Sunday, February 5, 2012

State of the City 2/5

Salutations, all.

In tomorrow's paper, I've got a story about Mayor Scott Johnson's State of the City address, which he delivered this afternoon at the City Center.

I focused in on his call for a new public-private partnership that would pay for a study to analyze the impact of building up Route 9 between the Northway and Lincoln Avenue, so I'll touch on some other topics here.

  • The city is happy with the VLT money it's receiving, but it's still not at the level it used to be. That needs to be addressed, Johnson said.
  • Any move that legalizes casino gambling should guarantee that it won't adversely affect the race track, Johnson said. I'm not sure how you accomplish that. What if they say it won't, but then handle drops 5 percent? Are you going to outlaw casino gambling again? Not easy.
  • The ongoing Charter Change saga continues, with appellate argument scheduled for Tuesday. Final decision on appeal is expected within the next two months.
Full text after the jump, courtesy of the mayor's executive assistant, Therese Connolly:

Welcome and good afternoon to my fellow Saratogians. As in prior years, it’s my honor, as your Mayor, to help better serve our very unique and wonderful community.

I also recognize and thank my fellow City Council members, Commissioner John Franck, Commissioner Michele Madigan, Commissioner Anthony “Skip” Scirocco, and Commissioner Christian Mathiesen, both for being here today and being committed to serve our City.

I trust we, as a Council, will continue with the civility and professionalism we’ve attained in City Hall during the last four years. A welcome and thank you also goes out to Deputy Mayor Shauna Sutton, Deputy Commissioner Lynn Bachner, Deputy Commissioner Timothy Cogan, Deputy Commissioner Eileen Finneran, Deputy Commissioner Sharon Kellner-Chille, City Attorney Joseph Scala, Assistant City Attorney Anthony Izzo and my Executive Assistant Therese Connolly.

I also welcome our County Supervisors, Joanne Yepsen and Matthew Veitch, and recognize their dedication to our City and efforts to improve our City and County relationship.

I also welcome the other elected officials here today, as well as all former members of our City Council. We appreciate and recognize your dedication to our City.

On a personal note, I must always thank my family, my wife Julie, son Conor and mother Jane, for their support and love each and every day. I wouldn’t be here today without you.

Lastly, please join me in a moment of silence to remember and express gratitude to our fellow Saratogians, family and friends who are no longer with us but who all contributed to make our community what it is today.

Please join me now as we consider the State of our City.

By design, the State of the City Address examines where we have been within the past year and where we are now heading. Unquestionably, 2011 continued to present many unprecedented economic challenges, which are bound to continue for some time. As a destination and resort community, we are better able to weather the economic downturns than other communities, but we must continue to plan for uncertainty in 2012 and beyond. We must continue to expand our tax base to ensure future fiscal
stability, while managing our growth to protect the appeal of what is uniquely Saratoga. We must never forget the increasing demands on the cost of living to many Saratogians, that struggle daily to make ends meet and provide for a secure future.

Certainly, the current issues present many challenges, some more difficult than others, but all demanding our attention. In order to be a community equally responsive to all, we must put aside our politics, act with sincere purpose, pursue innovative solutions and collectively work toward the common goal, to strike a balance in our community. Many issues may call for vigorous debate but we must never return to the politics of dissention. As your elected officials, we must at
times make tough and perhaps unpopular decisions to ensure fiscal responsibility and uphold our sworn responsibilities as elected officials.

Without doubt, the power of a united community far exceeds the power of any individual or special interest.

In prior State of the City Addresses, I have asked the City Council and all Saratogians for new eras of cooperation, responsibility, accountability and meaningful assistance as we plan for our future and meet our challenges. Today, I once again repeat that message to all Saratogians. As we face our challenges, the charge to our City Council remains obvious: Continued fiscal conservatism, good management and improved efficiency. If the economic recession has taught us nothing else, it is that we can never return to the tax and spend mentality of the past and must control those costs that are within our power.

Fortunately, many financial indicators and ongoing economic development indicate our City remaining relatively strong, stronger than most, given the new economic realities at hand.

Let’s look at the events of 2011.

Financial statistical data for 2011 continues to indicate that, for the most part, our City continues to trend upward from the results of 2010. For example, City sales tax collected for 2011, although not final until completely received by February 29, 2012, indicates a 4% increase over that collected in 2010; our hotel occupancy tax in 2011 was up 4.84% from 2010; mortgage tax for 2011 was up 5.88% over 2010; the 2011 occupancy rate for City hotels and boarding establishments posted a 6.8% increase over 2010; total revenue from City hotels and boarding establishments was up 6.8% over 2010; the reported increase in new small businesses expanding into available commercial space throughout the City; over 300 new high
quality apartments scheduled for completion this Spring and early Summer; the Saratoga County unemployment rate, at 6.5%, is still significantly better than the New York State rate of 8%; and last, but not least, an increase in our unappropriated, unreserved City fund balance, our “rainy day” fund, of $4.2 million in 2010. Bear in mind that a further increase in the unappropriated unreserved fund balance was achieved in 2011, despite a tax reduction of 0.81% for 2012, based in large measure on good management practices, great efficiencies and good old fashioned fiscal conservatism with your tax dollars.

Last year also saw the adoption and first implementation of the New York State property tax cap, under which many municipalities throughout the State have had either difficulty or inability in compliance, forcing many municipalities to massive layoffs and cuts to essential services. Saratoga Springs has fared better than most, having made prior cuts beginning in 2009 and continuing with implementation of better efficiencies to simply doing more with less. However, what remains lacking from the State property tax cap legislation is unfunded mandate relief, in order to achieve true savings to the taxpayers and not simply a shift of the tax burden from the State to the local level. In the long term, a property tax cap cannot work without unfunded mandate relief, particularly when many of the mandates are
unsustainable when funded at the local level. There must be pension reform, reform in collective bargaining laws that unfairly favor labor over management, relief from the burden of Medicaid imposed at the County level, and repeal of the cost excessive Wick’s Law. We are not seeking an unfair advantage, simply a level playing field. The time is overdue to correct the excesses and inequities over the last several decades that have brought us to this financial breaking point. Therefore, I implore you to get involved, join with us and take action by contacting our State representatives and Governor Cuomo to voice your opinion, that this imbalance is insanity and cannot continue.

Fortunately, 2011 saw the restoration of our rightful share of Video Lottery Terminal, or VLT, revenue from New York State, that had been eliminated back in 2009. Following elimination of the VLT funds in 2009, our City acted in collaborative fashion with our State representatives, notably Senator Roy McDonald, Senator Hugh Farley and Assemblyman James Tedisco, under a unified voice to demand restoration of the VLT funds rightfully due us as a host municipality. As you all know, we have now received at least partial restoration, of $1.5 million per year, from what we had previously received as $3.8 million. Last year, the City Council
treated the restoration of $1.5 million in VLT funds, as intended by New York State, not to meet general operating expenses but, rather, to offset the tax burden. Without a guarantee that we’ll annually receive the VLT funds from New York State, it would be financially irresponsible to rely on those funds to simply balance an annual operating budget. Instead, approximately $1 million of the $1.5 million reinstated has been put into a special tax reserve fund to offset future tax increases, as needed. This $1 million tax reserve fund is not part of the previously described over $4 million unappropriated, unreserved fund at year end. While some restoration is obviously better than none, we must continue our efforts to increase our equitable share of the VLT revenue generated to New York State from our local racino, and further work toward a guarantee of receiving funds each
and every year. Our advocacy must not end until we are assured that this
inequity is righted and common sense prevails.

The racing industry also received a long overdue boost by the long awaited finalization and opening of the Aqueduct VLT. Of course, the significance on a local level is the infusion of millions of dollars into the New York Racing Association based upon the success of that VLT operation. Plans are already in place for NYRA to increase its purses over $30 million annually and to finance over $100 million in capital improvements to our Saratoga Race Course. Last year, NYRA unveiled a long range plan for capital improvements at the track, through Turnbery
Consultants, working in conjunction with our local Preservation Foundation and Racing Advisory Board. Our track has always, and undoubtedly, maintained its charm and attraction as the premier racing venue and the oldest sporting venue in the nation. It has long been recognized that, while improvements are needed, changes must be consistent with the architectural heritage and Spa experience. While Saratoga is certainly more diversified than ever, in our economy and entertainment, we remain realistic that the Race Course is still the core of our vitality and economy. After many years of racing industry woes and New York State delay in finalizing the Aqueduct VLT, it is now reassuring to Saratogians that the future at the Spa does look brighter now than in recent memory.

Last year also saw the final touches on the expansion of our City Center, where we are fortunate to assemble here today to enjoy the obvious improvements and the engine that drives our economy year round. True to prediction, since the completion of the expansion the City Center business is up over 33% in the first year alone. It is not just the number of bookings and business as increasing but the nature and future potential this competitive facility brings even to an international level. For example, they hosted the first semi-conductor related global conference, the SEMI ASMCll, which brought over 200 semi-conductor manufacturing engineers from around the world last May and Saratoga rolled out the red carpet! The conference was such a success that they rebooked us for 2012, to return this May. This is
the first time this group has booked the same destination in back to back years in over 20 years of existence. In addition, as a result of this successful conference, we were also able to book the Semi Conductor Industry Association’s World Semi Conductor Council meeting in May of this year also. This global conference only comes to the United States once every six years, to bring the CEOs and top executives from the world’s leading semiconductor manufacturing companies from across the globe. Clearly, the combination of our wonderful expansion, our inviting and vital city, and development and continued expansion of Global Foundries and the Luther Forest technology campus nearby is already producing many tangible benefits to our City, now and into the future. Our Saratoga quality of life, and the emerging high tech growth nearby, will only serve to economically strengthen us as we move forward. The City Center Authority and its Board deserve our congratulations and gratitude for recognizing and committing to the pivotal role this venue plays in our future success.

Collective bargaining issues were again front and center last year. Many of the same contracts are up for renegotiation this year. I will continue to negotiate in good faith, to strike a balance in reaching fair, but affordable, contracts. Aside from union contract negotiations, the consolidation of all City employees into one health care provider significantly moved forward. My decision to force that move was to simply contain the escalating cost of health care, while still providing personal security to the employees but in a more cost effective manner. After the
unions filed grievances to prevent the conversion and arbitrations commenced, we were able to come to an agreement with all unions, but the PBA, to make the conversion. We must all recognize that decades of unsustainable contracts require a new thinking, some give and take, and that reasonable change is not the enemy. Given that our annual labor costs are approximately $30 million of an approximate $36 million annual budget, the consolidation of health care is a prime example of controlling what costs you can control, to produce savings measured in the hundreds of thousands of dollars each and every year. To those union members still withholding consent on this issue, I repeat my prior requests to develop a new mindset that recognizes the old model is broken, but we can nonetheless work
together to contain costs and maintain job security. As I have often stated, cost containment is not an option, but a necessity, for fiscal survival.

Last year also produced the first public-private partnership between the City and downtown businesses to provide a solution for the parking shortage downtown. After countless studies over the years, it took this first public-private partnership formation, of over twenty bipartisan members, to develop a parking solution in the most cost effective manner by simply sharing the burden between the City and the private sector. The result? Currently going to contract is a downtown parking garage that will accommodate approximately 500 vehicles versus 147 current parking lot spaces, coming in under the projected bid budget and, most importantly, to
be completed before our 2012 racing season. This has truly been a collaborative, bipartisan effort to finally act on a long awaited solution, while also providing economic development stimulus for our All American Award downtown corridor. With the addition of this garage, we will finally reduce the downtown parking shortage and, perhaps equally as important, the perception of lack of parking. To coin an old adage, build it and they will come. Lastly, and this will please many Saratogians, it’s not paid parking.

As the holidays approached, 2011 didn’t end quietly. In November, long standing emergency medical service provider SEMS (Saratoga Emergency Medical Services) announced it could no longer continue operating indefinitely and intended to transfer its certificate of need and operating license to another provider. In response, the City Fire Department sought to become the primary EMS provider, and transporter, for the City. For years, the City Fire Department has trained and used paramedics at all response calls as needed. Two commercial ambulance services provided proposals to provide full service to the City. The Fire Department’s
proposal was to provide partial service of primary response, with secondary and third response by an outside service by contract. After some public discussion and City Council consideration, the City Council approved, by divided vote, the Fire Department proposal, with the condition that the financial success of the operation be evaluated within 12-18 months. At this juncture, public opinion is divided on the issue, with questions of cost effectiveness, long term costs, timing, comprehensiveness, and some claims of unanswered questions. It is not a question of the qualifications of Fire Department paramedics to protect the public. The question remains whether the City providing the service is the most cost effective manner and fiscally responsible. The Fire Department has now commenced this operation. Final determination of the propriety of the City undertaking the service, and liability, must await future determination.

We also had a variety of issues, some serious, some not, that bear

o Skidmore College celebrated its 100th Commencement with its largest graduating class. Extensive redevelopment and expansion of its facilities continues, as does its cooperative and collaborative effort with the City to better improve relations. We continue to build on our relationship, improve communications and promote mutual respect.

o The 9/11 Sculpture, titled “Tempered by Memory”, eventually finds a new home amid some controversy after the initial site could not accommodate the sculpture as fabricated. The newly proposed site at High Rock Park is viewed favorably, by most Saratogians, as more pastural and contemplative in the context of historical significance and artistic vision.

o The legal battle over proposed Charter change by Saratoga Citizen continues with appellate argument now scheduled for next week, February 7, 2012. Final decision on appeal is expected within two months thereafter.

o Environmental initiatives continue to advance, with Complete Streets, Sustainable Saratoga, Cool Cities, and the City becoming the 100th member to join the Climate Smart Communities.

o The closing of Borders on Broadway, at a central location, initially shocked the City and understandably disappoints many with a vacancy in the core of downtown. However, most people recognize the closure was the result of a national bankruptcy, not local failure, and efforts remain ongoing to re-let the space in consultation with the owner.

o Near year’s end, some residents of Stonequist Apartments came forward to the City, to complain of bed bug infestation and allege the Saratoga Springs Housing Authority was not addressing the problem. The allegations led to new charges of fiscal and staffing mismanagement. Last week, public forums were held and a written request was sent to the New York State Office of the Comptroller, demanding an audit of the Housing Authority. The matter remains ongoing.

o The Spa City is listed the 75th best place to live in the United States in the September issue of Money Magazine. The criteria included quality of life, job opportunities, top notch schools, safe streets, economic strength, nice weather and plenty to do.

o The Marylou Whitney rose was formally dedicated at Congress Park and Yaddo Gardens. In Congress Park, there is a formal garden entitled Mary Lou Whitney Rose Garden, in recognition of the innumerable contributions by our friend and benefactor in so many respects, and the mutual love earned many times over.

o Plans began for the 150th celebration of thoroughbred racing in Saratoga Springs, to be celebrated 2013. Older, or more seasoned residents, recall the 100th celebration and events back in 1963.

o Census results, based on 2010 sampling, surprised many residents with results that our population has increased only approximately 500 residents over a 10-year period.

o SPAC yet again posted another successful season, also in the black. It was the 7th consecutive year of not posting a deficit. In 2011 alone, SPAC generated over $100 million in ancillary tourism dollars to the region, proving that supporting the arts means supporting our economy.

o The Saratoga Spa State Park celebrated its 100th anniversary with the renovation and rededication of the Vale Springs.

o The City and the City School District come to an agreement to reestablish the City’s maintenance and care of both the East and West side recreation fields.

o Our Central School District continues to be highly ranked and recognized as among the top 10% of all school districts beyond New York City, by the Buffalo Business Journal; ranked 9th out of 85 area school districts, by the Albany Business Review, now being in the top 10 for the last 6 years; and national recognition of excellence, by the Washington Post, as one of the top High Schools in the country for our Advanced Placement and Honors courses.

o The Canfield Casino undergoes extensive renovations, most notably the front sidewalk and entrance to the historic building, producing a sigh of relief from many high heeled female residents that risked life and limb in entering many social events.

o Same sex marriage is enacted in New York State and is officiated here.

o The Eastside recreation Skate Bowl finally, finally, reopens, under a skate at your own risk policy.

o Our Farmers Market was voted the Best Farmers Market in New York State, 3rd Best Medium Sized Market in USA and a top 10 Farmers Market in the USA in the American Farmland Trust “America’s Favorite Market Contest”. The market was established in 1978 by a small group of farmers and grown in its 32 years to a year round market of 55 vendors providing all local produce to the citizens and visitors of our City.

o Saratoga Hospital continues its expansion and improvements by announcing the addition of a 40,000 square foot administrative building.

o South Broadway McDonald’s completes a one-of-a-kind multi-million dollar reconstruction, as a key component and model in the future redevelopment of a primary gateway to our City.

o Fasig-Tipton completes another successful sales meet in its state of the art and designed for success venue.

o Hurricane Irene wallops a punch and results in the first closure of NYRA racing on Travers Sunday in recent memory. Nevertheless, NYRA posts an approximate 6% increase in on-track handle for the meet.

o Last, but not least, Saratoga almost out does itself by performing a Lip Dub on September 1, 2011, drawing thousands to downtown Saratoga Springs to participate in the fun and simply act goofy on film. The event, sponsored and organized by the Chamber of Commerce, was an enormous success, to be posted on YouTube and used as an effective marketing tool to visit Saratoga.

These items are just some of many things that we faced in 2011. The list is not meant to be exhaustive of all we faced but, simply, some perspective.

As we are now into a new year, how do we best prepare ourselves for continued global economic uncertainty, fiscal impacts from both the State Federal levels, and still take advantage of the emerging tech center in our backyard? Simply by controlling what we can control within our own sphere of influence, by continuing with improved efficiencies and productivity in our own government, continuing to plan reasonably and cost effectively for the future needs of our City, and by reassessing the potential for redevelopment of certain areas in our City that are ripe for smart

In the face of the great recession, we have already taken steps toward improving efficiency, productivity and changing the mindset that more staff is necessarily better. We must continue with these measures because, again, these are costs that we can control. As chair of the Capital Program Committee, I will continue with the better planning process and substantiation we have put in place, to effectively project the six year needs of our City to enable better fiscal planning. For those that seek longer, multi-year planning on our annual budgets, the answer is driven by one reality: controlling labor costs. Labor costs exceed 80% of our annual budget and, as such, have to be the focal point. It’s no small wonder that New York State, and across the country, union contracts have become targets in an effort to correct unsustainable models of the past. As I have often stated, it is better to have no contract than one we can’t afford. We must continue to work together, both labor and management, to strike a fair, but better, balance if we are to survive what lies ahead.

Aside from controlling spending, we must continue our preparation to take advantage of the development opportunities at our doorstep due to our neighboring technology park. As often emphasized, we continue to take great strides in streamlining and improving our Building Department and Planning Department, to take advantage of business opportunities that enable a healthy expansion of our commercial tax base. There are certain areas within our City, most notably the main gateway to our City from Exit 13 to South Broadway, that are prime candidates for a fiscal impact analysis to identify the economic benefit to our City by best utilizing these areas, in a creative fashion to conserve the aesthetics of our City. As I have often stated, to plan for development is not synonymous with over development. To ultimately remain a viable community, we must be competitive, open minded and not impose unreasonable barriers. A thoughtful and balanced expansion of our tax base is the most realistic way to lessen the future burden on the residential homeowner. A fiscal and tax base analysis will show how new development and current land usage can impact our City finances. We can better identify strategies to stimulate private investment, create employment opportunities and strengthen our tax base. Of course, this analysis requires funding and City expenditures must always be minimized. Therefore, I propose the formation of another public-private partnership, with our business community, to come together and work toward the common goal of determining development opportunities, under more articulated standards and guidelines, to preserve and improve our competitive edge. We will continue to work with the Saratoga Economic Development Corporation to promote good development, attract businesses and create jobs, now and for future generations.

We are fortunate to have diverse types of development, the combination of commercial/industrial, mixed use, educational, new construction, redevelopment and infill. It is precisely this type of diverse development that illustrates the healthy business development and continued investment in our community. Even within the past few years, in the midst of the economic downturn, there has been encouraging development in our City. Overall, the City is faring well, certainly in comparison with most other communities.

Before we close today, we would be remiss if we did not discuss the apparent statewide movement toward legalizing casino gambling. While the approval is by no means finalized and has much remaining process well beyond this year, we must act to protect our parochial interests as a racing community. We must also recognize the impact casino gambling may have on the racing industry, upon which we depend. Clearly, New York State is looking at casino gambling as a way of solving its economic deficits. While we are all New Yorkers, we must first and foremost be Saratogians on this issue. The racing industry has for years waited for the finalization of the VLT operations in order to financially survive without burdening the taxpayer. Whatever may jeopardize the VLT model, that now enables NYRA to bridge its economic gaps and remain competitive, must be very carefully scrutinized by our community. As a community dependent upon racing as our core identity, whatever may be detrimental to racing is certainly critical to us. At what point is the saturation point reached with the gambling dollar? One must also question whether we want full casino gambling in our City, with the potential loss of quality of life and certain increase on the cost for public services. As we have unfortunately learned from the past, New York State has not been willing to guarantee us, as a host community, funds to reasonably compensate us for the impacts, both fiscally and aesthetically, to our detriment. Therefore, whatever proposal may go forward on casino gambling, it must contain permanent guarantees that we receive fair compensation and have no adverse impact to the stability of our
racing meet. Make no doubt about it, a threat to racing’s future is a threat to our survival.

With a newly constituted City Council, there is both change and opportunity. Whether change is for the better is always subject to opinion, but opportunity can never be denied. Just as we have previously been at crossroads facing the challenges of economic uncertainty, this Council too must make choices of working together, for the common good, or allowing politics to divide us. In these difficult economic times, now more than ever it’s critical that we keep politics out of government. As a new Council, we are positioned to demonstrate to our community that we are willing to listen, willing to compromise, willing to collaborate, and willing to serve the taxpayer. In short, we must do simply that for which we were elected. Cooperation remains the cornerstone in any successful venture, whether
business or government. As a Council, and as a community, we must rededicate ourselves to join together for what should always be paramount in serving our City: to be a City inclusive of all Saratogians.

Certain values and virtues are timeless. Honor. Responsibility. Accountability. Integrity. Sincerity. Cooperation. Forgiveness. If we hold true to these ideals, the task before us is large, but not insurmountable. As public officials, our duty is nothing less. We must always be a voice of reason, remain practical and never lose sight that common sense works. On the other hand, as the French philosopher Voltaire stated: “Common sense is not that common”. No matter what, we should always act in accordance with the pride that is uniquely Saratoga.

In a prior State of the City Address I quoted from John F. Kennedy, whose words continue to stand the test of time and bear repeating today, particularly since we now have a new Council. He said:

“So let us begin anew – remembering on both sides that civility is not a sign of weakness and sincerity is always subject to proof. Let us never negotiate out of fear. But let us never fear to negotiate. Let both sides explore what problems unite us, instead of belaboring these problems which divide us.”

To my fellow City Council members, if we abide by these standards, we will better serve our City. In conclusion, this year I reiterate, to my fellow City Council members, to our City and its people, this is our charge.

Thank you all for attending today and for your commitment to our City. God Bless America, the City of Saratoga Springs, and all Saratogians.

Me again.

I think it'll be interesting to see how Route 9 plays out. Mayor Johnson said he doesn't want to see it turn into a Wolf Road in Colonie, which I understand. Doesn't mesh with the city. Maintaining Saratoga's vibe is just as important as expanding the tax base, Johnson said.

If you're going to pick just one thing from Wolf Road to bring to Saratoga Springs, though, may I suggest CiCi's Pizza? Would be nice not having to drive to Colonie to get Mac and Cheese Pizza.

Until next time,




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