Wednesday, April 9, 2008

Roosevelt Island's Proposed 2008/2009 Fiscal Year Budget

Image from RIOC

One of the items on the Agenda for the April 10 RIOC Board Meeting is approval of RIOC's proposed budget for the 2008-2009 fiscal year. Below is a Draft of the proposed RIOC 2008-2009 Fiscal Year budget.

Roosevelt Island Operating Corporation
Statement of Financial Activities- All Funds
Fiscal Year 2008-2009 Budget
Proposed Budget FY 08-09

Residential Fees Revenue $2,152,417
Ground Rent 7,707,472
Commercial Rent 1,542,195
Tramway Revenue 3,027,671
Public Safety Reimbursement 1,444,279
Transport / Parking Revenue 2,646,916
Interest Income 1,222,674
Other Revenue 611,869

Total Revenue 20,355,493

Personnel Services (PS) :
Salaries 6,311,133
Temporary Employees 235,000
Employee Benefits 2,412,036
Compensated Absences Exp -
Total Personnel Services (PS) 8,958,169

Other Than Personnel Services (OTPS) :
Insurance 1,432,409
Professional Services 1,164,000
Tram Management Fees 2,420,000
Motorgate Management Fees 686,003
Legal Services 446,700
Telecommunications 92,300
Repairs & Maintenance 581,060
Vehicles Maintenance 615,500
Equipment Purchases/ Lease 257,900
Supplies/ Services 1,480,301
Depreciation 2,630,561
Other Expenses 837,661
Total Other Than Personnel Services (OTPS) 12,644,395

Total Expenses 21,602,564

Net Surplus (Deficit) ($1,247,071)

Note: Does not include either Grants ($15,000,000 + $4,500,000) or Capital Improvements ($37,358,059)
Here is RIOC's approved 2007/2008 fiscal year budget. Among the differences between the two budgets are:
  1. the approximately $16 million Residential Fee Revenue line item for 2007/08 reduced to approximately $2.1 million for 2008/2009,
  2. approximately $9.05 million Ground Rent line item for 2007/08 reduced to approximately $7.7 million for 2008/2009,
  3. salaries are increased from approximately $5.3 million in 2007/2008 to $6.3 million in 2008/2009,
  4. a $14 million 2007/2008 expense line item for Island Improvements is not a line item at all in the 2008/2009 budget unless that may now be included in the Grants ($15,000,000 + $4,500,000) or Capital Improvements designation ($37,358,059) and
  5. approximately $2.85 million line item Tramway Revenue for 2007/2008 increased to approximately $3 million in 2008/2009.
There was a time when New York State pledged to subsidize any Roosevelt Island deficits. That ended over ten years ago and Roosevelt Island has had to be self sufficient ever since. Here's a brief history of the Roosevelt Island budget. From 1996 NY Times:
July 13 was a turning point for Roosevelt Island. That was the day the State Legislature, under the prodding of Gov. George E. Pataki, halved the state's contribution to the island's operating budget and, in Albany's argot, "zeroed out" its capital budget.

...To the Pataki administration, the cutback is a form of tough love. "This action will further transition Roosevelt Island to a more self-sufficient state," said John Signor, a spokesman for the Governor's budget office.

The budget history dates to 1971, when the state's Urban Development Corporation, now the Empire State Development Corporation, pledged to develop the island -- a former prison and workhouse known as Welfare Island -- into a mixed-income, multiracial community of 20,000 residents. (emphasis added)

But today, Roosevelt Island has only 8,200 residents -- far below the self-sustaining level -- in part because of the state's unwillingness to spend millions for full development. For two decades, the state's allocations have functioned as a subsidy to make up the difference between what the Roosevelt Island Operating Corporation collects in rent and other revenue, which last year totaled $7.7 million, and what it costs to manage the island. The state provides all the long-term capital construction budget.
The January 31, 1997 Main Street WIRE (PDF File) reports on the Pataki administration's decision to renege on NY State's commitment to subsidize Roosevelt Island until the Island became self-sufficient with 20,000 residents. Roosevelt Island's current population is approximately 12,000.
Roosevelt Island is owned by the City of New York, but is leased to New York State and operated by RIOC, a public benefit corporation. The original State plan for the Island called for it to be self-sufficient - require no state subsidies - when the number of residents reached 20,000. That number is currently just over 8,000.

Last fiscal year, the state’s contribution to the capital improvement and maintenance of Roosevelt Island was over $5 million. For the current year, that was reduced to zero. The operating subsidy was reduced from $1.5 million to $625,000.

...Commenting on the Governor’s proposed budget, Grannis said:
“The most irresponsible thing the Governor has done is eliminate the capital budget... It’s made it impossible for RIOC to carry on with an orderly capital construction process to deal with the Island’s needs the garage, the seawall, and so on. And we have plenty of history to show that if you don’t take care of things they fall apart.” Grannis cited the New York subway as an example of a system that suffered when preventive maintenance was deferred over long periods.
Here is the 2007 Roosevelt Island Operating Corp. Financial Statement, the Roosevelt Island General Development Plan (as amended 2003) and the 1974 Master Lease for Roosevelt Island.


Anonymous said...

Thank you for publishing the budget information and pointing out the spending increases. "Apples to Apples," the Operating Budget in increasing by over 17%. The $1,000,000 increase in staffing is outrageous! What is going on?