Monetization Booed

While an attempt to revive the city’s parking meter monetization plan was roundly rebuffed, one citizen came up with an idea not yet heard of in this budget season.

The action took place at a meeting of the Board of Aldermen’s Finance Committee in Aldermanic Chambers at 6 p.m. Tuesday. There were two items on the agenda: a public hearing on the mayor’s proposed budget for FY2012 and a vote on the so-called parking monetization plan.

Under the plan, the city would hand over 25 years worth of meter revenue — worth an estimated $111 million — to a Mayfield, Ohio investment firm called Gates Capital Partners in return for a quick up-front $50 million to spend over five years. Mayor John DeStefano introduced the concept last budget season, drawing criticism that it was a short-sighted quick-fix that would saddle the city with debt for years to come.

DeStefano announced last week he no longer supports the unpopular plan.

Meanwhile, a small group of pro-administration aldermen, working closely with a company lobbyist, are trying to revive it.

And the administration’s top budget official, according to testimony, behind the scenes convinced an alderwoman to change her mind and favor monetization.

Over the course of four hours Tuesday evening, a series of members of the public and aldermen blasted the plan as immoral and ​“the worst idea since margarine.” One person, Alderman Marcus Paca, voiced support for the plan.

At the end of the hearing, aldermen voted to send the proposal to the full Board of Aldermen with an unfavorable recommendation. That means the plan isn’t dead yet: The full board will discuss the matter either at its special budget meeting on May 23 or on June 6.

Meanwhile, East Rock’s David Cameron got some traction with a new idea to encourage non-profits to make voluntary tax payments on tax-exempt property.

A live blog of the meeting follows below.

Live Blog

6:00 p.m. Chairman Alderman Yusuf I. Shah kicks off the meeting. Seven committee members are sitting around a table, with one more (East Rock’s Matt Smith) in the audience. Smith, a vocal opponent of monetization, encouraged his constituents to attend the meeting and help him kill the bill.

6:04 p.m. Aldermanic President Carl Goldfield walks in. There are six members of the public here to talk about monetization.

Anyone else want to speak? asks Shah.

“I do,” says Cedar Hill resident Rebecca Turcio. She and a few others walk to the front of the room to add their names to a public signup sheet.

6:07 p.m. Aldermen Marcus Paca and Alfreda Edwards have joined the audience.

6:10 p.m. Jim Alexander (at left in photo), who worked in municipal finance from 1977 to 2000, approaches the table.

Alexander: Monetization would be a ​“temporary fix” but bad for the city’s financial health. It would be the tendency of most analysts to look at this as a ​“red flag” for a city’s bonding ratings. It looks like a deal where smart financeers are able to take advantage of less sophisticated people.

6:28 p.m. (Sorry folks, some connectivity problems.)

Fred Robinson, 32 Everit St. is the third to speak up against monetization. ​“Deeply troubling,” morally and fiscally. The idea of taking a $50 million bonanza, and committing future generations to pay it off, is hard to stomach. ​“I find the whole idea fundamentally immoral and fiscally stupid.”

6:32 p.m. Shah: ​“Can you go into immoral?”

Robinson: ​“It’s a form of theft, and I find theft immoral.”

6:33 p.m. Tim Holahan of Westville is up. He sat on the blue ribbon panel that looked at the city budget. Selling long-term assets for one-time revenues is untenable.

Alderwoman Bitsie Clark: If you were in our shoes, how do you see us dealing with continual roadblocks in getting more money?

Holahan: Says he prefers a tax increase rather than monetization.

Shah: Do you think it’s a good policy to fire people and take food off their plates? [Shah is getting fired up here.]

6:39 p.m. Holahan is coming under fire from Shah over how he would balance the budget.

Shah: Don’t you believe that we should leave no stone unturned?

Holahan: ​“I think you should not turn stones that are marked in red ​‘Illegitimate.’”

6:40 p.m. Goldfield joins in. He says he finds it very interesting that Holahan would even consider raising taxes.

Holahan: I’ve never been against raising taxes per se. He’s there to speak against monetization, not to suggest a specific tax hike.

Holahan: Monetization is like going to a ​“pawn shop.” ​“We have to budget responsibly.”

6:44 p.m. [The chambers is filling up now. Alders Blango and Colon are here. The audience seats are filling with budget watchdogs, some high school students, and a group from the New Haven Land Trust.]

6:45 p.m. Rebecca Turcio from Cedar Hill joins the opposition to monetization. She said we’re giving up a lot to have these other people in control of our parking meters.

Shah: That’s not true. We’re in control of our parking meters. There has been a lot of misunderstanding about this matter. That’s why we’re reviewing the matter now.

Turcio: My understanding is we’re getting $50 million for a 25 year deal with this company. That’s signing off a lot of money over the years. To answer Bitsie’s question — what would I do — ​“I would cut spending.” It’s in employees’ hands to figure out how to save money so they can keep their jobs.

[Here the budget watchdogs are echoing Mayor John DeStefano’s argument this year — that city workers should give up pension and health benefits so the city can stay afloat.]

6:49 p.m. Richard Snyder, a 47-year resident of 204 Canner St. New Haven is ​“a great place.” [A smattering of applause from the audience.]

He joins Robinson in calling monetization ​“immoral.” Yes, we are now dealing with obligations of past generations. ​“It’s time to stop passing the buck and kicking the can down the road.”

Snyder: One thing government does well is to maintain its own streets and infrastructure. Monetization would let private ​“vultures” raid that infrastructure. Looks like ​“loan shark borrowing.” If it weren’t beneficial to the company, you wouldn’t have Steve Mednick, a former alderman, hired as its lobbyist.

6:57 Clark: Explain the difference between mortgaging your house and doing this.

Snyder: The difference with this is that we’re getting a $50 million infusion of cash now with an asset that we ourselves could make more productive. Who’s going to pay it back? It’s not us. It’s our kids. By contrast, a mortgage is an obligation that I incur for myself — not kids, unless I die.

7 p.m. Anthony Law, of Canner St. shows up with his two kids. I’m already losing a firetruck in our neighborhood. I don’t want to lose two down the road when we have to pay off the debt to Gates.

Law (pictured) asks the crowd to raise their hands if anyone supports monetization: No hands go up. Anyone against? Lots of hands shoot up, including that of his young child.

7:05 p.m. Another East Rocker, father of three, suggests boosting parking meter fees rather than selling off the city’s future. I really feel that this endeavor is ​“frankly frightening.”

7:06 p.m. Gary Doyens, budget watchdog: ​“I’m here to support monetization … I’m just playing with you.” [He laughs.] Opposes it for the simple reason that ​“debt is our enemy.”

Doyens: If you do this monetization deal, your borrowing will go up by about 7 percent. That will rob the budget of the cash you need for other services that we say we want to protect. Not a good idea to add on debt when we need that cash for something else. ​“It will sink us.” If anything, we need to limit debt.

Clark continues a pattern of asking each speaker what they would do if they were in her shoes.

Doyens (pictured): Cut more from the budget.

Clark: We already did that.

7:10 p.m. Doyens ​“respectfully disagrees.” For example, eliminate the ​“hug a thug” program, his nickname for the Street Outreach Worker program.

Shah covers his face with his hands. ​“Hug a thug?”

Doyens said he’d cut back library services in the neighborhood and after-school programs for kids. He’s getting some skeptical looks from aldermen. He said he lives in Westville, but he hasn’t ever been to that library, because it’s inconvenient. He suggests closing Westville’s library because people in that neighborhood are more able to go downtown, compared to people in the Hill and Fair Haven.

Shah: Next time, don’t say ​“hug a thug.” ​“That hurt my feelings.”

Doyens agrees to say ​“Street Outreach Workers of limited value” next time, instead.

Shah gets up and takes a stretch to cool down while Alderwoman Maureen O’Sullivan-Best takes over the mic.

7:15 p.m.

David Cameron (pictured) of East Rock says he feels like ​“deja vu all over again” because budget watchdogs already told aldermen what a ​“bad deal” monetization is. He comes armed ready for Clark’s question of what he would rather do.

Cameron gives three suggestions:

1. Do what Boston did: Send a bill to each non-profit in the city of what their tax bill would be if their real estate weren’t tax-exempt. Invite them to pay 25 percent of that bill. In New Haven, where 50 percent of property is tax-exempt, it’s time to revisit that exemption.

2. Look at charging more fees for services the city provides. (Like the city is trying to do with the proposed stormwater authority.)

3. Look at the pension contribution for FY2012, which is going up by $9 million. That number is arbitrary and probably based on ​“faulty reasoning,” Cameron says. He suggests paying $1.5 million more, instead of $9 million more. Cutting the contribution would balance the budget.

Cameron: I’m not going to get into the moral issue of monetization, but financially, if aldermen are going to go ahead with it, you need to work out a better deal.

7:27 p.m. Alderwoman Migdalia Castro (pictured): When you’re talking about making non-profits pay more, what about Yale? They’re supporting the Promise scholarship program for city public school kids.

Cameron: That’s a good point, but non-profits need to step up and take more responsibility for keeping the city afloat. You need to look at the asset value of all the city’s not-for-profits, case by case, and see if they are pitching in.

Castro: Are you adding the churches in this list?

Cameron: I’d like every non-profit to contribute.

7:32 p.m. Castro: So, would it be mandatory?

Cameron: You can’t make it mandatory unless you change state law. The contributions would be voluntary.

Clark: This idea is fascinating — find a small percentage to ask non-profits to contribute. ​“That seems to make a lot of sense.” As someone who led a non-profit arts agency for years, I think there should be some money in each non-profit’s budget to contribute.

7:40 p.m. Goldfield (pictured) cross-examines Cameron on his idea of paying less into the city’s pension funds. Failing to keep those funded could really hurt the city in the long term. How can you say no to monetization, then suggest cutting pension fund contributions, which may do long-term harm?

Cameron: We shouldn’t underfund the pension funds, but he’s questioning the actuaries’ math. He said the latest projections were based on a time when the funds dipped in the recession. The funds may rebound more than the actuaries accounted for, he predicted. Paying less into the pension funds would be a way to solve our short-term problem without committing to a huge debt over 25 years.

Goldfield: The fact of the matter is that actuaries are watching whether the funds go up. If we have a gain, they’ll calculate that in and reduce our recommended pension contributions accordingly. It’s a dangerous game to start to reduce funding on the assumption that next year will be better.

Cameron: It’s much less dangerous than monetization. You’re not signing a 25-year deal.

7:47 p.m. Budget watchdog Ken Joyner says he came to speak on the mayor’s budget, but since monetization has reared its head again, he’ll say a word on that. Have aldermen revised the proposal? He hasn’t seen any changes put forth. That’s why all the testimony is the same.

Joyner: Last Thursday, the mayor announced he no longer supports the idea, and the president of the board also doesn’t support it.

Goldfield: I’ve always opposed monetization. I was mistaken, however, that the idea was illegal. I was mistaken that it’s illegal to borrow money to cover operating costs. The only issue is whether those bonds would be tax-exempt.

8:01 p.m. Joyner: The board shouldn’t pass this budget until the mayor balances it. We’re still dealing now with two things he put in the last budget — projected savings from labor negotiations and projected savings from monetization. Alders need to get rid of the stormwater authority and find a different way to balance next year’s budget.

Shah: I see a lot of nurses in the audience. Can you all come up at once? [About a dozen school nurses and supporters are here. They’ve been showing up at almost every public hearing on the budget, protesting layoffs. They say they’re stretched too thin between schools.]

8:04 p.m. Two nurses approach.

Laura A. works at East Rock Global Magnet, John Martinez and Riverside. ​“We’re in a dire situation. We’re having a difficult time covering our students.”

Jennifer Caron, a laid-off nurse from Barnard, says she knows aldermen have heard from her before. She suggest the mayor should be here.

Shah: We are the people who make decisions on the budget, not the mayor.

Caron: Please pass along the message: The mayor and superintendent are making an ​“immoral” decision by laying off nurses.

Shah: I know if I’m ever in a jamb, I’m calling the nurses! [He reaches over for a high five.] We’ll try to get your back.

8:16 p.m. A big group is here for the New Haven Land Trust, to protest cuts. Fifteen community garden enthusiasts approach the board.

Chris Randall, executive director: We’re facing a $17,500 cut to the Community Gardening program, from $25,000 to $7,500. I’m the only paid staffer — the rest of the people behind me are volunteers.

Dildine: What percentage of your budget is the city contribution?

Randall: It’s about 15 percent of our overall budget.

Shah: I was unable to get a bed in the Chapel Street garden because it was filled up too quickly. What I’m saying is urban gardening is popular, a wonderful thing.

Shah: Thanks. Will anyone share a bed with me? [Laughter.]

Randall: You’re welcome to a bed in the William Street garden. A garden bed.

8:32 p.m. Jim Alexander is back. He was here earlier to testify about how monetization is a bad idea. Now he’s weighing in on pensions.

Alexander the city should look at raising user fees, and pushing up tax rates — but don’t go against actuaries’ advice for how much to pay into the city’s pension funds. Not paying actuarially required contributions could be worse than monetization. But he’s surprised by how much the pension contributions are going up. He suggests looking closer the $9 million increase and how it was calculated.

8:42 p.m. Elsie Chapman (sp?) is here to protect the city’s libraries. Quotes Lady Bird Johnson — the only thing you need to access a library is ​“interest.” The library is one of the few remaining safe spaces where people can gather. Two institutions stand side by side — the library and the state court on Elm Street. If we keep cutting away at support for the former, we shouldn’t be surprised if more people end up in the latter.

8:50 p.m. Hill activist Helen Martin-Dawson of Dewitt Street is the first to take aim at Yale over paying its ​“fair share.” [Yale pays $4.3 million in annual real estate taxes on non-educational property and an additional $7.8 million in voluntary taxes, according to university officials.]

[Dawson joined the union-affiliated CORD group that lobbied for community benefits around the new Yale cancer center. She’s giving a taste of a union argument that’s in store this week. The unions are planning a presser tomorrow at 3:30 p.m. to urge Yale to ​“pay their fair share.”]

8:54 p.m. Doug Hausladen, downtown activist and potential aldermanic candidate in Ward 7, testifies on monetization. The idea is not good governance, he says. He rattles off a few budget-fixing ideas. For example: Hartford did a schools challenge on utility costs. We could follow suit and encourage more conservation. Roll out single-stream recycling faster. [It’s being phased in by neighborhood.]

[Hey, East Rock — Hausladen apparently has a scoop — the Tuesday recycling route is switching to single-stream next week.]

Hausladen: Was hoping for revenue from red light cameras, but he understands after today’s story in the Independent that the bill is dead. He argues that the city’s paid liaison (DePino & Associates) might not be doing a very good job at lobbying at the Capitol.

9:08 p.m. Dick Lyons, former East Rock alderman, calls monetization ​“a bad scheme.” Cut the middleman.

[Steve Mednick, Gates’ lobbyist and a former alderman himself, has been listening carefully for three hours, taking notes in a black binder.]

9:11 p.m.Matt Smith, freshman East Rock alderman, approaches. He urges colleagues to kill the bill now. By monetizing the parking meters, we become reliant on the parking meter revenue. So we’d need to encourage folks to drive and park in the city — which is not a good goal. Gas prices are rising, and we want to encourage other modes of transit. In the next 25 years, we want to encourage there to be fewer cars on the road.

… If the projections are off, and the meters don’t come through with the projected revenue, ​“we are still on the hook for the money.” That’s $122 million dollars in debt! [Estimates range from $111 to $122 million.]

Clark: You’ve given me a fantastic idea. Why aren’t we putting meters on the bike racks, if that’s the way of the future?

9:15 p.m. Alderman Marcus Paca (pictured), who’s pushing to revive the monetization plan, thanks his colleagues for ​“keeping an open mind.”

Paca: We were called upon to look for new options for the budget. Monetization wasn’t on the top of our list last year. But some form of the plan could work — one that isn’t necessarily 25 years, and that gives the city the option to pay off the debt early.

Paca: I can’t believe that nobody wants this as an option.

9:22 p.m. Holahan: Only one person came out tonight to support monetization. All the rest oppose it.

Shah: From two neighborhoods? [He’s pointing out that most of the folks that testified came from East Rock and Westville.]

Holahan: You’re wasting your time discussing this.

9:25 p.m. Public session closed. Now comes the vote!

Alderman Justin Elicker (at left in photo) proposes to pass the item with an unfavorable recommendation. ​“I believe that monetization is the worst idea since margarine.” Pushed by corporate lobbies, and bad for us. I tried to get his mind around what 25 years means. In 1986, we were still in the Cold War. What if aldermen then wanted to monetize revenue from pay phones? What will the world look like in 25 years? Twenty-five years from now, we’re not going to believe that we’re paying $4.5 million for parking meter revenue.

“Nobody showed up in support of this except Alderman Paca.” [The remaining four budget watchdogs break out in applause.]

Shah: ​“This is not a pep rally.” ​“If you’re going to do that, you’re going to have to tootaloo.”

9:33 p.m. Paca: Gates Capital has been extremely flexible in offering several different scenarios, so it doesn’t have to be 25 years. We will maintain control over these meters. If this gets killed tonight, then fine. But if it doesn’t, we can discuss it on the floor of the full Board of Aldermen, with amendments that don’t say $50 million up front and 25 years.

9:36 p.m. Hill Alderman Jorge Perez: This is an option we should only support if it’s a last resort — for example, if Gov. Dannel Malloy goes to a ​“Plan B” budget that costs the city $73 million in state aid. The problem with the current proposal is that we get $50 million up front over five years, but then what about year six? I can only support it if it’s the last result — and I don’t think we’re there yet.

[It looks like no one here besides Paca is supporting this plan, except Shah and maybe Clark, who has expressed some openness.]

9:48 p.m. Goldfield: this is a bad financial deal. We’re borrowing money with a high level of interest.

9:49 p.m. Shah: I support monetization. Yes, it’s a loan and it’s a risk. But who doesn’t have a risk in life? It’s a loan, and it wasn’t presented as anything else. [Shah, along with Paca, is one of three alders pushing the revival.]

Shah: If you want to discharge this unfavorably, then sure. Let’s debate it again [!] at the full Board of Aldermen. We have a board of 30 people — only 10 are voting today. [By now, all 10 voting members of the Finance Committee are here.]

Shah: Let’s debate it more — ​“anything else would be un-American.”

Clark: I was the first person to ask the $64,000 question, which was that ​“what if there are no cars in 2035.” At first, I was against monetization. I just can’t stand to listen to people talk about ​“don’t cut this,” ​“don’t cut that,” then refuse to go for other cost-cutting moves. City Budget Director Larry Rusconi convinced me that unless we can find other revenue, there’s no reason to be against this.

9:59 p.m. Clark: In the past, people ​“shrieked” when we talked about raising taxes. I was fascinated to hear people supporting raising taxes. I was fascinated to hear about collecting money from the city’s non-profits.

Clark: ​“I cannot in all consciousness vote against something that brings in revenue.”

Dildine: It’s not the time to borrow money to solve our problems.

Perez: Just because it’s an option doesn’t mean it’s a good option. To Clark’s comment, it’s not income — it’s borrowing. It’s like using a credit card to buy a car.

10:03 p.m. Clark: What about a modified deal?

Paca: I asked Gates to come back with 10-year and 15-year deals. They showed flexibility. That’s why I warmed up to the idea over time.

Clark: If we vote this down tonight, how many of us are prepared to raise taxes? I can’t support a budget that isn’t balanced. What are we prepared to do if the state fails to get $2 billion in union concessions and goes to Budget Plan B? I can’t imagine any colleagues voting to raise taxes this [election] year.

10:08 p.m. Hill Alderwoman Andrea Jackson-Brooks calls a vote to end debate. Done.

10:12 p.m. Aldermen vote 8 – 2 to send the item to the full board with an ​“unfavorable” recommendation.

Voting against the unfavorable recommendation: Shah, Clark.

Voting for the unfavorable recommendation: Perez, Goldfield, Jackson-Brooks, Castro, Elicker, Stephanie Bauer, Dildine, and O’Sullivan-Best.

Meeting adjourned.