Fulton’s financial distress plan moves ahead

ALBANY – Fulton’s financial distress plan has moved from discovery to its next phase as Albany officials agreed Tuesday to take a closer look at shared services as the “mantra” to help buoy fiscally stressed local governments into recovery.

The New York State Financial Restructuring Board for Local Governments held its third meeting on Tuesday afternoon in Albany. During the meeting, which was web cast for public viewing, board members voted to accept applications from the city of Rochester and villages of Alfred, North Collins and Wilson for comprehensive review – the first step in the process.

Members also discussed the progress of its already approved applicants – the city of Fulton and town of Fishkill.

During Tuesday’s board meeting, FRB secretary Tim Ryan briefed members on Fulton’s comprehensive review to date.

“Workforce and shared services likely will be the mantra for a city like this and for most local governments,” Ryan said, “and they go hand in hand. We’re just starting to delve into some of those possibilities with them.”

Created last summer by Gov. Andrew Cuomo, the purpose of the board is to analyze and advise qualified local governments on improving fiscal stability, management and the delivery of public services.

The board is empowered to provide awards of up to $5 million per municipality through the Local Government Performance Efficiency Program to eligible applicants. The board also serves as an alternative arbitration panel for binding arbitration between municipalities and unions such as police and fire.

Fulton’s application was the first accepted by the board during its November meeting. Once approved, Albany staffers met with Fulton officials by telephone conference the second week in December to get the ball rolling.

Ryan told board members including New York State Budget Director and chairman Robert Menga, Comptroller Thomas DiNapoli, and Seventh District Sen. Jack Martins, R-Mineola, that as a result of information collected during that meeting Fulton’s fiscal actions with respect to procurement practices, economic development opportunities, debt and workforce all seemed to be in line.

“They look to state contracts where ever possible, especially for vehicles,” Ryan said. “Economic development opportunities … they had the Nestle plant that closed in, I believe, 2004. They’re looking for a great candidate there. That’s probably not something that’s going to happen overnight but at least from a staff perspective, from a board perspective, what we’re trying to do is make sure that they work with the Regional Economic Development Council, ESD, NYSERDA, some areas that can help them out with that.”

The secretary said that the city’s debt profile and debt service were also reviewed by FRB staff members. “We just want to make sure they’re working with a financial adviser where applicable to look at restructuring of the debt, refinancing of the debt,” Ryan said.

Fulton Mayor Ron Woodward said Tuesday’s information is the first feedback he has received since the meeting with FRB staff members in December.

“The only thing I’ve gotten since then was an email wanting to know how many police calls we’ve had in the last two years,” the mayor said in a phone interview with OswegoCountyToday.com on Tuesday.

Locally, other leaders are also concerned about progressing the plan with the FRB, which is due in May.

During the public session of the Feb. 4 Common Council meeting, Oswego County Legislator Frank Castiglia, D-Fulton, expressed an interest in reaching out to his colleagues on the county level to work with the restructuring board.

Oswego County Legislators who represent the city of Fulton were expected to meet on Wednesday to discuss the restructuring process.

Meanwhile, as FRB members reviewed Tuesday’s new applications, Menga stopped Ryan to express his surprise that Rochester was an applicant. “We think of Rochester as one of our wealthier cities. Maybe because of the prior history with Kodak, Xerox, Bausch + Lomb, and the city in total,” the chairman said. “This is a real shocker to me.”

With just over $30,000 median household income and child poverty rate above 50 percent one member said the city is working toward better times, but has challenges.

By comparison, the city of Fulton has a median household income of $34,593 and child poverty rate of 29 percent according to its application data.

Ryan explained that in a recent report, Rochester was noted as the fifth poorest city in the country amongst the top 75 metropolitan areas. “They are behind Detroit, Hartford, Cleveland, Dayton and actually Buffalo was noted as number six on that list,” Ryan said.

In December, the Rochester Area Community Foundation and ACT Rochester released a 52-page report detailing issues critical to the community including poverty, academic achievement and racial and ethnic understanding and equity. Using federal standards and census data, the study names Rochester as one of the poorest cities in the country. View the complete report here:  http://www.racf.org/Portals/0/Uploads/Documents/Poverty%20Report%20for%20Web.pdf

As the board turned its attention to the other new applicants, the village of Alfred received immediate commentary from board members.

With tax exempt Alfred University and Alfred State College occupying a major portion of the village’s real property Ryan explained, “less than 10 percent of the total assessed value of the village is taxable.”

“Do they have any agreement with the universities as far as we know?” Menga asked.

“My understanding is, yes they do. … Whether one side or the other considers that enough is something we can look in to,” Ryan said.

“When the disparity between taxable and non-taxable is so great it’s something we have to look into,” Menga replied.

In other action, the board agreed that regardless of the size of the municipality, it intends to provide assistance to any qualified fiscally distressed locality that asks for help.

“I think the charge is brought,” DiNapoli said. “At this point, unless we have an overflow of requests, we might as well take them as they come.”

While it formulates its work model,Martins asked the board to consider the tough questions about whether a troubled municipality should even continue exist.

“One of the considerations that we have as a board is also for the smaller municipalities to determine whether or not there is enough of a tax base or enough of a population base to continue to sustain the services that they have,” Martins said.

“It’s a basic question. When you see the higher tax rates for these smaller villages it’s no accident that, if they’re going to provide the same services and they don’t have the same population or the same tax base, then those numbers are going to continue to increase.”

Martins added, “One of the questions I think we really should be asking as well is, ‘Where do we draw that line and how do we share services and, dare we say, right size government?’”

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