Two weeks ago, on October 1, I had the honor of participating in a Zoom panel of distinguished speakers.
Hosted by Steven Blank, CEO of Blank Slate Media, panelists were asked to respond to this question: “What should Nassau County, school districts and local governments do to keep their financial houses in order?” Joining me was Chris Wright, a long-time director on the Nassau County Interim Finance Authority, and Michael Imber, author of the 2011 Nassau Grant Thorton Report (a 338-page playbook on how to help the financially strapped Nassau County). Both Michael and Chris are experts in accounting and government finance.
The conversation focused on how COVID is affecting local government cash flows, and what political leaders can do to weather the crisis.
Since the Zoom panel discussion, several Long Island Towns and both Nassau and Suffolk have released tentative budgets staying under the tax cap, but not making any significant efforts towards government efficiency or taxpayer relief during a pandemic.
Only Suffolk County has provided an alternative budget, with deep and painful cuts that must be made if a federal government bailout doesn’t materialize by next summer.
All local governments knew COVID would be diminishing revenue since the economy collapsed in March. The hospitality industry, mainly consisting of restaurants and hotels, is shutting down at a distressing rate.
Mom and pop retail businesses are vaporizing right before our eyes. And, high unemployment and food insecurity for those struggling financially will continue into the foreseeable future. There is no clear light at the end of the tunnel, especially as COVID infection rates start to tick up as cold weather approaches.
Municipal leaders need to promote the measures they will take to help residents during what may be a long and deep recession.
Refinancing debt without structural change to government budgets just makes future budgets more difficult, because more money will be needed for debt service and less available for services.
That’s not good enough. During the COVID-caused financial crisis, how can local governments not be scrambling to tighten their belts and find ways they can deliver services more efficiently?
With that in mind, here are some solutions the Zoom panel discussed, along with a few additional suggestions:
A Long Island-wide Water Authority – Does Nassau County really need over 40 separate water districts? Suffolk County does a fine job at a low cost with its water authority that serves about 1.2 million residents.
Combining all water districts into a single Long Island water authority would provide a more efficient service at a lower price. This would be a good test of residents’ appetite for future consolidation.
Leverage Billboard Revenue and Naming Rights – Nassau County, to their credit, put out an RFP for service providers to leverage their billboard revenue and naming rights. The only problem is the RFP started in January and the county still hasn’t awarded a winner.
It was reported on CNBC in July that UBS paid an astounding $350 million over 20 years for the naming rights to the new arena at Belmont Park. There are many Long Island municipal assets that can be leveraged to do the same.
Speed up the Permitting Process – There is no better way to encourage investment and boost the local economy than to let developers know Long Island is open for business. Developers will invest if they are confident they can build in a timely way, in accordance with current zoning laws, and that municipalities won’t cower when the usual negative opposition comes out.
Addressing the huge deficit of affordable apartments on Long Island is a great place to begin expediting the permit process.
Audit, Audit, Audit – Sorry to beat a dead horse from previous articles, however, this topic is worth repeating. Local governments need to annually audit their insurance coverages and what they pay for them, and keep in mind commission rates are negotiable.
Also, audit franchise fees received from Cable TV, utility and telephone bills, and cell tower contracts. There are substantial savings to be had by renegotiating contracts that can be over a decade old. Rebidding all expiring contracts and not extending them is also prudent.
Pay Cuts to Outside Consultants – Lawyers, engineers and architects know governments are struggling. An across the board 15 percent pay cut to outside professionals is a reasonable request until the pandemic is over. We are all in this together!
Solar Farms – While recently driving through Hauppauge I was pleasantly surprised to see a solar farm on top of a landfill. There should be a solar farm on every landfill on Long Island.
In 2019 the Town of Hempstead rejected a solar farm on the Oceanside landfill that would have generated more than $7 million over 20 years. Why? This makes no sense.
Government buildings, and public and private school rooftops, are also an untapped resource that should be leased for solar panels. Long Island has over a square mile of public-school rooftops, and the three Long Island BOCES should work together to create an Island-wide public school solar bid to energy performance contractors.
There’s no better way to teach Long Island’s approximately 420,000 public school students about climate change while simultaneously generating much needed revenue for school districts.
We are entering a prolonged financial downturn and local governments should be planning ahead how to meet it. Business-as-usual isn’t going to be sustainable. Our local leaders must get creative and find cost-effective budget solutions as soon as possible.