Life Under A Public Benefit Corporation - The Cold Hard Facts For Roosevelt Island

Image from RIOC

I have urged in this blog that certain activities which are free in other New York City neighborhoods, such as viewing the Fourth of July fireworks from a public venue or playing in a city park, should also be free for those same Roosevelt Island activities in areas under the control of RIOC.

RIOC President Steve Shane addresses some of these issues below from his perspective as the President of a New York State benefit corporation.

I think the simple answer to your question about why not free
everything is that RIOC is neither the City of New York nor The State of
New York, but a public benefit corporation, separately funded by
on-island activities whose undertakings are, by and large, restricted to
the benefit of Island residents. I do not think it would be appropriate
to stage an event and spend RIOC's money on an event which is probably
80% attended by off Islanders. Sure, we could do away with the "event"
aspect, but would that be better? We do incur significant cost when a
crowd gathers on RI's shores.

In trying to maintain financial stability and being respectful of the
public fisc, the balancing of revenue production with cost in roughly
equivalent proportion is a necessary act. We do not have the power to
tax or issue debt, so our operating budget has to be roughly matched to
our operating income. Discretionary activity (fireworks watching for
instance), were it not self supporting, would be an activity subject to
being dispensed with at an early level of budget shrinkage. We do not
have a tax base of hotels, restaurants, shopping, etc. to protect by
attracting tourists, nor any significant revenue gains (cf sales tax
receipts) enjoyed by the City from staging public events (although you
will note that Macy's hosts and foots the bill for the fireworks. NYC
provides cops and cleanup, I think, although there may be some
backcharge to Macy's as there is for some sponsored events in the
parks). What are essential functions? We have established a Public
Purpose Fund to support the activities outside of ordinary government
function, as now divied up by the RIRA group. We do support other
Islander activities (movies, concerts, Fall for the Arts, Christmas Tree
lighting, halloween and little league parades, etc.).

Deeper philosophical discussion about the appropriate function of a
public benefit corporation as contradistinguished from a municipality
can always be had.

Mr. Shane presents the problems associated with Roosevelt Island's status under the control of RIOC and the State of New York well. My point has been that Roosevelt Islanders should receive the same benefit of municipal functions that every other resident of New York City does. We pay the same NYC and State taxes don't we? As residents living under the authority of a New York State Public Benefit Corporation apparently we don't.

Also, I have never advocated "why not free everything". We all understand the necessity of balancing revenue and public services. For example, one of Roosevelt Island's 4 ball fields could remain available for use by residents at all times instead of every single one being rented out to corporate groups or other organizations such as Zog. That is a fair balance. And maybe the "Event" status of Roosevelt Island's July 4 Fireworks should be re-considered so that it is open to more residents seeing the spectacular show though that does open up a whole host of new issues and problems.

Here is a 2005 NY State Assembly report by the Committee on Corporations, Authorities, and Commissions titled:

An Inquiry into the Management of Roosevelt Island by the Roosevelt Island Operating Corporation

that provides some historical background on RIOC as a Public Benefit Corporation. Remember though that this report details events occurring under prior administrations and does not reflect at all upon the current one. For the record, I think that RIOC has improved greatly during Mr. Shane's tenure as President.