American Federation of State, County & Municipal Employees, AFL-CIO 125 BARCLAY STREET * NEW YORK,NY 10007-2179 Telephone: 212-815-1000 LILLIAN ROBERTS Executive Director VERONICA MONTGOMERY-COSTA President CLIFFORD KOPPELMAN Secretary (MAF MISBAH UDDIN Treasurer Vice Presidents: Robert D. Ajay Leonard Allen Carmen Charles Santos Crespo Sina Crippen Michael L, DeMarco Cuthbert 8. Dickenson Jonathan H. Gray Robert K, Herkorimer Dennis Ii Moris R, Johnson Michelle Kellor-Ng Eric tson Faye Moore Eileen M. Muller Deborah A, Pits Watthene Primus Dany A. Ramsey Fred Rica Eddie Rodriguez Jackie Rowe-Adams Peter Stein James J. Tucciareli Esther (Sandy) Tucker Shirley A. Witiarns Associate Director ‘Olver Gray Retirees Association ‘Stuart Leibowitz District Council November 9, 2010 Mayor Michael R. Bloomberg City Hall New York, NY 10007 Dear Mayor Bloomberg: In light of the city’s financial difficulties and the proposed reduction of essential city services, District Council 37 is submitting for your consideration recommendations for savings, The proposals inchided with this letter come from many of our rank-and-file members who are serving in revenue generating titles in various city agencies. ‘The enclosed recommendations include: 1 U. The collection of tax revenue for billboards in Transit Authority parcels which are sub-licensed to third parties for the installation and maintenance of outdoor advertising signs, as determined by two court decisions as well as an increased collection of revenue for under-assessed or un-reported billboards in the Real Property Income Expense Statements (RPIE). We estimate that the city could generate over $22 million in additional revenue by collecting the proper fees on the billboards, ‘The increased collection of tax revenue for Cell Phone antennas through increased assessments. We estimate that the city could generate between $19 and $27 million in additional taxes and fees. The elimination of property tax exemptions continued in error to property owners who purchase properties from non-profits and religious institutions. In addition, there should also be an increased effort to collect revenue from newly constructed roperties still not captured in the city’s tax roll. This measure could generate over $173 million in property tax revenue. " Metromedia v. Tax Commission of New York City and Clear Channel Outdoor, Ine v. Patricia Lancaster, New York City Commissioner of Buildings (summaries enclosed) apn eeMayor Michael R. Bloomberg November 9, 2010 Page 2 A. 15% Voluntary Vendor Rate Reduction program for personnel and technical contracts which could generate over $316 million. Similar measures have already been successfully implemented in Chicago and Los Angeles. I firmly believe that through the implementation of these four proposals we are submitting, the city would increase revenue by more than $500 million annually. District Council 37 as always would like to discuss these recommendations at length in an effort to produce the savings. I look forward to your response. Sincerely yours, Sian! Chalo Lillian Roberts LRiws c: Deputy Mayor Stephen Goldsmith (Ene.)un DisTRICT COUNCIL 37 RECOMMENDATIONS FOR SAVINGS/REVENUE GENERATING PROPOSALS District Council 37 represents several revenue-producing titles throughout the various city agencies. Due to budgetary reductions, the headcount in these titles has been reduced in several agencies. This reduction has limited the ability of the city to capture the appropriate tax proceeds from businesses and institutions, shifting the burden on individual property owners In the last eight years, the number of city assessors in the New York City Department of Finance has been reduced from 170 to less than 110. In addition, the use of the title of city assistant assessor has been completely eliminated. Similarly, the number of city tax auditors has decreased from 420 to 280. During the same period, the number of parcels in the tax roll has increased from 250,000 to over 300,000. The reductions in headcount for these titles are penny-wise and pound foolish since their work generates billions in tax revenue. We believe that by implementing four recommendations for new revenue/savings proposals the city could save over $540 million RECOMMENDATIONS FOR NEW REVENUE COLLECTION OF TAX ASSESSMENT AND LEVIES BILLBOARDS According to New York City Property Tax Law, income derived from the rental of billboards must be reported by the landlord by completing a Real Property Income and Expense Statement (RPIE) form. Since these forms are never audited and no penalties are levied for fraudulent filings, most building owners do no report billboard income. District Council 37 estimates that more than half of the 6,000 billboards in the city of New York are not being assessed or are under-assessed. The reason for the lack of proper assessment is due to the decrease of assessors in the New York City Department of Finance. If the city properly assessed those 3,000 (including 300 larger billboards near highways and the 500 located in Transit Authority properties) the city could collect about $22 million in revenue (see sample billboards enclosed). This would assume rent of $10,000/month for your average billboard and $100,000 per month for your large highway billboard (see enclosed graphic of billboards). COLLECTION OF PROPERTY TAX FROM CELL-PHONE ANTENNAS SITES According to the New York City Tax roll for Fiscal 2009, The Department of Finance collected taxes for approximately 3,300 antennas. This amount is miniscule in comparison to the number of existing antennas in the city. For example, under Local Law 99 established in 2005, the Department of Buildings is required to maintain a list of permits issued for the erection or the placement of cell antennas. Since the law was implemented, more than 4,800 permits have been filed. That is more than 1,500 cell antennas not collected in the tax rollMh, Under the Spring Valley New York State Supreme Court decision, taxing Jurisdictions are allowed to tax the income generated from the leasing of cell towers. In addition, wiring, equipment, sheds, and other real property associated with a cell antenna can also be taxed. Throughout the city there are approximately 9,000 cell sites. District Council 37 estimates that more than 30% of the cell phone antennas are not being taxed. Each antenna could bring to the city between $7,000 and $10,000 per year. This would generate between $19 and $27 million in additional revenue annually (see sample antennas included). REDUCTION OF IMPROPER PROPERTY TAX EXEMPTIONS Since Fiscal Year 2001 the assessed value of property exemptions has more than doubled, rising from $18 billion to $39 billion dollars. During the same period, the number of parcels (properties) have remained relatively flat, from 14,024 to 15,393. The largest increase of exempted properties has been in the category of charitable organizations, many of which have been continued in error when owners of for- profit institutions purchased parcels from non-profit organizations or religious institutions. The number of parcels with Industrial and Commercial Incentive Program (ICIP), or business tax exemptions have almost tripled during the eight year span, The assessed value of ICIP property exempted properties rose from $1.9 billion to $5.2 billion. The number of ICIP exempt parcels increased from 4,273 to 6,333. Our research shows that many of the ICIP property exemptions have been issued in error. The seven city assessors who are responsible for monitoring and verifying the accuracy of the exemptions have all been laid-off or removed from the process. RECOMMENDATIONS FOR SAVINGS A VOLUNTARY VENDOR RATE REDUCTION PROGRAM Since Fiscal Year 2005, the amount of money spent on procurement in the city has doubled from $5 billion to $10 billion. During the same period, the number of contracts has remained at approximately 18,000 contracts. The sharpest increase of the contract rates is in the area of personnel, professional and consultant services contracts. Between FY'05 and FY'10, the rates for this category of contracts increased by an average of 79% (or 15% per year). Itis only fair that the vendors who provide services to the city and who profited from the booming New York City economy over the past five years, now share some of the pain during the current economic downturn. Therefore, we are proposing that the city implements a 15% voluntary vendor rate reduction program for personnel, professional and technical services consultant contracts for Fiscal Year 2012. Our calculations show that this would save over $318 million. Similar measures were successfully implemented in Chicago and Los Angeles, resulting in savings of millions of dollars.