Transforming Rochester Podcast 5 - Ending Truancy in Our Schools

Alex and Dave finally discuss the Rochester City School District.  They start with the recent news of continuing declining graduation rates but the discussion quickly turns to truancy.  How do we improve our schools.  THEY HAVE THE ANSWER, but will anyone listen?  And what is the City's role in our children's education?  Does poverty matter?  They actually run out of time so this is only Part 1 of the discussion.  Give your feedback!

You can listen to the podcast by clicking here or use the download link in the right column.

What the Budget Tells me

The City has put out its new budget and, as required by law, it is balanced. This has been done by getting $15 million from the state, cutting some capital expenditures, using $3.5 million from reserves, asking unions to pay more for health care, and claiming sales taxes will increase by $3.5 million.

What was not cut though is perhaps more interesting. The City has a few major areas of investment and no funds for these were touched. In the next budget we will be spending $12,851,000 on the Marina and Midtown Rising. Of this, only $750,000 will be coming form another government agency. So after the State raised our Aid and Incentives to Municipalities for one year we went out and spent most of this money on 2 building projects. It seems odd that we are putting off road repair, asking unions to give concessions on one year-old contracts, dipping into the reserve, canceling funding programs which help our young people graduate high school, cutting funding for recreation, and scaling back library services so we can pay for building projects. In fact, these two projects represent 40% of the total capital expenditures for the City in the next budget year.

So what are we getting for our money?

For Downtown, we have reconstruction on the old Midtown site with roads, sidewalks, infrastructure, and landscaping. This 16-acre site has 2 projects on it. One is the Windstream building, which is owned by Pike and is an $18 million investment to turn a once-viable building into something usable. There is also the Midtown Tower, which was given to Conifer for $1 and as of today, nothing has been done with this. To date over $150 million of public money has been spent on this site and we have been able to secure less than $20 million of investment. Now we are throwing more money at this huge money pit.

The Marina is a more interesting project. This project presently does not have a developer or a plan but we are spending $8.5 million to put a marina in an area which is already serviced by 3 other marinas, none of which were filled to capacity last year. With rising gas prices and an unstable economy, it seems that there would be little demand for another marina, but the plan is to create an inducement for condominiums to be built, thus creating demand for the new marina. This seems like a lot of speculation with questionable pay back, particularly at a time of another budget crisis.

These are only the largest projects as College Town is getting $450,000, High Falls is getting another $271,000, and Erie Harbor is getting another $480,000. So it seems that the big winners of the budget are the developers, which makes me wonder what are the priorities of our City leaders?

Transforming Rochester Podcast 4 - City Budget Priorities

This week on Transforming Rochester we look at the proposed City Budget. What the City decides to spend our money on shows where its priorities are. We see their priorities on big business and not on what the taxpayers really value. The marina project is a perfect example of this. What should our priorities be? Here is the link to the petition Dave and Alex talk about. http://www.ipetitions.com/petition/fairtaxassessment/

You can listen to the podcast by clicking here or use the download link in the right column.

The Sibley Building Shame

The Sibley Building is the poster child for bad development in Rochester. In 1992, it seemed like a great idea to help Wilmorite renovate the Sibley Building. Here was a deep pocket company with experience in retail spaces taking on a very challenging project, which was going to revitalize this section of Main Street. Twenty years later the City is left paying the bill for this whole project while Main Street is in worse shape than ever.

At one time this was a $22 million project, but now it owes the City more than this in unpaid loans and back taxes. This amount could be much higher if we did not extend the generous tax agreement which valued the building at mere $12.50 a square foot but ran out in 2002 even though this building stopped paying taxes in 1998. This project floundered even though the county gave a very favorable lease for the Downtown Campus of Monroe Community College. Through all of this, the City refused to foreclose on the property or collect on the unpaid debt.

So now we are being asked to pay off the last of these loans and settle the tax lien so the property can be sold to another developer who will revitalize this section of Main St. This seems criminal. If you break open a parking meter and steal the change inside the City goes after you. If you fail to pay the taxes on your house the City forecloses. But if you steal millions from the City they forgive you. Mayor Richards claims there is nothing he can do but this is just a rationalization. The City does have options.

The City could foreclose on the property and take it over immediately. Presently this property is earning $3.5 million a year from the lease for MCC. Taxes we should be getting from that generous arrangement are less than half a million which leaves $3 million for operating expenses and it seems like this should make a profit for the City. Further there is a buyer and if we foreclose we get the total sale price of the building. It seems very straightforward and easy to do. This process would even facilitate the sale of the building as it removes the debt problem from the equation. So we would then be able to get this into the hands of someone else quicker. It would be nice to know that this was a one-time situation where a savvy developer hoodwinked the City into a deal where the developer could avoid payment, but that is not the case. The City uses the same tax and loan agreements on projects all the time, including the recent College Town project.

So they have not only failed to correct the problem with the Sibley Building but have expanded it a hundred times. If there ever was a reason to try something else it is with the Sibley Building, but our City leaders never learn and we keep accepting this as the only option for development. Hopefully someone in charge will wake up before the next major project falls through and costs the City (and the taxpayers) millions of dollars we do not have.

Poor budgets cause problems for Rochester Streets

Desperate economic times call for desperate economic measures. So in order to close the budget deficit the City of Rochester has decided to delay all road repairs for a year. Instead they are spending some of the money saved on a road remediation process called oil and stone. While this seems like a good “band aid” solution, this process creates more problems than it solves. Rochester has a combined sewage and water system. So the waste from your sink mixes with the rain run off on the streets and goes to one place for treatment. When you put stones on the streets some of these end up going down the drain. This will eventually clog the sewers but even if this does not happen, it poses another problem for the system. These stones will help block material from flowing freely and this build up of material will eventually harden, creating a solid lining which is very costly to remove. There is also the oil, which is put down with the stones and also runs into the sewers and thus our water supply.

Now perhaps this would be acceptable if the oil and stones permanently protected our streets but they do not. This procedure only delays the need for repairs and burdens future administrations with more problems. It seems to me that if we have $4 million to oil and stone roads, then we should be able to fix a few instead and avoid the unnecessary complications which this process causes in an urban environment. And to stay on our theme, if the City assessed properties fairly and appropriately, we would not have to make these kinds of choices.

Transforming Rochester Podcast 3 - Social Businesses

Alex and Dave discuss social businesses and co-ops.  What are they and how can the help Transform Rochester?  The concept of a social business was started by Muhammad Yanus.  It involves the realization that capitalism alone just does not work.  We contend that investing our tax dollars on smaller, locally-owned and developed projects is better than continuing to fund larger projects such as College Town.  The example Alex discusses of import replacement is Evergreen in Cleveland.

You can listen to the podcast by clicking here or use the download link in the right column.

How to Solve a Structural Deficit

Tom Richards' flashy State of the City Address was a wonderful mixture of platitudes and problems.  The jokes were funny and he was not afraid to mention some very big issues.  While most of the presentation focused on the problems it seemed to gloss over the solutions. I want to start where Mayor Richards left off.  Rochester has a structural deficit whereby the City is unable to cover its expenses.  The worst part of this is that Rochester only controls a small part of its financing and the rest is left to the caprice of the State. As a result, Rochester is unable to provide all the services which make Rochester an attractive place to live.  So how do we correct this?  As usual, I have a few ideas.

We should be fighting poverty with home ownership.  I have nothing against rental housing, in many cases,  landlords do not live in the community where they own property.  They may maintain these homes, but they do not spend their money in Rochester.  As a result, they do not support local businesses nor increase the cycling of money in a community. Whenever money is spent, a portion of that money leaves the local economy and the rest is spent again at home.  The larger the percentage that remains local, the more times it is spent and the more the economy grows.  Local spending creates more local spending and when city landlords do not live in the city, the Rochester economy suffers.  A program to increase and preserve home ownership would give greater returns than a huge housing project.

For the same reason, we should be investing in local businesses and rather than creating building projects that house national chains.  If we made loans available for business that required local ownership in projects like College Town, then we would have a stronger economy and generate more revenue for the City.

To facilitate this, the City should be a leader in import replacement.  City Hall should work with other large companies to find out what services they use that are provided by businesses outside the city.  Then, the City can use this information to facilitate the creation of locally-owned, co-op businesses in the city with local residents as owner-workers as was done with Evergreen Laundry in Cleveland.

Finally we need to start fairly assessing all properties.  In Rochester, many middle-income houses are over assessed by a little, but large commercial properties are under-assessed by a lot.  This has created a positive investment environment, but has also created a tax base which is incapable of supporting our needs.  While we may need to occasionally give tax incentives for job creation, these incentives should be temporary leading to the owners paying taxes on the full value of the property. This would allow our city to lower the tax rate but collect much more in taxes.  After all if everyone paid their fair share the burden would be easier to bear for everyone.

With these changes we would still foster growth while creating real wealth in our community.  The focus on jobs and local spending would help reduce poverty and increase revenues for the city while a lower fairer tax rate would stimulate investment at both the small and large levels.  This would solve the structural deficit which Mayor Richards fears is threatening our city and is the only positive solution that has been presented so far.