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City Council Pushes Its Priorities at First Hearing on De Blasio's Executive Budget


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Council Member Dromm and Speaker Johnson (photo: John McCarten/City Council)


The New York City Council and budget officials from Mayor Bill de Blasio’s administration engaged in a familiar push-and-pull on Monday, at the first hearing on the $92.5 billion executive budget proposal for the 2020 fiscal year that begins July 1.

The Council, disappointed that many of its priorities were not included in the latest spending plan presented by the mayor, pushed for more funding and pointed to hundreds of millions in revenue available to the city, but officials from the Office of Management and Budget urged restraint as they emphasized the dangers of a slowing economy and insisted the Council’s revenue estimate was far rosier than their own.

De Blasio presented his executive budget last month with $300 million more in proposed spending than his preliminary plan released in February. The $92.5 billion proposal would mark yet another record high in city spending, up nearly $3.4 billion from the current fiscal year and about $20 billion from the budget that de Blasio inherited from former Mayor Michael Bloomberg.

The budget included, for the first time under de Blasio, a PEG (Program to Eliminate the Gap) that identified $629 million in savings in agency spending.

But the executive budget excludes funding for most of the items that the City Council had listed in its response, issued last month, to de Blasio’s preliminary budget plan, and Council members made their frustration clear at Monday’s hearing.

The Council found the executive budget “incredibly insulting,” said Council Speaker Corey Johnson, in his opening remarks. The Council had called for pay parity and wage equity for several categories of city-funded workers (including nonprofit human service providers, assistant district attorneys, indigent defense attorneys, and daycare workers), investments in a variety of social service and local programs, $250 million more in reserves, more transparency across the budget, and 100 percent “Fair Student Funding” to aid local schools.

Johnson noted that though most of the Council’s priorities were ignored, “The Administration saw fit to implement our ideas from the response for how to save money, and then took those savings to fund even more of the mayor’s priorities.”

Even requests that would have cost nothing -- for instance, more transparency for multi-agency programs such as ThriveNYC, and spending on the new ferry system -- were rejected, Johnson said.

He did, however, point to a bright spot in the negotiations with the administration. The Council had called for continuing $155 million in “one-shot” funding that is in the current fiscal year budget for various purposes -- adult literacy programs, summer youth employment, post-arrest diversion programs, social workers for homeless students, and more. After the Council’s push, the city added $77 million to restore some of those programs, but Johnson indicated that negotiations would be tough regardless.

“Typically, we try to get this budget adopted by the first week of June. I doubt that’s possible and I’m willing to wait until just before July 1,” Johnson said, referring to the start of the next fiscal year and the deadline for approving the budget. “This needs to be done the right way,” he added. Over the next few weeks, the Council will continue to examine the budget at agency-specific hearings where administration officials will testify, while public rallies are held and op-eds are written advocating for certain expenditures and private negotiations continue among stakeholders.

A central dispute of the hearing was over the amount of revenue available to the city from personal income tax collections, which came in higher than earlier projections. Through April, the city received $474 million more than initially estimated, which the Council repeatedly said should be put to use to fund their demands. But OMB Director Melanie Hartzog repeatedly pointed out that other tax revenue came in lower, and that actual revenues only increased by about $200 million.

“We continue to face uncertainty related to economic conditions at home and abroad,” Hartzog said in her opening remarks, pointing to a weak housing market and slowing consumption. She emphasized that much of the new spending in the budget was required because of $300 million in unfunded mandates and cost shifts from the state, and about $150 million in additional needs that were not factored in to the preliminary budget.

Council Member Daniel Dromm, chair of the finance committee, didn’t hold back in criticizing the executive budget’s approach towards the Council, pointing out that the Council had urged the administration for years to rein in costs, increase reserves, and find agency efficiencies. He noted that the PEG made cuts in areas where the Council wanted more spending, including cultural institutions, youth services, and senior centers.

“The PEG was couched in the context of a potentially worsening economic position for the city and the need for us all to tighten our belts in anticipation,” he added. “So what is truly baffling is that in light of this sentiment, the administration has chosen not to add even a single dollar towards our reserves.” That increases the likelihood, he said, that the administration will have to slash services when an economic downturn hits in earnest.

“It was a challenging budget,” Hartzog said, a position she had to repeatedly rely on as Council members pressed her on a slew of specific priorities, whether funding for social workers and guidance counsellors in schools, or support services for youth in the foster care system. She did however promise to work with the Council in finding more savings and to address their individual issues.

And the issues were many. Council Member Jimmy Van Bramer, chair of the cultural affairs committee, said $6 million in proposed cuts to cultural institutions were “disrespectful to this body.” Hartzog said they were “relatively modest,” noting that the overall budget for those institutions is about $139 million and that the administration wanted to avoid cuts in library service. 

Council Member Mark Treyger, chair of the education committee, lambasted the lack of funding for pay parity for universal pre-kindergarten teachers, Title IX coordinators, for busing for foster care students, for new school counsellors, to baseline Teacher’s Choice funding, and more education-related programs. “How can you say this is a schools-not-jails budget?,” he wondered, with apparent reference to the fact that the mayor’s updated capital budget plan, $117 billion over 10 years, includes billions in funding for jail construction as the city moves off of Rikers Island.

Council Member Helen Rosenthal noted that nonprofit service providers need at least $250 million more from the city or they risk fiscal insolvency. Hartzog, in response, noted that the de Blasio administration previously gave nonprofit providers cost-of-living-raises for the first time in years and that the administration is negotiating issues with the nonprofit sector. 

Council Member Barry Grodenchik, chair of the parks committee, said the parks and recreation budget “continues to go sideways,” and called for modest and targeted investments in parks infrastructure.

Council Members Carlina Rivera and Carlos Menchaca, co-chairs of the Council’s census task force, called for more funding for 2020 Census outreach, insisting that the $26 million over two years that the administration is funding is inadequate compared to the Council’s $40 million request. Hartzog said the amount was sufficient -- $8 million will go to community-based organizations, $10 million to a media outreach campaign and the rest to staffing needs -- particularly in tandem with $20 million in overall state funding, but said the administration was open to adding more funding if needed down the line.

Hartzog told Council Member Mark Levine that funding for so-called safe injection sites wasn’t included because the city was waiting for approval from the state health department.

The OMB director did agree to providing a measure of more transparency in the budget, and said her office had identified 34 new units of appropriation at the Council’s urging.

Hartzog similarly said the administration had made new “Capital Detail Data Reports” available online, in response to a request from Council Member Vanessa Gibson, who chairs the subcommittee on the capital budget. Gibson and others have critiqued the city’s ten-year capital planning process, insisting that it frontloads investments in early years and underfunds them in the second half of the plan. The ten-year capital plan reached $116.9 billion in the executive budget, of which 78% is planned for the first five years, Gibson noted.

But Hartzog said the city was working to distribute capital spending more evenly, with $3.9 billion redistributed from fiscal years 2019-2021 into later years. The administration has also proposed rescinding $2.3 billion pledged in previous capital budgets, she said.

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by Samar Khurshid, senior reporter, Gotham Gazette
     

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Payphone-Replacing LinkNYC Kiosks Not Generating Projected Revenue


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Mayor de Blasio makes the first LinkNYC call (photo: Appleton/Mayor's Office)


During a February 2016 press conference, Mayor Bill de Blasio made the first phone call on New York City’s first LinkNYC kiosk, stationed at the corner of 16th Street and 3rd Avenue. “It will be the biggest and fastest network in the world, and completely free of charge. And one thing I know about my fellow New Yorkers, they like things that are free of charge," said de Blasio.

Not only that, but New Yorkers were promised money for the city’s general fund. That money would come in the form of revenue based on the agreement with proprietors who would refurbish the city’s obsolete payphones and sell advertising. While the city is indeed set to see the promised money, the financials of the LinkNYC equation have been choppier than the free phone calls or street-side wifi.

The kiosks, which many residents and visitors of the city recognize as the nearly 10-feet-tall rectangular obelisks displaying 55-inch screens of digital advertising that dot the sidewalks, are seen by some as a modern twist on the streetscape to, in part, bridge the digital divide by offering free wireless internet.

There are now roughly 1,800 LinkNYC kiosks installed across the city, according to Samir Saini, the city’s commissioner for the Department of Information Technology and Telecommunications (DoITT), who discussed Link at a March City Council budget hearing and mentioned a guaranteed $27.5 million in revenue for 2019.

The kiosks do offer fast and free wifi, as well as the ability to make free domestic phone calls, charge USB devices, and make 911 calls, with special red buttons to summon emergency services. (Tablet internet browsing was also an original feature of the kiosks. After it was discovered people were watching pornography on them, however, that feature was quickly disabled.)

While some of the civic technology promises of Link have been realized, what is less clear is the revenue side of things. It’s all part of the deal inked between New York City government and CityBridge, a so-called consortium of Intersection, Qualcomm, and CIVIQ Smartscapes. (Intersection was launched by Sidewalk Labs, which is owned by Google.)

According to the franchise agreement, signed in 2014, a total of 7,500 LinkNYC kiosks were to be installed across the five boroughs by 2022. In terms of the financials, a November 2014 press release from de Blasio’s office promised $500 million in guaranteed revenue in the first 12 years (2014-2026) of the program. Not mentioned by that press release, the franchise agreement stipulated $750 million in guaranteed revenue by 2029.

But in the first years of the program, revenue generated by the Link kiosk advertising, as outlined in DoITT budget documents and a department spokesperson, show the much-heralded program is not meeting its targets. From 2015 to present, LinkNYC has fallen short of its revenue projections by more than $21 million, and is projected to miss by an additional $13 million for fiscal years 2019 and 2020. It adds up to $34 million under what is guaranteed to the city from CityBridge during that five-year period, calling into question the efficacy of Link advertising.

The basic financing in the deal is that CityBridge gets access to 7,500 payphone sites and must pay for their refurbishment into the Link kiosks and provide certain public services. In exchange, CityBridge gets to keep any advertising revenue beyond what the city is guaranteed in the contract. That revenue would come from contracting with a third party to build out the Links, as well as allowing Intersection to run advertising campaigns on the kiosks’ displays.

The revenue guarantee means CityBridge must pay a specified amount to New York City every year, even if Link advertising campaigns don’t generate that minimum number.

As it sells Link advertising, Intersection is working with BerlinRosen, a local public relations firm (which also ran major aspects of de Blasio’s two successful mayoral races) that has trumpeted the Link expansion.

The guaranteed city revenue can be from advertising revenue and non-advertising revenue, including “the fair market value of any non-monetary consideration (in kind) in the form of materials, services or other benefits, tangible or intangible, or in the nature of barter the Franchisee may receive,” per the franchise agreement. That same agreement stipulates the minimum annual revenue CityBridge has promised the city each year through 2029:

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Actual revenue brought in by the Link kiosks from 2015 through 2018 shows that the kiosks initially failed to sell enough advertising to hit the CityBridge guarantees to the city, meaning the consortium had to make up the difference (there were no Links up and running in 2015). CityBridge has started to hit those targets, if only barely.

The chart below shows those past figures as well as the revenue that DoITT is projecting for the LinkNYC kiosks for 2019 and 2020, next to the minimum guaranteed city revenue each year. According to those city projections, the LinkNYC kiosks will not hit the minimum guarantees that CityBridge must nonetheless pay the city.

Revenue has fallen short over the first four years and is predicted to continue to fall short of the minimum guaranteed city revenue for every year of LinkNYC’s first six years, save 2017, when the actual revenue of $26 million just passed the promised $25 million that had to be paid to the city.

For 2019, Link revenue is expected to fall short of the minimum guaranteed to the city by 23 percent. And 2020 is projected to fall short by a little over 7 percent. The total shortfall in advertising revenue for both years, if the projected revenues are correct, just for CityBridge to meet what it owes the city, would be another $13 million. It doesn’t hurt New York City financially, as CityBridge is obligated to pay the minimum annual guaranteed revenue, but it raises questions about the long-term viability of Link advertising revenue that could boost the city.

Potentially cutting into LinkNYC’s advertising revenue are LinkLocal campaigns, which are, according to a Link spokesperson, “free advertisements for small businesses to promote their stores and nonprofits to promote free local events. Additionally, LinkNYC has partnered with more than 40 nonprofits to help raise awareness for their campaigns.” The spokesperson declined to share any examples or case studies of previous LinkNYC advertising campaigns.

The spokesperson added that over 40 nonprofits partnered with LinkLocal for advertising, with nearly 600 total free campaigns being run through the program.

Intersection first declined to share with Gotham Gazette its advertising rate card, which is typically used to offer potential clients exemplars and costs, and then denied the existence of the rate card upon further questions. Intersection also declined to disclose how many paid campaigns have been run through the kiosks, claiming the number of paid campaigns is not part of their internal data tracking.

Other issues have plagued LinkNYC. In late April, the NYPD arrested a local man for smashing 42 LinkNYC displays. His acts of vandalism were captured by the kiosks’ on-board surveillance cameras, which most New Yorkers were likely unaware of prior to the smashing spree and related news coverage. This led to alarm bells over just how much the Links are watching people, and how much of their data is being collected in the name of providing free wifi.

LinkNYC has responded to these issues, responding to Twitter users that all video footage is deleted after seven days, and that it only shares the footage in response to “valid subpoenas.” As for data, the LinkNYC privacy policy states it collects quite a bit of it, including your IP address and URL requests through the wifi network.

In 2016, the year the program launched, local reports detailed how some people set up living-room-style arrangements around a single Link kiosk, bringing lawn furniture or milk crates to camp out within close range of the units. Other concerns have been raised over the kiosks’ free domestic phone calls being used to arrange drug deals and other illicit and illegal activities.

Despite some issues and concerns, usage of the Links has steadily increased since they hit the streets in 2016. According to the city’s Open Data Portal, over 10,000 terabytes of data (equitable to over 2 trillion songs) has been used by New Yorkers in over 1.5 billion total Link sessions. Perhaps one day Link advertising will pay for all that data usage.

Advocates Give De Blasio and Cuomo Failing Grades on Addressing Homelessness


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(photo: John McCarten/City Council)


Mayor Bill de Blasio was defensive on Thursday when asked about a report, released earlier this week by the Coalition for the Homeless, that criticized him for not doing enough to address the city’s homelessness crisis.

While he has acknowledged his administration’s struggles addressing the crisis, the mayor has devoted significant additional resources to fighting homelessness and though the number of people in shelter has increased under his watch, he has made some progress in breaking the trajectory of the growth, which has been particularly acute over the past ten years.

According to the Coalition for the Homeless’ new report, there were 37,800 homeless people in city shelters in January of 2011; 51,600 at the start of 2014, when de Blasio took office; and 61,700 at the start of 2018, when de Blasio’s second term began. According to the de Blasio administration, as of Tuesday of this week, there were 58,700 people in city homeless shelters.

Experts and stakeholders like those at the Coalition are calling for more from the mayor, but de Blasio said Thursday that there should be focus on how much his administration has done to move people -- 100,000 of them, he said -- out of shelter and into housing. The administration has also enhanced efforts, with some success, to reduce evictions. But, there is no plan to drastically reduce the homeless population.

On Tuesday morning, the Coalition, led by policy director Giselle Routhier, hosted a press conference at its Manhattan headquarters to release its detailed “State of the Homeless 2019” report, evaluating both New York City and State, particularly the mayor and Governor Andrew Cuomo on efforts to address homelessness.

“The report finds that policy failures by the City and State have exacerbated the decades-long homelessness crisis stemming from New York’s severe lack of affordable housing,” an announcement from Coalition for the Homeless reads. “In January 2019, an all-time record 63,839 men, women, and children slept in New York City shelters.” (That number has dropped all the way to 58,700 so quickly because the administration bought several buildings from landlords providing shelter that then became categorized as affordable housing.)

Homelessness in the city is still near record highs, and the “report card” from the Coalition that is part of the larger State of the Homeless “gives Mayor de Blasio a failing grade on his efforts to create sufficient housing for homeless New Yorkers and Governor Cuomo multiple failing grades on housing vouchers, homelessness prevention, and systematic cost-shifting practices that unduly burden the City.”

While de Blasio announced a modest goal in 2017 to reduce the city’s homeless population by 2,500 people by 2022, the Coalition projects that if certain policy and program measures are not soon enacted, “the shelter census is on track to increase by 5,000 people by 2022.”

The “House Our Future NY Campaign,” which the Coalition is leading, is calling on Cuomo and the state Legislature for a variety of actions, including a major increase in rent subsidies. Meanwhile, the main change it wants from de Blasio is an increase in the number of apartments set aside for homeless New Yorkers in his “Housing New York 2.0” plan.

“To achieve a meaningful decrease in the shelter census,” the Coalition writes, de Blasio should “build 24,000 new apartments – and preserve at least 6,000 more – for homeless families and individuals,” a total of 30,000 of the 300,000 units in the 12-year housing plan that goes through 2026.

Asked at an unrelated press conference about the report and the central question of dedicating more units in his housing plan toward moving people out of homelessness, de Blasio said on Thursday:

"We’ve been over this a lot of times, I’m happy to go over it again. So, I want to just do a little background. I’ve been working on these issues since 2002 when I became Chairman of the General Welfare Committee in the City Council. I know the Coalition for the Homeless really, really well. I have immense respect for them. I have disagreed with them more than one time, and I disagree with them now. I’m always astounded when we have this conversation that we don’t start with the actual facts on the ground, the things that actually happened. I don’t know what’s going on here. 100,000 people in the last five years went from shelter to affordable housing – 100,000 people. Now, I get that good news is not easy to report and I actually don’t hold it against you guys, I hold it against your editors, bluntly, much more. But the fact is, 100,000 people already got affordable housing – that’s kind of newsy – that’s not theory, that’s not percentages, that’s actual human beings. So, I want to give a lot of credit to Homeless Services for the way they’ve created that, working with all of the rest of the team that works on affordable housing. That already happened and we’re going to continue to do that. But look, I care deeply about fixing the problem at the root cause. For the first time, we’re able to stop homelessness on a really big level because we’re providing lawyers – you know, real serious numbers of lawyers to stop evictions. We did things like the rent freeze for two years. I mean, these are the ways you stop homelessness to begin with, and we think it’s having a big impact. But we have more work to do, but there’s no question in my mind that the shelter population is going down because these initiatives are starting to work, and we’re going to be doing more. You know we’re going to be using eminent domain more and other tools to keep bringing that population down."

According to the Coalition’s report, “The last appreciable reduction in homelessness in New York City took place immediately prior to the Great Recession, and since then the shelter census has doubled.” More recently, in city fiscal year 2018, “an all-time record 133,284 unique individuals spent at least one night” in a city shelter, the report says, “an increase of 61 percent since fiscal year 2002 when the figure was 82,808 – fueled in large part by the increase in the number of homeless single adults.”

The report focused on preventing homelessness, housing people experiencing homelessness, and shelter processes and conditions. While the report finds New York City is taking some redeeming action, it finds the state woefully insufficient.

Homeless Housing and Prevention
New York City was graded with an “F” for its housing production and supply, largely because de Blasio has only designated 15,000 units of affordable housing for homeless households in his plan to build and preserve 300,000 affordable units. Only 6,000 of the 15,000 will be available in the near future, according to the report.

Supportive housing, which provides for social services for certain homeless people struggling with mental illness and/or substance abuse and seeking shelter, was graded a “C” for both the city and the state. Last year, the number of people in supportive housing was at a 14-year low, according to the report, despite the total number of people in homeless shelters being at an all-time high. However, de Blasio and Cuomo have been working to change that, bringing on-line 850 units and 550 units, respectively, by the end of 2018.

The report does indicate the city’s success when it comes to homelessness prevention, and to some degree, with housing vouchers and stability. Evictions have been declining since 2016, in large part to the city’s added resources toward providing lawyers to low-income tenants facing eviction, resulting in the city earning an “A-”.

On the other hand, the state has been letting parolees out directly into shelters without enough planning for their reentry, often keeping them in prison beyond their release date because of a lack of space. “This is entirely the state’s fault for not doing adequate discharge planning,” said Routhier. The state received an “F.”

The state also received an “F” from the Coalition for the Homeless for vouchers and stability, having not provided any meaningful subsidies toward homeless housing, whereas the city got a “B-” for keeping over 8,000 households from being forced into homeless shelters through subsidies.

However, the city often places homeless people in room rentals, which is not always a stable situation because people are often paired with roommates they have never met. “It oftentimes results in returns to shelters,” said Routhier.

Shelter Processes and Conditions
The city’s ability to meet the need for homeless shelters was rated satisfactory with a “C+” as investment from the city to shelter the homeless grew by about $800 million since 2011. The state was given an “F” because its contribution only grew by $71 million. The state’s 2019-2020 budget continues to cut relevant spending.

According to the report, city agencies are not finding as many violations as they used to when it comes to homeless shelter conditions. However, the infrastructure at older shelters is not holding up and routine cleaning and maintenance is often poor. The people in the shelters are also often poorly treated by the staff, the report says. On shelter conditions, both the city and state received a “C+.”

The increasing number of students spending time in homeless shelters (more than 114,000 in 2018, up by almost 50,000 since 2011) missed a lot of days of school -- about 32 days on average last year. That is almost double the 18 days of absence that the state defines as  “chronic absenteeism.” On top of that, less than 50 percent of homeless families were placed near the school of their youngest child. Thus, the Coalition for the Homeless graded the treatment of homeless children and students by the city a “C-.”

The city and state got “Ds” for family intake and eligibility because of how difficult the shelter enrollment process is. More than 44 percent of homeless families with children were only able to gain eligibility after sending in multiple applications. The eligibility rate for families with children is also low at 40 percent, the Coalition says.

Solutions
The House Our Future NY Campaign urges the mayor to build 2,700 new apartments for homeless New Yorkers per year between 2019 and 2026. There is a hope that the city will continue to provide rent subsidies, free of conditions that may drive people back to shelters. There is also an appeal to increase the number of housing placement vouchers for homeless families to rent on the private market.

It also calls for an earlier completion date for the 15,000 city-funded supportive housing units. Construction is the priority. “It is critical to know that we’re heavy on new construction because preservation units are already occupied,” said Routhier.

The report calls for Cuomo to support the Home Stability Support program to provide state subsidies for people who are homeless or at risk of being homeless and increase the pace of production of the state’s 20,000 supportive housing units.

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by Ashad Hajela, Gotham Gazette

Read more by this writer.

Ben Max contributed to this story.



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