9/26/08 Affairs and Appointments
- Appointments and Elections
- Cultural Item of the Week: Guggenheim Completes Restoration of Museum Façade
Web Tools of the Week
New York City
City Budget under Stress
- Preparing for Fiscal Impact of Credit Crisis, Mayor Bloomberg Directs Agencies to Cut Spending by $1.5 Billion
- Budget Deficits Looming, Mayor Bloomberg Floats Idea of Raising Property Tax 7 Percent
- Related Participates in Public Forum at Community Board 4 to Discuss Scoping Plan for the Hudson Yards
- New York City Green Building Competition: 2008 Winners
- Travertine Restaurant Persuades Divided Community Board 2 to Support a Liquor License for 19 Kenmare Street
New York State
- Governor Paterson Rings in New Era to Contain Climate Change
- Governor Paterson Announces Plan To Limit Harm To Markets From Damaging Speculation
- Governor Paterson Announces Working Group To Explore Potential Wind Energy Project Offshore Of Rockaway Peninsula
Dr. Michael A. Stocker, a retired internist, was selected by Mayor Bloomberg this week to become the new chairman of the board of the New York City Health and Hospitals Corporation (HHC). Founded in 1970, HHC is the nation’s largest municipal health care system – a $5.4 billion public benefit corporation that serves 1.3 million New Yorkers every year (nearly 400,000 of whom are uninsured). Dr. Stocker will officially replace Charlynn Goins as chair of the 16-member board on Oct. 1. Read coverage of Dr. Stocker’s appointment at the New York Times City Room blog.
Assemblyman James F. Brennan announced on Wednesday that he was ending his campaign to succeed William C. Thompson Jr. as New York City Comptroller. Also this week, the Times’ City Room blog published an interview in which Queens Councilman John C. Liu strongly hinted at a run for NYC Comptroller in 2009. The existing field of candidates for the Democratic nomination for comptroller includes three other City Council members – Melinda R. Katz, David I. Weprin, and David Yassky – as well as Bronx borough president Alolfo Carrion, Jr.
At Ceremony Officiated by Mayor Bloomberg, Guggenheim Showcases New Façade with First Public Viewing of Work by Artist Jenny Holzer
The Solomon R. Guggenheim Museum officially marked the completion of its three-year restoration project with a ceremony officiated by New York City Mayor Michael Bloomberg, who switched-on a site-specific illumination of the building created by artist Jenny Holzer and commissioned in honor of the restoration’s major benefactor Peter B. Lewis.
Holzer’s work, entitled, For the Guggenheim, is a light projection onto the newly restored facade and will illuminate the exterior of the building every Friday evening, beginning September 26 through December 31, 2008, from dusk to 11 p.m., with a special additional showing on New Year’s Eve.
The restoration of the Solomon R. Guggenheim Museum was made possible through the generous support of Peter B. Lewis, the Board of Trustees of the Solomon R. Guggenheim Foundation, and the Department of Cultural Affairs of the City of New York. Additional support was provided by the State of New York and MAPEI Corporation.
(Adapted from Governor Paterson’s press release, available in full here)
Governor David A. Paterson this week joined representatives of the MTA, the Port Authority, and the founders of Google to announce the launch of Google Transit in New York. Google Transit, a feature of the Google Maps online mapping service, provides point-to-point public transit trip planning that will now include transit services throughout the MTA service territory including: New York City Transit, Long Island Rail Road, Metro-North Railroad, MTA Bus, Long Island Bus and Staten Island Railway, as well as other regional connecting services participating in the initiative, such as New Jersey Transit, the Port Authority’s AirTrain and Staten Island Ferry. For the first time, travelers can access streamlined, regional trip-planning based on up-to-date schedule data across the subway, bus and rail systems. The application even includes walking directions for the beginning or end of the trip.
“Google Maps for Transit is a truly innovative marriage of information and infrastructure. It is a perfect example of how the public and private sectors can partner together to benefit us all – and it didn’t cost New York taxpayers a penny,” said Governor Paterson. “I applaud my colleagues at the MTA and Port Authority for making this a priority, and our friends at Google for continuing to make the world an easier place to navigate.”
John Hanke, Director of Google Maps & Earth, said: “We are extremely pleased to join forces with the MTA to provide information about their vast transit system in Google Maps. By being able to access station and schedule data for the largest public transit system in the United States via Google Maps, users are exposed to the availability and convenience of public transportation and are better equipped to take advantage of all that the New York metropolitan region has to offer.”
The program provides users with trip information; generates useful local information from Google Maps; and creates opportunities for MTA to reach out to car commuters who may not realize the availability and convenience of public transit. Key benefits of Google Transit trip planner include:
- Point-to-point trip planning using the familiar Google Maps format
- In-depth information about a destination:
– subway, train or bus stops serving the destination
– next scheduled departures from the station or stop
– search of nearby businesses, restaurants, attractions, and amenities (e.g. “delicatessens near City Hall Station”)
- Unique, user-friendly features:
– 360-degree street-level views of the destination with Google Maps Street View, which can be rotated by the user with their computer mouse
– “My Location” feature triangulates the user’s approximate cell-phone position on Google Maps for mobile and indicates distance from the destination
– Still photo entries for popular destinations
– Icons for Wikipedia entries for places of interest at stations
– Trip planning also accessible via many portable devices
- Helpful links:
– Ability to instantly share a trip plan with friends via email
– A link on the Google Transit page will take visitors back to www.mta.info to access additional MTA information each time MTA data is shown on Google Maps
At no cost to the MTA, Google and the MTA collaborated on the development of Google Transit for the New York region, joining other major public transit providers who had launched similar services with Google, such as Chicago Transit Authority (CTA), NJ Transit, San Francisco (BART), Atlanta (MARTA), and internationally, Moscow and Tokyo. The project involved consolidating and reworking disparate MTA schedule and station location data into a format that would enable the service for the New York region. This information will be made available to other developers to enable development of new customer-focused services in the future. Google Transit complements existing MTA trip planning services, including Trip Planner and Trips 123, by providing another way for riders to discover the services that the MTA offers.
(Adapted from Mayor Bloomberg’s press release, available in full here)
Mayor Michael R. Bloomberg Thursday unveiled a new online tool that tracks the work of the Mayor’s Office of Operations’ Street Conditions Observation Unit (SCOUT) team and will be available to New Yorkers on the City’s website, nyc.gov.
The SCOUT team, in operation since October 2007, is a group of inspectors whose mission is to drive every City street once per month and report conditions that negatively impact quality of life to 311. As a result of SCOUT reporting, agencies have addressed thousands of conditions – such as litter, potholes, damaged signs, graffiti, and defective traffic signals – they may not have known about otherwise.
With SCOUT on the web, each pothole and street defect catalogued by SCOUT inspectors, and what has been done about it, will be available for public review.
The Mayor also announced the results of a Mayor’s Office of Operations-administered “secret shopper” program that visited 308 agency walk-in facilities for 25 City agencies in all five boroughs. The shoppers used the same technology used by SCOUT inspectors to record quantitative findings in key customer service areas: language access, service & accessibility, facility conditions, queuing experience & service transparency, and staff customer service.
Continue here to finish reading the Mayor’s press release on the City’s new online tools.
Preparing for Fiscal Impact of Credit Crisis, Mayor Bloomberg Directs Agencies to Cut Spending by $1.5 Billion
Agency Cuts would save $500 million for FY 2009 and $1 billion FY 2010
Comptroller Thompson Praises Proposed Reductions as Necessary
Grappling with the fallout from a severe downturn on Wall Street – the source of an estimated ten percent of City tax dollars – Mayor Bloomberg’s budget director this Tuesday requested that agency directors slash spending by a total of $1.5 billion over two fiscal years, beginning with the current fiscal year (which began on July 1).
Out of a roughly $59 billion budget, the spending reductions would save $500 million for the 2009 fiscal year, which ends next June, and $1 billion for the 2010 fiscal year. Spending reductions would be permanent and expected to recur in future budgets.
This week’s request comes on the heels of $1.1 billion in agency spending that Mayor Bloomberg eliminated from the FY 2008 budget. Taken together with prior requested cuts to the FY 2009 and FY 2010 budgets (made by Mayor Bloomberg in October 2007 and this past March), this week’s budget reductions make for a cumulative elimination of $1.3 billion from the FY 2009 budget and $1.2 billion from the FY 2010 budget. The new reductions will be reflected in November, the next time the city is scheduled to formally update its financial plan.
In a memo to agency heads, director of the city’s Office of Management and Budget Mark Page made the following points:
- As of June 30 2008, the City’s Financial Plan forecasts “substantial deficits in future years” – $2.3 billion in FY 2010, $5.2 billion in FY 2011 and $5.1 billion in FY 2012
- “The effects of a slowing U.S. economy and a national commercial and residential real estate slump were reflected in the revenue forecast underlying the June budget. In the period since then it has become increasingly clear that our forecast future deficits will not be cured, as has been the case for the past few years, by an improvement in that forecast and higher than expected revenues.” [italics added]
- “The full extent of actions necessary for the City to maintain its legally mandated balanced budgets may not be clear for some time. However, any responsible plan to address our forecast budget deficits must start from a base of spending for vital services which is as contained as we can make it.”
- The FY 2009 budget is balanced in part with the $1.3 billion Agency Program that the City enacted last May, which also included recurring actions for savings that reduced the FY 2010 budget gap by $1.2 billion.
- “We are also now asking for an agency program to reduce City-funds operating spending by approximately $500 million in the current year and $1 billion annually starting in FY 2010. These amounts correspond to reductions in City funds of 2.5% in this year and %5 in FY 2010, recurring in each year thereafter.”
Summarizing Mr. Page’s letter, the Daily News reprinted a graphic of how the requested cuts would affect specific agencies:
City Comptroller William C. Thompson Jr., a likely candidate for Mayor, quickly endorsed Mayor Bloomberg’s proposed spending cuts as prudent and necessary:
As we have seen during recent months, the economy is deteriorating. Couple the problems on Wall Street with the looming budget gap in FY 2010 and larger gaps in the years to follow and we find ourselves in a dire financial situation. It is responsible to take action now to address this problem and it is my hope that any reductions will be managed in a way that minimizes the impact on critical services provided to New Yorkers.
During a speech last week to a breakfast hosted by Citizens Union and New York University’s Robert F. Wagner Graduate School of Public Service, Comptroller Thompson made several notable observations on the impact of financial downturns on the City’s economy:
- The New York City metropolitan area accounts for roughly six percent of the nation’s population but is responsible for about $1.25 trillion – or nine percent – of the $13.8 trillion total gross domestic product for the United States, in large measure due to the significance of the finance industry in our local and national economy.
- The securities industry represents about five percent of jobs in the city and about 20 percent of all wages.
- A loss of only 25,000 jobs in the securities industry – the Comptroller’s office forecast prior to the collapse of Lehman Brothers and AIG, companies that employ roughly 20,000 New Yorkers – could cause a loss of another 37,500 spread throughout the city’s economy.
- “Before the startling events of the past week, we had forecast a loss of 25,000 jobs in the city’s financial services sector. Considering that Lehman Brothers had over 12,000 employees in the city and the immediate vicinity, and AIG has almost 7,500 in New York City alone, the job losses may be ever deeper than what we originally forecast.”
- The financial industry accounted for more than 45 percent of the city’s business income tax collections in recent years, amounting to about $5.5 billion in Fiscal Year 2008 alone; these collections are expected to drop by 10 percent during the current fiscal year.
With pain and paralysis in financial markets seemingly jeopardizing one of out of every ten dollars to the City’s coffers (for this is the estimated ratio of tax revenue that the City derives from the securities industry), Mayor Bloomberg this week announced that his administration is contemplating imposing a 7 percent property tax on homeowners in January.
The Mayor estimated that such a tax increase would raise an additional $600 million, going almost one-third of the way to closing the City’s estimated $2.3 billion budget gap in FY 2010. This rise in property taxes would effectively eliminate the popular 7 percent cut in property taxes that the Mayor and City Council agreed to in 2007 (when the City was in a sunnier fiscal climate).
If enacted, the 7 percent tax increase would raise taxes by an average of $308 to $358 annually for residents of co-ops or condominiums in buildings with 11 or more units. For owners of one-to three-family homes, next year’s average tax bill would rise by $226, according to the city’s Independent Budget Office. The increase would appear in quarterly bills mailed in December.
The City Council would have to approve any change in property taxes. With citywide elections in 2009, persuading lawmakers to vote for a property tax increase could be a difficult sell, as Mayor Bloomberg himself acknowledged. Councilmembers’ memories of voters’ harsh reaction to the 18.5% property tax increase that Mayor Bloomberg succeeded in passing in 2002 – now regarded as essential to keeping a post 9/11 city on sound fiscal footing, but very unpopular at the time – will probably do little to make the Mayor’s current suggestion more palatable.
Read here an article by David Chen and Michael Barbaro in the New York Times on Mayor Bloomberg and a possible property tax hike.
Related Participates in Public Forum at Community Board 4 to Discuss Scoping Plan for the Hudson Yards
In early May, the Related Cos. entered into an agreement with the Metropolitan Transportation Authority to develop the parcel of land known as the Hudson Yards, which sits between 30th and 33rd Sts. between 11th and 12th Aves.
This past Monday at Sacred Heart of Jesus Church on W. 51st Street, Related voluntarily participated in a public forum hosted by Community Board 4 to consult with citizens on the direction of the project.
The session marked the first public consultation on Related’s “draft scope of work” for its Environmental Impact Statement (EIS) for the western half of the 26-acre site (the Hudson Yards is split into eastern and western halves; the eastern half was rezoned in 2005, mostly for commercial use, while the western half is currently undergoing a rezoning process).
Related’s plan for the Western rail yards currently includes one 800- to 950-foot-tall office building or hotel at the northeastern corner of the site; eight mixed-use residential and condo buildings containing ground-floor retail or community facilities; and five acres of open space including a waterfront lawn and playgrounds. A 200,000-square-foot outpatient health care facility could also be part of the package, as well as a 120,000-square-foot elementary/middle school on site.
At Monday night’s session, public comments focused primarily on the inclusion of more affordable housing, a larger on-site school and preservation of the northern section of the High Line known as the “spur,” which runs west and north from 30th to 34th Sts.
Members of the Related team emphasized that since filing its original response last spring to the city’s Request for Proposals (RFP), it had adapted its design plan to incorporate many community priorities, including creating a street grid that places buildings closer to the water and makes them less dense, and making open spaces as publicly accessible as possible. Related also noted that its design plan, even in its initial version, preserves the High Line on both halves of the Hudson Yards site while also creating affordable housing and a new public school.
Stressing that plans remain flexible, Related Hudson Yards President Jay Cross estimated that the ultimate development plan would provide 1 million square feet of rental housing, 260 units of which would be affordable. Meanwhile, Related’s Vishaan Chakrabarti, executive vice president for design and planning, made a point of expressing to audience members’ that his employer shared the community’s desire for a school on the site, noting that it is in a developer’s interest to have its residential properties sit amid top-notch schools. Chakrabarti also described Related as evaluating where on the site to locate a supermarket and an Equinox gym.Monday evening’s forum was a voluntary event that Related participated in outside of the mandated EIS process. Related’s official public hearing on the draft EIS will be held on Oct. 2 at the Javits Center.
Travertine Restaurant Persuades Divided Community Board 2 to Support a Liquor License for 19 Kenmare Street
Read here the New York Observer’s account of Community Board 2’s decision (by a vote of 17 to 14) to support Travertine’s request for a liquor license for its 19 Kenmare location.
With the MTA digging a subway tunnel through a short stretch a short Second Avenue, Jim Dwyer of the New York Times reports:
The current estimate is that the construction will cost about $3,000 every minute of every day next year. Then the real money begins. Which raises the question: Is it really such a great idea to be digging subway tunnels in Manhattan?
Continue reading Mr. Dwyer’s article here.
The Times’ William Neumann, on the time and expense of new subway signs:
High-tech electronic signs on station platforms that announce how long riders will have to wait for the next train are still a distant dream in most of New York’s subway system.
And the wait just got longer.
New York City Transit, the arm of the Metropolitan Transportation Authority that runs the subways, said this week that a system of computerized signs planned for 152 stations on the numbered subway lines would not be finished until 2011. That is two years later than a previous estimate and five years later than the original schedule.
Work on the project began in 2003 and was originally to be completed in 2006. The cost has also increased to $185 million, from an earlier estimate of $161 million. Continue reading Mr. Neumann’s article here.
Finally, Mr. Neumann on the expectedly high costs of cleaner-burning (e.g. sulfur-free) bus fuel:
Five years ago, as they were signing a contract for a cleaner-burning bus fuel, some officials with New York City Transit foresaw the day when similar low-sulfur fuels might become more common and less expensive.
That fuel was custom-made, and over the last two years, fuel suppliers warned transit officials that it might become difficult to get and urged them to consider a cheaper alternative.
But the transit agency never switched.
So last month, it found itself caught off guard when there were no bidders for a new fuel contract. As a result, it rushed through a stopgap agreement with its previous supplier at a much higher price.
The tale of how officials signed a contract that increases the fuel costs for their bus fleet by what could be tens of millions of dollars over the next year, at a time of budgetary crisis, helps show how well-intentioned efforts can go awry and end up affecting riders.
The custom-made fuel costs about 20 cents a gallon more than the more common ultra-low sulfur diesel that suppliers recommended. The fuel also requires special handling that in the new contract adds about 45 cents a gallon to delivery charges. On 50 million gallons of fuel to be delivered over the next 12 months, the extra costs represent an additional expense of more than $30 million.
Continue here to finish Mr. Neumann’s article on the rising cost of bus fuel.
New York Among Ten States Participating in the Regional Greenhouse Gas Initiative
Program to Cut Carbon Dioxide Emissions Covers More Than 200 Northeastern Fossil Fuel Power Plants
(Adapted from the Governor’s press release, available in full here)
Governor David A. Paterson Thursday opened the nation’s first-ever auction of carbon dioxide allowances when he rang the ceremonial bell at the New York Mercantile Exchange in Manhattan, and by doing so launched the nation’s most serious initiative yet to reduce emissions of greenhouse gases. New York and nine other Northeast and Mid-Atlantic states have come together to launch the Regional Greenhouse Gas Initiative (RGGI, pronounced “Reggie”), a mandatory program that covers more than 200 fossil fuel power plants, requiring the owners of those plants pay for the carbon dioxide they emit into the air.
By putting a price on carbon dioxide pollution through the RGGI auction, power plants will now have a financial incentive to reduce pollution. Proceeds from the auction will go toward energy conservation and renewable energy programs in each of the ten participating states, including: New York, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Rhode Island and Vermont.
“Global warming is the most pressing environmental issue of our time, and unfortunately the federal government has failed to take comprehensive action to address it. But by coming together with nine other states, New York is showing that we can take our own bold action in reducing greenhouse gas emissions,” said Governor Paterson. “With the Regional Greenhouse Gas Initiative, we are attacking global warming in three ways: reducing emissions, fostering energy conservation and stimulating development of a clean energy economy and green jobs.”
Under RGGI, ten states have established a cap or limit on the total amount of carbon dioxide pollution that power plants can emit into the air. Power plants over 25 megawatts (MW) that emit carbon dioxide must obtain pollution allowances to do so. These allowances, which are available by auction, give the power plants permission to emit carbon dioxide. The cumulative emissions of all carbon allowances may not exceed the amount set by the cap. Over time, the carbon cap is lowered incrementally, thus bringing down carbon emission levels.
RGGI represents the first mandatory program to reduce power plant emissions of carbon dioxide – the principle gas that causes climate change – by instituting a six-year cap on carbon emissions in the participating states, followed by a 10 percent reduction over the next four years.
The auction process makes these carbon dioxide allowances a commodity, which market participants will use for compliance to buy, sell and trade. This market-based approach finds the cheapest place in the electrical generation sector to achieve reductions in carbon emissions. The auction will be open to all who are qualified to bid.
Power plants pump out about 25 percent of the total amount of carbon dioxide emitted annually in New York. Under RGGI, annual carbon discharges from power plants of 25 megawatts or larger would be capped. New York is distributing 64.3 million tons of carbon dioxide to be used for compliance, which is a third of the total RGGI cap. Emissions would be reduced 2.5 percent per year for the following four years, for an overall 10 percent decrease.
RGGI has spurred action elsewhere. Seven western U.S. states and several Canadian provinces have embarked on the Western Climate Initiative, a similar cap-and-trade system that will be implemented by 2012. Florida is also studying a cap-and-trade system, as our several Midwest states. The European Union has recently indicated it wants its members to shift programs to an auction-based format.
Continue here to read a list of political and business notables endorsing the Regional Greenhouse Gas Initiative.
S.E.C. Limited “Short Selling” of Stock, New York Will Now Regulate Portion of Market for “Short Selling” Bonds
For First Time New York Will Regulate Part of $62 Trillion Credit Default Swap Market
(Adapted from the Governor’s press release, available in full here)
Governor David A. Paterson today announced that New York State will, beginning in January, regulate part of the credit default swap market which has to date been unregulated and has been a major contributor to the emerging financial crisis on Wall Street. Governor Paterson also called on the federal government to regulate the rest of the massive $62 trillion market.
This action is similar to one recently taken by the federal government that tightly restricts “short selling,” or profiting from falling stock prices. The state action applies to credit default swaps which are a means of profiting from falling values of bonds. Under the direction of Governor Paterson, the New York Insurance Department today issued new guidelines that, for the first time, establish that some credit swaps are insurance and therefore subject to state regulation.
The primary goal of insurance regulation is to protect policyholders by ensuring that providers of insurance are solvent and able to pay claims on policies they issue. The goal of regulating these swaps is not to stop sensible economic transactions, but to ensure that sellers have sufficient capital and risk management policies in place to protect the buyers, who are in effect policyholders. At AIG, for example, insurance companies regulated by the state are required to hold substantial reserves and as a result those companies are solvent and able to pay claims. However, a major part of AIG’s problems were created when credit default swaps were issued by a non-insurance unit that did not hold sufficient reserves.
A credit default swap is similar to a short sale of a stock. In both cases, an investor profits when the value of the security, either a bond or a stock, declines. As part of efforts to contain the current financial crisis, the federal government has temporarily limited some short sales of some stock to prevent destructive speculation that was damaging the health of targeted companies.
Credit default swaps played a major role in the financial problems at AIG, Bear Stearns and the bond insurance companies. A credit default swap is a contract under which the seller promises to pay the buyer if the insurance provider of the bond cannot pay principal and interest. Credit default swaps can be used by the owners of bonds who want to protect themselves if the company that issued the bonds is unable to pay interest and principal. In those cases, the swap is insurance, because the swap buyer is like a homeowner insuring a home. But, just as with short selling of stock, most swaps are now used by speculators who do not own the bonds and the value of swaps outstanding are generally much more than the value of a company’s debt. Swaps bought by speculators are known as “naked swaps” because the swap purchasers do not own the underlying bond. Speculation in a company’s bonds can under some circumstances hurt that company’s ability to borrow.
The new guidelines establish that when the buyer owns the underlying security on which he is buying protection then the swap is an insurance contract. Under these new regulations, such swaps would be subject to regulation for the first time and can thus only be issued by entities licensed to conduct insurance business. So called “naked swaps” are not insurance and cannot be regulated by the State.
The Insurance Department today issued Circular Letter No. 19 (2008), which sets forth best practices for financial guarantee insurers, also known as bond insurance companies or monolines. In the fall of 2007, the Department developed a three-part plan to address the serious challenges recently faced by the financial guarantee industry. Under that plan, the Department has:
1. Encouraged the entry of additional, well-capitalized insurers into the financial guarantee market and facilitated capital raising by existing insurers.
2. Protected policyholders and the public by helping financially distressed bond insurers to develop workable solutions.
3. Developed new standards to which the financial guarantee business should adhere.
Today’s circular letter is part of developing the third point, new standards. The Department will continue to encourage new players to enter the financial guarantee industry to ensure a healthy competitive market for those who need these products.
The new best practices:
1. Strictly limit financial guarantee insurers from guaranteeing collateralized debt obligations or “CDOs”—securities based on the payments from many mortgages. These CDOs, often based on subprime mortgages, have caused substantial financial difficulties for many commercial and investment banks. Credit default swaps on CDOs are the source of a large part of AIG’s financial troubles.
2. Institute a number of measures to limit risks for financial guarantee insurers. For example, the rules better define concentration risk, which is the risk from insuring too many bonds from a single source. The new rules include originators and servicers of debt as sources to consider.
3. Require written risk control and underwriting policies.
4. Increase the minimum amount of capital and reserves a financial guarantee insurer must maintain.
5. Expand reporting requirements.
Circular letters provide regulated insurance companies with direction from the Insurance Department. The Department also plans to propose regulations and legislation to implement reforms. The Department is prepared to answer questions and provide guidance about its views with regard to complicated credit default swap issues.
The new guidelines will not affect any existing credit default swaps. Financial guarantee companies were very active in selling credit default swaps, but are conducting little if any business currently. The new guideline provides a means for current and new companies to more prudently provide this type of insurance.
To avoid market disruptions, the guidelines as regards to credit default swaps will not take effect until January 1, 2009.
New York regulates most of the nation’s financial guarantee companies and Article 69 of the New York Insurance Law, which governs financial guarantee insurance, generally serves as the model for the laws governing financial guarantee insurance in other states. In 2000, the Department ruled that all credit default swaps were not insurance. Today’s circular letter effectively reverses that decision only to the extent that certain swaps are insurance under New York Insurance Law.
Governor Paterson Announces Working Group To Explore Potential Wind Energy Project Offshore Of Rockaway Peninsula
Public-Private Partnership to be Formed Between LIPA and ConEd
(Adapted from the Governor’s press release, available in full here)
Governor David A. Paterson today announced the formation of an interdisciplinary working group between the Long Island Power Authority (LIPA) and Consolidated Edison, Inc. (ConEd) to study the potential for an offshore wind project that would be situated at least ten miles off the Rockaway Peninsula. This project, which originated from Governor Paterson’s Renewable Energy Task Force, could provide significant market development benefits to the wind industry, create clean-tech jobs, and help diversify the State’s electricity system.
The working group will study, among other things, suitable locations for an offshore wind project, transmission and interconnection capabilities, and the availability of wind as an energy source. The information gathered from the working group will be used to provide a better understanding of the opportunities for such a project and, if feasible, the development of a jointly issued request for proposals whereby both utilities could share the cost of the project as well as the power generated from the project. Wind developers, industry representatives and other interested parties will also be invited to participate in this study.
Several years ago, LIPA had proposed the construction of a 40-turbine wind farm that would have produced 140 megawatts of energy off the shore of Jones Beach.
The project was ultimately shelved by LIPA when it was discovered that costs substantially exceeded what was originally anticipated. Had the project moved forward, those costs would have been borne solely by LIPA customers. The economies of scale would now dictate that an offshore wind project would have to be larger and farther out to sea than the one previously considered by LIPA. New offshore wind turbine technologies allow for the siting of facilities much further into the ocean than was possible just a few short years ago.
The announcement of the working group marks the first regional partnership project between LIPA and ConEd.
Technology in Government Gale A. Brewer, Chair
Monday, September 29, 10:00 AM
Committee Room – City Hall
Details: Oversight – The Regulation and Use of the Unallocated Portion of the Radio Spectrum, Also Known as White Spaces
Health; Civil Service & Labor * Addition Joseph P. Addabbo, Jr., Joel Rivera, Chairs
Monday, September 29, 10:00 AM
Council Chambers – City Hall
Details: Oversight – An update on access to medical care and benefits for uniformed municipal workers involved in the 9-11 recovery effort.