RIOC’s new budget proposal for 2021 should keep you up at night. Here’s how it crams politics and influence into good government.
By David Stone
Ideally, a budget is a fiscal roadmap paving the way for routine activities, side trips and handling potential obstacles. But while the Roosevelt Island Operating Corporation’s proposed budget for 2021-22 does some of that, it also implies that a drunk driver might be at the wheel.
At least some of the time, and those times are critical.
RIOC’s board does not vote on or much participate in preparing the proposed budget for the year starting on April 1st. It must eventually approve the final edition in December, after the proposal chews its way through the mechanics of Albany bureaucracy.
As a result, like so many things RIOC, the process is opaque. The community, which pays nearly all the bills, has no real input, not even from the generally detached board.
When reviewing RIOC’s new budget proposal in September, the board quibbled lightly about fantastic projections for Tram revenue, then went back to sleep.
But that doesn’t mean there wasn’t plenty to be alarmed about.
Capital Projects in RIOC’s New Budget Proposal
After big years of infrastructure improvements under past president Susan Rosenthal, this year’s budget falls by nearly $28 million. The reduced figure, under $12 million, reflects completion of several Rosenthal era projects.
But clanking sounds emerge from reading the overview. It’s short on detail, but it looms large nonetheless.
Small by comparison, $200,000 deferred into the future for unexplained work at “Dayspring Church” is consequential because it contradicts assurances RIOC gave The Daily, last year.
Dayspring Church, announced as The Sanctuary in 2019, is a business. It’s outfitted as a speakeasy and outdoor beer garden; so, why did RIOC’s 2020 budget add a $200,000 contribution?
Last year, a spokesperson said the state agency didn’t intend doing anything with the structure. So, why is it still in the budget?
The once treasured, natural landscape known as Southpoint continues its devolution into Brooklyn Bridge Park North. And it’s now achieved the clunky title “Southpoint Open Space Park.”
Finishing off the last reminders of natural space on Roosevelt Island accounts for a big chunk of the Capital Projects decrease.
But management saves its biggest clang for last, the one area of significant increase. After handing over about $1.5 million to an “owner’s representative” in 2020, RIOC proposes topping that up with a million more in 2021.
“The increase is mainly due to the engagement of an Owner’s Representative to facilitate the many projects,” the new budge proposal whispers. This while overall projects are decreasing.
The idea of hiring an outside firm to oversee capital projects was floated by RIOC’s sleepy board a couple years back by Rosenthal. It was meant to supplement staff, but now replaces them.
At vastly higher costs. No explanation given.
But it’s more concerning as a budget crisis is already here, whether RIOC sees it or not.
Revenues: A major concern given magical treatment…
RIOC’s new budget proposal projects nearly $33 million in revenue, most of it from the hidden RIOC tax. Covering the bulk of RIOC’s income, it’s disguised as ground lease payments and residential fees, but every cent comes from rents and various coop charges.
In other words, the community pays for the state agency’s life blood without having a say in how much goes in or how it gets spent. What we used to call “taxation without representation.”
But in reality, the greatest looming disaster hides in the category of Tram revenues. They form roughly 20% of the money feed RIOC feasts on.
In the year ended last March 31st, actual Tram revenue came in at $4,526,290. Nonetheless, RIOC projected an astonishing $6,356,000 for this year.
That’s right. In balancing their budget, RIOC expected a 40% increase in Tram revenue. Without any fare increase.
What does the real figure look like today? RIOC concedes they will get only about $1,408,000, largely due to COVID-19.
Okay. That’s a huge gap, but they’re dealing with it.
The problem comes with projections for next year: $6,356,000, same as they never got this year.
Questioned by the sleepy board, CFO John O’Reilly said RIOC’s budget anticipates a coronavirus vaccine in October or November. As a result, New York City would be back to full speed, including all those tourists, by April 1st.
Nobody believes anything like that will happen, but a scarier rationale lurks behind the nonsense. That magical figure is in RIOC’s new budget proposal because the state agency cannot absorb another $4 million loss, O’Reilly said.
But fending off catastrophe with magic jeopardizes the very existence of the Tram and red buses because its fares pay for both. And much else at RIOC.
If that doesn’t make your eyes blink open at 2:00 a.m., read it again.
RIOC’s new budget fails to deal with excess spending…
Bloated employed expenses power efforts to invent money that will never come in. A couple of examples stand out.
Thick in the roll call of excess employees is the Public Safety Department. Over 50 full-time equivalents pocket $2.8 million in salaries, and that doesn’t include benefits.
That’s roughly 30% of RIOC’s total salary expense.
While no one wants PSD to go away, there’s plenty of room for belt-tightening. Especially as the department’s oft-reported failures at performing basic tasks, like controlling bike safety, weigh against valued services like the Tram and red buses.
To a lesser, but not so glaring extent, the Youth Center hauls in over half a million in salaries for a program with vastly reduced participation.
Before RIOC booted the 40-year-old Roosevelt Island Youth Program, maneuvering an inside takeover, the state used to pay out $200,000 a year.
For next year, it projects $581,533 in salaries alone.
Serving far fewer kids and sponsoring fewer programs.
All the takeover did, it appears, is add payroll to little effect, but management fails to see this as a place for savings.
Conclusion: RIOC’s New Budget Proposal
While RIOC’s management covers the basics, its new budget relies on magical revenues that will never pop out of any hat. And it fails miserably at dealing with accumulating employee bloat.
When shenanigans like this put critical services like the Tram and red buses in danger, you can’t help but wonder where the adults are.
As RIOC spent years fattening up, it set aside nothing for emergencies. It hired and spent, as one observer wrote, “like a drunken sailor.”
Will the state’s budgetary apparatus, in recent years little more than RIOC’s accomplice, bring some common sense into play?
If so, how do we get there? And spotlighting the communities most glaring failure, who leads?
[…] held in preparation for the full board, CFO John O’Reilly said that Albany approved the unrealistic budget RIOC sent up the river in […]
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