Over the past 15 years I have been employed in both the finance sector on Wall Street and as a Finance Director at a Fortune 40 Corporation. At present, I serve as the CFO of a Westchester-based non-profit. Academically, I have multiple graduate degrees—in financial economics, public administration and American history. I mention this because it is relevant on two fronts. Firstly, I am both educated and extensively experienced to the nuances of large-scale budgeting, general management (both private and public) and the policies that impact them. Secondly, I am the paradigm resident who bears much of the burden of the New Rochelle budgeting process. While I enjoy very much hearing about how national and local politicians are constantly "working for the middle class," I write this letter as an established middle-class member. As such, I am demanding that the City Council execute the following initiatives so as to truly “work” for us.
2) Publicly remand and striking from the record of inflammatory September 2012 comments made by the Citizens’ Panel for Sustainable Budgets regarding residents’ acceptance of taxes and decreased services as serving some “higher public purpose.”
Since I have moved to New Rochelle, my tax bill has increased approximately 100%. That equates to more than 10% on a compounded annual basis, including all state and local taxes. Over the last 2 years, my New Rochelle taxes have increased in the mid double digits—likely close to 20% (excluding the impact of proposed 2013 budgets).
Having been in business for over 15 years, I can tell you that NO industry has been fortunate enough to realize this type of pricing increase (except, interestingly, those utilities enabled by government). Those that have been forced to take such increases are generally mismanaged, and are eventually washed out of whatever industry they were apportioned to. The government, however, seems immune to this Darwinism. I truly feel saddened for modern politicians, however, because following Hurricane Sandy it is obvious that the days of avoiding hard questions are seemingly over.
Residents are obviously and regularly exposed to the standard local political arguments regarding residential taxes: the "City doesn't control" all of these taxable items. For those making that defense, I beg to differ. The fact remains that the City clearly retains discretion over key drivers, including cost structuring, real estate levies, schools and sewers. While its recent report seems to indicate the City drives only 20% of the overall tax bill, again many of the other items and off-sheet fees / taxes remain under City jurisdiction. As such, the City retains unique power to optimize its own operations. Further, the City seems always at the ready to impose "backdoor" taxes—including last year's garbage increase and 2013's leaf pickup discontinuance—to tailor financial levies outside of the tax base. All of these issues come to bear in a seemingly mundane issue—curbside leaf pickup.
Curbside Leaf Pickup
Sanitation is a basic service, generally provided by the government. In cases where the government chooses to exit this service, private options generally fill the vacuum so residents can continue in a choiceful manner. In New Rochelle, however, the City holds the unique (and fortunate) disposition of having a closed audience in its residents. For instance, in cases where the City needs more revenues, it imposes backdoor taxes in the forms of increasing garbage pickup fees from $66 to $223 per annum. As such, 2012 saw a price increase of 238%! (By the way, if anyone knows any business that has ever sustainably taken such an increase, please let me know as I’d like to invest in them). When that increase is blended with the base taxes, the average taxpayer assumed an overall 15% City tax increase! With really no say in the matter, residents were walloped by this absurd fee. But the beat doesn’t end there…
As proposed for 2013, residents will now be forced to bag leaves. While other municipalities have attempted and failed to do this, New Rochelle seems to enjoy blazing the trail on such punitive issues. While many think this is a trifle—so easily handled by those "wealthy" residents lucky enough to have some trees on their property—I recognize this as something else.
While this service cut clearly represents another backdoor increase, it is also an unquestionable shirking of municipal responsibility within the City’s existing construct. Contrary to the deluded Citizens’ Panel for Sustainable Budgets indicating that ending curbside leaf pickup would improve street safety, it is obvious to anyone who lives near a tree that curbside leaf pickup does the exact opposite—rendering our streets, highways and sewers safe and operational. Further, the idea that residents have a comparative advantage to handle sheer leaf volume of a generally wooded area belies the army of City trucks, manpower and expertise already devoted towards it.
Ultimately, this service cut will drive up residential costs (coincidentally, outside of the auspices of the base tax increase) and also pose a vital sanitation and public safety issue—especially considering New Rochelle’s abysmal record of flood response (which could be the topic of another letter, altogether). Only a reasonable mind would approach such an action with the promise of generating some enormous savings. Again, New Rochelle never fails to defy logic.
Amazingly, $250,000 potential savings represents less than 0.2% of the City’s budget. As someone who has managed budgets 3 times the size of the City’s, I can tell you that such a proposal reeks of myopic financial analysis and overall short sightedness. The fact that this proposal even saw the light of day costs more in money, time and energy than it is worth.
While I can go on regarding the strangulation of responsible City residents—as well as the questionable financial management of the City during these difficult times (e.g. proposed 2013 cuts to emergency services that again drive laughable amounts of savings)—residents have to wonder what is actually going on in City Hall. The double-talk of “difficult times” doesn’t seem to have been met with much creative solution. A detailed email I send to Mayor Bramson indicates my overall point of view regarding the Citizens’ Panel Report. All told, I (and many others) are viscerally unwilling to bear the burden and increased cost of doing more of the city's work.
Most importantly, I take real offense to the idea purveyed on page 23 indicating that acceptance of this mismanagement is somehow linked to “higher public purpose.” That statement is patronizing to hard working residents and to American history. Actually, I will render that such a statement is actually ignorant to history, and seeks to off-put mismanagement problems to residents under the guise of public service. Such a mention is inflammatory to both current residents as well as those residents who have lived through truly difficult times—growing victory gardens and listening for air raid sirens. Members of Council, I can tell you that no air raids have recently sounded. Such a “sacrifice” simply avoids true growth and change that were so prevalent during times of real challenges.
As an ancillary point regarding the Citizen’s Panel report, I have lived (in the real world) through the economic downturn. My wife remains unemployed. Yet, as a financial professional, I can tell you undoubtedly that a key route to true change is through size reduction of underutilized personnel. I’ve lived through force reductions, and as painful as they are, there’s a reason they prevail—because they work! While I do not advocate for such actions willy-nilly, I find it laughable that the Citizens’ Panel only uncovered $300,000 of operational efficiencies at the Headquarters / overhead level. Having directly managed compensation budgets equal in size to that of the City’s, I can tell you that even after the recent reductions and natural attrition at the City’s headquarters something is clearly missing from that analysis. But I digress.
All of the chronic symptoms I mention are evident of the lack of some overall, transformational plan towards sustainability. Instead of New Rochelle planning ahead, the idiosyncratic reactivity to challenges is evident. Instead of New Rochelle putting away for a rainy day, the City comes during the rainy day and takes away the umbrella. Instead of seriously dealing with Consolidated Edison following its abysmal performance during Irene, the City sends out emails and voicemails detailing the extensive outages following Sandy (bearing such emergency costs on behalf of the taxpayer). As my dad always says, you can best evaluate one’s leadership during boom times. As I like to say, failures of history are failures of preparation. In this, the City’s 2013 budget is no different.
In closing, I can say that I am completely disenchanted with the City of New Rochelle. When I moved here in 2004, I was truly proud to say that New Rochelle was a City rich in public services, and comparable to my home borough. New Rochelle was not a second-run City. Now, I believe that I was naïve.
I feel increasingly trapped between increasing local levies, declining services and a disinterest by the City / City Council towards back-broken residents. If I were not tied to the local area by family, I would say good riddance to the burdens of this entire place, and never look back.
If I could only get out of here before the City enacts its proposed Real Estate Transfer Tax.
John Lozito has served as an executive in both the private and non-profit sector, currently as the head of finance for a local non-profit. He holds graduate and undergraduate degrees in financial economics from Fordham University and a Master's of Public Administration in Local Government from Pace University.