RIRA Common Council Meeting Tomorrow Night at 8 PM - RIRA President Asks For More Long Term Planning, RIOC President Says 5 Years is More Reasonable

Image is of a RIRA Common Council Meeting

The Roosevelt Island Residents Association (RIRA) Common Council will be meeting on Wednesday, February 4, 8PM at the Good Shepherd Community Center (543 Main Street). Prior to the meeting, time is alloted for any resident to speak before the Council and air their views or issues of concern to Roosevelt Islanders.

RIRA President Frank Farance sends the following message regarding the RIOC budget process which was the subject of this RIRA Town Hall Meeting and the 1/15 RIOC Board of Directors meeting (Web Cast available here). From Mr. Farance:

On January 14 RIRA held a Town Hall meeting to discuss the proposed RIOC budget. RIOC CEO Stephen Shane and RIOC CFO Steven Chironis made presentations and answered questions.

Residents asked about budget estimates 10, 15, and 20 years into the future, but learned that RIOC was only willing to prepare 5-year budget estimates, as confirmed by Shane and Chironis. Because of RIOC's significant recent and present spending, residents expressed concern about the long-term financial stability of RIOC. In response to residents' What If questions concerning future RIOC budget shortfalls, Shane said the ground rents might be raised and/or services significantly curtailed.

A long-term budget outlook and transparency is essential to the financial health of Roosevelt Island. State Assembly Member Micah Kellner has drafted legislation to mandate RIOC's financial transparency.

RIRA has formed a RIOC Budget Analysis subcommittee under its Planning Committee, chaired by Matthew Katz, to provide analysis and insight to Island residents and RIOC Board members. The RIOC Budget Analysis subcommittee expects to make a report at the March 4, 2009 RIRA meeting for endorsement and forwarding to RIOC in time for its March 26, 2009 RIOC Board Meeting. The RIOC Budget Analysis subcommittee includes Frank Farance (RIRA President), Matthew Katz (a former RIRA President), Steve Marcus (a former RIRA President), Margie Smith (Chair of Government Relations Committee), and Russell Fields (RIRA Treasurer).

RIOC President Steve Shane responds:

In the realm of "no good deed shall go unpunished", I believe we have extended ourselves in the Budget process for '09/10 to present it early to the Board and the Island residents early in draft stage to make meaningful a comment period before final adoption. We have posted the draft budget on our website as well as making the presentation at both the January Board meeting and a RIRA sponsored community meeting the night before. We have carefully separated the Operating Budget from the Capital Budget.

The statement that was made about more than 5 year projections was that the level of uncertainty rises to such an extent that it is virtually worthless to expend the effort. I did indicate that as the provider of essential services, RIOC would have to do whatever it takes to serve the public. No more obvious example of just such an effort is available than the current gyrations of our City, State and Federal governments to meet the present economic condition.

Update - 2/5: RIRA President Frank Farance replies:

Certainly, no one has any interest in punishing your Good Deeds.

However, framing your sharing of documents as merely a Good Deed is disingenuous within the context of the current legislative process that will mandate you do so.

Furthermore, no right-minded executive manager would accept your premise: the plan might change in the future, thus we cannot plan. Certainly, plans change but that does not stop us from planning.

By limiting your perspective to a 5-year horizon, many Island residents believe there is a disaster just beyond the horizon. According to your proposed budget (09-10 proposed budget, PDF page 15), RIOC will spend $41 million this year in capital improvements and another $31 million over the next 4 years for a total of $72 million. Your cash balance in FY 13-14 will be $81 million (PDF page 5), but it might be off by $40 million if Southtown 7-9 aren't built.

Putting this into the long term perspective, if RIOC has $41 million in FY13-14 to spend over 54 years (excludes Southtown 7-9 payments), RIOC should be budgeting about $2.4 million a year on capital improvements, not $41 million this year and not $8 million per year thereafter, as presently budgeted by RIOC.

It appears that RIOC is spending the Roosevelt Island's Nest Egg and will leave us broke soon. Transparency and sunshine will reveal the true nature and extent of this problem, which is why RIRA is interested in providing its own independent analysis.

I cannot understand why you are unsupportive of financial transparency, especially considering the severe negative impact this will have on Roosevelt Island, the quality of life here, and the financial attractiveness for new/current owners and renters alike.