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05/16/08 Affairs and Appointments

05/16/08 Affairs and Appointments

New York City

Public Hearings

This Week’s Notable Comments

Putting a moratorium on new initiatives will allow us to cut back on city spending and to focus on restoring funds to essential services that New Yorkers already depend on everyday.

  • City Council Speaker Christine Quinn, announcing the Council’s decision to withhold funding for new initiatives in Fiscal Year 2009

This demand changed the economics of the proposed deals and the certainty of payments to the MTA.

  • MTA press release, explaining why the agency refused Tishman Speyer’s demand to defer lease payments on the Hudson Yards until the western half of the site was rezoned

Over all, we’re pleased to report that New York City drinking water continues to be of very high quality… the city gets good grades in protecting our water supplies but we also found areas that need improvement.

  • James L. Simpson, co-author of the Clean Drinking Water Coalition’s new report card on New York City water quality

City Council Will Cease Funding New Initiatives in FY 2009

Mayor Bloomberg’s 2009 Executive Budget prepares for the likelihood of declining City revenues by holding spending essentially flat for the coming Fiscal Year (a projected 0.1% increase over FY 2008).  The $59 billion Executive Budget proposes to reduce or hold constant the budgets of many City agencies, a move that the Bloomberg administration calculates will save $1.3 billion, or 6.4% of City expenses, over the coming Fiscal Year.

This week City Council Speaker Christine Quinn indicated that minimizing proposed funding-reductions for City agencies will be a central goal of the Council’s own budget deliberations.  To preserve funds for existing programs, Speaker Quinn announced that the Council this Fiscal Year will not fund any new initiatives.

It is as yet uncertain exactly how much money the moratorium will save; also to be determined are the agency budgets the Council is most keen to protect.  Preliminary reports have focused on education, which is a bit unexpected since, as Mayor Bloomberg often notes, the FY 2009 Executive Budget actually increases funds for the Department of Education by $200 million. 

Read New York Sun coverage of Speaker Quinn’s announcement

Read prior Capalino+Company analysis of Mayor Bloomberg’s Executive Budget here

Hudson Yards on Hold: Tishman Speyer and MTA Negotiations Dissolve Over Timing of Lease Payments

The Metropolitan Transportation Authority (MTA) rail yards on both sides of 11th Avenue between West 30th and West 33rd streets are known as the Hudson Yards.  As of March 26 the MTA thought is had successfully concluded a multi-year effort to lease the 26-acre site, securing a needed revenue stream for the agency’s capital budget program. 

This week, however, the tentative agreement dissolved as the MTA and the bidder it selected – Tishman Speyer – could not resolve a disagreement about when Tishman would begin leasing the site.  One can summarize this tumult in the Hudson Yards story with a few key numbers:

700 million – dollars the MTA needs to fully fund its capital budget program

1 billion – dollar size of Tishman Speyer’s successful bid for the Hudson Yards parcel

16 million – square feet of offices, housing, parks and cultural space that Tishman had planned for the Hudson Yards

3 – estimated number of years necessary to fully rezone the western half of the Hudson Yards site, which Tishman insisted had to occur before it would begin its lease with the MTA

0 – size of down payment MTA received from Tishman upon selecting Tishman’s bid

It is the first and last numbers that are perhaps most significant; the collapse of negotiations this week between the MTA and Tishman leave the agency to confront anew a significant capital budget shortfall.  Though many observers say the MTA was correct to refuse Tishman’s eleventh-hour effort to revise a critical aspect of the deal – that is, when leasing payments will begin – Tishman’s departure means that any eventual Hudson Yards lease will probably yield less revenue for the agency. 

Back in March, a joint venture of The Durst Organization and Vornado Realty Trust furnished a runner-up bid of $892.2 million.  Though that partnership expresses continues interest in the Hudson Yards project, it has not disclosed whether it might seek to revise its bid in light of Tishman’s exit. 

This week’s events are a setback for the Bloomberg administration, which was a major advocate of the Hudson Yards project and intervened in the final days of the Tishman-MTA negotiations in an effort to salvage an agreement.

Read Crain’s New York Business coverage of the Hudson Yards here

NYC Water Board Votes to Raise Rates 14.5 Percent Increase is Largest Since 1992

From Anthony DePalma of the New York Times:

Today the New York City Water Board approved a 14.5 percent increase for water and sewer rates – the largest increase since 1992.  When the new rate is in place on July 1, according to the city’s Independent Budget Office, water rates will have risen a cumulative 77 percent since 2001, and double digit increases are expected to keep coming for at least a few more years. According to official projections, the average single-family homeowner will pay $800 for water in the fiscal year that starts July 1, up from $700 this fiscal year.

Continue reading coverage of the water rate increase at the Times’ City Room blog here.

Grades for New York City Water: Generally High, but Still Areas for Improvement

This week the Clean Water Drinking Coalition released a thorough report grading New York City’s Department of Environmental Protection on its efforts to protect the quality of City drinking water.

Read coverage of the report at the New York Times City Room blog here

Read the Clean Drinking Water Coalition Report here

Manufacturers Must Collect E-Waste: Council Overrides Mayor’s Veto to Establish Mandatory Recycling Program for Manufacturers

A month ago the City Council passed two bills to deal with the hazard of electronic waste (e-waste); Mayor Bloomberg signed one of these bills and vetoed the other.

The bill the Mayor vetoed, Intro. 729, would have forced manufacturers of electronic goods to take back and recycle their products when customers were finished with them.  The Mayor argued that punishing manufacturers for failing to meet certain e-waste collection rates was misguided; Councilpersons voting for Intro. 729, and especially Councilman Bill de Blasio (its chief sponsor), defended such penalties as necessary to make the recycling program work.

It seems the Council’s preference will win out in City law.  This week the Council voted 44-3 to override the Mayor’s veto and put Intro. 729 into law.  
The new bill, approved in a 44-3 vote, punishes manufacturers for failing to reach collection rates for an electronic recycling program.  Defenders of the bill say mandatory targets will help keep harmful elements, such as mercury, from contaminating City landfills.

Read Crain’s New York Business coverage of the e-waste override here

Read prior Capalino+Company discussion of e-waste legislation here

At Co-op City in the Bronx, Mayor Bloomberg Turns on NYC’s First Tri-Generation Power Plant

Mayor Bloomberg hailed the $65 million renovation for reducing emissions of carbon dioxide and other pollutants (helping to meet the City’s goal of reducing carbon emissions 30% by 2030), as well as for increasing generation efficiency to reduce electricity bills for Co-op city residents.

The Mayor’s press release explains the advantages of the plant thusly:

Traditional power plants convert fuels such as oil or natural gas to electricity inefficiently because the conversion generates wasted heat.  Co-generation plants divert that heat for other uses.  In tri-generation fuel is used for three separate functions: it generates electricity, uses the waste heat or steam for heating and cooling, and diverts the excess steam to a turbine that generates even more electricity and heat energy, making it the most efficient type of power plant in use.

Read the Mayor’s full press release here.

Read here prior Capalino+Company discussion of PlaNYC carbon emissions reduction targets.

Schedule of Hearings in the New York City Council for the Week of May 19

Finance; Public Safety David I. Weprin, Peter F. Vallone, Jr., Chairs
Monday, May 19, 10:00 AM
Council Chambers – City Hall
Details: 10:00 – 12:00 Police 12:00 – 1:00 Civilian Complaint Review Board 1:00 – 2:15 District Attorney / Special Narcotics Prosecutor

Zoning & Franchises Tony Avella, Chair
Tuesday, May 20, 9:30 AM
Committee Room – City Hall
Details: See Land Use Calendar Available Thursday, May 15, 2008, Room 5 City Hall

Finance; Governmental Operations David I. Weprin, Simcha Felder, Chairs
Tuesday, May 20, 10:00 AM
Council Chambers – City Hall
Details: 10:00 – 10:45 Citywide Administrative Services 10:45 – 11:45 Board of Elections 11:45 – 12:45 Campaign Finance Board 12:45 – 1:30 Community Boards

Landmarks, Public Siting & Maritime Uses Jessica S. Lappin, Chair
Tuesday, May 20, 11:00 AM
Committee Room – City Hall
Details: See Land Use Calendar Available Thursday, May 15, 2008, Room 5 City Hall

Planning, Dispositions & Concessions Daniel R. Garodnick, Chair
Tuesday, May 20, 1:00 PM
Committee Room – City Hall
Details: See Land Use Calendar Available Thursday, May 15, 2008, Room 5 City Hall

Finance; Juvenile Justice David I. Weprin, Sara M. Gonzalez, Chairs
Tuesday, May 20, 1:30 PM
Council Chambers – City Hall
Details: 1:30 – 2:15 Juvenile Justice 2:15 Public

Finance; Youth Services * Addition David I. Weprin, Lewis A. Fidler, Chairs
Wednesday, May 21, 9:00 AM
Council Chambers – City Hall
Details: 9:00 – 10:00 Youth and Community Development

Finance; Education David I. Weprin, Robert Jackson, Chairs
Wednesday, May 21, 10:00 AM
Council Chambers – City Hall
Details: 10:00 – 12:00 Education & School Construction Authority (Capital)

Finance; Transportation John C. Liu, David I. Weprin, Chairs
Wednesday, May 21, 12:00 PM
Council Chambers – City Hall
Details: 12:00 – 1:00 Transportation (Capital) 1:00 – 1:30 Transportation (Expense) 1:30 – 2:30 MTA NYC Transit 2:30 – 3:30 Finance 3:30 Public

Finance; Governmental Operations David I. Weprin, Simcha Felder, Chairs
Thursday, May 22, 9:30 AM
Council Chambers – City Hall
Details: 9:30 – 10:30 Law

Land Use Melinda R. Katz, Chair
Thursday, May 22, 10:00 AM
Committee Room – City Hall
Details: All items reported out of the subcommittees AND SUCH OTHER BUSINESS AS MAY BE NECESSARY

Finance; Oversight and Investigations David I. Weprin, Eric N. Gioia, Chairs
Thursday, May 22, 10:30 AM
Council Chambers – City Hall
Details: 10:30 – 11:00 Investigation

Finance; Land Use; Technology in Government Gale A. Brewer, David I. Weprin, Melinda R. Katz, Chairs
Thursday, May 22, 11:00 AM
Council Chambers – City Hall
Details: 11:00 – 12:00 City Planning 12:00 – 1:00 Information Technology and Telecommunications

Consumer Affairs * Addition David I. Weprin, Leroy G. Comrie, Jr., Chair
Thursday, May 22, 1:00 PM
Council Chambers – City Hall
Details: 1:00 – 1:30 Consumer Affairs

Parks & Recreation; Finance Helen D. Foster, David I. Weprin, Chairs
Thursday, May 22, 1:30 PM
Council Chambers – City Hall
Details: 1:30 – 3:00 Parks & Recreation 3:00 Public