Dear Member:

The purpose of this newsletter is to keep you informed and updated as we go through our PERB Arbitration process.

The sessions were held on Monday, April 22 and Tuesday, April 23. The focus was on the city's ability to pay and the interest and welfare of the public. 

Not surprisingly, the city continues to pull out all the stops to prevent us from obtaining a much deserved pay raise that brings our compensation in line with other police jurisdictions.

For example, the city has used the teachers' fact-finding decision to try and influence the outcome of our process. According to one source, every word of the teachers' decision was crafted with the PBA in mind. This is evident from reading the decision, which spends page after page on pattern bargaining and ability to pay issues. Deputy Mayor Shaw was quoted as saying: "It's like a home run for our position with the PBA" (NY Times Metro, Wednesday, April 10, 2002).

The city also prematurely released the fiscal budget about a week earlier than scheduled-April 17th- in order to be able to use the pessimistic budget forecasts during the city's ability to pay argument presented on April 22.

Nevertheless, in light of everything that has occurred through bargaining and the PERB litigation, we anticipated the city's tactics and were prepared to deal with them.

We will continue to keep you updated of important developments.

Fraternally,

Patrick J. Lynch

This session was for the City's ability to pay and the interest and welfare of the public.

• (CITY) -  Opened Hearing with the testimony from Mark Page, Director, and David Rubenstein, Deputy Director, of the NYC Office of Management and Budget(OMB).
  
  Their presentation overview was on:

  1. New York City's Budget Process ......... Mark Page
     1. Origins of the City's Financial Management System
     2. Financial Emergency Act
     3. Budget Cycle
        
        
  2. Preliminary Budget and Executive Budget Overviews......... Mark Page
     1. Why is there a $5 billion gap in 2003?
     2. 2003 Financial Plan
        
        
  3. Economics and Tax Outlook......... David Rubenstein
     1. City's Tax Structure and Economy
     2. Economic Conditions Before and After 9/11
     3. Forecast
     4. City's High Tax Burden
        
        
  4. 2003 Gap Closing Program ......... Mark Page
     1. City's Budget Constraints
     2. The Plan
     3. Contingency Cuts
        
        
  5. Other Issues ......... Mark Page
     1. 9/11 Federal Assistance for New York
     2. The Transitional Finance Authority will close 1.5 billion of the revenue shortfall caused by 9/11
     3. Moody's Investors Service
        "Negative Outlook"
     4. Cost of PBA Proposal Above Budgeted Pattern

In total, the first day's testimony took approximately 7 1/2 hours.

EDUCATION
Ph.D., Economics, London School of Economics, 1977.
MA, Economics, University of Michigan, 1970.
BA, Economics, with distinction, University of Michigan, 1968.

PRESENT POSITIONS
Economic & Management Consultant
Senior Fellow (non‑resident), Urban & Metropolitan Policy Center, The Brookings Institute

PREVIOUS POSITIONS
Visiting Fellow, Economic Studies, The Brookings Institution, 1996-1997
Directed DC Revenue Project and authored The Orphaned Capital.
Consultant on Economic Development, NYC Partnership & Chamber of Commerce, 1994-95

Director, New York City Office of Management & Budget, 1993
Top financial executive, responsible for policy and administration of annual $31 billion  expense budget and $50 billion multi-year capital plan. Issued and re-financed City debt, including related due-diligence, negotiations with rating agencies, underwriters and major lenders. Managed fiscal relations with NYS Financial Control Board, NYS & NYC Comptrollers, City Council, and NYS Budget Office and Legislature.

Commissioner, NYC Department of Finance, 1990-94
Set policy and administered 23 taxes, raising $17 billion in revenue; 2,500 employees; assessed America's largest property tax base. Senior member of Mayor's budget cabinet. Directed  the Treasury, with a cash flow of $30 billion and daily balances of $250 million. Chaired Banking Commission, awarding banking contracts. Directed City pension  policy and chaired Trustee Boards and Proxy Committees of the two largest retirement systems (NYCERS and TRS), assets in excess of $35 billion.

Chief Economist, District Council 37, AFSCME, 1976-1990
Professional economist, with international reputation on a broad range of policy issues, including tax policy,health & labor economics, pension funds and corporate governance, and international labor.

(Many other awards, appointments, associations, publications and corporate directorships.)

Carol O'Cleireacain spoke on numerous topics addressing the City's ability to pay including a written presentation with charts and graphs, that covered the history and structure of the budget and financial plan, the economic context, and the current financial plan.  O'Cleireacain demonstrated that past forecasts underestimated actual results by upwards of $6 billion dollars and that the City routinel underestimates revenues.  O'Cleireacain also testified that the U.S. economy has emerged from  the recession and projected substantial Gross Domestic Product increases into the foreseeable future.  Finally she testified that at least $21.5 billion dollars of federal aid is headed to NYC, and that $38 - $52 billion dollars in insurance claims are working their way through the system.

PROFESSIONAL HISTORY

• Director of Graduate Studies,City and Regional Planning,Cornell University, 2001 -
  Visiting Fellow, Yale University School of Management,1999-2000
  Professor, Department of City & Regional Planning,Cornell University, 1992 - Present
  Visiting Professor, Harris Graduate School of Public Policy Studies and the School of Social Service Administration,University of Chicago,1990
  
  

• Member of Economic Advisory Panel to New York City Office of Management and Budget, 1977 to present

• Economic Consultant to: Federal Reserve Bank of New York, Port Authority of New York and New Jersey, and others.

• (Impressive Resume too extensive to list.)

Matthew Drennan addressed the City's ability to pay, spoke on numerous topics covering the U.S. economy now, the New York City economy now and put present New York City economy in context, spoke on the impact of disasters on regional economies, compared the recent recession to other recessions that have hit the NYC economy, and concluded that the recent recession was relatively mild and short lived. He compared the 9-11 disaster in economic terms to other disasters and concluded that the local economy will rebound.

• (PBA) -  New York State Senator Thomas Duane - Spoke on several topics relating to, but not limited to, public safety.It is in the public interest to pay the New York City Police a higher salary, retention and recruitment problems, most complex/difficult City to police, and his constituents support a higher police salary.

• (PBA) - City Council member, Oliver Kopell - Addressed issues pertaining to City Council's authority to adopt a budget, City Council's enactment on property taxes and negotiation of budget between Council and Mayor.

• (PBA) - Robert Linn (PBA Lead Negotiator) spoke on additional PBA demands:

  1. Sick leave Avoidance Incentive Program
  2. Shift differential calculation
  3. Mutual exchange of tours
  4. Longevity
  5. Defibrillation Pay

Conclusion of Testimony

At the close of the sessions the arbitrator changed the proposed April 29th and 30th dates to May 6th and 7th, where the Panel will hear final arguments on comparability, pattern bargaining, parity, ability to pay and the interest and welfare of the public.

In total, the second day's testimony took approximately eight hours.

Fraternally,

Patrick J. Lynch
President