The Captains of the two “ships of the city,” the School District Titanic and the City Hall as the Carpathia (the Titanic rescue ship),  could have taken last night as an opportunity to entertain possible solutions to steering around their twin financial icebergs:

The first iceberg is the Mayor's "roll-over-and-play-dead, never-met-a-certiorari-I-didn't-grant" response to certioraris the last six years that lower the city assessibles.

The second iceberg is the school district reluctance to trim staff, attack its bureaucracy, and trim the automatic 7% increase they deliver every year minimum in the school budget.

No, that did not happen in White Plains last night.

The Mayor and Superintendent met in separate sites in the same city. Much as the Titanic wallowed for two and a half hours before sinking while the ship California, a mere 3 miles away from the Titanic ignored the distress calls, and five other ships within two hours' sail, passed her by. Only the Carpathia, 40 miles away steamed to Titanic rescue.

Neither Captain of the two city ships seems particularly interested in working to a joint solution to the laissez faire budget trends of either financial ship.

One City Captain, the Mayor, keeps kowtowing to certiorari-filers and entrepreneurs and does not jawbone them, let alone extract a quid pro quo that protects city taxpayers. But his administration does document his record of success. Recently statements have been made that the city  has had 1,000 businesses have come to the city. Could we have a list, please? Who are they, where are they?  

 

 While the other Captain, the Superintendent of Schools, has yet to institute an aggressive program to cut school district budget growth. Both Captains seem to be imitating each others’ spending policies, while feeding taxpayers into the boilers of their respective city financial engines. The question is when will they run out of coal (taxpayers)?

Now what could be gained by a public meeting of Superintendent Connors and Mayor Delfino? You never know. 

Can the Mayor show some numbersmanship to take hold of his budget? It continues to grow unchecked due to blind faith in development falling short of expectations, while the development creates new spending needs that outpace development benefits.

Can the Superintendent embark on budget projections and spending cuts in anticipation of city certioraris before rather than after the fact -- with timely information from the Assessor's Office? Could a certiorari "giveback" penalty be enacted by the city fathers to make cert-filers think twice before "cert-ing"?

Could the city, rather than balancing budget by selling off assets, cut its budget just a tad? One day before Decision Night, the Common Council has not announced any cuts in the budget. Let alone a freeze in administration salaries. Perhaps a token cut might be made? Perhaps we could lop off a street sweeper, one commissioner car?

The city, though appears to be taking its cue from the School District 25 year traditional habit of spending and the city is playing great catch up ball.

The City combined operating budget for 2006-2007 is $146.3 Million. It’s growing at 5.2% a year 2% over the inflation rate. This means by 2007-2008 we can expect a city budget of $154 Million, and by 2008-2009, a budget of $162 Million, just about what the school budget is now. 

This is what happens when you spend more than your revenues and bet on the next big check, borrow for the future against the present.

The School Budget will break $200 Million in two years.

In a projection issued February 27, the school district predicted it will spend $178 Million in 2007-2008.  At least the school district does do projections.
 

Now let’s take this into 2008-2009. The School District Salaries, according to the Assistant Superintendent for Business office will hit the $104 Million mark in 2008-2009, with fringe benefits hitting $42 Million, and the rest of the budget based on conservative 3% inflation will put the 2008-2009 budgets at $189 Million.

However the district 2008-2009 projection appears understated, because it assumed a 5% per annum increase and 6% per annum increase in transportation and utilities -- both sure to escalate with the unforeseen escalation in fuel costs in recent months. The 2008-2009 projection is a very generous budget prediction on debt service. The $189 Million 2008-2009 "Budget" lists debt service with no allowance for new certioraris in 2008-2009, and leaving out any mention of the capital improvements bond issue in documents presented to the Annual Budget Committee.

Only astute ABC-ers who looked at the Capital Improvements  debut service financials and added them to the Budget projection got this subtlety.

The school debt service would climb from approximately $6,000,000 in 2006-2007 to 10.6 Million in 2008-2009 if the school district floated the full $66.7 Million bond. That adds $4 Million to the rosy scenario budget, lifting it to a minimum $193 Million in two years.

 
This does not include any new certioraris the school district does not know about.

It is not inconceivable that rising expenses will bring additonal budget increases well beyond those February projections in order to keep the School District Titanic steaming ahead with a full compliment of crew that will kite the 2008-2009 budget over $200 Million. It is interesting to note that if that happens the budget will go from $165.8 Million this year (2006-2007) to $200 Million in two years.  

Think about this: The School Budget is compounding at about $15 Million a year. There is talk on the Board of Education about trimming. The Teachers Union head has talked about paying more health costs. (The Next School District Iceberg: the Teacher contracts expire at the end of 2007. That will most surely hit the $200 Million mark.)

Something’s gotta give. Something’s gotta give. Something’s gotta give.


When both the city and the school district increase spending when revenues are, in the school district case, dwindling, and in the city’s case, not rising as fast as they would like, something or someone has got to give. 

 Usually it is you and me, the taxpayer. Are the financial Captains and the School Board members and Common Council members going to take a look, together?

City and school district financial policy is flooding red ink all over the city books, despite contrived surpluses by counting loans as revenue, by desperation bonding, fire sales of land, and assurances that development will save the day. Maybe it will. It has not so far.

Plugging the monetary gash in the side of the School District Titanic with tax increases, stopgap borrowing, while the Carpathia of the city government steams in circles instead of coming to the rescue is aggravating the revenue situation for both city and school district.

Both revenue sources are drying up on the city and the school district. It does not take a Ph.D. or an MBA to figure that out.  Because the Ph.Ds and MBA's have not figured it out. All you have to do is look at your tax bill. 

 As the Mayor is fond of saying, and some councilpersons and school board members echo, “it all comes out of the same pocket.” Well it is our pockets.

 In the future, the city has to find some way to stop the certioraris.

The city has to extract an infrastructure tax of some kind with new development.

The school district must cut..  

The entire city has to wake up and smell the coffee that development has to be done, but you have to extract a fair amount of taxes out of the developers.

The real increase in city development  has only risen $7,587,000 a year since 2002-2003 when the city sales tax collected was $34, 413,400 a year in sales tax, for 2005-2006, if all goes according to plan we will hit $43 Million -- that's a rise of $9 Million a year (and yes, Paul Wood, there are mortgage taxes and permit fees -- paid once). That's not adjusting for inflation.

 The city gained $2.6 Million in PILOTS this year. The school district saw roughly $8.5 million in PILOT payments from the development for 2006-2007 but has gotten killed by certioraris that the city has not fought. Has this development helped the School District?

The School District received $6 Million in PILOTS in 2004-2005, $7.2 Million in 2005-2006 and budgets based on city figures, will receive $8.8 Million in PILOTS in 2006-2007. That is $22 Million in PILOTS. But, water is still pouring into the bowels of the School District Titanic.

Because the $22 Million in PILOTS in the two years and upcoming in 2006-2007 has been wiped out  by certiorari assessment losses to the tune resulting in a $23 Million increase in school taxes in the same three years.

The PILOTS are a wash because of the certiorari drain of $21 Million those three years. Perhaps the city negotiated PILOTS just a tad too generously?

The Mayor says there is nothing he can do about the certioraris. That is not the answer. Together the two captains should get their ships together soon with the commercial businesses that are creating these financial icebergs because they can. You can hardly blame them.

The question the two captains have to engage is when do the tax increases become too much for the well-meaning and generous White Plains taxpayers to bear? When will the populaces who believe all the city hall and school district hand-wringing and finger-pointing, realize what is happening and why?

Do they care?

As Superintendent Connors said Tuesday evening at the Council of Neighborhood Associations, "everything is relative," noting that the same things were said about the budget twenty years ago.