finance

A pair of articles in the Buffalo News this morning has bleak and bleaker pronouncements to make on the upstate economy as we head into the holiday season. While economists have yet to declare the big 'R' word at the national level, researchers at one local university have no trouble making such a statement about our own home turf. From one article: "University at Buffalo researchers are declaring a recession in New York."

Not only have we taken off with a head start, but it looks like we'll be huffing and puffing out on the track field of troubled economies even after the nation has made its laps and gone:

“Given that the current decline has been precipitated by the implosion of the real estate bubble that created a serious financial crisis for major Wall Street investment banks and insurance companies, New York state’s economy is again likely to be hit harder than the national economy,” said Isaac Ehrlich, a UB economist. Wall Street accounts for about 20 percent of the state’s tax revenues.

In another article, picked up from the Associated Press, holiday job seekers are found to be too many for too few open slots.

The odds of landing a part-time job at department store operator Bealls Outlet Stores this holiday season are slimmer than getting into Harvard University: It’s one out of every 45.

It's much the same across the nation. In California, one 7-Eleven received more than 100 applicants in a week for a position that pays $8.50 per hour.

The national trends are being borne out locally as department store, convenience chain and call center managers who only a year ago had to scramble to fill holiday jobs are seeing a surge in the number of seasoned applicants — many of them laid off in other sectors and desperate for a way to pay the bills.

That was the case with Tracey Gibbs, a Buffalo resident who landed seasonal work at keepsake store Things Remembered in the Boulevard Mall. She said last month that she accepted a seasonal job because full-time positions were scarce.

What have you seen here locally? A few weeks back, the Daily News published a handful of stories on the economy that all sounded the note of cautious optimism. Since then, it seems things have only gotten worse. We've heard about troubles with several downtown businesses, and whether that's linked to the general economic downturn or not, it doesn't bode well. Are you a local retailer? Have you seen more applicants than usual looking for a part-time holiday gig? Have you cut back your positions?

You can now count the Daily News among those of us trying to get information from officials at Victorian Manor, where construction ground to a halt earlier this year amid rumors that the Main Street senior living complex would soon close down altogether. Any attempt to find out what was going on has been met with stalwart silence on the part of Marcia Noonan, the complex manager, and it turns out we weren't the only ones getting stonewalled.

Reporter Joanne Beck called up the complex on Monday and got nowhere. Nevertheless, she put together an interesting piece that mostly rehashes what was reported on The Batavian nearly a month ago by our diligent and undaunted readers. She did, however, have some other information that we have not yet seen that helps paint a bit more of a detailed picture.

A resident, who asked not to be identified, has also said the site's emergency system has not been working since this summer. The system involves pull cords in each resident's bed and bath rooms. It was touted as part of the security for an apartment that costs some $2,000 a month plus utilities.

The Batavian also received an anonymous tip on this same topic, but since we were unable to verify the individual's identity, we were unable to publish what was alleged.

Most of Beck's article, as mentioned, is made up of information that Kelly Hansen has been posting on The Batavian over the past three weeks. So, rather than report what we already reported, we will direct you to that earlier post.

Beck raises one point that is particularly confusing and possibly incorrect. She reports that KDA Construction Inc., a subsidiary of Sunwest Management, "filed a mechanic's lien for nearly $164,000 against Victorian Manor for lack of payment." Why would KDA, which is owned by Sunwest, file a lien against Victorian Manor, which is also owned by Sunwest? Wouldn't that amount to the company filing a lien against itself?

Our own research at the Genesee County Clerk's Office found that KDA Construction and Victorian Manor were both named as debtors in the mechanic's lien filed on September 17 by On It Inc., a Rochester-based company that claims $163,480.62 in unpaid labor and material costs. We telephoned On It earler today to see if we could get some more details. Unfortunately, the phone rang indefinitely. No answer. No voice mail. In the notice of the lien filed by On it, the labor and material costs were related to the installation of "HVAC equipment, duct work and piping."

Further, KDA Construction is named as a debtor in a dozen other liens filed over the past three months, totalling more than $1.54 million. The first, for $194,032, was filed on August 29; the most recent, for $22,382, was filed on October 29. In most of those, Batavia Senior Living LLC, the legal name for Victorian Manor, is also named as a debtor. Callea Electric Inc. is named as the creditor in the lien for $339,783.45—the most costly—filed on September 15.

Beck also spoke with a former employee of Victorian Manor who said that while she was employed there, "she was shorted money in her paycheck a number of times and had a couple of company checks bounce for insufficient funds." Ouch! Beck continues:

An investigation by the state Labor Department involved at least two employees who had complained about getting paychecks that did not include all the hours they had worked and about bouncing checks. Noonan had told Labor Standards Investigator Mary Confer that "she was aware checks had bounced" because management firm Sunwest Management had changed banks. However, the time period for bounced checks was from December 2006 to at least until April 2007, records state.

The Batavian called and left another message for Marcia Noonan earlier today. We have not yet received a call back. If we do, you can be sure we will let you know.

Batavia-based manufacturer Graham Corp. has seen its sales slow in the second quarter after so many months of strong growth.

From the Buffalo News:

The troubles in the financial market and the plunge in energy prices are taking a toll on Graham Corp.’s sales and orders, but company executives said Tuesday they don’t think the slowdown will last long.

Investors, however, had a more bearish view, focusing on the company’s slowing sales growth and flat profits during the second quarter and causing Graham’s stock to plunge by 27 percent, or $5.70, to $15.25.

Graham Corp. is no more immune to the current credit crisis than anyone else, it would seem.

Because of the upheaval in the energy and credit markets, which have made it difficult for independent refinery operators to borrow the money needed for expansion or upgrade projects, Graham’s new order bookings fell by 15 percent in the summer quarter. Lines said he also expects orders to be “light” during the final three months of the year.

Still, (Graham's President R.) Lines said Graham’s customers continue to work on new projects and noted that the company still has ample opportunities to bid on future work.

Don't expect any economic slowdown to slow down the company's own verve. Lines is already talking aquisitions.

With nearly $43 million in cash on its books and virtually no debt, Lines said he sees the ongoing economic upheaval as creating an opportunity for Graham to use its solid financial position to make acquisitions, although asking prices remain high.

Graham is interested in deals that would be less than $100 million in size and broaden the company’s line of custom- engineered products for the energy industry, ranging from refinery projects to the renewable energy field. The company also is interested in deals that would expand the company’s geographic footprint, he said.

Monday morning, Pontillo's restaurant in Batavia closed up shop temporarily for renovations. "It's all good," owner Sam Pontillo told Daily News reporter Joanne Beck. In that article, which appeared in the Tuesday edition of the Daily, Beck wrote that Pontillo "expects to re-open ... within a couple of weeks."

One has to wonder if that's really the case. Owing to an anonymous tip, The Batavian has learned that "Pontillo's Pizzeria" in Batavia owes more than $112,000 in unpaid taxes to the New York State Department of Taxation and Finance. In an attempt to collect those funds, the state department has issued six tax warrants to "Pontillo's Batavia Pizzeria Inc." totalling $58,379. Another roughly $53,000 in unpaid taxes were the subject of warrants issued to other "trade" names of Pontillo's.

Finance Department Spokesperson Susan Burns:

"Generally, the tax department tries to work with the taxpayer and work on some sort of negotiated settlement in order to satisfy those warrants. Generally we like to see everything come to a positive outcome, and that's generally what happens in these situations. Sometimes, is there a time when a business is seized? Yes, that happens also."

No seizure of property has yet been made by the state, however, Burns said. Pontillo's is not faced with any deadline when the taxes must be paid. Burns stressed that the department does its best to negotiate a settlement before it comes to legal seizures.

In a records search at the Office of the Genesee County Clerk, The Batavian turned up six tax warrants issued to Pontillo's Batavia Pizzeria Inc. Two of those were for withholding tax, three for sales tax and one for corporate tax, explained Burns. They were issued between March 28 and October 17, of this year. All are still outstanding.

In addition to these, we discovered another tax warrant issued to "Sam's Tomato Pies Inc." and "Pontillo's Pizza" in the amount of $36,117.80. Another warrant in the amount of $17,585.03 was issued to "Pontillo's Pizzeria." Burns explained that "Pontillo's Batavia Pizzeria Inc." has been trading under the name "Sam's Tomato Pies Inc." for about a year or so now. Pontillo's Pizzeria is the sort of general rubric that comprises the Batavia Pizzeria Inc. and Sam's Tomato Pies. That entity is responsible for all of the owed taxes listed under all three "trade" names, which amounts to more than $112,000.

A warrant was also issued to Pontillo's Batavia Pizzeria Inc. by the New York State Department of Labor in the amount of $1,640.92. The Workers' Compensation Board of the State of New York has also filed a judgment in the amount of $1,250, in addition to a civil suit filed with the state's Supreme Court.

Whether this is related to the recent closure of Pontillo's, we cannot say. The Batavian tried to contact Sam Pontillo earlier today. We left a message at the Pontillo's restaurant in Le Roy at 3:30pm. We also tried a telephone number listed for John Pontillo in the Batavia phone book, but that was disconnected.

Downstate may lead the pack in late payments on credit cards and mortgages, but Genesee and Orleans counties reign king this side of the Catskills, according to the Buffalo News. From that article:

According to data from TransUnion, compiled and released this month by the Federal Reserve Bank of New York, 2.04 percent of credit card loans are at least 60 days late in payments in Orleans County. That’s the most in the eight-county region, and the seventh-highest late-payment rate in the state.

Niagara and Erie counties both come in second for the region, although Erie is below the average. Genesee County doesn't show up there, but in late payments on mortgages, we lead the pack.

For mortgage loans, Genesee County has the highest pace locally, at 1.84 percent of its loans that are at least 90 days late, followed by Allegany at 1.69 percent. Erie’s was much lower, at 1.41 percent.

Have you felt the credit crunch? All told, two percent doesn't seem too terrible.

WBTA's Chad Zambito tells us about a new Web site for state residents that allows anyone with the inclination to search out how much their municipality is spending, in real dollars. The site is called Open Book New York, and it was launched and will be maintained by the state Comptroller Thomas DiNapoli. Really, folks, it's this easy:

Zambito did us the favor searching the city of Batavia. Spending for the city was $24 million in 2006, while $5.5 million of that went to public safety. You can look at figures as far back as 1996, but no later than 2006, at least for the time being.

It's that time of year, folks. Time to switch on the heat in the car for the morning commute. Time to dust off the coats and scarves. As chilly as it may have been in Genesee and Monroe counties this morning, it was much more so down in Wyoming, Cattaraugus and Allegany. Those three counties were under a freeze warning issued by the National Weather Service out of Buffalo this morning, according to WBTA's Wayne Fuller. That could be dire news for some vegetable growers. We'll have to wait and see.

In contrast to the cautious words of calm issued by an Oxford-educated economist who stopped by Batavia earlier this week to tell folks that it just "doesn't feel like an honest-to-goodness recession," unemployment numbers were reported as ever on the rise statewide. Genesee County is up more than a percentage point over this time last year: from 3.7 percent last August to 4.7 percent this year. Orleans County climbed from 5.1 to 7.1 percent. So, when does it start to feel like a recession? Is it when Orleans County can say that one in ten of its residents doesn't have a job?

In addition to the increase in unemployment, Fuller reports that job growth is either stagnant or shrinking. ...Maybe recession just isn't the right word, then. Can anyone else think up some words to describe what this feels like? Anyone?

Also (reported again on WBTA), the state looks to fare far worse than was initially suspected following the recent bankruptcies and bailouts on Wall Street. Gov. David Paterson envisaged a worst-case scenario of 30,000 jobs lost and a loss of $1 billion in revenue for the state. State officials now expect to lose 40,000 jobs and $3 billion in revenue over the next two years.

Oh. Almost forgot to mention... the price for a bus or train ride on the Niagara Frontier Transportation Authority is going up a quarter.

Economist William G. Cheney stopped in Batavia yesterday to tell folks to calm down about the incessant, emphatic, sky-is-falling bad news about the national economy, according to the Daily News. Reporter Scott DeSmit does a great job with this article, drawing out some of the seeming contradictions between the advice (everything is just fine) and the market performance that is signalling real and serious decline. Here's the lede:

One of the nation's leading economists was in Batavia ... attempting to allay fears about financial markets just as Wall Street took another beating, dropping more than 4 percent and sending world markets into further turmoil.

Hmm. How about this:

"I still haven't given up," Cheney [said]. "It still doesn't feel like an honest-to-goodness recession. Outside of the housing market, the economy is generating growth."

Still, he said, the financial events of the last month are like nothing he's ever seen.

Come again? Does anyone sense a mixed message here? DeSmit qualifies Cheney as the chief economist for John Hancock Financial Services in Boston—for more than 20 years—and an Oxford-educated economist.

Check out the article by DeSmit. It's a good read.

In other news... Lorie Longhany was elected as the new chairperson of the Genesee County Democratic Committee by a vote of 31-7, according to the Daily News. Longhany, of Le Roy, was previously the the vice-chair of the group. The term is two years. She is an art teacher.

We encourage you to pick up a copy of the Daily News at your local newsstand. Or, better yet, subscribe at BataviaNews.com.

All things local may keep our blood pumping each morning as we scan the doppler for clouds over our heads, but the national scene never ceases to prod our ponderings as we chew the cud of the day. With that in mind, we thought to start the morning—along with our roundup of other local media leads—with a look at which stories are quickening the collective pulse of the nation.

Here's what we found inciting the editorial finger to wag this morning (feel free to talk amongst yourselves):

Bloomberg reports that "we the people" will back the loan to bail out yet another private Wall Street institution:

The U.S. government took control of American International Group Inc. in an $85 billion bailout to prevent the bankruptcy of the nation's biggest insurer and the worst financial collapse in history.

The Federal Reserve will provide a two-year loan, take 79.9 percent of the New York-based company's stock and replace its management because "a disorderly failure of AIG could add to already significant levels of financial market fragility," according to a statement by the central bank late yesterday.

This quote in the Bloomberg article is especially revealing:

"Nobody really knows what it would have meant if they would have been allowed to fail, but there was an enormous amount of systemic risk," said David Havens, a credit analyst at UBS AG in Stamford, Connecticut. "It's an enormous relief."

Nobody really knows. In an NPR account of the bailout broadcast this morning, commentators were heard to say that if AIG had been allowed to fail, the "already delicate" economy would have been hurt even further, "confidence in the economy" would have been weakened even more and it would become even more difficult for borrowers to get loans from banks. Even more, even further—there's a good reason they call these moves bailouts. The ship is sinking, folks. All hands off deck. Worst financial collapse in history, according to Bloomberg—and they're not the only one to say it.

What do you think? Does a government bailout help staunch the blood flow from an already profusely wounded economy? What does this matter to the everyday John and Jane down the block? I asked my six-year-old niece yesterday if she thought the economy was doomed or if we might get done with this backslide and start climbing back up soon, and she was doom and gloom all the way. She's a smart kid. Should we believe her?

Any financial gurus out there who can give us a better idea of what's going on and what to expect?

Here's some more coverage:

• Waiter, there's a banker in my soup, Asia Times
• Fed in AIG rescue, CNNMoney.com
• After AIG rescue, Fed may find more at its door, Reuters

Republicans in the town of Batavia will head to the polls Tuesday to choose their pick for town justice, according to the Daily News. Roger Muehlig put together a solid, straight-to-the-facts piece on the contenders: Thomas Williams and Dennis Rider.

Williams, 48, is a Batavia native who has a bachelor's degree from Hamilton College and a law degree from Columbia Law School. He is married and works in a law practice with his father in the city.

Rider, 55, is a Genesee Community College graduate who worked in security at GCC, then spent 10 1/2 years as a Genesee County sheriff's deputy before becoming a city police officer in 1987.

Williams already occupies the justice position. He was appointed in March when Joseph Filio retired. Rider is still a police officer but plans to retire whether or not he wins the primary. Williams is also listed on the Conservative line, so he will be an option in the general election regardless of the outcome of the primary.

Genesee County's proposed 2009 budget "for the county's self-insured workers compensation program" could go up 8 percent to $1.8 million. That an increase would mean about $60,000 more coming from "participating governments and school districts." I would suggest checking out the article by Paul Mrozek for the details on this. It's a complex topic—for me, at least. That increase in contributed funds does not necessarily mean an increase from all contributing parties. Batavia City Schools, for example, will contribute $750 less, while Pembroke will contribute $13,000 more.

All of the school districts and municipalities in the county are members of the plan, with the exception of the city of Batavia. The city withdrew from the program several years ago.

Each government and school district is assigned an "assessment," which is the amount of money it contributes toward the compensation fund.

A local veterans group is looking for ways to better assist veterans returning from the war in Iraq who may "run afoul of the law." Hal Kreter, director of the Genesee County Veterans Service, wants to look at setting up a "veterans diversion initiative" that would work much the same way as a drug court. Mrozek writes:

The goal of drug court ... is to provide a criminal defendant the opportunity to resolve a case by getting treatment for substance abuse. If the defendant is successful in rehabilitation, the judge has the option of reducing the underlying criminal chrages.

Kreter said the veterans returning from active service "are overmedicating themselves with alcohol and drugs" and often end up doing "something stupid." Many of them may suffer from undiagnosed post traumatic stress disorder.

One of the key components of Kreter's proposal is to provide the defendants with a mentor who also has seen active duty. Most combat veterans will only trust other combat veterans.

Hopefully we will see more information about this in coming months and maybe even see if some progress is made.

Another neighborhood clean-up has been scheduled for Saturday, September 13, from 10:00am to 1:00pm at the property of an elderly woman at 14 Warren St. Volunteers from God's Helping Hands/Project Hope will be on hand to remove debris from the yard. Anyone can join. Pauly's Pizza will provide refreshments for all the workers.

As always, we encourage you to get out and pick up a copy of the Daily News wherever they are sold. Or, better yet, subscribe at BataviaNews.com.

Police in Le Roy are looking for anyone with information about an apparent break in at the Little League concession stand in the village, according to WBTA. At some point over the past few nights, someone had forced open the door and got inside. Anyone with information should call (585) 768-2527.

Assemblyman Steve Hawley told WBTA's Dan Fischer that most of the $450 million that the state legislature recently agreed to cut from its spending are "un-spent member items, the so-called pork that legislators use to win points with their local constituents." (Quote from Fischer.)

An independent audit of the city's finances declares Batavia in "improving financial stability." For only the second time in the past five years, the city recorded a surplus in its general fund. Thanks to an excess of revenue over spending of $1,652,361, the city logged $617,218 in surplus and chipped away at the "undesignated" deficit, which shrank from $1,860,906 to $365,895.

Auditors Freed, Maxick and Battaglia chalk up the successful year to "cautious revenue and expenditure budgeting," the increase of more than $800,000 in property tax revenue owing to a higher tax rate, state aid for struggling cities and the elimination of seven full-time and 12 part-time employees. The last saved the city approximately $460,000 in personnel expenses.

And the future, too, looks bright:

These efforts along with continual expense monitoring and revenue improvements will assist in regaining long term fiscal solvency, while building a healthy fund balance and investing in capital equipment, City facilities and infrastructure.

The three part audit runs well over 100 pages and paints a much more nuanced portrait of the city's financial state, and addresses such topics as the imminent consolidation of city police and county sheriff dispatch crews, future savings from fixing leaks in the city's water lines and the ongoing arbitration with the police union.

We'll inspect the document more closely over the next week, but in the meantime, let's just let the graphics speak for themselves.

Lisa Neary from Attica will assume the position of deputy director of finance for the city of Batavia, according to WBTA's Dan Fischer. Neary fills a vacancy left by the unexplained departure of Shelly D'Alba earlier this summer. She will earn about $52,000 per year and starts September 5. Neary holds a degree in accounting from the Rochester Institute of Technology and had previously worked as the finance director for Wymong County Community Action.

Summer in the City kicks off tonight in Batavia. Check back in with us later today for a full list of events.

A new Web site called See Through NY promises to deliver "a clearer view of how ... state and local tax dollars are spent" by quite literally connecting users with the state's financial tax data. Launched by the Empire Center for New York State Policy on Thursday, the site has already made quite a splash. When I visited it this morning, it took about ten minutes to load because the site traffic has been so overwhelming.

All visits to the site today come with this disclaimer:

Due to heavy traffic, SeeThroughNY is experiencing technical difficulties and may be performing slowly.  We apologize for this inconvenience and are taking every step to correct these issues as quickly as possible.

We anticipate full functionality by mid-day on Friday, if not sooner.

It's pretty simple to use the site. Say you want to find out about how much money a state employee earns. Click on the bright green Payrolls button, follow the links to search the state payroll database, and... Voila! Or, at least, it would be voila if the search wasn't "timed out" after every effort to browse the salaries of the legislative branch, for example.

You can do the same for information on Contracts and Expenditures — and the data seems comprehensive — when the site is working, that is.

An article from the Johnson News Service, published in today's Daily News goes a little more in depth, behind the scenes. Reporter Tom Wanamaker talks with several people, including a municipal journalist's best friend, Robert Freeman, the executive director of the state Committee on Open Government.

"Thirty years ago, 'high-tech' meant electric typewriters and carbon paper," Freeman told Wanamaker. Freeman went on to call the site a "treasure trove of information on how public money is spent."

Barbara Bartoletti, legislative director of the League of Women Voters of New York State, hopes the site will spark a "rich debate about how governments spend taxpayer money."

Just a thought: The timing for the site's launch seems almost too perfect considering the governor's recent announcement that the state will need to start cutting staff and services to avoid a complete fiscal meltdown. We can now see in the barest and most unforgiving of languages — mathematics — just how each and every person, project and contract stacks up. Is this a good thing? Or a bad thing?

I've liked Gov. David Paterson since the first time I saw him. He's erudite, knows his facts, and he's got a sense of humor and a capacity for reason that about every other politician in the state, and many across the country, lacks to a fault. I'm not well versed enough in the political scene to get much more into my appreciation than that. That is, I can't say with any real authority if he's doing well or poorly at his job, though I would cautiously lean towards the former.

Proof:

Now that the news is out that the state accrued another $1.4 billion in debt over the past 90 days, he's calling our legislators back to work. How could the state be $1.4 billion in debt? City Council President Charlie Mallow alluded to it some the other day, in a comment appended to our initial story about the impending fiscal crisis, when he said that there are simply far too many special interest groups hankering after a piece of the pie. What looms is a question that ought to have been asked a long time ago in this state: What are we spending our tax money on... really?

Assemblyman Steve Hawley, R-Batavia, told WBTA's Dan Fischer that the state need to perform more regular audits. Sounds good to me. Let's find out the gritty details of what money is going where.

Here are some details from Paterson's address last night, courtesy of the Buffalo News:

The state’s projected deficit for next year has swollen by another $1.4 billion in the last 90 days, Gov. David A. Paterson warned Tuesday during a statewide television address in which he summoned the State Legislature back next month for a rare, midsummer special session.

He issued the call for greater fiscal discipline just three months after he approved the current state budget, which provides for raising spending at twice the rate of inflation projected by state officials.

“New York’s families are already making the tough choices — New Yorkers are prioritizing spending every day,” Paterson said Tuesday in the five-minute address. “Now, your government is going to follow your lead. We are going to end legislative vacations and bring them back to Albany to reprioritize the way we manage New York State’s finances.”

So, he can talk a good game. But what now? What happens now?

Paterson did not offer specific ideas for controlling spending. Whether he will make such proposals before the Legislature returns Aug. 19 remained uncertain.

How aggressively the Legislature will cut spending also remained unclear. The special session will meet less than three months before all members are up for reelection.

If Paterson hoped legislative leaders would rush to his side to make serious cuts in the current budget, Tuesday evening must have been a disappointment.

Assembly Speaker Sheldon Silver, a Manhattan Democrat like the governor, went so far as to draw up a list of programs — the biggest items in the state budget — that should not be cut. It included education and health care, which, together, account for 63 percent of the budget.

First, I would be interested in knowing what accounts for the other 37 percent of the budget. Second, I would like to see how the education and health care funds are allocated.

The governor made no mention of education or health care. Nor did he discuss the state’s ballooning debt levels and other rapidly rising costs, such as pension and health care benefits for state workers.

The state’s worsening fiscal problems are twofold: spending that has risen 45 percent over five years to $122 billion in this year’s budget and a softening economy that is evaporating tax revenue to pay for these costly programs.

Despite the gloom, Paterson did not say whether he would consider layoffs or a hiring freeze. Under the current budget, the state work force is projected to add 1,400 positions to 201,000 workers.

But he did say that, in coming weeks, he will look at the size of the work force, which immediately raised red flags among some state worker unions.

Danny Donohue, president of the Civil Service Employees Association, the state government’s biggest union, called any talk of trimming the work force “a sham.”

“We will not stand by for knee-jerk political solutions that diminish our quality of life and create more misery,” said Donohue, whose union has major leverage with legislators, especially in an election year.

For the full story, see the article by Tom Precious.

WBTA's Dan Fischer reports this morning that Gov. David Paterson will "deliver an unprecedented special address" to announce that the state is in the worst fiscal crisis in three decades. The announcement is expected sometime this week, and the New York Post claims that Paterson will cite "plunging state revenues" as the reason for the crisis and the forthcoming cuts in state services and personnel.

He may also call a special session of the Legislature to propose reducing some of the record-high levels of spending that were approved as part of the state's new budget in April.

"The situation is worse than anyone realizes," said a source close to Paterson.

"The governor has said he's tired of the state going from deficit to deficit, spending like it has a credit card that never has to be paid, and that he's prepared to take action," the source said.

In the meantime, the New York Times reported earlier this year that state legislators were hankering after a 20 percent pay raise.

New York legislators are looking for a raise of as much as 22 percent, saying the $79,500 base salaries they earn are not enough.

But an examination of state records shows that most make considerably more than their base salary. With extra pay for chairmanships and other posts, they earn just over $90,000, on average, for what is widely considered a part-time job; the Legislature is in regular session for 63 days a year.

And more than a third earn more from outside employment, often as lawyers in their hometowns, but they are not required to disclose how much or from what clients.

Not long after, the New York Sun reported that state judges, now, were asking for a raise.

A state judge has ordered Governor Paterson and the Legislature to start paying him and his 1,180 fellow state jurists more money.

If each judge on the state bench received the $600,000 sought by the four plaintiffs, the state's taxpayers would be on the hook for more than $700 million. The order by Judge Edward Lehner of state Supreme Court in Manhattan appears to instruct the Senate and Assembly to pass a law upping judges' pay within 90 days, which could prove an impossibly fast time frame for slow-moving Albany.

What prompted the request?

Judges on the state's main trial court make $136,700 a year, plus benefits.

Even though salaries for New York state judges are close to the national average, the judges say that the cost of living in New York is higher, and they argue that federal judges and corporate lawyers are paid more.

New York's chief judge, Judith Kaye, filed a suit on behalf of the entire judiciary in April seeking a pay raise order of the type Judge Lehner issued yesterday. But yesterday's decision came in an earlier lawsuit filed jointly by four judges seeking more than $600,000 each. That money, the say, represents the cost-of-living increases that they haven't received over the years, plus interest.

As for your run-of-the-mill hourly worker, the median income in 2007 was about $25,000, and an employee who made no more than the minimum wage — $7.15 per hour — earned less than $15,000 and likely brought home barely more than $10,000.

The median wage paid to the 4.1 million hourly workers in the state was $12.03 last year, meaning that more than two million New Yorkers earned less than that, the report from the Bureau of Labor Statistics showed. That was about equal to the median national hourly wage of $11.95 — about $25,000 a year for a 40-hour work week.

See the article by Patrick McGeehan in the New York Times for the full story.

From the Daily News (Wednesday):

• Graham Corporation's Chief Finanicial Officer J. Ronald Hansen will reture August 1. Hansen has been with the company since 1993. The Batavia-based manufacturer of "vacuum-and-heat exchangers" has seen tremendous financial growth over the past few years.
• For commentary on the article about Youth Football and the school board, see our earlier post.
• Construction of the shopping plaza off Veterans Memorial Drive in the town of Batavia resumed after a delay to get the plans for the plaza in accord with state environmental regulations. No mention in the article of the length of the delay.
• The city's Neighborhood Improvement Committee will meet tonight at 6:30pm in the Council Board Room at City Hall.
• Virginia Kropf's "Around the Towns" column in today's paper addresses her membership in the "crazy group of older women called 'Red Hatters.'" It's a delight. I look forward to Kropf's columns.
• Well, I'm sure at least Sen. Chuck Schumer would be pleased with the front page of today's Daily News. In a huge photo that dominates the top half of the paper, the senator almost seems lifesize, a giant among the puny windmills in the distance behind him — yikes! Apparently, he was in Wetherfield looking for support for a windmill bill he's excited about.

For the complete stories, the Daily News is available on local newsstands, or you can subscribe on BataviaNews.com.

WBTA reported this morning that Genesee Community College is asking the county for an additional $50,000 in support. Also in store for the next academic year is a tution increase of about $50 per full-time student per semester.

We asked the college why they needed the extra funds and just what would be funded and found a brief, slightly more detailed explanation of the increase on the college's Web site (published May 13):

A proposed $50,000 increase in support, from $1,836,374 to $1,886,374 from Genesee County, sponsor of the College. Genesee County support would be 6.1% of the total operating budget, the lowest percentage of support in the history of the College. Genesee County’s sponsor support during 2006-2007 was $966 per full-time-equivalent student, the lowest sponsor support ratio of any of SUNY’s 30 community colleges.

We're waiting to hear from the college about how long the increase would last. GCC's Web site implies that the increase is only included in the 2008-2009 budget.

By way of an explanation for the increase:

The budget ensures that Genesee will maintain program excellence and affordability, President Stuart Steiner told trustees. “Our commitment is to provide extraordinary education to our students, and to do so as cost-effectively as possible,” Dr. Steiner said. “For well over a quarter-century, we have maintained operating costs lower than those of our peers, yet we have developed a reputation across New York State and beyond for excellence and innovation.”

Overall, the total budget for GCC for the next year is up about 4.5 percent, from $29.5 million to $30.8 million.

By way of a preface... When I was a reporter in Canandaigua and an editor would assign me a story about any sort of agency (pseudo, government or otherwise) and its finances, procedures or reportings, I cringed. Visibly, I'm sure. Scowling, grumpy and none too sure what was going on, I tried my best to crack the bureaucratic nut and spill out a tidy, readable article. I'm not talking the routine meeting stuff. I mean the hundred-page report in small type with definitions of the definitions of the indecipherable financial jargon. It took me half my shift once to figure out what one word meant on a company's earnings report. All I remember was that the term not only had nothing to do with its meaning but was very much an obstacle to understanding it — maybe like using the word liquid to describe something solid and unmoving.

So I sympathize with reporter Paul Mrozek wholeheartedly in his attempt to write a comprehensible article about an auditor's report on the Genesee County Nursing Home that showed the facility lost $1.7 million last year.

That being said, there is so much information involved in these sorts of articles, that too much is always said and too much is always left out.

Mrozek tells us that this was the second year in a row that the nursing home lost more than a million dollars and had to be bailed out by the county with subsidies — but that right there raises the first question that is never really answered. If the nursing home is a county-run facility, wouldn't the county already be responsible for its funding?

Further, how is the loss measured?

Mrozek tackles that fairly well by breaking down in simple language the facility's costs per resident versus its revenues: $229 to $204, respectively, for a shortfall of $25 (per resident per day). That sounds pretty significant when you consider the nursing home has 160 beds: 160 x $25 x 365 = $1.46 million lost per year if all beds are filled. They aren't. But at 96 percent occupancy, they're close.

So why are costs higher than revenue?

A few reasons are given in a few different places in the article. One, since the nursing home is a public facility it has to accept patients on "public assistance and people who have no health insurance," while a for-profit facility can fill its beds with people who have fully-funded private health insurance. Another reason is overtime for employees, an expense that seems problematic in both the public and private sectors, but not easily remedied.

Mrozek writes that the county legislature is looking at "a possible increase in Medicaid payments" to help offset the imbalance. One of the auditors is cited as saying that the increase would "reverse the trend of increased county subsidies." (That is one of a few instances in the article that Mrozek paraphrases the auditor using language such as reverse the trend or confluence of changes.)

That's really the best as I can do for a summary of this article, though it seems like an issue worth revisiting, or at least further explications. Check out the paper for more details.

A sincere kudos to Mrozek for tackling this tricky topic. Hopefully, we can get an article in the future explaining in simple language how the nursing home is funded — touched on some in this article. Is it all through Medicaid and insurance? What about the folks with no insurance?

I'm a financial dunce and could really use the detailed explanations. And I'm sure I'm not alone.

Also, if the county is putting up the big bucks to bail out the nursing home, what does that mean for us? Does the county just have that money lying around? Where does it come from? How is it managed?

The departure Wednesday of the city's finance director was announced jointly with the news that the IRS had placed a lien on a city bank account owing to a "reporting error" in payroll that would have been handled by the finance office. Within hours of both announcements — following a closed-door meeting that morning — City Manager Jason Molino said that any penalties owed from the lien were revoked because the error had already been rectified.

Lickety split, Batavia was in... and out of a mess.

Yet, articles in the Daily News yesterday and today raise a few questions about the issue that still haven't been answered by the city. Molino refused to specify the error. He also said that connecting the departure of former Deputy Finance Director Shelly D'Alba with the IRS lien would be a mistake.

For sure, we must keep in mind the delicate nature of a "personnel matter" and not go smearing a city employee — with or without all the facts. There's never any excuse for slander. But that doesn't mean we don't deserve to get at the truth of the thing, find out what's going on without naming names and pointing fingers.

In an article in the Daily News today, City Council President Charlie Mallow said that "the city received several notices, sent to the person handling that" (the payroll error discovered by the IRS). And, more straightforward, reporter Joanne Beck writes: "D'Alba would have been the person to handle the filing."

In an earlier article, Molino said that his office had only recently found out about the error discovered by the IRS. That begs the question: If the city manager only found out about the problem once the IRS placed the lien on the account, what happened with the "several notices" that were sent to the city, some dating back to last spring?

Mallow said he could not speak on behalf of the city manager. An e-mail and a telephone call to Molino made earlier today have not yet been returned. Mallow did caution, however, against "connecting the dots" and relating matters that may not be directly linked.

In the same article, Mallow spoke optimistically of the current state of the city. Residents should not be worried by the recent departures. The city is in transition. Not everyone will stick around through such drastic changes, he said. Besides, the position of public works director has already been incorporated into the workload of the assistant city manager. An interim police chief should be appointed within a couple weeks. And an interim fire chief should soon follow. As for the new vacancy of deputy finance director, the city will have to wait and see, he said. For now, the responsibilities of that position will fall to the city manager and assistant city manager.

Mallow told the Daily News: "It's good to shake the apple cart about. There's no cause for concern at all. Strategic changes are planned."

There was no mention in the article of what "strategic changes" have been planned to deal with the glut of empty positions. So we asked Mallow if he could explain the connection. His response: consolidation.

"Our workforce is getting older in the city," he said. "In the next five years, we'll have 30 people who can retire. So we're at a very good point to consider consolidating."

Grants have come through to study the possibility of consolidating, merging positions, sharing responsibilities with the county and the city. Mallow feels strongly about the issue, and seems to see it as the city's way out of a future financial crisis.

"In the next five years, we'll have 30 people who can retire," he said. "So we're at a very good point to consider consolidating."

That could mean big changes for the city. Mallow:

"There might be an elimination of city borders, but that requires the town to buy in and that our finances are in order. We're pulling out of our financial problems. But a big glut of money will be needed for retirements, and insurance for our employees is something that needs to be taken care of."

In the meantime, it seems the city staff simply needs to get settled, the real responsibilities of each employee pretty clearly defined, and the public notified of just who does what down at City Hall.

Previous related posts:

• IRS lien already "corrected"...
• IRS placed a lien on a City Hall bank account
• News roundup: "Secret" meetings at City Hall