Gotham Gazette

The Place for New York Policy and politics

Topics

Topics

Doubts Grow About City's Capital Spending


Photo (cc) 2008 Department of Environmental Protection
The digester eggs at the Newtown Creek Wastewater Treatment Plant -- one of the city's many capital projects.

New York City, you have a problem.

Yes, like the thousands of shopaholics or compulsive credit card users, you have racked up some serious debt. And now some advocates want to cut you off.

During the first two terms of the Bloomberg administration, the city's capital budget ballooned from about $24.8 billion to $45.5 billion -- an increase of more than 83 percent. In that same time period the amount of money the city paid in debt service every year increased from $2.4 billion to $5.4 billion. In the mayor's $63.6 billion budget proposal for fiscal year 2011, nearly 9 percent is dedicated to paying off the city's capital debt.

And it doesn't stop there. By fiscal year 2014, the city could be paying about $6.9 billion in debt service.

For years, Mayor Michael Bloomberg has bragged of his commitment to capital investment. He has said he would not abandon the city's infrastructure -- in fact, he would make its renewal one of his top priorities.

Now that those investments have been made, budget experts wonder whether they were the right decisions. The size of this plan has some of them worried.

"What you see in 2010 is record high commitments," said Maria Doulis, a senior research associate at the Citizens Budget Commission, who has called for the mayor to cut back on the capital budget. "They should figure out what their priorities are and adjust accordingly."

The Bloomberg administration has made some strides in the last several years to get its debt service under control -- such as paying off debt with surplus dollars and stretching out the capital budget from four to five years.

But experts wonder whether these actions are enough.

Capital Catastrophe?

Last week, Marc LaVorgna, a Bloomberg spokesperson, said the administration would not turn its back on economic growth. In a struggling economy, city-fueled development helps create jobs. The administration, he added, will not make the same mistakes of the 1970s era New York City -- when streets and economic development deteriorated.

Nonetheless, some members of the administration acknowledge that there is a problem and it needs to be addressed.

On Thursday at the start of the City Council's hearings on the preliminary budget, Councilmember Domenic Recchia, the council's new finance committee chairman, wondered just how big that problem really is.

"Are you requesting we reduce it more, cut the capital plan in half?" asked Recchia.

The city's Budget Director Mark Page responded: He'd take a rain check.

"As a practical matter, I think it's too much to deal with in the next few months," Page said of the city's rising debt. "In the long run, I think the long term cost of debt service as a fixed cost in New York City is a serious problem for us."

The current fiscal year has the largest proposed capital budget commitments in all of Bloomberg's tenure -- projected to top more than $14 billion. Funding is going to resurface 3,700 miles of roadway, at the cost of $689 million, more than $11.2 billion will go to school facilities construction and $646 million for the Newtown Creek Wastewater Treatment Plant.

While debt service is often referred to by the administration as an "uncontrollable cost," it is linked entirely to the size of the capital budget, said Page. If the city cuts the capital budget, then its debt service obligations will also go down.

The record high commitment this year comes despite stretching the budget from four years to five and cutting 27 percent from projects funded with New York City General Obligation and New York City Transitional Finance Authority bonds last year.

While some of the overall increase during the Bloomberg administration has to do with the mayor's priorities and his commitment to updating the city's infrastructure, some of the rise originated outside of City Hall. When the state started matching the city's allocation for school construction, the department's capital allocation effectively doubled, said Doulis. The building boom also caused construction costs to spike, increasing the cost for the city's projects, Doulis added.

Beyond that, she said, the administration substantially increased funding for capital projects for parks, public buildings, hospitals and environmental protection even when adjusted for construction cost increases.

Debt Be Gone

Doulis would like to see the city cut back on capital spending, though she would not detail a specific target.

Those in the construction industry, however, side with Bloomberg.

"Our infrastructure is the circulatory system of what keeps our economy moving and growing and thriving," said Felice Farber, the director for external affairs at the General Contractors Association of New York. "If we're not building it or maintaining it, it's going to cost us more in the long run."

Farber suggested the city commit to completing projects on time instead of cut capital spending. The longer a project is delayed, the more likely the cost of construction could increase, making the entire project more expensive. Nearly two years ago the city and the association agreed to a pilot program that would penalize the city if it were at fault for delaying a project. The city already penalizes contractors if they are at fault for delays.

That program, which was set back when the capital budget was cut last year, just got started in January and covers $5 billion worth of projects, according to the administration. But Farber thinks it will help keep projects on time and on budget.

More than half of the construction trade in the city is supported by city funds right now, Page said last week. With the recession, it's hard to imagine what would happen if the city started cutting capital too.

Problems at St. Vincent's Reflect Health Care System's Woes


In the lobby of the Service Employees International Union Local 32BJ’s lower Manhattan headquarters on Feb. 10, senior citizens with oxygen masks who might lose their closest hospital gathered with paramedics, nurses and doctors who might lose their jobs. They came to hear the city’s highest elected officials -- everyone with the notable exception of Mayor Michael Bloomberg -- express their outrage over the imminent closing of St. Vincent’s Hospital in Greenwich Village, their shouting often competing with the voices of parents of various ethnicities trying to sooth their coughing children with winter colds.

New Yorkers are used to hearing doomsday calls and cries that the closing of this or that institution will cause irreparable harm to the city, and the cynical newsreader often walks away unimpressed, sure that at the end of the day it will be no big deal. But community activists, health care experts and many local officials said, to put it bluntly, that the closing of the St. Vincent’s Hospital is a big deal, and a sign of an intensifying contraction of the already overburdened health-care apparatus in the five boroughs. This, they fear, will lead to chaos, a spike in avoidable fatalities and an inadequate response to a future disaster, natural or otherwise.

Start with the immediate impact. Assuming St Vincent's does close, if you live, work, or spend significant time in the West Village, Chelsea or Soho and you have a heart attack or any other kind of serious medical emergency, an ambulance would have to take you across town to Bellevue, a public hospital, or Beth Israel. Alternatively, the emergency medical technicians could head south to New York Downtown, which is also a long trip. Medical responders note that all of these facilities are already overburdened with patients, meaning that, if they have to take on more, ambulance response capability and quality of emergency care in the entirety of lower Manhattan could plummet.

Residents of the East Side are worried, said Jo Hamilton, chair of Community Board 2, which represents Greenwich Village, noting that her constituents have the support of Community Board 6, which represents part of the East Side. "They're very, very concerned about what the impact of this closing is going to have on their hospitals, which already filled to the brim," she said. "So where are those 60,000 emergency visits that St. Vincent's has every year, who's going to absorb those?"

Stopping short of invoking 9/11, Hamilton noted that St. Vincent's is a Level 1 trauma center, meaning it is equipped to handle the highest level of care to trauma patients, who often require a number of different types of treatments. "God forbid any kind of a disaster be it natural, or another -- I don’t even want to say it. If anything major happens, this is the place that is actually equipped to service those kinds of emergencies," she said.

Manhattan Borough President Scott Stringer, speaking at the 32BJ event, said, "This is the hospital that was ready to roll during the terrorist attack, and every day is ready to help if you have a heart attack."

How Did We Get Here?

St. Vincent's is a Catholic institution that turns away no one. The hospital incurs the cost of treating uninsured patients every day, resulting in a massive financial loss that has reached a breaking point.

In short, St. Vincent's is a victim of the bigger problem of the American privatized health-care system. Two hospitals in Queens -- St. John's and Mary Immaculate -- closed a year ago after falling into bankruptcy. According to Patrick Bahnken, who as president of District Council 37 Local 2507, which represents Fire Department paramedics, this has put a strain on both the 911 system and the other medical centers in the borough. Specific numbers are unavailable, but the Mayor's Management Report released last week found that citywide "ambulance response time to life-threatening medical emergencies increased three seconds to six minutes 39 seconds, while fire unit response to these emergencies remained the same at four minutes 14 seconds."

St. Vincent’s, like the two Queens hospitals, cannot reconcile the goal of serving the public good with staying in the black, and its closing would cause similar problems beyond its immediate surroundings. The lack of long-term thinking on how to keep the hospital alive only highlights just how broken the entire health-care system is. Gov. David Paterson has established bridge loans to the hospital, which, if we're lucky, will have kept the place running as you read this article. In the meantime, he's meeting with unions, creditors and other stakeholders.

On Friday, the hospital began laying off some 300 employees, including managers, unionized workers and medical residents. The hospital has also instituted a temporary 20 to 25 percent pay cut for non-union workers, and it proposed a temporary 15-percent pay cut for 1199/SEIU members, which the union is considering if it can stave off closure.

The hospital could switch hands, meaning that it would no longer be a Catholic hospital, but could still provide care to the surrounding community. One group has already pulled away from doing this, but even if that deal had gone through the hospital would have been converted to an outpatient facility, resulting in the same strain on the emergency response grid.

Real Estate to the Rescue?

The hospital, in conjunction with Rudin Management Co., proposed leveling the hospital's signature O'Toole building to build a new medical center and condominium. The deal could provide the hospital with much-needed revenue, and Hamilton expects to hear about the approval in the spring. But in the meantime, it has become irrelevant. "This is completely on the back burner,” she said. “It’s more important at this point to save the hospital."

The plan was controversial. "From the beginning, critics have assailed the mass and height of the proposed towers and their impact on the historic neighborhood, while the hospital’s supporters underscored the need to upgrade St. Vincent’s," the New York Times observed.

After much controversy and some modifications, the Landmark's Preservation Commission endorsed the plan, but it still needs approval from the City Council.

No Easy Answers

Bloomberg's absence from the discussions involving St. Vincent's future has disappointed community groups and unions (3,500 workers would lose their jobs). Stringer, along with Comptroller John Liu and Public Advocate Bill de Blasio -- all of whom are seen as likely mayoral candidates in 2013 -- won applause at the 32BJ meeting by pointing the finger at City Hall, accusing it of inaction.

"I'm tired of people telling me every time there's a recession or a budget cut that the most vulnerable will have to pay this price," Stringer shouted.

De Blasio said the city and state should "help us put together the building blocks to save this hospital. Because if you don’t, we’ll look back for decades and say, 'How did this happen on our watch?'"

With the crowd on their side, the officials pleaded for the city to do something.

What? No one knows, and if three mayoral hopefuls cannot offer an alternative to the mayor’s silence, Bloomberg probably cannot do much either. He has already proposed cuts in city services, so a city bailout at this point seems unlikely at best. The reality is that the closing of two hospitals in Queens and the fate of St. Vincent's are not isolated incidents but part of a system failure. All the city’s private hospitals could be threatened by the American notion that health care must generate revenue. That is something a Community Board chair or even a mayor who has made public health one of his top priorities cannot change.

Ari Paul is a reporter for The Chief-Leader, a weekly newspaper covering city government and the civil service, and a correspondent for Free Speech Radio News.

Food Deserts Could Bloom if City Hall Helps


Photo (cc) h-bomb

City health officials have now rolled out a voluntary program to reduce the salt in foods. This follows the ban on transfats, the requirement that many menus include calorie postings and the removal of junk food and soda from schools. All of these efforts are geared to steering consumers toward healthier choices. But questions remain about how much effect these measures can have on public health problems like obesity and diabetes that are related to the food that people eat.

For example, though preliminary surveys show some people make healthier choices based on calorie postings the findings are inconclusive, and an October 2009 study published in the journal Health Affairs found many fast food restaurant and frozen foods processors underestimate in their posted calories counts. Unhealthy choices -- usually foods that are sweet, salty and relatively cheap – are pervasive, especially in wide swaths of the city known as "food deserts," where fast food prevails, while access to fresh fruits and vegetables is limited. These areas have the highest levels of obesity, diabetes and other food-related diseases, and they tend to be low-income and minority neighborhoods.

To address this, many cities are moving aggressively to shape broad policies on food systems. They are using land use regulations to restrict junk food outlets, and to promote urban agriculture and community gardening. Since access to healthy food varies greatly by neighborhood, many cities are working with the most affected communities on plans and strategies for change. New York City is not there yet. So far, it has not yet expanded its focus to go beyond consumer choice and include access.

However, Mayor Michael Bloomberg has hired a food policy czar and formed a Food Policy Task Force. And City Council Speaker Christine Quinn has said she will roll out a policy agenda for food this spring that will address the question of access in a more comprehensive way. The question now is how far these efforts will take the city toward a more holistic food policy.

From Choice to Access

City food policy has yet to focus on the supply side of the equation -- improving access to healthier foods, especially in the food deserts but also in areas where good choices are available but not affordable.

This theme emerged from the recent New York City Food and Climate Summit, sponsored by Manhattan Borough President Scott Stringer and an array of non-profit healthy food groups. The conclave, which drew hundreds of people from throughout the city, followed an earlier Stringer report on food policy and his 10-point NYC Food Charter: 10 Principles for a Sustainable Food System.

The city already has some of the building blocks in place to expand the supply of healthy foods. The Council on the Environment sponsors 51 green markets, but they tend to be located in areas that already have good access to fresh food. In addition, many are open only once a week, most are seasonal and not all accept food stamps, which 1.1 million New Yorkers rely on to buy food.

The city's http://www.greenthumbnyc.org/Green Thumb program supports over 600 community gardens throughout the city, and many of them supply produce to gardeners. The city’s health department launched healthy bodega and green carts initiatives in neighborhoods where access to healthy foods is particularly limited, but these are limited in scale and have produced mixed results. And the city’s botanic gardens help train people to do their own composting, which can create soil for local gardens.

So far, however, city has not connected the dots to both increase the supply of healthy food and focus on food deserts. In the policy arena, food was noticeably absent from Mayor Michael Bloomberg’s long-term sustainability plan, PlaNYC2030, released on Earth Day 2007.

Meanwhile, the city’s ongoing development efforts have undermined access to better food. For example, the city has been shutting down the Depression-era city markets that were mostly located in working class neighborhoods and could have filled the gap in the food supply. For example, the Bronx Terminal Market was recently converted to a shopping mall and the city has not been able to make places like La Marqueta in East Harlem or the Essex Market on the Lower East Side into major centers for low-cost healthy food let alone multiply that model throughout the city.

While many European cities have preserved their neighborhood public markets, New York has let them slide into disuse and instead encourages large supermarket chains. One of the most dramatic recent examples of the city’s developer-driven policies is the ill-fated city proposal to turn the Kingsbridge Armory in the Bronx into a suburban-style shopping mall with a supermarket that would have driven out of business many well-established local markets.

Planning for Supermarkets

On the surface, it might appear that the city is moving in the right direction with its recent initiative offering tax and zoning incentives to supermarkets that locate in food deserts and older manufacturing areas. But this effort may do more to help supermarket giants find cheap land than it does to improve access to healthy food, as I have previously suggested.

The problems with this initiative are emblematic of the upside-down land use policy regarding food access. The new initiative can pave the way for giant retailers to move into low-income areas that are in transition to upper income communities, helping to push out the very people that are most in need of access, and thus not solving the problem of access. The 100 rezonings completed by the administration, fueled by the real estate bubble, helped pave the way for these changes.

The city’s supermarket program can also push out smaller local retailers, destroying the bodegas instead of helping them to offer healthy food and to become examples of healthy local entrepreneurship. And the zoning changes have made it easier for supermarkets to move into industrial zones, pushing out active industries because they escalate rent levels and cause traffic problems. The supermarkets are allowed to have ample parking, encouraging more driving and energy use at a time the city claims it wants to reduce traffic.

While the chain supermarkets do tend to carry fresh produce, there is nothing in the law that will prevent them the stores from stocking almost all of their shelves with industrially processed food with lots of sugar, salt and other mysterious ingredients. The program offers no incentives or subsidies for green markets, community gardens, consumer cooperatives or other media for healthy food. And it does nothing to expand the production of food in the city.

Urban Agriculture or Asphalt and Concrete?

At first sight, the idea of growing food in New York City might seem absurd. The island of Manhattan is densely populated. Much of the soil throughout the city is contaminated. And even though there were working farms in all five boroughs only a century ago, few New Yorkers have practiced farming.

Yet urban farming occurs throughout the world in cities as densely populated as New York, and it is growing in places where governments help out. According to City Farmer, 40 percent of the population in Vancouver, Canada, a city of 1.6 million, grow food. Vancouver also has 1,000 community gardens and a food policy that encourages the production and distribution of local food, which also reduces transportation and energy costs.

New York City has 52,000 acres of backyard space in New York City that could together provide vegetables for 700,000 people, New School Professor Nevin Cohen, a leading expert on urban agriculture, said at the Food and Climate Summit. There are no city programs to help cultivate them or to systematically promote community efforts.

Just Food, a local non-profit, helps create Community-Supported Agriculture groups that buy directly from local food producers in the region. The city’s zoning regulations are fairly open, permitting agriculture in most residential districts.

While proposals for vertical farming on Manhattan-sized skyscrapers may be literally "pie-in-the-sky," no one in government seems to be looking at the more possible alternatives of farming in the outer boroughs, where some 30 percent of land is public right-of-way, much of it unused or underutilized, and much of it in food deserts. Throughout the city, many parks, schools and other community facilities could host urban farms and composting operations, train a new generation of urban farmers, make healthy food more accessible, and expand the choices for the majority of the population.

In urban Milwaukee, Will Allen created an urban farm that does all of these things and has become a national model. We need to learn from these experiences and then do it here on a large enough scale to make a difference.

This article originally cited the number of neighborhoods where the Green Carts and Healthy Bodega programs exist. That information has now been corrected.

Tom Angotti is Professor of Urban Affairs and Planning at Hunter College, City University of NY, editor of Progressive Planning Magazine, and a member of the Task Force on Community-based Planning.



Print Friendly and PDF

Editor's Choice


Gotham Gazette: New York Voters Approve $4.2 Billion Environmental Bond Act
New York Voters Approve $4.2 Billion Environmental Bond Act
Gotham Gazette: 
New York City Voters Approve Racial Justice Ballot Measures
New York City Voters Approve Racial Justice Ballot Measures
Gotham Gazette: 
Housing Development in New York City Slows to a Crawl as Officials Debate Tax Incentives
Housing Development in New York City Slows to a Crawl as Officials Debate Tax Incentives
Gotham Gazette: 
City Council Examines Low Voter Turnout, Moving Local Elections to Even Years City Council Examines Low Voter Turnout, Moving Local Elections to Even Years