Showdown looms over city budget

[andreahaxton]

[May 05, 2008]


City, School Board to vote on steel plant assessment: LACKAWANNA



(Buffalo News, The (NY) (KRT) Via Acquire Media NewsEdge) May 5--The City of Lackawanna and its school district are close to reaching an agreement in their lengthy legal battle over the assessment on the former Bethlehem Steel Corp. site.

The Lackawanna City Council and the Lackawanna School Board are each set to vote tonight on a settlement that would slash the property's $40 million assessment, Lackawanna Mayor Norman L. Polanski Jr. said Sunday.

Officials would not disclose details, but they said the agreement does not require the city to pay a refund to the site's owners and it will leave the city on a fiscally stable footing.

"We have negotiated what I feel is a very good deal for the city," Polanski said.

The agreement, if approved, would end an eight-year fight over the taxable value assigned to the sprawling, 1,400-acre former Bethlehem Steel property.

The site's current owner, Mittal Steel Co., pays about $1 million in property taxes each year to the city and hundreds of thousands of dollars more to the school district, the county and in sewer taxes.

Those payments are a key part of Lackawanna's $21 million annual budget, Polanski said.

The assessment on the property during Bethlehem Steel's glory days in Lackawanna was $131 million, but Mittal today argues that the site is worthless.

The value was reduced twice previously, in 1990 and 1997, and both times the city ended up paying a total of $7 million to the site's owners as a refund for overassessment.

A 2006 audit from the state comptroller's office warned that Lackawanna was in a precarious financial situation and cited the potential loss of tax revenue from the Mittal site as a serious concern.

However, Polanski and Council President Charles Jaworski said Lackawanna will withstand the drop in future tax payments driven by the lowered assessment, thanks in part to increased state aid and new development in the city.

In fact, Polanski will lower property taxes in the budget he plans to unveil Friday.

The agreement was reached following secret negotiations involving the city, its lawyers and representatives of Mittal. The city and school district have spent hundreds of thousands of dollars on legal fees in the case.
Read more: http://www.tmcnet.com/usubmit/2008/0...#ixzz20RoBsfUS

[LAsurvivor]

From the City of Lackawanna Municipal Code:

Article VIII. Department of Administration and Finance

5-69. Divisions within the Department.



The Department of Administration and Finance shall be divided into the following divisions:
A. Accounts and Control.

B. Assessments.

C. Bureau of Personnel.

D. Bureau of Purchasing.

E. Treasury.

§ 5-70. Duties of Director.



In all cases where the duty is not expressly charged to any other department or office, it shall be the duty of the Director of Administration and Finance to act to promote, secure and preserve the financial and property interest of the City.
A. Fiscal supervision over officers. The Director of Administration and Finances shall exercise general supervision over all officers of the City regarding the proper management of the fiscal concerns of their respective offices.

B. Examination of departments' books. The Director of Administration and Finance shall examine the books of each department monthly, and see that they are kept in proper form.

C. Supervision and reports. The Director of Administration and Finance shall see that officers receiving money pay the same into the City Treasury, when such is required, and shall see that all necessary financial reports are made by officers. The Director shall report all delinquencies in such payments or reports to the Mayor and Council.

D. Default of officers. Upon the default of any officer of the City to comply with Subsection C herein, it shall be the duty of the Director of Administration and Finance to report such default to the Mayor who shall direct the City Attorney to take immediate legal measures for the recovery of the amount for which such office may be in default.

E. Condemnation proceedings; tax redemptions; special funds. The Director of Administration and Finance shall pay out on his or her own warrant such money as may be due persons entitled thereto pursuant to condemnation proceedings, or for the redemption of property sold for taxes, and all special trust funds.

F. Vouchers or warrants; time limit. The Director of Administration and Finance shall approve or disapprove for disbursement all vouchers or warrants for all bills, claims or demands against the City within seven days of the receipt of the same by his or her office. Disapproval of such vouchers and warrants shall be immediately reported in writing to the Council.

Soooooo it would seem that the Director of Administration and Finance has the authority to pay bills


§ 5-71. Accounts and Control Division.




A. Supervisor. The Division of Accounts and Control shall be headed by the City Comptroller.

B. Duty to keep accounts. The Division of Accounts and Control shall keep all general accounts of the City government and of the respective departments, offices, boards, commissions and institutions thereof.

C. Submission of financial statements. The Division of Accounts and Control shall transmit to the Director of Administration and Finance, at least monthly, an audited statement of cash on hand and of classified unencumbered appropriation balances for the City as a whole, and such other financial statements as the Director may from time to time require.

D. Duty to keep departments, etc., informed of unencumbered appropriation balances. The Division of Accounts and Control shall keep all departments, boards, commissions and institutions of the City currently informed of its classified unencumbered appropriation balances. In no event shall any official or employee receive as his or her salary an amount in excess of that salary as established by the appropriation of the Council in its adopted budget, and any and all sums paid to an employee pursuant to the Mayor's interim budget are then to be prorated so that the salary shall not exceed the amount established by the Council in its adopted budget. All salaries as established by the Council's adopted budget are yearly salaries and are to be prorated as of the date of appointment. The Mayor shall veto any item which does not appear in the budget adopted by the Council and enacted by it into law.

E. Budget duties. The Division of Accounts and Control shall prepare estimates of revenue and shall give such other assistance in the preparation of the budget as may be required by the Director of Administration and Finance.

Don't see anything about transferring money here?


So now we will check......

[LAsurvivor]

CHAPTER 7. Department of Administration and Finance





§ 7.1. Department, generally.




[Amended 8-31-2005 by L.L. No. 5-2005 Editor's Note: This local law provided for an effective date of 7-1-2006. ]
There shall be a Department of Administration and Finance, the head of which shall be the Mayor of the City of Lackawanna or any other person qualified by training and experience in governmental administration and finance appointed by the Mayor to serve as director for a term of two years and which shall be one of the division heads within this department. The Director of Administration and Finance so appointed shall serve without any additional compensation. Within the department there shall be the following divisions:
A. Accounts and control;

B. Assessments;

C. Treasury; and

D. Bureaus of purchasing and personnel.

So does this mean that the Mayor is the Director of Administration and Finance? And therefore can approve the Bills? Seems to me that the problem is solved. The Mayor can approve payment to vendors, employees and the IRS. Imagine that!

[LAsurvivor]

§ 7.4. Division of Accounts and Control.



Within the Department of Administration and Finance there shall be a Division of Accounts and Control, the head of which shall be the City Comptroller. The Division shall:
A. Develop, maintain and enforce a uniform system of accounts, including forms, standards and procedures for all departments of the City government;

B. Maintain and operate the City's central bookkeeping and accounting records according to sound accounting principles, including such records and reports as may be prescribed or approved by the Director for the determination of the cost of performance of each function or program or activity, measured in such work units as may be appropriate thereto;

C. Preaudit all bills, claims and demands against the City, including payrolls, and require each department head to certify that the materials, supplies or equipment have been received and accepted as specified and that the services have been duly rendered;

D. Require reports of receipts and disbursements from each department to be made daily or at such intervals as will most efficiently protect the public interest;

E. Install, operate and maintain a central payroll system and all social security, pension and insurance records for personnel of all departments;

F. Control all expenditures to assure that budget appropriations are not exceeded, and maintain such books and records as may be required for the proper exercise of such budgetary control, including an encumbrance system of budget operations;

G. Review each proposed expenditure and commitment to be made on behalf of any City department for conformity with the Charter and ordinances of the City; and authorize only such expenditures and commitments as conform with all of the requirements of this Charter and ordinances;

H. Compile budget documents, schedules and exhibits, and make such budget estimates as are otherwise required by the Charter and assist the Mayor in the preparation of the City budget in accordance with this Charter.

Still nothing about being the only one authorized to money between accounts?
Hmmmmmmmm could the information at the press conference be misleading?

[bluethunder]

you need a history lesson. Bethlehem closed because foreign countries, especially France, were subsidising their steel industry. Do you need an economics lesson too?

In 1982, Bethlehem Steel announced the closing of nearly all production at the Lackawanna Steel plant in New York. Bethlehem Steel, like many American steel companies, was encountering significant financial problems. Although the company made several public attempts to reassess the plant' viability and keep the plant open in the late 1970s, closure was a foregone conclusion for many. On June 25, 1982, Bethlehem Steel announced it would close the Lackawanna facility and lay off its remaining 10,000 workers in six weeks.

The Lackawanna Steel Co. plant closed on October 15, 1982. The company laid off workers in waves before the final closure, and transferred many others. On the day the plant closed, more than 6,000 workers lost their jobs (most of them high-paying). The city of Lackawanna's 22,700 people faced extremely large tax increases just to maintain basic services, as the amount of taxes paid by Bethlehem Steel fell from 66 percent of the city's revenue to just 8 percent.

I guess paying 66% of the city's taxes isn't high taxes?

[bluethunder]

As Prosperity of Steel Fades, A Town Debates Its Future
By SAM HOWE VERHOVEK
Published: July 25, 1989


The Bethlehem Steel Corporation practically created this brawny city, bringing not only smoke and grime but also decades of prosperity when it built one of the largest steel mills in the world here on the shore of Lake Erie.

Today there is still smoke in the air and grit on the streets, but the prosperity is gone. Basic steel-making operations were shut down six years ago, and only 1,300 people - about 5 percent of the peak work force - still work at the plant stretching for miles along the lake, tending coke plants, a bar mill and a galvanizing line.

For some people, Bethlehem's welcome is also gone. ''Get out,'' Mayor Thomas E. Radich said in his recent state of the city address. ''Let Bethlehem take its coke gas and benzene emissions and its water pollution to where it has clearly staked its future.''

Bethlehem Steel may be a skeleton of its former presence here, but it remains the largest employer in what is still a company town. So there was intense reaction - some anger, some cheers - when Mr. Radich, who worked in the mills for 30 years, said the company should leave town and make way for newer, cleaner industries. A Losing Tax Battle
The mayor's words reflect the bitterness in this community of 22,700 people just south of Buffalo who not only have lost thousands of well-paying jobs but also now are locked in a losing tax battle with Bethlehem that will almost certainly force sharp increases in local tax bills.

But the words also represent the hope, so far quixotic, that Lackawanna might somehow transform itself from a smokestack town into a high-tech center. Local development officials say that several computer companies, as well as a toy manufacturer, have expressed interest in moving operations to a trade center on the waterfront, but only if there were no longer emissions or odor from the Bethlehem plant.

But Bethlehem Steel said it has no interest in leaving Lackawanna. In a statement issued from the company's headquarters in Bethlehem, Pa., officials pointed to their 67-year history in the community and said they were still investing money here, including $20 million in environmental quality controls at the coke ovens. The extremely hot ovens process coke, a residue of the steel-making process, and can scatter particles over a wide area.

City officials said that they could not act on their own to force out the company. But they have vowed to press the state Department of Environmental Conservation to close the remaining operations if Bethlehem continues to violate state pollution standards. Echoes of the Past

After repeated violations concerning soot and particulate discharge, the company signed a consent order with the state in May. It agreed to pay a $115,000 fine and install $11 million in pollution-control equipment, said John J. Spagnoli, director of the conservation department's western New York office.

Meanwhile, here in Lackawanna, a faded city whose large brick buildings and marble Basilica of Our Lady of Victory speak proud echoes of the past, some people applaud the Mayor for his boldness while others ridicule him.

''He was crazy to say it,'' said Elias P. Amar, who was eating fried eggs at the Basilica Family Diner today and who worked in the steel mills for 13 years until he was laid off in 1979. ''There are still people working in there. Besides, 20 years ago we had a lot more pollution, and nobody hollered about it then.''

Roy Toomey, who still works in the coke ovens as a foreman, said he doubted the Mayor's contention that only dirty air was keeping new businesses out. ''It's not the emissions, it's the taxes,'' he said. 'A Diamond in the Rough'

But William Huitfeldt, a resident who helped lay the railroad track into the mills, said the Mayor ''has a good point.

''I've always thought of that whole waterfront as a sort of a diamond in the rough,'' he said. ''If Bethlehem Steel cleared out, they could probably open up a lot of restaurants and maybe even a couple of hotels.''

One politician who has endorsed Mr. Radich's comments is the Mayor of neighboring Buffalo, James D. Griffin. ''If they don't clean up their act, they should get out of there,'' he said of Bethlehem Steel. ''They're doing more harm to Buffalo and Lackawanna than they are helping.''

But many union leaders and politicians said they were furious that Mayor Radich was inviting the loss of hundreds of jobs. 'Hope and a Prayer'

''Even if he could bring in new jobs, they wouldn't be high-quality jobs, that's for sure,'' said Arthur Sambuchi, the president of Local 2603, the bar, rod and wire division of the United Steelworkers of America.

Louis J. Thomas, the New York State director of the Steelworkers Union, said the area ''cannot afford to take the chance of giving up good-paying jobs at the Lackawanna facility in favor of hope and a prayer. We've lost too many jobs here already.''

Mr. Thomas said Mr. Radich's comments were an attempt to redirect anger at a city tax increase from City Hall to the steel company. Bethlehem once paid more than two-thirds of the city's taxes but now pays about 8 percent, and the city owes the company $5 million for tax overcharges.

The city's efforts to attract high technology have not panned out so far, Vincent G. Dziechciarz, the city's director of economic development, said.

''The perfect thing would be for someone from Silicon Valley coming out and saying they need 100,000 square feet of space,'' he said.

''But it's tough to get them to come in when you have to turn on your headlights to find a parking space,'' he added, in a reference to the coke dust that swirls in the air some days.

Still, the city and private investors have had some success in attracting small manufacturers, including makers of guardrails, plastic injection molders and plastic silverware.

About 60 such companies now provide 700 jobs on small plots of former Bethlehem land, said Dan Bicz, vice president of Gateway Trade Center, one development.

On Ridge Road, Lackawanna's main street, several people said they were skeptical that Bethlehem's departure would spur more jobs.

''What new jobs?'' asked Peter Makasymik, a retired sheet slitter at the steel mill. ''If they left, there'd be almost nothing left at all, and I suppose it would just stay that way.''

But Mayor Radich remains adamant that the main obstacle to a prosperous future for city is Bethlehem Steel.

''Of course nobody screamed about the air when they had 22,000 jobs and paid $6 million in taxes,'' he said. ''But then they pulled out, and they left behind the dirtiest parts of the steel process.''


This was 1989 and while other closed Bethlehem Sites are thriving ours is a economic and social disaster. When will our city benifit like the others have?

[bluethunder]

Indeed, Bethlehem Steel Chairman Donald Trautlein's announcement of the shutdown strongly suggested that the city of Lackawanna had been gouging the company on taxes. Taxes at Lackawanna have been more than five times the average amount paid per ton of shipments at Bethlehem's five other major steel plants, he said.

Donald E. Stinner, a tax comptroller at Bethlehem headquarters, said the records show that the plant twice had been subjected to arbitrary property tax assessment increases -an $8 million jump one year and $17 million in another -with no real recourse or consideration of depressed business conditions. Stinner estimated that Bethlehem used to pay 73% of the property taxes in Lackawanna.

Bethlehem frequently warned the city that the tax inequity could kill its future in Lackawanna, Caldwell, the caretaker officer, recalls. He said the company even sent fiscal experts to advise the city on how to put its municipal affairs in shape. When their recommendations were continually ignored, Bethlehem sued the city over its tax bills for five consecutive years starting in 1978. Corporation personnel said each action seemed to be met with the attitude, "What are you going to do about it? You have too much of an investment to pull out."

After Bethlehem shut down the steelmaking plant, Lackawanna conceded the inequity. All legal actions were settled out of court and Bethlehem's tax bills were cut retroactively, from $13.5 million in 1982 to $9.5 million in 1983, and to $6 million in 1984. In 1985, taxes are expected to be $2.5 million.

While Bethlehem Steel had often complained about its tax treatment, it lived quietly with another problem that might have been a greater factor when tough choices had to be made. This was the plant's notorious record of labor hostility.

Company industrial relations personnel say that more labor grievances were filed in Lackawanna than in all other Bethlehem plants combined. Caldwell said that when he began labor relations work in 1978, more than 4,500 grievances were in various levels of procedure. While most were over work rule nuances, many were petty retributions against management. (One worker filed a grievance because the company flew a 48-star flag the day after Hawaii was admitted to the union.)

Members of the more than a dozen crafts at Lackawanna jealously protected their turf by "grieving" at the slightest suspicion of intrusion, Bethlehem labor relations sources said. And nowhere, they say, were workers quicker to spot openings in antiquated work rules as a way to embellish their pay, which was already the highest in manufacturing, (For example, if a foreman carried a board across the room, a union worker was entitled to file for an extra four hours of pay because a manager technically did union work. Many blue collar workers in other plants would ignore such petty technical violations, but grievances in Lackawanna remained the sport of the day, plant people reported.)

"More often than not it was cheaper from a management standpoint just to say, 'Give the guy four extra hours of pay' than to fight the issue through grievance procedure," Caldwell said.

He is one who believes that Lackawanna might have been saved -at least in the first wave of shutdowns -if work rules piled on in the bonanza era had been eased to improve productivity. "If we could have, we would have reduced crew sizes," he said. "In almost all the mills, the crew sizes were much larger than they needed to be…I think technological changes would have come sooner and been accepted better had we had the flexibility."


There you have it when it comes to taxes, the union and Bethlehem.

[bluethunder]

§ 7.4. Division of Accounts and Control.



Within the Department of Administration and Finance there shall be a Division of Accounts and Control, the head of which shall be the City Comptroller. The Division shall:
A. Develop, maintain and enforce a uniform system of accounts, including forms, standards and procedures for all departments of the City government;

B. Maintain and operate the City's central bookkeeping and accounting records according to sound accounting principles, including such records and reports as may be prescribed or approved by the Director for the determination of the cost of performance of each function or program or activity, measured in such work units as may be appropriate thereto;

C. Preaudit all bills, claims and demands against the City, including payrolls, and require each department head to certify that the materials, supplies or equipment have been received and accepted as specified and that the services have been duly rendered;

D. Require reports of receipts and disbursements from each department to be made daily or at such intervals as will most efficiently protect the public interest;

E. Install, operate and maintain a central payroll system and all social security, pension and insurance records for personnel of all departments;

F. Control all expenditures to assure that budget appropriations are not exceeded, and maintain such books and records as may be required for the proper exercise of such budgetary control, including an encumbrance system of budget operations;

G. Review each proposed expenditure and commitment to be made on behalf of any City department for conformity with the Charter and ordinances of the City; and authorize only such expenditures and commitments as conform with all of the requirements of this Charter and ordinances;

H. Compile budget documents, schedules and exhibits, and make such budget estimates as are otherwise required by the Charter and assist the Mayor in the preparation of the City budget in accordance with this Charter.

Still nothing about being the only one authorized to money between accounts?
Hmmmmmmmm could the information at the press conference be misleading?

Great points!The problem is no one from the old school has ever read the city charter or they either just ignore it or try to change the interpretation of it. Watch the city attorney try to spin this one.

[getalife123]

Thomas Love has indicated he may resign also if the salaries are not reinstated, go ahead. The gravy train for him should have been over years ago. He lives in Boston doesn't he. There is a super Walmart in Springville, they may also be looking for a store greeter.

[andreahaxton]

Great points!The problem is no one from the old school has ever read the city charter or they either just ignore it or try to change the interpretation of it. Watch the city attorney try to spin this one.

EXACTLY!

Normie was the Director of Development for years........and we have NOT had a Director of Administration and Finance in Lackawanna since February 2007.
The City has been operating illegally (violating our own City Charter/Code) since then.....by condoning and covering up the City's violation of this situation that Normie and Council created for.........this same person, who is now quiting and crying, wah-wah-wah all the way home, because his $30,000/yr freebie is gone down to $10,000!
Please, with computer soft-ware, he could have ran it from his home because he came and went as he wanted to for the $30,000/yr.
He told me publicly that he and the rest of the RETIRED and still working for LA for $30,000 ........ONLY "work 19 /hrs/week"! ( Remember they are currently collecting State PENSIONS, and one got a $15,000 City BONUS and a State BONUS to retire a few years back !) RETIRE......nice pocket money.......I say taking the job from a Citizen who needs a break!
$30,000 for 19 hrs week....... ( And don't forget his wifey works at City Hall too....$40,000+ ; their kids get thrown bones too, ie. Proctor a Civil Service exam for a few hours for $60.00 or so )!

He has been the " retired/part-time City of Lackawanna Comptroller like I said since February 2007......also, you know who, has condoned it all this time! I have repeatedly brought it up over the years....only to be told to shut-up!

Now that the shoe is on the other foot......they bring in some guy from the County to say, no-one else can handle the money??!!??

I believe it says.........Somewhere in the Charter/Code (I can't cut and paste it because it is no longer on web)........
that in the absence of a Department/Division Head, the Mayor assumes the duties.
POLI-TRICKS! And a prime example of feeding the "family and friends" club pyramid, to keep them voters happy! While ******* on the rest of the City/playgrounds/streets/activities/police and fire equipment, etc.!

Btw:
Mayor Kuryak zero-ed the " Assistant Comptroller " position in the Budget in order to downsize .......
Normie brought it back about 3 years to give a cronies kid a job (not the lady in it now).......

No offense.....but the $ 30,000 and Assistant's appr. $50,000 with bennes .......could be used to hire ONE NON-POLITICAL CPA type person that has ONLY the taxpayers at heart and NOT "The Party" favors!

Poli-TRICKS ! YUK!

[andreahaxton]

BTW:

City Tax increasing appr. 95 cents/$1000 of assessed value on a homestead parcel
And......

School Tax appr. $ 1.79/$1000 of assessed value on a homestead parcel

So my house in Beth Park with no garage is assessed at $44,000 will increase $120.56/year!
A home assessed at $100,000 will increase about $274.00/year.......WHOA! Even with the $30,000 standard STAR exemptions.......it is still......WHOA!
It will be, appr. $220./yr less, " discretionary money ", to spend for fish fries, etc., at those "newly created mom and pop businesses".......

[highestpropertytaxes]

EXACTLY!

Normie was the Director of Development for years........and we have NOT had a Director of Administration and Finance in Lackawanna since February 2007.
The City has been operating illegally (violating our own City Charter/Code) since then.....by condoning and covering up the City's violation of this situation that Normie and Council created for.........this same person, who is now quiting and crying, wah-wah-wah all the way home, because his $30,000/yr freebie is gone down to $10,000!
Please, with computer soft-ware, he could have ran it from his home because he came and went as he wanted to for the $30,000/yr.
He told me publicly that he and the rest of the RETIRED and still working for LA for $30,000 ........ONLY "work 19 /hrs/week"! ( Remember they are currently collecting State PENSIONS, and one got a $15,000 City BONUS and a State BONUS to retire a few years back !) RETIRE......nice pocket money.......I say taking the job from a Citizen who needs a break!
$30,000 for 19 hrs week....... ( And don't forget his wifey works at City Hall too....$40,000+ ; their kids get thrown bones too, ie. Proctor a Civil Service exam for a few hours for $60.00 or so )!

He has been the " retired/part-time City of Lackawanna Comptroller like I said since February 2007......also, you know who, has condoned it all this time! I have repeatedly brought it up over the years....only to be told to shut-up!

Now that the shoe is on the other foot......they bring in some guy from the County to say, no-one else can handle the money??!!??

I believe it says.........Somewhere in the Charter/Code (I can't cut and paste it because it is no longer on web)........
that in the absence of a Department/Division Head, the Mayor assumes the duties.
POLI-TRICKS! And a prime example of feeding the "family and friends" club pyramid, to keep them voters happy! While ******* on the rest of the City/playgrounds/streets/activities/police and fire equipment, etc.!

Btw:
Mayor Kuryak zero-ed the " Assistant Comptroller " position in the Budget in order to downsize .......
Normie brought it back about 3 years to give a cronies kid a job (not the lady in it now).......

No offense.....but the $ 30,000 and Assistant's appr. $50,000 with bennes .......could be used to hire ONE NON-POLITICAL CPA type person that has ONLY the taxpayers at heart and NOT "The Party" favors!

Poli-TRICKS ! YUK!

great point Andrea. And why is the news not really pointing out that it seems fishy that the assistant comptroller would quit as well? Doesn't anyone see how that is another political ploy to create a false sense of urgency or are the sheep that dumb?

[highestpropertytaxes]

And how do we get a copy of the charter? Someone should email the Buffalo News about the points listed above in the charter

[LAsurvivor]

I pulled the charter and code right off the City website

[andreahaxton]

I pulled the charter and code right off the City website

Thank You!
My blooper....I was used to it at the top of their web. Thanks again, and I am sorry for my oversight.

BTW:

Can't dispute OUR own LAWS......but they sure try to!
Our forefathers knew it would happen.......duh!

Lackawanna's negative reputation/image .......shame......