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Builders Rule – You Get a Tax Hike. Construction Goes Wild While Building Permit Revenue Falls. Guest Column by Ted Carroll.

Guest Column by Ted Carroll

According to last week’s Rye City Review, Rye City Management is proposing a 6.73% local property tax increase for 2017. City Manager Marcus Serrano claims its “impossible to stay below the tax cap” of .68%. How about this – no increase for abused residents in 2017, let the builders prove their unsupported affidavit cost submissions and pay up for a real change of pace…

Licenses and permits

(PHOTO: Building activity is up, but fees are projected to be down. Huh? See the full stats here.)

Anyone who lives in the City of Rye today knows that residential construction is everywhere and in many cases out of control with builders frequently not following the rules.  I’ve never seen such undisguised contempt for residents tolerated by any prior city administration or city council. Builder subcontractors, for example, on my mother’s street this spring tore lose utility wiring that remained hanging about 5 feet off the pavement in a public street turnaround circle for literally months. Any bicyclist not paying close attention could have been garroted. No amount of calls by me to city hall or the police department could bring resolution. Only the complete tear down of the wires by yet another builder subcontractor on the same street brought Verizon & Cablevision out to replace their mangled infrastructure.

Builders: Trust Us

In May I wrote a column using my background as a CPA and former Rye City auditor to showcase a gaping internal financial control weakness in the building department. That MyRye.com article – “Rye’s Political Assessments – Found Money” begins with the following proposition – “I’d like to reduce everyone’s property taxes. Interested?” The official silence from city hall was unfortunately both predictable and deafening.

In June I followed up with a more detailed analysis, doubling down on these lapses in financial controls favoring the largest political donor industry in the city and proposing easy to implement solutions to inject accountability and transparency using 3rd party proof to prevent shortchanging and fraud.

That June MyRye.com article – “Trust, But Verify? Nyet So Fast” – makes the case for reform, does the long math showing overall annual city budget financial impacts, and analyzes the tangible impact of an actual case of apparent serious ongoing building and assessment fraud by one of the city’s largest political donor family’s. The official city hall silence to these revelations was again predictable and deafening.

Residents: Pay Up

So now we’ve arrived at official annual budget season and for the 3rd year in a row city management is forecasting a DECREASE in building permit and license fee revenues while on the very same page noting cheerfully that “Building activity has seen tremendous increases and has rebounded from the recession. This trend is to continue in 2017.”  (See attached 2017 Budget schedule here)

I believe that by adding a single clerical position under the supervision of our excellent City Comptroller Joe Fazzino we could easily internally proof check all of these building and permit final cost affidavits against the basic 3rd party documentation that builders can supply. Habitually honest builders would see zero permit cost increases.

And since the 2nd largest revenue line item in our entire city budget behind Property Taxes is this area of Licenses & Permits, I believe it’s reasonable to predict substantial and material compliance related permit revenue increases. After all, everyone knows these large dollar ‘I Swear” final cost submissions are not being policed. And this I suspect is also why the local building industry and certain political class individuals perhaps contribute so heavily and so consistently to all the city council election races in Rye.

I think they’re probably getting real value for their money. How about the rest of us?

Ted Carroll is a lifelong Rye resident, a Certified Public Accountant, and a partner at Noson Lawen Partners, a media industry private equity firm.

See Carroll’s other recent MyRye.com commentaries here:

Rye Mayor Sack’s Secret Emails

A Field Guide to Rye Municipal Corruption – Special Edition

3 COMMENTS

  1. NY State Election Contribution Records indicate the following:

    For the Rye City Council elections of 2013, Julie Killian, Terry McCartney, Kirstin Bucci and Joe Sack ran under the banner of “Rye United” as the Republican Party candidates. Meg Cameron and Shari Punyon ran under the banner of “Friends of Cameron & Punyon” as the Democratic Party Candidates.

    Friends of Cameron & Punyon’s DEMOCRATS collected $29,224 from 72 individual donations. There are $0 readily identifiable donations to the Democrats from building & construction interests.

    Rye United’s REPUBLICANS collected $62,994 from 160 individual donations. $19,250 or 31% of this amount was received from 26 donors related to building & construction interests. Also, $500 was received by Rye United from a local Democratic leader and prolific Democratic Party donor family exceptionally lucky over the years in matters of permits, permissions and real estate assessments issued by Rye City Hall.

    For the Rye City Council elections of 2015, Richard Mecca, Jim Culyer and Leon Sculti ran under the banner of “True To Rye” as the Republican Party Candidates. Emily Hurd, Danielle Tagger-Epstein and Jeff Taylor ran under the banner of “Friends of Emily, Danielle and Jeff” as the Democratic Party candidates.

    Friends of Emily, Danielle and Jeff’s DEMOCRATS collected $36,392 from 119 individual donations. There are again $0 readily identifiable donations to the Democrats from building & construction interests.

    True To Rye’s REPUBLICANS collected $17,305 from 24 individual donations. $14,500 or 84% of this amount was received from 9 donors related to the building & construction industry. Substantially all of these amounts were reported as being received the day AFTER the final public reporting “cut-off date” prior to the election. Included in the total of $17,305 but not the $14,500 from builder & developer interests is $1000 from candidate Richard Mecca, an electrical inspector in White Plains.

    Donations by the aforementioned local Democratic leader and prolific Democratic Party donor family exceptionally lucky in matters of permits, permissions and real estate assessments issued by Rye City Hall in the past several years are indicated to be $26,850, with $20,000 alone given to the area’s most powerful elected Democratic Party official, who also is a former Rye City Councilman.

    You can look it up.

  2. overbuilding in Rye ( especially of multifamily rentals ) is a disaster . The schools are packed & our student test scores in freefall and the multifamily rentals generate little additional school tax revenues .
    but the need for the out-of-control tax hikes is NOT due to builders ! Its due to completely insane pension & healthcare costs of its unionized workforce as mandated by state . This is why everybody with a brain and some wealth is fleeing NY .

  3. –Rye Building Permit Fees–

    2012A $ 1,456,043 $+323,631
    2013A $ 1,895,975 $+439,932
    2014A $ 2,446,504 $+550,529
    2015A $ 1,941,821 $-504,686
    2016P $ 1,626,000 $-315,821
    2017B $ 1,566,000 $ -60,000

    Loss: Past 3 Years $ 880,507 (36%)

    2017B Proposed Resident Tax Increase over Tax Cap – $1,097,184

    (A=Actual, P=Projected, B=Budget)

    Builders Know – No One Is Checking.

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Guest Column by Ted Carroll

According to last week’s Rye City Review, Rye City Management is proposing a 6.73% local property tax increase for 2017. City Manager Marcus Serrano claims its “impossible to stay below the tax cap” of .68%. How about this – no increase for abused residents in 2017, let the builders prove their unsupported affidavit cost submissions and pay up for a real change of pace…

Licenses and permits

(PHOTO: Building activity is up, but fees are projected to be down. Huh? See the full stats here.)

Anyone who lives in the City of Rye today knows that residential construction is everywhere and in many cases out of control with builders frequently not following the rules.  I’ve never seen such undisguised contempt for residents tolerated by any prior city administration or city council. Builder subcontractors, for example, on my mother’s street this spring tore lose utility wiring that remained hanging about 5 feet off the pavement in a public street turnaround circle for literally months. Any bicyclist not paying close attention could have been garroted. No amount of calls by me to city hall or the police department could bring resolution. Only the complete tear down of the wires by yet another builder subcontractor on the same street brought Verizon & Cablevision out to replace their mangled infrastructure.

Builders: Trust Us

In May I wrote a column using my background as a CPA and former Rye City auditor to showcase a gaping internal financial control weakness in the building department. That MyRye.com article – “Rye’s Political Assessments – Found Money” begins with the following proposition – “I’d like to reduce everyone’s property taxes. Interested?” The official silence from city hall was unfortunately both predictable and deafening.

In June I followed up with a more detailed analysis, doubling down on these lapses in financial controls favoring the largest political donor industry in the city and proposing easy to implement solutions to inject accountability and transparency using 3rd party proof to prevent shortchanging and fraud.

That June MyRye.com article – “Trust, But Verify? Nyet So Fast” – makes the case for reform, does the long math showing overall annual city budget financial impacts, and analyzes the tangible impact of an actual case of apparent serious ongoing building and assessment fraud by one of the city’s largest political donor family’s. The official city hall silence to these revelations was again predictable and deafening.

Residents: Pay Up

So now we’ve arrived at official annual budget season and for the 3rd year in a row city management is forecasting a DECREASE in building permit and license fee revenues while on the very same page noting cheerfully that “Building activity has seen tremendous increases and has rebounded from the recession. This trend is to continue in 2017.”  (See attached 2017 Budget schedule here)

I believe that by adding a single clerical position under the supervision of our excellent City Comptroller Joe Fazzino we could easily internally proof check all of these building and permit final cost affidavits against the basic 3rd party documentation that builders can supply. Habitually honest builders would see zero permit cost increases.

And since the 2nd largest revenue line item in our entire city budget behind Property Taxes is this area of Licenses & Permits, I believe it’s reasonable to predict substantial and material compliance related permit revenue increases. After all, everyone knows these large dollar ‘I Swear” final cost submissions are not being policed. And this I suspect is also why the local building industry and certain political class individuals perhaps contribute so heavily and so consistently to all the city council election races in Rye.

I think they’re probably getting real value for their money. How about the rest of us?

Ted Carroll is a lifelong Rye resident, a Certified Public Accountant, and a partner at Noson Lawen Partners, a media industry private equity firm.

See Carroll’s other recent MyRye.com commentaries here:

Rye Mayor Sack’s Secret Emails

A Field Guide to Rye Municipal Corruption – Special Edition