At the Monday meeting of the Battery Park City Authority (BPCA) board, staff members reviewed financial performance for the fiscal year that closes on October 31, and the upcoming 12-month period.
For fiscal year 2017, BPCA acting president Benjamin Jones said, “overall revenues are $287.6 million, which is just over 17 million higher than projected. Excess revenue is estimated to be $189.4 million.” This term refers to the funds left over each year, after the BPCA deducts expenses for operations and debt service.
“We plan to send these funds to the City, and that goes to two places,” Mr. Jones continued. “The majority of it, about 79 percent, is used for payment in lieu of taxes [PILOT] to the City. And the remaining portion goes to the Joint Purpose Fund, which was established for both the City and State. Under a 2010 settlement agreement, we agreed with the City to fund their pay-as-you-go capital fund, to the tune of $260 million, which we continue to pay down, with about $39.8 million this year, which gets us to $125.8 million of that obligation.”
“In terms of our operating budget,” Mr. Jones noted, “we are under budget for fiscal year 2017 and so are using some of that money to pre-fund our pension and other post-employment benefits obligations.”
Turning to the fiscal year that will being on November 1, Mr. Jones said, “we are planning a slightly smaller operating budget of $27.7 million, which will be the lowest operating budget in 15 years, while still investing more spending in parks programming and other community initiatives.” He added that, “we are estimating revenues of approximately $284 million, with an estimated $186 million of that going to the City.”
He also observed that, “we are planning to continue forging ahead with our existing capital projects, which include items like pile remediation, the West Thames Bridge, and improved way-finding signage. We also have some additional items, particularly when it comes to resiliency, that we are also planning to move forward with in earnest and are now working on our financing options, in order to budget for those additional projects.”
BPCA chairman Dennis Mehiel reflected that, “in the year just ended we returned a record amount of excess cash to the City, as we typically do, and in 2018 we are forecast to improve again.” He continued, “while we are operating on a tighter budget, our view is that our community programs are actually more robust than they were five years ago. So we think we’ve had an increase in amenities for the community. We’ve maintained a reasonable degree of discipline on expenses, and revenue continues to increase based on how dynamic this community is. We have not sacrificed quality or breadth of services to save money.”
BPCA board member Louis Bevilacqua (center): “It seems to me that if we have excess revenue and we have good projects down here, that’s obviously the first order of business.”
Louis Bevilacqua, one of three new BPCA board members appointed by Governor Cuomo earlier this year, asked about how the City and the State split BPCA excess revenues.
“The concept behind this is that the PILOT is basically the equivalent of a real estate tax and goes into the general fund of the City,” Mr. Mehiel noted. “The gain that the Authority achieves each year on the ground lease payments themselves is dedicated to the City’s affordable housing program, so it goes into that bucket, and after that the money is fungible.”
Mr. Bevilacqua reflected that, “to the extent that we increase programs for the local community, we have no obligation to increase the revenues to the City?”
BPCA chairman and chief executive officer Dennis Mehiel (center): “I think that’s fair.”
Mr. Jones and Mr. Mehiel both answered that this was correct.
Mr. Bevilacqua then added, “it seems to me we should find good uses for the funds down here. It seems to me that if we have excess revenue and we have good projects down here, that’s obviously the first order of business.”
Mr. Mehiel replied, “I think that’s fair.”