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February 10, 2009 - 8:16am

News roundup: City could tap into stimulus package for $4.5 million

posted by Philip Anselmo in batavia, business, city council, construction, finance, Nation, stimulus.

Batavia's City Council voted in favor of a measure last night that would use $425,000 to "design work for a half dozen" infrastructure projects, WBTA's Dan Fischer reports. That investment of $425,000 is supposed to yield $4.5 million worth of construction, on projects such as: undersized water mains, waterline break history, inoperable valves, sanitary sewer line conditions and road conditions.

Fischer explains that the $425,000 would be part of the aid received by the city from the Video Lottery Terminal Aid that was received earlier this year.

Councilman Frank Ferrando is quoted in the Daily News this morning as saying: "If we can get $4.5 million to get jobs that we have to do and can get it for an investment of $425,000, I think we have to do it,” he said. “There’s going to be a lot of money out there."

No one, however, explains how any of this would work. In fact, rather than explaining it, the article today in the Daily has only this to say:

It is a gamble. Assistant Manager Sally Kuzon said there’s no guarantee of the city actually getting the money from the state Economic Facility Corp. But spending $425,000 to design those six projects is a move toward it, she said.

It's a gamble!? So the city plans to gamble with gambling money. A little irony, perhaps. Furthermore, where did the state Economic Facility Corp. come from? No one is explaining this to us, folks. All we hear is Frank Ferrando saying: 'Hey, we can turn $425,000 into $4.5 million. Poof! We're rich and we have jobs. How can we not do this?'

What everyone has failed to note is that the hoped-for millions that would magically be available if only the city spent this $425,000 are part of the proposed economic stimulus package that just last night was the subject of a national news conference.

From a letter drafted by Assistant City Manager Sally Kuzon:

I have been monitoring the progress of the President's proposed Economic Stimulus Package over the last several weeks in an attempt to place the city in a competitive position to receive funding for infrastructure improvements.

Kuzon goes on to say that while there has been "tremendous debate" over just what will happen with the stimulus, she believes that "infrastructure improvements nationwide will have a prominent position within this initiative." In other words, the city should get it on it. We should submit "shovel ready projects" to the state's Economic Facility Corp., which will adminster the federal funds allocated to New York.

She continues:

Although there is a certain amount of uncertainty as to whether or not the programs will include loans or grants or whether the program will extend to projects not currently listed on the (Intended Use Plan); it is clear that only shovel ready projects submitted to the EFC will be considered for the current or future funding rounds. Based on this premise, I am recommending several projects for Council to consider submitting tothe EFC for economic stimulus funding.

We mentioned some of those projects above. The $425,000 requested by Kuzon would be used to design the projects and submit the designs to the state so that they would be eligible to receive the funding if and when it became available. However...

It is unknown at this time if the design phase or only construction cost will be eligible for reimbursement. If for some reason the city does not receive economic stimulus funding the projects will be designed and ready for construction as funds or grants become available in the future.

In a letter drafted to the City Council on Kuzon's proposal, City Manager Jason Molino writes: "The crux of this stimulus package is to get people back to work receiving pay checks; with $4,500,000 of infrastructure improvements that goal will be acheived."

Nowhere does anyone explain how these infrastructure improvements will acheive the goal of "getting people back to work." Kuzon never once takes up this issue in her letter, and nothing from Council addresses this either. We only hear people tell us: It will happen.

Molino justifies this use of these funds in this way:

Utilizing a portion of this years (sic) VLT aid to support the project design costs is both appropriate and realistic considering the City did not budget for this one-time revenue and these costs are one-time capital costs.

Council President Charlie Mallow can be heard in an audio quote on WBTA as saying that Batavia needs to do this. Otherwise, the jobs will go to New York City. He wrote to us in an e-mail this morning:

The action council took last night was about job creation right here in Genesee County, instead of New York City. Regardless of how we feel about the spending on the national level, we owe it to our residents to secure our share of this huge stimulus package. We are all going to pay for it whether we have enough foresight to act or not on a local level.

We're waiting to hear back on how this will create jobs. See below.

Click here to download the letters by Molino and Kuzon, along with descriptions of the infrastructure projects noted in the proposal.

Councilmen Sam Barone and Bob Bialkowski were the only two members of Council who voted against the measure, saying that the state aid could be used instead to reduce the city's deficit or for "future needs."

Updated (8:28 a.m.): Council President Charlie Mallow responded to our question of how this stimulus money would create jobs.

Any aid we receive needs to be spent on projects that are shovel ready and can break ground in 180 days. That means putting people to work this summer. Local construction workers would be the first ones to work or to keep on working. Then there is the trickle down affect with people who work driving trucks, making concrete, selling building supplies, laying pipe, and even restaurants the workers, etc. We as a local government decided to do what we needed to do so that our people would feel the benefits of these make work projects that will be going on around the country. I believe this depression era type projects will boost our economy up and out of the slump we find ourselves in.
 
If fully funded, these projects will rebuild parts of 11 streets in the city this year. These projects are for sewer, water, road surface and sidewalks, and most call for complete reconstruction. This work will be on top of the work being done on Walnut, Oak and the $150,000 of sidewalk repair already budgeted this year. There will be a lot of activity going on this summer to rebuild the city from the ground up.

Update (8:35 a.m.): A very timely headline in the Buffalo News this morning reads: New York loses millions in revised Senate stimulus bill. From the article:

Gone entirely is funding for higher education construction, which, under the House-passed version, could have meant up to $242 million for the University at Buffalo.

Similarly, the Senate eliminated funding for school construction. The House bill would have provided $31.9 million for the district of Rep. Brian Higgins, D-Buffalo.

Senators also halved a $79 billion fiscal stabilization fund for the states. While much of the aid to local school districts remains intact, the cuts included a $25 billion fund aimed at helping governors balance their budgets.

Will we see even more funds cut from the stimulus by the time it is passed?

jennifer runfolla
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I dont understand how working on the roads, sidewalks sewer and water will help our economy?! Also how is that going to help with employment? This is a bunch of crock if you ask me!!!! Genesee county is shot especially their judicial system and the batavia pd!!!
Howard B. Owens
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Well presumably, the city will hire local contractors, who in turn will hire local workers, who in turn might otherwise have been out of work. That's the theory. We'll see how it pans out. It will be interesting to follow whether local contrators and workers are hired, and whether they are just being shifted from other work they might have done, or if they were really otherwise out of work.
Mark Potwora
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Howard are local contractors doing walnut street project..are those local jobs...i think not..sounds like a gamble..Remember urban renewal..government money..what did it do for Batavia..
Charlie Mallow
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Mark, we have water pipes being replaced that were installed in the 1920’s. I guess depressions are the only time that infrastructure is actually replaced in this county. I’m not sure how things are around your work place right now but, we mostly have talks about what we are going to do to feed our families if sales don’t pickup. We have done what we need to do in the city and have balanced our budget. If there is a lump of money out there that could be used to create a job and help someone feed their family this summer, I’m going to go for it. The political ideology discussion aside people are in trouble and I’m not going stand by without trying to do something to help them. If we can get our infrastructure repaired all the better. It’s time to think like those people did in the 1920’s who laid those original pipes.
Russ Stresing
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City Council has decided to seed the ground for the future with this move instead of just hoping in one hand and waiting for the other hand to fill up. There have been local business success stories amongst otherwise gloomy recent reportage, but bad news has a better press agent than good news. Council has taken a pro-active stance in this case and, if not encouragement, then at least should be given a grace period. The move to treat this money as the windfall it is and invest it instead of using it as a short-term budget band aid makes sense.
Andrew Erbell
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This money isn't a windfall. It's a massive financial burden future generations are going to look at and ask us; "How did you ever let that happen?" And you're answer is going to be, "Well, at least we got new sewer pipes out of the deal."?
Russ Stresing
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The VLT money is most certainly a windfall.
Philip Anselmo
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Russ: I believe Andrew is referring to the stimulus money. The VLT money will only pay for the design work so the city can submit the designs to the state to be considered for stimulus funds that will be allocated by the Economic Facility Corp.
Gabor Deutsch
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Okay, maybe we dont need new sidewalks or this project wont create long term jobs, but there is a need to update the water and sewer system. If we are going to keep or attract people to Batavia you need water and some good sewer systems.
John Roach
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The water line repair is needed. Remember, we do not have our own water anymore. We have to buy it. Our "City" water bill is really owed to the Monroe County Water Authority. When we have water leaks, we have to pay for it. This money, if we get it, will help reduce that bill. New sidewalks, repaired roads and water lines have always been paid by tax dollars. This will be a better use of the money than using it for Honey Bee insurance
Mark Potwora
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Charlie..I was asking Howard about the hiring of local contractors..Thats the way you are trying to sell this ..I don't believe it happened with the walnut street project..We do need to do alot of water and sewer and street repair work...And if we only have to spend a half a million to get it all done without borrowing a dime then that is great..Go for it.. But don't sell it as a local jobs program..It will be done by who ever has the lowest bids..It has nothing to do with local contractors. ..If all cities like Rochester and Buffalo and local villages and towns around us has these same type of Shovel Ready lists..Where are all these local contractors going to come from... What i do not understand is how can the Assistant Manager Sally Kuzon all of a sudden from monitoring the progress of the President's proposed Economic Stimulus Package decide what is going to happen with this stimulus bill..And that it will cost a half of million dollars to create some list that isn't a sure thing..The congress just took out alot of spending for the states.. Isn't their allready a list of what the city needs done.. What cost a half a million dollars..I guess that what i don't understand..Are we going to hire a local company to come up with a list..Where is this money going to go..
Charlie Mallow
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Companies in WNY will have a chance to bid on the work. That’s how government contracts work, we can’t change that. I believe Walnut is being done by a company out of Akron. I don’t know how many people work for that company who are local. Where are all the new employee’s going to come from when every single company in the area is overwhelmed with work? They will have no choice but, to hire more people. Same thing happens when every concrete manufacturer is over whelmed with orders. Are you getting it, they hire more people. There was no list of dream repairs for the city; we never had the luxury before. We usually just waited for something to fall apart then we spent what we needed to patch it. All the while these old pipes are leaking about 20% of your water bill into the ground. When you don’t have the money, things like that get pushed to the bottom of the list. Your third question had to do with when we started looking for projects. We have been attending meetings and talking to our contacts in the governor’s office and other parts of the government. This is what we do, we stay in the loop. Then when it was clear there would be funding Sally’s department got a list together of our weak points. These initiative isn’t much of a “gamble”. That statement has a lot to do with semantics because, the money is coming from profits from the track. There are grants all the time for this kind of thing. The hard part is for municipalities to become organized with projects we would like to do. Because of our financial issues over the last few years, the city has become very good at obtaining grant money. I believe we gathered $580,000 last year. That was part of our budget and made it look larger. Either way, these repairs need to be done. Whether we use the designs over time and try to get grant money or pay for the work ourselves. We can not neglect our infrastructure forever. We need to continue on the current coarse fixing one problem at a time.
Charlie Mallow
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The $425,000 is for the design work. We need to have designs in the box ready to go in order to qualify for the grants. Those are the same designs we will need for other grants or even to do the work ourselves.
Mark Potwora
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Charlie thanks for clearing up most of my questions..So the half a million dollars is to come up with the plans for these projects..Has the city hired someone to do all this..Seems pretty costly to come up with plans for 4.5 million dollar project.Who came up with this number..
Charlie Mallow
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The $425,000 the maximum number we will spend. It’s a ballpark figure on the high side, I’m sure Jason and Sally will get that number lower. The work will be hired out to an engineering firm or firms. It is costly for designs we are hoping we could possibly recoup some of those costs too. Is there anything else you need me to clarify?
Mark Potwora
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No Charlie ..Thanks alot ..I'm sure it helped other to understand all this also...Its just this all happens so fast and out of the blue..I just keep thinking of The Big Dig in Boston and the millions of cost over runs..Just hope we don't put more on our plate then we can handle at one time....Don't add to the city payroll..

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