this warning and directed City Attorney Clark Cannon to pursue taking ownership of the property.

There were several other development proposals from the arts group in that time period, but all involved the reuse of the existing building. When Capraro re-joined City Council in late 2006, Rising conducted the new Council ‘orientation’ session, stating that the Council policy on 305 Main Street was the see the existing building stabilized and reused, given its prominent placement on Geneva’s Main Street.

But then the development deal fell through, the Council realized the mess (literally) it had gotten City taxpayers into, and instead of admitting its error and trying to make it right,Rising led the Council majority down the path towards demolition, trying to ‘make the facts fit the theory.’

So why wasn’t the building immediately demolished? Because the City Council got sticker shock from the cost to demolish the building. The cost to demolish was, in fact, much higher than the initial estimates to clean up the site with the building in place. So Rising encouraged the City Council to apply for grants from the EPA and the DEC for site cleanup that included demolition. But, those agencies are giving out your taxpayer dollars, and they want some assurance that the projects are being done in the most responsible way possible.

The City was awarded both grants, pending completion of this review. The City has not yet accepted the DEC money, but it has started working with the EPA. As our previous post indicated, the EPA is not content with the information provided regarding demolition.  To say it another way, a federal agency has deemed that the information that Council based its demolition decision on is actually not a compelling case for demolition. The EPA wants the City to demonstrate that it has seriously developed and discussed alternatives to demolition.

So, unless the City wants to reject a federal EPA grant and leave City taxpayers on the hook for the environmental cleanup, it has to follow the EPA’s requirement that it explore all options related to cleaning up the soil without demolishing the building.

After voting for a $16+ million spending plan for the 2009 budget, they proceeded to argue for about an hour about spending $2,400 on the ‘alternatives assessment’ that’s needed for the EPA. But what was there to argue about? A private (as in non-tax-payer) agency provided all but $4,400 of the study’s cost through a grant that the City Council agreed they should apply for. The Landmark Society of Rochester (again, a non-taxpayer-funded agency) kicked in another $2,000, leaving a gap of $2,400. As we wrote about earlier, this study is part of the process to draw down the $250,000 EPA cleanup grant. But instead of just saying “okay, $2,400 investment for $250,000 in grant funds seems to make sense,” the Council majority refused to pony up the money. Never fear, the Geneva Historical Society came to the rescue, agreeing to pay the $2,400 balance if the City refused.

So, you might ask yourself, “If there was a gap, and the gap was covered by the Historical Society, what else was there to argue about for an hour?” Well, it seems that some Councilors are still uncomfortable with the idea that there might actually be an option to remediate the soil that doesn’t involve demolition. But why? Why are some people so stuck on demolishing that building when there’s no plan for reusing the site and everyone agrees that it will not be an attractive site for developers given the size and grade of the land?

Imagine, in an ideal world, a Council that said “here we are, we’re a new group, and we find ourselves with this piece of land with a troubled history. Let’s put aside the baggage of the past and just look at the situation with a fresh set of eyes.” What do you think a responsible group of public-policy-makers should do in that situation? Would you think it was reasonable for them to say “let’s look at the options, look at the funding sources for each option, look at the return on investment for each option (with regard to property tax, impact on Main Street, etc.) and then have an open, public discussion to select the best course of action?” Or, would you prefer that the group say, “you know, that building’s not our problem. The previous group wanted it down and we’re just going to charge ahead in fulfilling their wish.”

Why must Geneva’s residents, under a new Council, be forced to suffer the tax implications of the mistaken decisions of the prior Council?

Praise and Blame: The Bloggers' Perspective

Our Friday morning radio appearance with WGVA’s Ted Baker covered a lot of ground. We led off with discussion of the 2009 City Budget which was carried by Council with no tax increase. This year’s budget is a legitimate “0%” tax increase budget. People’s taxes are not going up. Contrast this with the 2008, which saw no increase in the tax rate, but an over 7% increase in property assessments, resulting in most Genevans paying at least 7% more property tax. That budget (which Capraro and Augustine voted against) brought unwarranted praise for Council.

Capraro went on to extend guarded praise for the new City Manager, Matt Horn, who, in contrast to his predecessor, created a transparent budget process that insisted Council articulate its priorities and responded with a responsible spending plan that tracked with those priorities--without raising taxes!

Of course, in the context of a declining economy, Capraro said he is "not optimistic" that revenue projections--particularly sales tax and state aid--will be as high as anticipated and again stressed the need to look at budgeting solutions other than future property tax increases, such as shared services and alternative sources of revenue.

We were then given a riddle, "How many councils does it take to tear down an old gas station?" We'll answer this more fully in a future post, but the short answer is: It only takes one Council acting in good faith, in the public eye, and with adequate funding to implement its decision, either way.

Ted then asked us about the lakefront plan, as proposed. While it is absolutely clear that the community has reject Building 12, the most important point is that Council needs get the process gets back on track with regard to weighing community values against special interests. We indicated a way that Council could discuss and act on the plan in a responsible, praise-worthy fashion instead of bringing upon themselves the blame of the community for letting outside forces unduly alter the outcome.

Listen to this, and our former radio appearances by visiting the NoStringsGeneva Radio Archive.

Can City Council Hold the Line on Property Taxes?

In our previous two posts about the 2009 budget process, ("Council Visioning" and "Budgeting Around Priorities") we indicated that if the new City Manager followed the priorities that Council set, we expected a 0% tax increase. And that’s 0% talking both about the tax rate and the rate of reassessment, not the kind of “back door tax increase” that one of our readers called last year’s political stunt (you can read the comment here).

Truth be told, we weren’t sure it would happen. In years past, just when it looked clear what the next logical, reasonable step would be, we’d end up unpleasantly surprised by some new kink in the works. So, we had to look twice when the budget proposal was released. You can read it for yourself here.

This year the only assessment increases come from individual properties that have undertaken significant improvements. The total increase to the assessment rolls was less than 1/2 of 1 percent. In municipal finance terms that means that, if the tax rate stays the same, people’s tax bills stay the same. It’s called ‘holding the line’ on taxes. This fact sheet put out by the NYS Office of Real Property Services provides some more explanation of how your property taxes are calculated.

The 2009 City budget proposal, as put forward by City Manager Horn, does not call for an increase in the tax rate. No assessment increase + No rate increase = No tax increase. Really. No doublespeak like last year’s “no tax increase” budget, no “back door increase”, just a stable balanced budget.

How was it done? The major change appears to be a restructuring of retiree health benefits. Currently the City pays 100% of the premiums for a health insurance product that provides rather limited coverage. The upside of the current plan seems to be its prescription drug benefit. However, there exists a better plan that covers more diagnostic services and specialist appointments as well as better hospitalization and supplement benefits like vision, but has a more costly prescription co-pay schedule. That makes the premium the City pays significantly lower. Staff could have made the argument that changing plans but continuing to pay 100% of the premiums was a good deal for retirees and a good deal for taxpayers. But staff understood the importance of that prescription drug benefit to the retirees and wanted to share some of the City’s cost savings in a way that was sensitive to those concerns. Therefore, in addition to paying 100% of the health care premiums, the new proposal is that each retiree receives an annual health saving account of $750. This should cover the difference between the current prescription copays and the new plan. Let’s take an example of a retiree who needs 6 prescriptions per month. The current health insurance plan has a flat $2/month co-pay. So that retiree currently pays $12/month out of pocket, or $144 annually. The new plan uses a three tier system with the most expensive class of drugs carrying a $40 co-pay. But the new plan also allows prescriptions to be filled with a 90 day supply rather than 30 days. So let’s assume that our hypothetical retiree’s prescriptions are mostly expensive, name brand drugs at the top end of the tier. That means total co-pays of about $185 every three months, or $740 annually. With the $750 HSA, this retiree not only has all of his/her prescriptions covered (saving the $144 out of pocket currently paid) but also has $10 to spend on things like gym memberships or other health related items. A side-by-side comparison of the two plans appears on pages 14-15 of the budget message.

The budget also brings the police department to full strength but postpones the hiring of that community aide position that was a last-minute addition to the 2008 budget. The restructuring of the City Attorney position also yields a cost savings as Council agreed to eliminate the full time secretary position and the benefits associated with that.

But the 2009 budget isn’t all about cuts, it’s about priorities. Like we said in a previous post, the first priority Council established at its worksession was increasing value for the tax dollar. Keeping taxes stable and maintaining the same level of service means that the value of the tax dollar doesn’t decrease, but it would take some additional initiatives to show an increase value. Enter “GenevaWorx.” This program, making its debut in the 2009 budget proposal is an effort to use the City’s GIS programs in a way that coordinates city efforts on yet another priority area: Improving Neighborhood Conditions. You know the expression, “the left hand doesn’t know what the right is doing?” Well, sometimes this describes the operations of city government. Code enforcement doesn’t always know that the property with multiple code violations also happens to be the one that is getting notices from the Comptroller’s office for tax delinquencies or the one the Police department has been called out to every Friday night. Having this information brought together in one system will allow staff, Council, and the public to diagnose and address conditions that threaten neighborhood health.

The one area in the budget that shows no change from 2008 is ‘outside agencies.’ But, if history is any guide, it is this segment of the budget that receives the most attention and is most likely to result in changes that potentially increase the tax rate. We’ll have more to say about that, about the appropriation of city tax dollars to community agencies, but for now we hope that City Council can take a look at their work, at the budget process, and commit to its logical outcome: Voting in favor of the 2009 no-tax-increase budget.