Rockland County Executive Day Continues To Stabilize Finances, Foster Economic Growth
John Jordan | December 16, 2016
Rockland County Executive Ed Day continues to make good on his campaign promise back in 2013 to implement governmental and budgetary reform, to improve county government operations and put the days when county government was on the brink of default in the rear-view mirror.
In an exclusive interview at his offices in the County Office Building in New City, Day recalled that in the first days of administration in January 2014 he learned that the county was just $42,000 from defaulting on its debt.
Since that time, Day and his administration have succeeded in bringing reform to county government operations and arranging a $96-million bond financing deal that has helped put Rockland back on much firmer financial footing.
Real Estate In-Depth sat down with County Executive Day to discuss the initiatives he has put in place and his outlook on the Rockland County economy in 2017.
County Executive Day was interviewed during 2017 County Budget deliberations by the County Legislature. On Dec. 6, the County Legislature by an 11-6 vote, approved a $705-million spending plan that cuts property taxes by 0.43%. While critical of the final budget, at press time it was not known what possible items Day might veto. County Executive Day on Sept. 30 proposed a $674-million spending plan that reduced government spending in 2017 by 3.5%, a reduction that comes a year after Day cut spending nearly 6%, which Day’s office stated was the largest cut in recent Rockland history.
In-Depth: While Rockland County has come a long way since the early days of your administration when county government teetered with default, can you provide an update on where you see Rockland County government’s finances and do you still have a long way to go?
Day: Every story starts from the beginning. Day one we had a $138-million deficit. We had three years (in a row) of double-digit tax increases. We had an organization with 25 silos; it was a bunker mentality here, which is not unusual under the circumstances. The third week we made payroll with $42,000 to spare on three-quarters of a billion dollar budget and our bonds were rated one step above junk. That is how we started. We began a lot of hard work in really implementing basic organizational changes, such as accountability by our managers. Some of those managers are no longer here. Those that were up for the ride we were going to go on are still here and are doing a great job. We have seen the deficit of $138 million (addressed). $98 million was structured in a bond purchase. We have eight more years to pay that off. There was a predicted 12% tax increase that people said was going to come with that based on the payments of $13.5 million per year. We had $42 million in the remaining deficit.
What we have been able to accomplish through a variety of means is to absorb that deficit bond payment into the operating budget and I will tell you the first three operating budgets I proposed averaged a 2% (increase) a year, so we are staying at the 2% cap. How do we do that? We reduced government spending by 9% in two years—$67 million less. The 2017 (proposed) budget is roughly the equivalent to the 2008 budget. We have done a lot. Our workforce is 22% less since I came into office.
In-Depth: Are the workforce reductions through both layoffs and attrition?
Day: We also had layoffs at the (now shuttered) Summit Park Nursing Home. Also through attrition and consolidation; we have done a lot of work in that area. I give a lot of credit to our employees because they are still delivering services at the same level. So, they have done a good job… Bond ratings—we have had four (credit) upgrades in my time here. So the cost of our money is continuing to go lower… We are now in a situation where because of the efforts we made over the last three years, we are now starting to see the light. We are away from any more massive layoffs… There is a steadiness now that we can see in our operations. These are all coming to fruition now. It is like any organization and there is no other way of putting this—government has its own challenges, but if you approach it organizationally the way you should, good things happen. So, we have a long way to go, we still have to pay that bond down. Our deficit has gone from $42 million… to $29.9 million to $16 million audited at the end of 2015 and a projected deficit at the end of 2016 to $10 million.
Editor’s Note: The most recent credit upgrade came on Oct. 28 when S&P Global Ratings raised the county’s bond rating to BBB+ with a positive outlook. The new ranking is one step below A grade. The County Executive also credited the “tough” decision to shutter the money-losing Summit Park Nursing Home, which he said was costing the county anywhere from $12 million to $18 million a year. Summit Park is now going to become home to some county government Health and Human Services operations.
In-Depth: Does the current deficit include revenues from the proposed sale of the Sain office building in New City?
Day: No. The lack of a sale of the Sain Building is counterproductive and has created a deficit. It forced me to put austerity measures in place so we would not have a deficit for 2016.
Editor’s Note: County Executive Day expressed his frustration over the lack of progress over the proposed sale of the Sain Building to National Development, which has twice been the sole bidder for the property with an offer of approximately $4.5 million. The County Legislature’s approved budget plan commits to selling the Sain Building, with estimated revenue from the sale of at least $4.5 million, and designated that the proceeds be used for deficit reduction. However, it is unclear how the Legislature will move forward with the sale process and if it will once again seek bidders for the property or look to close on the National Development offer. Stay tuned!
In-Depth: You implemented a program to be more aggressive in collecting non-residential delinquent taxes. Has that program been successful thus far?
Day: Yes it has been very successful. We have collected $2.4 million I believe, 81% of the outstanding money that was out there we collected or put on payments. So it has been very successful. One of the first ones we cited was Patrick Farm, which served as a clarion for legal abuse of the system. Again, legally they are entitled to hold (tax payment) for three years, but it never stopped. At the end of the day, what is happening is that good taxpayers who pay their taxes on time are subsidizing those that don’t want to. Not that they can’t (pay their taxes), they don’t want to. The proof in the pudding is that when we announced that we would foreclose on that property, in 30 hours we had a check for almost $400,000…
In-Depth: Do you think that the business climate in Rockland County has improved?
Day: Absolutely. The reason why, and if I can take a little credit here, is there is a focus in this office that really wasn’t there before. Editor’s Note: Day noted that after being shut out for three years running in Gov. Cuomo’s Consolidated Funding Application process and hearing the frustration from business leaders like Al Samuels, president and CEO of the Rockland Business Association, and Dr. Cliff Wood, president of Rockland Community College, his office devoted significant time and effort to advocate for county projects. Since 2014 a host of Rockland County projects have secured CFA funding, he said.
Earlier this month, Rockland County projects were awarded more than $3 million in CFA grants.
In response, County Executive Day stated, “Our vision of the county as a place where businesses thrive and residents enjoy top-rate services and access to the arts and recreational opportunities has been recognized. Funding these worthwhile projects will help create jobs and boost our economy.”
The awards included $750,000 for revitalization efforts in the Tuxedo-Sloatsburg corridor, $825,000 for Jawonio to provide job training and health care to people with disabilities, $1 million in financing for Urban Electric Power, a high-tech start-up in Pearl River, $100,000 to update Haverstraw’s comprehensive plan, and other projects.