Limi

AIDS at Center Stage Nelghborhoocl Yenture Capital

C j ~ v L j m j ~ s
Volume XX Number 1
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2/JANUARY 1995/CITY LIMITS
Survive in '95
T
here is one certainty of history: the future is guaranteed to shock.
Two months ago, who among us could have guessed where the com-
munity development and anti-poverty movements would stand in
the politics of 1995?
Evefi for those who were not surprised by the Republican victories in
Washington, D.C., and Albany, the rapid and impulsive collapse of the
Clinton administration on poverty issues has come as a real stunner. After
more than 18 months of reformist activity within the bureaucracy of the
Department of Housing and Urban Development-efforts praised by many
in the advocacy, public housing and business circles as collaborative and
sincere-the entire agenda for paring down regulations and improving ef-
ficiency has been thrown out the window. In its place is a proposal to vast-
ly diminish all affordable housing programs and turn most of them over to
the states in the form of a block grant with much less money included.
Even Ronald Reagan never came up with a plan like this.
Of course, the Republican Congress is committed to major cuts in hous-
ing and welfare programs. As Fred Karnas of the National Coalition for the
Homeless puts it, Clinton's crew might as well have just painted a big
bull's-eye on the front of HUD headquarters. A hostile Congress will use
the administration's dismantling of HUD as a starting point, and go further.
Spending what funding is left in the block grants that eventually reach
state governments will be up to local political forces to decide; with pro-
grams designed to support housing and services for formerly drug addict-
ed homeless people thrown into a pot alongside housing for senior citi-
zens, only one can win.
Washington sources all confirm that there is currently a very deep feel-
ing of resignation among progressive activists inside the Beltway. The
Clinton administration has decided to toss programs for low income Amer-
icans into the maws of Congress, and the status quo-where Washington
once played the role of defender for many poverty programs-is no more.
Whatever hope there will be in the coming year has to come from out here
in the urban hinterland, where we are all still working for positive change.
If Washington's assault on low income people proves as vicious as it
promises to be, there will undoubtedly be a reaction. One out of every 10
Americans depends on food stamps, after all. The poor haven't been heard
from as a major political force for a long, long while. But times do change.
The future is guaranteed to shock.
* * *
Last month's cover and inside photos of Geoffrey Canada were taken by
Eve Morgenstern. Sorry, Eve.
Cover design by Lynn Baldinger. lllustration by Barry Canter.
REPORT ON GOVERNMENT
Part 1: Uncivil Service 12
Mayor Giuliani claims he wants to strengthen the core functions of
government by plugging the holes in New York City's leaky ship of state.
Who's likely to get thrown overboard? Women and children first.
by James Bradley
Part 2: Balance of Power 18
When Rudy took office, he knew he was going to have to tango across
the city's budget gap. But there's more than one way to tango: A City
Limits primer on balancing the budget. by Robert Kolker
PROFILE
Blessings in Disguise 6
The theatre project at Housing Works is teaching audiences about
homelessness and AIDS. It's teaching cast members about themselves.
by William Harris
PIPELINES
Bucking the Odds 8
By most definitions , venture capital investment funds are tools for
ultra-high-risk speculation. So how can they help the neighborhood?
by Kim Nauer
Business as Usual 24
When it comes to city contracting procedures, CrItIcs say it's the
spirit, not the letter of the law that's being violated. Either way, it's
costing us millions of dollars. by John Gilmore

Cityview
Freedom of Choice
Review
A Vision With a Task
DEPARTMENTS
Editorial
Briefs
Nagging Odors
Landlord Detente
Lead-Free Zone
2
4
4
5
Letters
Professional
Directory
Job Ads
26
by Bill Lipton
27
by Marti Bombyk
29
29,30
28,30,31
6
12
24
CITY LIMITS/JANUARY 1995/3
BRIEFS
Nagging Odors
the worst polluters.
City Council Member Ken
Fisher has joined Nekboh's de-
tractors. "When Nekboh first
came to Greenpoint-Williams-
burg, I was unhappy about it be-
cause they were taking a prime
piece of waterfront real estate.
But as long as they were operat-
ing within the law, there wasn't
much anyone could do about it,"
he says. Fisher charges that the
company is now violating regu-
lations by allowing trucks to
form long lines outside plant
grounds, however, and that the
city is failing to enforce the rules.
Residents in the largely in-
dustrial neighborhoods of
Williamsburg and Greenpoint
have long had to deal with the
pollution and stench of the
area's 25 garbage transfer sta-
tions. But recent construction on
the Brooklyn-Queens Express-
way (BQE) has forced trucks
onto the community's streets,
and the resulting congestion has
left residents angrier than ever.
Trucks carting garbage to the
transfer stations-where waste
is stored and sorted before
being sent to out-of-state land-
fills-formerly used the BQE.
Now they have switched to Met-
ropolitan Avenue, congesting
one of the area's main thor-
oughfares. Tensions over the
traffic came to a head last Octo-
ber when a truck hit and killed
an elderly woman crossing the
street. The driver reportedly had
a suspended license.
It's been more than four years
since Community Board 1 took
the city to court to challenge the
disproportionate number of
transfer stations sited in Green-
point and Williamsburg. North
Brooklyn is home to one-quarter
of the city's transfer stations,
says local activist Peter Gillespie.
The court concluded that no
single facility was illegal, but 25
transfer stations operating in a
4.9 mile stretch was excessive. It
ordered city officials to take this
into consideration in the loca-
tion and regulation of new plants,
says Inez Pasher, chairperson of
the community board's environ-
mental committee. So far, the de-
cision has had little effect in the
neighborhood, she says.
Recently, an activist group
called Neighbors Against Gar-
4/JANUARY 1995/CITY LIMITS
bage (NAG) organized a march
of more than 200 people in
Williamsburg. The protesters
had several grievances: the
stench of garbage waiting to be
carted away, the exhaust fumes
of trucks that can number up to
a dozen in line, and the engines
left running as the trucks wait-
sometimes all night-to get into
the station and unload. The
march ended outside the Nek-
boh recycling plant, a facility
which activists charge is among
Today, NAG and another
community group, the Make A
Landlord Detente?
Call it Heat 101. A promi-
nent pro-tenant organization
and the city's leading land-
lord group are conSidering a
plan that would force certain
small landlords into boiler
school if they fail to keep
their buildings warm.
The Community Training
and Resource Canter (CTRC),
a Manhattan-based tenant-or-
ganlzlng and advocacy
group, and the Rent Stabiliza-
tion Association (RSA) are
working on the proposal.
Some landlords fined for
committing heat violation&-
primarily first-time offenders
and "mom-and-pop" owners
-would be required to take a
course in boiler maintenance
and energy conservation,
possibly in exchange for fines
being forgiven or reduced.
The alliance is unusual,
given the city's bitter hous-
ing politics. However, CTRC
Director Anne Pasmanick
says her goal is to keep ten-
ants warm, not punish land-
lords. The plan would give
small property owners a
break without weakening
rent regulation or code en-
forcement, she says. And
hardcore violators would be
excluded. "You wouldn't have
Leonard Spodek or Anthony
Morfesis" qualifying for the
program, she says, referring
to two of the city's most no-
torious slumlords. "We'll try
to differentiate between those
who don't know how to run a
building and those who don't
want to run a building."
"I don't see any downside,"
agrees RSA president Joe Stras-
burg. Many small owners are in-
experienced or are immigrants
"with absolutely no clue" about
heating regUlations, he says,
adding that they need classes
like this.
If the program is implement-
ed, the Department of Housing
Preservation and Development
(HPD) will look at the owners'
records of past violations before
giving them the option of taking
the course, says Deputy Com-
missioner Harold Shultz. Other
gauges might include how many
buildings they own and whether
they use a professional manage-
ment company, Strasburg adds.
The RSA and CTRC are still
discussing the plan with city
housing officials; its size, struc-
ture and financing remain unra-
solved. Pasmanick says she
would prefer that the city hire
Comell University's Cooperative
Difference Community Action
Project (MADCAP), are looking
for alternate uses of the water-
front property that these trans-
fer stations now dominate. With
the assistance ofthe community
board, residents are drawing up
a light-manufacturing and resi-
dential plan for the riverside
property. It will be submitted to
the city next year.
Activists at NAG and MAD-
CAP hope that publicizing illegal
and non-permitted activities at
these transfer stations will pres-
sure regulators into action. If that
happens, say local residents,
they may finally get a breath of
fresh air. Kurt Gottschalk
Extension-which ran man-
agement training classes for
the city during the 198Os-to
teach a four-session course
at various neighborhood
sites. Anything less, she
says, would be "toothless."
HPD, according to Shultz,
is still mulling over whather
to run a class strictly for
heat violators, which he
says could be more effi-
ciently monitored if done in-
house at a Lower Manhattan
site, or to do a larger-scale
owner-education program,
working with Cornell and
neighborhood banks and
credit unions.
How to pay for the pro-
gram is another question.
Between 1,000 and 2,000
landlords are fined for heat-
ing violations each year. If a
landlord's fines-$125 a day
for buildings of six or more
apartment&-are applied to-
ward tuition, that would
cover costs. But the RSA
wants these fines waived or
reduced to encourage land-
lords to take the course.
HPD's Shultz says he is
inclined to agree, adding
that the course should re-
duce code enforcement
costs anyway by reducing
heating problems. The hope
is that some version of the
plan will be in place by the
end of this winter, he adds.
Steven ..... n ..
~ B R I E F S
During the 198Os, the Brooklyn Anns Hotel on Ashland Place in Downtown Brooklyn housed more than 260 homeless fllmHies-a II1II", as 1,500 people-
at a time. It was one of the city's largest welfare hotels, and the birthplace of the homeless family rights ac:tIvIst group Parents on the Move. In recent years,
the orpniDtlon's membenhlp has IIIOYtd on to other things. And the hotel, empty for nearly five years, has been flattened to IIIIIke way for a parking lot.
Lead-Free Zone
Families of children suffering
from lead poisoning can now
get out of their contaminated
homes and into state-of-the-art
treatment programs at the new
Montefiore Lead Safe House in
the Bronx, the first of its kind in
the nation.
The safe house provides fam-
ilies with more than just a
temporary place to stay, says
Megan Charlop, director of Mon-
tefiore Medical Center's Lead
Prevention Program. Children
get ongoing medical treatment
and their parents are taught how
to cope with the brain damage
and behavioral problems that
frequently follow prolonged lead
exposure, she says, such as
hyperactivity and learning dis-
abilities. They also get advice on
treatment, nutrition and educa-
tion for their children.
Following a successful three-
year pilot, the program is now
permanent, thanks to a $1 million
commitment from Bronx Bor-
ough President Fernando Ferrer.
Ferrer has been involved in the
fight for lead abatement since
1986 when he was chairman of
the City Council Health Committee,
says spokesman Clint Roswell.
The grant, to be dispersed over
the next three years, was a siz-
able chunk of Ferrer's discre-
tionary fund, he adds.
The safe house can provide
six families at a time with four to
six weeks of shelter while lead
paint is being removed from
their homes.
Because lead-poisoned chil -
dren can be very hard to handle,
the safe house concentrates on
parenting and nutrition skills,
says Mary Martinez, director of
the project. In some cases, this
simple course of treatment can
successfully reverse the dam-
age, she adds.
"Sometimes, learning has to
be reconstructed in another part
of the brain," adds Charlop,
whose own daughter was a vic-
tim of lead poisoning years ago.
"We teach parents to help their
kids sit still so they can learn. n
Montefiore has long been es-
tablished as a pioneer in treat-
ing lead poisoning, and advo-
cates from the program are
pushing hard for reforms in the
city's regulation of lead paint re-
moval. They argue that better
prevention would save taxpay-
ers millions of dollars in the
cost of medical care for low in-
come New Yorkers. Dr. John
Rosen, professor of pediatrics
and head ofthe division of envi-
ronmental sciences at the Al-
bert Einstein College of Medi-
cine, an affiliate of Montefiore
Medical Center, maintains the
cost of hospitalization, outpa-
tient treatment and special edu-
cation services for each lead-
poisoned child is $25,000 for
the first year of care-totaling
between $38 and $50 million in
1993 (See City Limits, Novem-
ber 1994).
One major problem, Charlop
adds, is the lack of adequate
training for workers who remove
lead paint from housing. Im-
properly trained employees of
private lead abatement compa-
nies can just make a bad situa-
tion worse. She says she has
seen numerous cases in which a
second child has been poisoned
as parents try to rid their homes
of lead that poisoned a first child.
A bill mandating govern-
ment certification of lead paint
workers was shot down by the
state legislature last session.
Landlords opposed its passage,
arguing that property owners
would bear much of the in-
creased cost of hiring the bet-
ter-trained workers, she says.
Charlop points out that one
of the safe house's missions is
to train parents to become lead'
awareness activists in their
communities-as well as advo-
cates for improved government
regulation.
Montefiore may have started
a trend. Lead poisoning activists
in Brooklyn and Westchester are
now looking for money to set up
similar homes. "The number of
people who stay in homes with
perilous levels of lead is absurd-
ly high," says Dan Kaff, director
for the Center for Occupational
and Environmental Health. "If
they had a place to go, they
would not only want lead abate-
ment, they would demand it."
Amber Malik
CITY LIMITS/JANUARY 1995/5
Blessings in Disguise
A theater proiect is transforming the lives of homeless
people living with AIDS and HIV.
I
was so happy to be
born," began Pauline
Jones, during a recent
performance of the rock
gospel musical, "Release
Me," at St. Peter's Church in
the Citicorp Building. "My
mother and father thought
that I would be a boy, be-
cause they really wanted a
boy. But I'm a girl.. .. At the
age of seven, my father start-
ed coming into my room
every night to lay with me.
He told me that if I ever told
anyone, he would hurt me
and my family. So I never
told anyone. He kept on rap-
ing me until he made me
pregnant at the age of 15 .... I
Roger Steele lforeground) and fellow cast memben in a rehearsal
of "Release Me," a project of Housing Worits.
wanted to tell my mother it was his,
but I didn't. So I carried the baby and
turned to drugs, which seemed to be
the only way out."
Jones delivered these autobiograph-
icallines with a cool matter-of-factness,
making the horror of her childhood
even more emotionally resonant. Yet
she is not a professional actress. Jones
is a client of Housing Works, the four-
year-old nonprofit organization devot-
ed to housing, advocacy and services
for homeless people living with AIDS
and HIV. Housing Works is not only
serving this marginalized group, many
of whom are still active drug users; it
is also giving them a voice through its
theater project, directed by Victoria
McElwaine.
To be sure, it is a potent voice. Jones
is just one of 14 cast members with a
powerful story to tell. Roger Steele re-
membered losing his job, his place to
stay and all of his material possessions
in the course of one week. Isabel
Sanchez told of how her father died
when she was seven, the same year she
started sniffing model airplane glue.
She graduated to heroin at age nine.
Tony James spoke of how his father
left the day he was brought home from
the hospital. His mother subsequently
went to jail and he became a ward of
the state, institutionalized for 10 years.
Each described the time they
learned they had been infected with
6/JANUARY 1995/CITY LIMITS
HIV, how they survived being home-
less on the streets and how they were
treated by passersby. Some of these ob-
servations were funny; most were har-
rowing. Yet ultimately, "Release Me"
was an affirmation of being alive and a
celebration of community building.
Columnist Amy Pagnozzi of The New
York Post wrote: "What's it about?
Drugs. Drunkenness. Degradation.
Prostitution. Rape. Rejection. Incest.
AIDS. I kid you not when I tell you it
is the happiest show in town."
The Process
"Release Me," written entirely by
the cast and developed over a six-
month rehearsal period, is a collage of
images and anecdotes, punctuated by
Harry C. S. Wingfield's songs and
stitched together by director McEl-
waine. It ran for eight, mostly sold-out
performances over two weekends last
November. For many in the cast, those
performances provided an opportunity
to be reunited with their families for
the first time in years. It is hoped that
the production will be performed for
New York State officials in February,
followed by a performance in Wash-
ington, D.C. There have also been pre-
liminary discussions about building
another piece in conjunction with the
New York Shakespeare Festival.
Putting on a good show is rewarding
but somewhat beside the point, says
By William Harris
McElwaine. The theater pro-
ject, she says, is about
providing Housing Works
clients with a structure that
can help them take control of
their lives. "It's not the play
that's so important," she said
during a recent interview at
the organization's Soho of-
fices, "as much as the experi-
ence for the people-the re-
hearsal process and the expe-
rience of getting out there
and talking about themselves
J and letting people see that
~ they are real people with real
~ lives, feelings, backgrounds
and families."
Somewhat by accident,
McElwaine also discovered
that putting on plays helps Housing
Works clients develop skills that are
useful outside the rehearsal studio. If
people can commit to spending six
months creating a project, for instance,
they can also learn to keep doctors' ap-
pointments or to take their medicines.
These seemingly simple tasks can be
overwhelming for a person who has
spent the night in the subway, say, or
for someone shooting drugs.
Teaching people to be less self-de-
structive falls into the broad category
known as harm reduction. In its sim-
plest form, harm reduction is about
teaching people how to use drugs safe-
ly so that they do the least amount of
harm to themselves and to others.
Using clean needles to prevent HIV
and other infections is an obvious ex-
ample. For McElwaine, harm reduc-
tion is also about creating a situation
that is stimulating and fun.
As seven members of the "Release
Me" cast assemble in a conference
room at Housing Works a month after
the performances, the affection they
feel for each other is palpable; their
comments are often interrupted by
laughter or applause from one another,
with the occasional "Amen" thrown in
for good measure. Only at the end does
one of the cast members start to cry,
saddened by the fact that the group,
which had worked so closely together
for so long, is now dispersed.
Each speaks about why they wanted
to be in "Release Me."
"The play gave me a chance to deal
with a lot of feelings that I had sup-
pressed," says Idell Gillard. "The
group bonded, and it became like a
support group. It took up a lot of my
time, and it was something construc-
tive that I wanted to complete. I can be
my own worst enemy with a big block
of time on my hands."
"I saw it as a chance to learn more
about the theater and to involve myself
with other clients" says Steele, a client
who recently, after competing the or-
ganization's job training program, has
joined the Housing Works staff. "As a
person living with the HIV virus, it
was also a great opportunity to get in
touch with how I feel about being HIV
positive. It's a fight not to isolate my-
self with this virus."
"This show gave me the opportunity
to tell my life story," adds James. "That
I am black, gay, have the virus and was
born deaf. It was a way to tell other
people that you don't have to worry
that there ain't no help. There is help."
We're Artists, Too
The theater project was born two
years ago, shortly after McElwaine
came to Housing Works to manage its
contracts department. Back then, the
organization was fighting to obtain
community board approval to trans-
form a building on Grand and Greene
Streets into a client residence. During
strategy discussions with the organiza-
tion's executive directors, McElwaine
suggested that instead of having the
staff plead Housing Works' case, why
not create theater pieces and let the
clients speak for themselves?
"There was a lot of local opposition
to our opening a residence in Soho,"
she recalls. "Their main argument
was, 'This is Soho, and if we're going
to have an AIDS center here, it must be
for artists.' We took the stand that
we're artists, too. Whether or not we're
professional, our art is vital and real.
We created a piece called 'A Common
Ground,' which was about twenty-five
minutes long. In the process of getting
to production, we discovered enor-
mous benefits for the performers that
we hadn't really thought about. We no-
ticed people who had participated
were maintaining apartments longer
and having a lot more control over
drug use and becoming more involved,
more clear and articulate about what
their rights were."
Housing Works never acquired com-
munity board permission for the
Greene Street residence, although it
has subsequently located a space-and
won approval-for a residence on East
Ninth Street. But the efficacy of the
theater project as both an advocacy
and therapeutic tool had been estab-
lished. Since 1992, there have been
three other shows: "You and Me,"
"After Us," featuring women living
with AIDS and their daughters, and
"Release Me." Auditions for the next
production will be held January 1I.
Auditions are something of a formal-
ity; McElwaine will cast anyone who
shows up. "Release Me" began with a
cast of 27; only 14 people ended up in
the show. People drop out along the
way for various reasons, often because
of their illness. For the most part, peo-
ple are expected to show up regularly
for rehearsals and to be on time. If they
have too many unexcused absences,
they are asked to leave the production.
"I try to keep it as traditional as pos-
sible," says McElwaine. "I want them
to be familiar with the vocabulary of a
regular rehearsal, the limitations and
the tools of regular theater. It has a clin-
ical value, but it is not a clinical pro-
gram. Nor is it a group session; they're
not going to discuss what happened
that day. It's task-oriented. They're
going to work on a project and they
harm reduction, part of my job, is to
create an environment where you in-
teract comfortably."
McElwaine hopes to build on the
performance success-and to keep
people involved-by instituting a se-
ries of theater classes such as move-
ment, speech and singing. Eventually,
she hopes also to involve the clients in
all aspects of designing, building and
maintaining the productions.
"The nature of the process and our
objectives are becoming more and
more clear," she says. "These are not
necessarily political objectives ....
They're about an opportunity for our
clients to do something for themselves,
to take a look at themselves and to
finally be given a forum for claiming
space. Its about awakening self-esteem,
and it works."
Saved My Life
It has also given them a different
perspective on AIDS. "I was glad to go
onstage and tell people I have HIV,"
says Isabel Sanchez. "I wanted to
know how many hearts I opened up or
how many cans of worms. Sometimes,
I say that this disease has been a bless-
ing in disguise. If I hadn't accepted the
fact that I have the virus, I would have
been out there killing myself."
"I feel the same way," adds Karyn
Pena. "It isn't a death sentence. This
1 was glad to go onstage and tel peop e I
have HIV. I wanted to know how many hearts
I opened up or how many cans of worms."
will make it happen and we will per-
form it and we will have an audience."
Although the rehearsal process re-
sembles that of ,any experimental the-
ater production 'Where the script is cre-
ated collectively, McElwaine points
out that it is not easy. In addition to en-
couraging people to talk about difficult
issues, life and death and all kinds of
trauma, she is also dealing with the
tensions amongst the Housing Works
clients themselves. The fact that some
are gay and some are straight is the
least of her problems. Some clients are
still using drugs and others are in re-
covery; some have found housing
while others still live in shelters or on
the streets; some are sick with AIDS
while others remain asymptomatic.
"Some cast members get mad and
want to leave," she says. "But part of
disease saved my life. I was homeless,
I was shooting heroin, I wasn't hus-
tling, but I was sticking up drug dealers
and I was going to get killed eventual-
ly. When I found out I had the virus, I
came straight to Housing Works. I now
have my mother and daughter and
grandchild back in my life."
"We're all survivors," Steele says.
"We're surviving this virus, although
we know people who haven't changed
their lifestyle, who are still out there
getting high and drinking. We also
know people who have died. One of
the best reasons for having a theater
group is we all got to know each other
and became friends." 0
William Harris writes frequently for
the Arts &- Leisure section of The New
York Times.
CITY LIMITS/JANUARY 1995/7
Bucking The Odds
Community groups are adopting the ultimate capitalist tool-
venture capital-to create inner city jobs.
L
ooking to build a new career
track for low-skilled workers?
A group of Brooklyn activists
thinks they have found a
promising solution.
The Park Slope-based Fifth Avenue
Committee (FAC), an organization
with a long history of developing
affordable housing and providing sup-
port for small businesses, plans to set
up a for-profit oil-change franchise,
staff it with workers from South
Brooklyn and give them ongoing
mechanical training. The hope is that
after a year or so, these workers will be
prepared for higher-paying jobs as
mechanics in the private sector.
F AC needs more than bank loans to
start this business, however. Like most
entrepreneurs, the group needs some
r i ~ capital to invest up front. Such fi-
nancing is rare in inner cities and,
with the exception of foundation
grants, almost unheard of in the non-
profit world.
It may have been a long shot, but
this unusual enterprise. They have set
up a new venture capital fund, and
with the goal of improving employ-
ment prospects in South Brooklyn,
LEAP may invest as much as $75,000
for stock in the franchise, says LEAP's
chairman Lyndon Comstock. This
would not be a loan, he explains.
Rather, his organization would be buy-
ing a full-fledged stake in the new
company.
In doing so, LEAP gingerly joins a
handful of other community develop-
ment financial institutions that have
entered the high stakes venture capital
business. And there are signs that oth-
ers may soon begin to join them. Just
last month, the John D. and Catherine
T. MacArthur and Ford foundations
sponsored the first meeting of the Com-
munity Development Venture Capital
Alliance, a nationwide trade group for
socially-minded equity investors who
are exploring new ways to boost eco-
nomic activity in neglected areas.
Its members include both nonprofit
and for-profit institu-
tions that have tradi-
tionally stuck to the
much less risky busi-
ness of offering loans
to entrepreneurs in
low income commu-
nities. But loans are
not enough, says
Comstock. While the
idea of venture fi-
nancing is still only
experimental, this
self-sustaining, free
market approach may
turn out to be a very
effective way to seed
~ new businesses, he
1 says.
~ "A lender is never
~ going to provide 100
The fifth A_ c-dttee's lind Lander (UcMt) hopes to ..... a _
busIn_ and _ ......... this Gowa_ street comer.
percent financing.
They want to see risk
capital there first. But
F AC appears to have found its backer.
Officials at LEAP, Inc., an economic
development techical assistance
provider affiliated with Brooklyn's
Community Capital Bank, say they are
set to become the guardian angels of
S/JANUARY 1995/CITY LIMITS
a business in the South Bronx is not
going to get traditional venture capital.
"There is no ready source of capital
at all, other than family and friends,"
Comstock says. "That's why we're try-
ing to make this happen."
By Kim Nauer
Such investments are tricky, howev-
er, says Kerwin Tesdell, program in-
vestment officer at the Ford Founda-
tion. The failure rate of small business-
es is estin;lated to be as high as 70 to 80
percent. To make any money as a ven-
ture capitalist, a smart investor must
buy into a number of promising enter-
prises so that profits from big winners
offset losses from the inevitable fail-
ures. And anyone getting involved
with venture capital, he adds, needs to
appreciate exactly how it works, how it
differs from loan financing and what
the potential perils are.
Refined Gamble
Dozens of venture capital funds
have sprung up on the mainstream
financial scene since the early 1980s.
For the most part they are a refined
form of gambling for capitalists. Pat-
terned like mutual funds but reserved
for high stakes players, these funds are
investment pools run by professional
Wall Street money managers who scour
the country, and sometimes the world,
for cash-hungry businesses with big-
time growth potential. Typically, such
enterprises have focused on the tech-
nology and biotech industries, where
one successful patent can turn a strug-
gling company into a multimillion-dol-
lar corporation. The fund, or sometimes
rich private investors, will provide
companies with a large infusion of
cash to help pay for a new plant or
equipment. The money can also be
used to leverage even more financing
from banks. And unlike bank loans,
venture capital can be used-free from
repayment obligations-for years.
Companies with the benefit of these
financial "angels" can grow by feet
rather than inches, Tesdell explains.
But the risky nature of the investment
makes such money hard to come by.
Experienced money managers will
consider only the most promising
companies for investment.
Translating these concepts of high
finance to the community develop-
ment world is no simple thing. Ac-
tivists have long grumbled that up-
and-coming businesses in disadvan-
taged neighborhoods rarely make the
;
cut for outside investors, though they
concede there are valid reasons for
caution. Unlike banks, venture capital-
ists actually buy a percentage of a com-
pany. If the business thrives, investors
simply let the value of their shares in-
crease until the return is large enough
to "exit" by selling out. But if growth
stalls, they may have a hard time find-
ing anyone to buy their shares. Worse
yet, venture capitalists, unlike banks,
are among the last to get paid in bank-
ruptcy proceedings. If the business
fails, they can bet on losing all of their
investment, Tesdell says.
Innovative Investors
But in some parts of the United
States, innovative investors are buck-
ing the odds in low income communi-
ties. Five years ago, a disastrous reces-
sion in the iron mining and steel
industries left the northern Minnesota
region with pockets of 100 percent
unemployment. Nick Smith, then
managing partner of Duluth's leading
law firm, set out to convince his
friends and neighbors that they could
turn things around. It wasn't easy: al-
most overnight, the area had lost 7,000
mining jobs and 20,000 people, he
says. One sign on 1-35 south of Duluth
read, "Will the last person to leave
please turn off the lights?"
That sign is gone now, in part be-
cause of Smith's work. The founder of
Northeast Ventures in Duluth, Smith is
credited with building one of the
country's most successful, albeit small,
community venture capital funds.
With $8 million fronted by founda-
tions and several hopeful but leery
corporate investors, 12 new companies
employing more than 400 people have
opened in the last four years. Smith re-
ports all but one of the businesses are
doing well, and he has already suc-
cessfully exited two deals.
"On one, we had a twenty-three per-
cent profit," he says. "The other has
gone public and we've decided not to
sell our stock yet. But I think it will be
a real winner. They make a portable
blood gas analyzer, and that's break-
through technology."
In Maine, a state with one of the
highest per capita welfare dependency
rates in the nation, a community de-
velopment financial institution called
Coastal Enterprises has been quietly
making similar investments for 15
years. This has been only a sideline to
its traditional loan business, says
Nathaniel Henshaw, and its earliest in-
vestments-$200,000 made to two fish
cutting enterprises in the late 1970s-
went bust. But the last three years have
been so successful that Coastal decid-
ed last October to spin off a for-profit
venture capital subsidiary. Today,
Henshaw is president of CEI Ventures,
responsibile for maintaining and
building Coastal's $1.5 million venture
capital portfolio.
One business, a manufacturer of
monitoring equipment for underground
storage tanks, is apply-
for these jobs. If possible, Henshaw
adds, he also likes his companies to
produce socially beneficial products.
The restrictions do make investment
more challenging, Henshaw says, but,
in his market at least, they have not
prevented profitable deals.
"We're looking to be competitive
with [mainstream] venture funds," he
says. "And we're not restricting our-
selves in a major way. Any successful
business is going to create jobs. The
ing to trade shares on The hallmark
the stock market and
issue is whether they'll
hire low-income people,
and generally speaking,
Coastal can sell its stake
at any time. Four others
look like they will offer
"very substantial" prof-
its, Henshaw says. More
importantly, he adds,
the six most recent deals
requiring just $600,000
in investment have re-
sulted in 147 jobs being
created or sustained in
of th fi
we can work with [the
ese nns IS companies] so they can.
their insistence
on tying social
goals to invest-
ment dollars.
"All we're really
ruling out is destruc-
tive firms, and presum-
ably, over the long run,
they won't do well
anyway. They'll be leg-
islated out of business
or they'll have legal
problems."
the last year and a half. Other than his
outfit, Henshaw says, "there's very little
equity capital here at all for community
development. And that means there's
real opportunity here for us."
Social Goals
While increasing employment is al-
ways important to any deeply impov-
erished area, the hallmark of these
firms is their insistence on tying social
goals to investment dollars.
LEAP, for example, will invest only
in firms that pay a living wage to low-
skilled workers who might otherwise
be left out of the labor market. CEI
Ventures shares similar goals, and has
a partnership program to train workers
But Henshaw and others also warn
that these endeavors are notoriously
labor intensive and require vigilant
handling on the part of the fund man-
ager. It's also important to study the
market carefully before jumping in.
There's no guarantee that anyone re-
gion or neighborhood will have the in-
terest, or entrepreneurial talent, to sus-
tain a successful venture fund, says
Robert Schall, president of the ten-
year-old Self Help Ventures Fund in
Durham, North Carolina.
Despite the organization's name,
Self Help Ventures is strictly in the
business of loans. Schall says he has
been intrigued by the venture capital
world and explored the idea over the
THE COMMUNITY REINVESTMENT CLEARINGHOUSE
at New York Law School
The Community Reinvestment Clearinghouse offers:
Trainings/information on the Community Reinvestment Act (CRA)
Technical support for community-based lending initiatives
Workshops on CRA advocacy and organizing strategies
Resource Library
Regulatory Alerts
For information, contact: Sarah Ludwig, Community Outreach Director
Community Reinvestment Clearinghouse, New York Law School
57 Worth Street, New York, NY 10013 - Tel: (212) 431-2899/ Fax: (212) 966-2053
CITY LIMITS/JANUARY 1995/9
last year. In the end, however, he de-
cided that the benefits were not there
for his community.
"Venture capital firms make their
money because a business grows
quickly. But our customers are not
Federal Expresses or Apple Comput-
ers or biotechnology companies, " he
says. "The companies we deal with
will never go public. They will not
grow 20 times their size. They are
small proprietorships and corpora-
tions that are, for the most part, run by
individuals and families. They will
grow, but they will grow slowly.
Therefore, there's no way for us to get
a return off their growth. "
Another big question remains. Can
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this idea be successfully transplanted
to a city? Notably, the core members of
the newly formed Community Devel-
opment Venture Capital Alliance hail
almost exclusively from poor rural
areas where creating even a dozen jobs
can be a large step forward for the re-
gion. In a city with more than a million
people on public assistance, the task is
somewhat more daunting.
But LEAP's Comstock is confident.
By using the same screening and
training strategies that have made the
city"s community banking movement
successful, he says, venture capital
could have a significant impact in
troubled communities. In the case of
the proposed Fifth Avenue Committee
project, LEAP would have a partner-
ship position in the oil-change busi-
ness and take an active role with its
management.
Sophisticated Training
Under the plan, the station will
hire eight to 10 people a year from
both the Gowanus neighborhood,
which FAC serves, and Red Hook,
which LEAP has taken an interest in,
says FAC executive director Brad
Lander. The business is expected to
make enough money to buy LEAP out
in five years, but Lander says he
hopes LEAP will want to keep its
stake in longer and allow the profits
to be plowed back into more sophisti-
cated training programs.
A conventional venture capitalist
would choke on the suggestion, but
LEAP's Comstock, who disdains even
the term venture capital, just laughs
and says this may be unrealistic. "We
do want to reinvest in this business,
but we also want to keep using the
money to invest in new businesses,"
he says. "I guess we'll have to learn
how to strike this balance." 0
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CITY LIMITS/JANUARY 1995/11
Special Report on City Government, Part 1

unCIVI

service
by James Bradley
~
- ~
~
"
.c
U
~ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~ ~
12/JANUARY 1995/CITY LIMITS
Is Giuliani cutting the fat out
of the budget-or the heart
out of the government?
, ~
A
year into office, Mayor Rudolph Giuliani's "rein-
venting government" agenda is beginning to take
shape: an increasing number of public services are
being contracted out to private companies; an ag-
gressive "workfare" experiment goes into effect this month;
the city workforce will soon be the smallest it's been in 10
years; and new contracts with the sanitation and school
custodian unions include unprecedented productivity re-
quirements. Like it or not, the mayor has taken some concrete
steps towards reshaping the city government.
But a number of critics, from social service advocates to
independent fiscal auditors, charge that while the mayor's
approach to government is politically populist, it is deeply
flawed. The mayor plans to cut the city workforce by 10
percent, but other than a vague plan for shifting employees
around, he has proffered no cohesive strategy on how these
agencies will be restructured to maintain an acceptable
level of services. Giuliani has promised to get rid of gov-
ernment waste, but has exempted the police and fire de-
partments-agencies notorious for bureaucratic bloat-
from scrutiny. And for all the wonkish rhetoric emanating
from City Hall these days, a bold vision for city government
has yet to be clearly articulated.
These ambiguities have led some people to conclude that
the mayor's policies are little more than slash-and-burn as-
saults on social spending couched with souped-up slogans.
To many, that's decimating-not reinventing-government.
"The mayor has a very simplistic notion of government, to
protect the uniformed services," says Harvey Robins, former-
ly the city's Director of Operations under Mayor David Dink-
ins and now a full-time critic of Mayor Giuliani. "He needs
to show that there's a strategic plan, that there's going to be
shared sacrifice. The nip-and-tuck approach he's taken will
in no way achieve the systemic changes that are needed."
Advisors within Giuliani's inner circle ask for patience. It
takes time, they say, to tame a bureaucratic beast of New York
City's magnitude, and after a year of bruising budget fights
and election-year scrapping, the mayor can now devote more
energy to making government work for all New Yorkers.
"Reinventing government is an ongoing process," says
Richard Schwartz, a senior policy advisor to the mayor. "It
takes months, even years, to be fully implemented. It's a
constant process of refinement and improvement. It's what
the private sector has been going through over the past ten
years, and it's something governments have to do, too."
T
he phrase "reinventing government" comes from a
popular book of the same name that detailed how the
spirit of entrepreneurialism was revitalizing ~ e : i
ca's staid public sector. In recent years, many bIg CIty
mayors, governors, even President Clinton, have embraced
the rhetoric of reinvention and its emphasis on making the
public workforce smaller, more efficient and, theoretically,
more democratic.
But what's really behind the popularity of reinventing
government, many policy analysts argue, is the expedient
practice of bureaucracy-bashing. "The appeal is mainly
political," observes Dean Baker, an economist at the Eco-
nomic Policy Institute, a Washington-based think tank.
"It's the sort of thing where it's nonsensical to argue the
opposite. No one's going to say, 'I'm in favor of waste in
government.' "
Locally, critics charge that Giuliani is just pursuing an-
other classic form of populism: the political pay-off. "The
Giuliani people are not reinventing anything. They're going
back to another model, a pre-New Deal model of patron-
age," argues William DiFazio, a st. John's University soci-
ology professor who specializes in labor issues, referring to
the mayor's eagerness to turn more city services over to the
private sector.
Indeed, privatization is one aspect of the reinventing
government debate that the administration has whole-
heartedly embraced. Already, the city has moved forward
in hiring private workers to maintain parks, roads, city
office buildings and homeless shelters. This year, the ad-
ministration is planning to have public and private work-
ers compete with each other for contracts to offer services,
something proponents believe is the true test of privatiza-
tion's merits. "We want to go through the competitive
process and have the market dynamic determine who is
the most efficient and the most competitive at delivering
services," says Schwartz.
Despite the administration's enthusiasm, however, few
expect to see privatization employed on a significant scale
in New York. Already, the mayor has faltered in his plans to
sell municipal hospitals and the city's Off-Thack Betting
agency. As Dean Mead of the Citizens Budget Commission,
a business-supported watchdog group, points out, "It will
be a part, but it will not be the biggest part [of reinventing
government]. There's just too large a portion of city services
you can't privatize."
At this point, it is difficult to confirm what other aspects
of the reinvention revolution are being explored within the
Giuliani administration. Observers on the periphery of city
government sayan aura of mystery still shrouds Giuliani's
plans, partly because the entire concept of reinvention re-
mains largely enigmatic. "Nobody's clear on what reinvent-
ing government really is," says Glenn Pasanen, an analyst for
the budget watchdog group City Project. "That's what's so
convenient [for the mayor]; it's new ground for everybody."
Even the city's official fiscal monitors note that the
mayor has been less than forthcoming about his long-range
plans. The Financial Control Board (FCB), an independent
state agency that reviews and oversees New York City's fis-
cal management, wrote in a recent report that there has
been a "conspicuous lack of publicized implementation
plans" about the city's finances. Rosemary Scanlon, the
state deputy comptroller for New York City, admits she is
also largely in the dark on this matter. "In terms of his com-
mitment to bring down the size of government and hold the
growth of expenditures, he's very clear in his actions," she
CITY LIMITS/JANUARY 1995/13
says. "What we don't have yet is any sign of the reinventing
of government, or maybe just marginal signs."
B
ut one thing is clear: fundamental changes in how
the city administers services are already taking
place. Last year, in addition to cutting nearly $2 bil-
lion in staffing and programs, Giuliani began
redefining the structure of city government and the kinds of
services he thought it should provide. When the mayor
submitted his emergency budget modifications in October,
he suggested that basic municipal services were threatened
by a costly array of "ancillary" programs that should be ei-
ther dramatically scaled back or abolished in order to pre-
serve and strengthen government's "core" functions.
To understand how he defines "ancillary," look at what
has been targeted: under the mayor's plan, preventive,
proactive programs involving such areas as housing, health
care, drug treatment, legal services, and other social and
community needs have been hit hard by the budget ax. The
departments of Homeless Services, Social Services, Parks,
Transportation and Housing Preservation and Development
have borne the deepest reductions in staffing.
Several of these agencies have also weathered across-the-
board cuts in contracts to nonprofit groups, who provide
many of their key services. The Human Resources Admin-
istration (HRA), for example, has had tens of millions of
dollars cut from its nonprofit contracts, money that goes to
child welfare, AIDS, domestic violence, suicide prevention
and day care, among other programs. The contract budget of
the Department of Youth Services has been virtually elimi-
nated, save for a few key programs.
Studies show that many of these cuts of so-called ancil-
lary services could cost the city substantially over the long
term. One city-funded program on the chopping block,
Family Rehabilitation, provides a wide range of services,
including case management, therapy and drug treatment, to
mothers with substance abuse problems. The program
helps these women rebuild their lives so they can care for
their children properly. There are 31 community-based
agencies throughout the city that provide these services to
some 700 families with 2,000 children.
Eliminating Family Rehabilitation will save the city $1.6
million for the remainder of this fiscal year and $2.5 million
in the next. But two studies published in November indi-
cate that these services save the city millions more every
year by averting expensive foster care placements. One of
them, by Victim Services, followed 386 families in the pro-
gram for one year. Researchers found that 42 percent of the
mothers enrolled in the program retained custody of their
children-or had them returned from foster care-and the
city's child welfare officials closed their cases, deeming
them successful. Another 25 percent were still in the pro-
gram, but almost all of them (92 percent) were considered
at low risk of losing their children to foster care. If even half
of the children in Family Rehabilitation had ended up in
the foster care system, it would have cost the city at least an
additional $8 to $10 million a year, experts say.
Moreover, a study by the National Development and Re-
search Institute predicted that one-quarter of the children
with mothers enrolled in Family Rehabilitation are likely to
14/JANUARY 1995/CITY LIMITS
be placed immediately in foster care if and when the
program is abolished, again driving up the city budget by
millions of dollars.
While admitting that some of these programs are effec-
tive, Giuliani's advisors say the city budget simply doesn't
have room for them. "Some of them are programs that we
think are very good, but the city just can't afford to deliver
those services any longer," argues Schwartz. "They are
worthwhile programs, and they can be helpful, but they're
not critical to the operation of city government."
But social service providers and advocates say the ad-
ministration has adopted a dangerously narrow view of
government. What, they ask, does Giuliani mean when he
speaks of "core" services? Gail Nayowith of the Citizens'
Committee for Children fears the administration's defini-
tion encompasses nothing more than services mandated by
law, which the mayor has no choice but to provide. "Huge
services like child care, the ones that everybody needs, are
pretty much core services, but they are not mandated ser-
vices," she says. "Those are the ones most vulnerable. " In
fact, the administration was in a budget battle with the City
Council in December over the elimination of 1,892 city-
funded day care slots.
"If you look only at mandated services, you really end up
with a hodgepodge of categorical, narrowly-defined pro-
grams that serve very few children and families, and that
don't even begin to meet their needs," Nayowith says.
The mayor's cuts in housing, health care and other social
services also require sacrificing vast sums in matching
funds from state and federal government, as well as private
charities. While the administration has estimated that its
day care cutbacks will save the city $6.2 million, for exam-
ple, such a reduction would result in the loss of $18 mil-
lion from Washington and Albany. The same formula
applies to headcount reductions: by cutting 4,200 workers
from HRA-the city's welfare agency-the city will save
$32 million but lose $80 million in federal and state match-
ing dollars. Many of the caseworkers losing their jobs cost
the city only $7,500 a year each; because of the matching
funds, they are among the cheapest service providers in the
city workforce. "If you wanted to save $30,000, you would
have to fire four HRA workers, as opposed to one cop,"
observes the City Project's Glenn Pasanen.
S
lashing the size of the city workforce is a crucial
component of Giuliani's reinvention strategy. The
administration has already offered city workers gen-
erous severance packages, winnowing more than
11,000 of them off the payroll. The plan is to cut the total
number of city employees by more than 20,000 before the
end of June, leaving a total of about 196,000 men and
women on the public payroll . That's the smallest it's been
in 10 years.
When evaluating changes in the city workforce, howev-
er, numbers only give part of the picture. "If you look at the
budget in the aggregate, it doesn't tell you very much,"
explains Carol O'Cleireacain, the city's budget director
under Mayor David Dinkins. "It doesn't tell you the degree
to which each of those agencies coped with [headcount
reductions], and how much they changed the way they did
business, and whether those changes worsened or im-
proved services."
Many activists who work with city government in pro-
viding and coordinating services have experienced signifi-
cant problems under the current
and other public assistance have had to wait several months
for their applications to be processed, well beyond the man-
dated limit of 30 days. According to Melinda Dutton, an
attorney with South Brooklyn Legal Services, months pass
before some Medicaid applicants have the opportunity to
present documents proving their needs. As a result, her
office has filed a lawsuit to force HRA into compliance.
"This is a federal mandate. The city takes federal dollars to
implement this program," says
administration. Staff cutbacks,
personnel changes and new policy
directions have strained relation-
ships with nonprofit contractors,
further undermining service deliv-
ery. "There seems to be a new kind
of attitude at the Department of
Housing Preservation and Devel-
Cutting staff will save the city
$342 million-but the total
overtime costs for the year
will exeed $500 million.
Dutton. "The only dispute is
whether the city chooses to re-
spect the law or not."
A similar state of disarray is be-
coming commonplace at neighbor-
hood welfare offices. Liz Krueger,
associate director of the Communi-
opment," notes Jay Small of the Association for Neighbor-
hood Housing and Development. "There used to be people,
from assistant commissioner on down, who were accessible,
who were willing to talk, who knew what the terrain was.
They understood that the nonprofit sector was important to
them .... Now the agency seems a lot more closed. "
Indeed, city employees report that most divisions of the
housing agency have been subordinated to the administra-
tion's primary goal of selling city property to the private
sector. Other parts of the agency have lost as much as half
their staff, they say, making even basic administrative tasks
extraordinarily difficult.
Elizabeth Darguste, coordinator of the Emergency
Alliance for Homeless Families and Children, has encoun-
tered such problems in dealing with other city bureaucracies.
"It's a very confusing time," she says. "There's an overall
lack of coordination in dealing with family homeless poli-
cies among the agencies." Darguste has been pushing for
the city to improve the Emergency Assistance Rehousing
Program (EARP), which gives landlords cash bonuses to
house homeless families. Four different city agencies ad-
minister various portions of EARP, but budget and staff cuts
have left the program in disarray, making it more difficult
for families to move out of the city's costly shelter system.
"Each agency manages a different component of EARP,"
says Darguste. "If one component fails, the entire program
falls apart."
Budget analysts and fiscal monitors note that staff short-
ages have also lead to severe increases in overtime costs,
enough to threaten the savings from headcount reductions.
The administration estimates that cutting staff will save the
city treasury $342 million during the current fiscal year, but
according to a recent report by the City Council Finance
Committee, overtime costs for the year will exceed an astro-
nomical $500 million, the highest level in the city's history.
Although all of the increase cannot be attributed to staff
reductions, much of it can: last July and August, following
the first round of severance, overtime in the Department of
Corrections was up 144 percent from the previous year. In
many other agencies burdened with an increasing workload
and decreasing staff, overtime costs have grown consider-
ably, as well.
Problems with staff shortages may also lead to increasing
fines and litigation costs. At HRA, people seeking Medicaid
ty Food Resource Center, says the
staff at the Waverly Income Support Center on West 14th
Street is operating with 20 percent fewer staff, according to
workers there. Even the center's director is gone. "The center
is mind-boggingly behind. Caseloads of work are piling up,"
says Krueger. "It's pretty easy for hysteria to prevail in that
kind of circumstance. When there is no rationality to a down-
sizing structure, anything and everything can happen."
The administration's own September 1994 Mayor's Man-
agement Report confirms a notable drop in the city's ability
to hold public assistance hearings and complete Medicaid
and welfare applications within the period mandated by
law. The staff cuts at HRA-including a reported 25 percent
drop in eligibility specialists-will reinforce this trend, ac-
tivists predict, resulting in increased fines and litigation.
Court fines for failures to comply with state laws in just one
small area of the agency-the Child Welfare Administra-
tion-have averaged $13 million annually in recent years,
according to the city comptroller's office.
O
f course, by not including school teachers or po-
lice and fire officers in severance plans, Giuliani
has let the city know what he means by "core" ser-
vices in the broadest sense. The hardest-hit agen-
cies are the Board of Education's administrative staff (43
percent cut, 2,630 workers), Housing, Preservation and De-
velopment (27 percent, 344 workers), the Police Depart-
ment's civilian staff (25 percent, 1,851 workers), Parks (24
percent, 689 workers), and Social Services (18 percent,
4,331 workers). The Sanitation and Correction departments
have been heavily slashed as well.
The administration has also used a number of gimmicks
to give the impression that government is getting smaller,
when in fact the costs are simply being shifted elsewhere.
According to the City Council's Finance Division, the Fi-
nancial Control Board and the City Project, many posi-
tions are being eliminated via severance and attrition,
only to be contracted out to the private sector. Also, sev-
eral hundred employees were shifted from the Department
of Health to the Health and Hospitals Corporation, whose
CITY LIMITS/JANUARY 1995/15
workers are not included in the city's overall headcount.
The costs will still be there, but they won't show up on the
ledger. As O'Cleireacain notes, budget numbers give only
one side of the story.
Meanwhile, the police force will be beefed up with
nearly 1,500 new uniformed officers. Giuliani has justi-
fied this course by highlighting the need for more public
safety, but even the administration readily concedes that
thousands of uniformed officers will now move into desk
jobs and other posts formerly held by low-cost civilians
who have lost their jobs. This has been exacerbated by a
state law requiring that the city increase its police force
(the civilians don't count). If officers wind up behind a
desk rather than on the street, however, the public loses
out on two fronts : little or no improvement to public safe-
ty, and a bigger tab to pay for it.
"It's hard to understand why the mayor hasn't attacked
two very bloated bureaucracies like police and fire," says
Mead of the Citizens Budget Commission (CBC). "They,
more than any other agencies, with the possible exception
of the Board of Education, have a tremendous amount of
bureaucratic fat that could be trimmed with little pain."
The CBC released a detailed report last April outlining how
the police department could be made more efficient; it was
summarily dismissed by the mayor.
Another problem with severance is its randomness. If the
city intends to downsize through
partment is scheduled to receive 5,000 participants under
this program.
B
y the standards set forth in just about every treatise
on reinventing government, the ultimate measure of
success is not only reducing the cost of government
but improving its cost-effectiveness. The mayor's
tough talk about dismantling bureaucracies may make good
politics, but that means little when it comes to improving
service delivery and worker productivity. "The real test of
the downsizing effort must be more than bringing large
bureaucracies to their knees," observes Harvey Robins.
"The challenge is to reshape them into responsive service
deliverers." So far, Robins doesn't see that happening.
One of the integral problems is that privatization, while
sometimes cheaper, is easily turned into a threat held over
the heads of municipal unions to demand concessions on
wages, benefits and work rules (see City Limits, February
1994). The same can be said of any rapid dismantling of
government programs and services.
"When you create an environment of fear, people are
demoralized and don't deliver services better," says Stanley
Aronowitz, a sociology professor at CUNY and a labor theo-
retician. "If you say to people, 'We're going to share work
during a fiscal crisis ... and our policy is to keep people work-
ing and keep services flowing to
severance and attrition, what is
the impact when key personnel
leave, particularly those that pro-
vide essential services? At the De-
partment of Health, for example,
242 positions were eliminated
under the first phase of severance.
But many of those who took the
/I How many billions of dollars
are we going to cut before
we decide we have to rethink
the whole mission?/I
the communities,' you'll have a
much more effective and efficient
government. "
Other analysts see democracy
as the catalyst for making the pub-
lic sector work more efficiently.
"If you give workers more respon-
package held important positions in highly specialized
fields, and included lab microbiologists, pharmacists, and
epidemiologists. Others were public health advisers who go
into low income areas to help tuberculosis patients or to
test for lead poisoning. At this point, it is unclear how the
department will cope without this personnel.
The administration plans to make up for such vacancies
by shifting workers either within agencies or from one to
another. So far, only about 1,000 workers have been rede-
ployed as of the end of the year, according to the Mayor's
Office of Operations. Little information about the details
has been made available except by agency leaks, leading
many observers to wonder about the planning process.
There seems to be an assumption that employees from HRA
can be easily shifted over to the transportation department,
for instance, notes Pasanen. "But the jobs are different
enough that the managers on the receiving end wouldn't
want that person."
One way to deal with staff shortages without spending
a lot of money is to use cheap labor. Under the mayor's
new "workfare" proposal, called NYC WAY (Work, Ac-
countability, You), Home Relief recipients-mostly child-
less men and women who receive an average of $350 a
month in public assistance-will be given work assign-
ments such as cleaning parks, sweeping streets and doing
low-level clerical work at city agencies. The Parks De-
16/JANUARY 1995/CITY LIMITS
sibility, they tend to rise to the oc-
casion," says Dean Baker of the Economic Policy Institute.
"Then you'll have more innovative ways of doing things,
and it will save you money in terms of employing supervi-
sors, who won't have to watch workers all the time. Unions
can be used to further that."
Not surprisingly, organized labor agrees. "How many bil-
lions of dollars are we going to cut before we decide we
have to rethink the whole mission?" asks Ed Ott, political
director of Local 1180 of the Communications Workers of
America. "I don't want to reinvent government by this lean-
er, meaner approach. It's not working. We have to talk about
what the mission is, what the needs are, and then how we
reorganize to get that done.
"That requires input from all levels of government. It
can't just be the mayor," Ott continues. "It has to involve
the business community, the social service community,
labor and neighborhoods. Then we can decide how to rein-
vent government."
In other words, broken bureaucracies and busted ser-
vices do not a government make. 0
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CITY LIMITS/JANUARY 1995/17
Special Report on City Government, Part 2
a
1S/JANUARY 1995/CITY LIMITS
ance
ower
by Robert Kolker
A primer on the /I structural
imbalance" in the budget,
and what people who
about government can
about it.
care
do
O
nce upon a time, before urban renewal gave way to
urban unease, keeping up with the Joneses meant
who in the apartment building had cable TV, or
whether your vacation plans measured up to the
neighbors'. But have you checked in on the Joneses lately?
Shifting from the prosperous 1980s to the uncertain
1990s, Mr. and Mrs. Jones have had big trouble just balanc-
ing their budget. Their paychecks aren't as fat as they once
were, and the debt payments on their latest home repair
loan are becoming increasingly difficult to meet. The Jone-
ses are learning the difficult skills of doing more with less.
The City of New York has fared no better. From the stock
market crash of 1987 right up until 1994, New York's work
force and tax base steadily shrank. At the same time, money
borrowed in the 1980s for infrastructure projects has to be
paid back, and the size of our interest payments is rising
fast. Health care costs, particularly the cost of Medicaid-
funded services, are shooting through the roof.
All of these problems, along with dwindling state and
federal funds , have helped spawn what economists call the
"structural budget imbalance," the year-to-year budget gap
that never goes away, no matter how many services the
mayor or City Council may cut. Like the Joneses, the City of
New York is losing ground fast.
"There cannot be a pretense among people who believe
in government, who think government should do things
that help people, that there is not a long-term structural im-
balance in the city's finances," says former city budget di-
rector Carol O'Cleireac8in. "This is not a hoax from the
pages of the Post or the Daily News."
What exactly has caused the structural imbalance is a
matter of debate. The only point of agreement among peo-
ple across the political spectrum is this: the growth rate of
city revenues falls far short of the growth rate of city ex-
penditures. And the disparity is only getting worse. Ac-
cording to the Mayor's Office of Management and Budget,
the likely budget gap for fiscal 1996-which begins next
July-is in the range of $1.3 to $3.2 billion, depending on
what kind of shifts are made in the coming months.
Some officials, including Mayor Rudolph Giuliani, blame
the problem on the size of the city bureaucracy, the demands
of unions and the state-mandated hiring of new cops. Priva-
tization and cutting city agency personnel, they argue, is the
best way to close the chronic budget gap.
Yet as schools chancellor Ramon Cortines tearfully told
the City Council in November, you can cut only so much
without causing serious damage. If we are ever to correct
the chronic, year-to-year imbalances, economists say, gov-
ernment must find new ways to raise money and gain con-
trol over expenses-like Medicaid and debt service costs-
that are rising well beyond the rate of inflation.
"In each round of budget modifications, the mayor is
playing fast and loose with the quality of life," argues Man-
hattan Borough President Ruth Messinger, who believes the
mayor's approach is misdirected. Her office recently report-
ed that the city's debt payments, as well as its medical costs
and fringe benefits for city workers, are growing by about 13
percent a year. Meanwhile, most other budget items, in-
cluding personnel and social services, have grown by only
one percent. "He keeps cutting money for neighborhoods
and curtailing neighborhood services, [butl this is not what
is growing fastest in the budget," Messinger says. Clearly,
the big-ticket items should be falling under the scrutiny of
the budget makers. But they are not.
There are a number of areas where fiscal managers are
looking to find new revenues, or where extraordinarily ex-
pensive items can be dealt with in innovative ways. Some
options, such as reducing unfunded federal and state man-
dates, may be more feasible now, given the new Republican
governor and Congress. Others, such as raising taxes and
requesting new money from the state and federal govern-
ments, appear to be little more than pie-in-the-sky scenarios,
given the recent political upheaval. Indeed, Mayor Giuliani
has already committed himself to a series of tax cuts-nearly
$1 billion worth by 1998-a move fiscal monitors say will
only deepen the budget crisis. With all of this in mind, the
following is a rundown of some of the ideas now vying for
a hearing in the corridors of City Hall.
The Medicaid Monster
n average, cities and counties in the United States
pay only one percent of the cost of health care for
residents covered by Medicaid, the federally-man-
dated, state-administered health insurance pro-
gram for low income people. Uncle Sam picks up at least
half the tab, while states usually pay for the rest.
But for New York City, it's another story entirely. Here, the
federal government pays about 50 percent, the state about 29
percent, and the city antes up a whopping 21 percent.
In his attempt to ease the budget imbalance last spring, the
mayor pinned his hopes on the state or federal government
picking up a greater share of the city's Medicaid payments.
According to the City Council, this year's $1.1 billion budget
gap could be eliminated by relieving the city of only half of
what it will spend on Medicaid this year. The size of these
payments is increasing rapidly: the Citizens Budget Commis-
sion, an independent watchdog organization funded by busi-
ness and foundations, reports that the cost of Medicaid in
New York City jumped 45 percent from 1989 to 1992.
CITY LIMITS/JANUARY 1995/19
Early in his administration, Giuliani
and five county executives from the sub-
urbs teamed up and called for greater
state assumption of Medicaid costs. The
state did make a minor concession: Gover-
nor Mario Cuomo agreed to assume a grand
total of one percent more of the burden. Giu-
liani has not given up, however; sources in the
mayor's office say top officials still dream of swing-
ing a deal with the incoming Pata-
quickly add up. "The result of having localities pay for
these functions is that they have to raise local revenue to do
so," explains Dean Mead, senior research associate for the
Citizens Budget Commission.
The new governor isn't entirely insensitive to mandate
relief. Easing his and Giuliani's election feud in November,
Pataki announced he would oppose a bill in the state legis-
lature that would require the city to increase pension pay-
ments for public employees. He called the bill an "unfund-
ed mandate," and said it would be
ki administration to relieve the
Medicaid crunch.
But Pataki is himself facing a
deep hole in his next budget go-
round, reportedly in the range of
$2 to $5 billion next year, so any
deal between the city and state
In 1995, the city will pay a total
of $2.4 billion in interest and
principal on its overall debt.
unfair to a city trying desperately
to close a $1.1 billion budget gap.
It may not be the best example-
Pataki is no great friend of orga-
nized labor, which supports the
measure. But other politicians, in-
will have to include some form of compromise. It is still un-
clear what Giuliani may be prepared to offer. The City
Council leadership has proposed a program in which, at the
end of five years, the state would take on all of the city's
contribution to Medicaid-funded outpatient services-that
is, health care in clinics and doctors' offices-but only half
of what the city pays for inpatient hospital services. In ex-
change, the city would expand managed care and primary
care services for the poor, reducing the number of people
who seek care in expensive hospital emergency rooms.
By the final year of the program, the council estimates, the
state would relieve the city of about $1.55 billion in Medic-
aid expenses. And as fewer of the city's poor residents spend
time in emergency rooms, the outrageous rate at which Med-
icaid costs are increasing-the real budget bugbear-should
slow. Ultimately, they say, the program would pay for itself
by driving a stake into the heart of Medicaid inflation.
But others argue that the state is not likely to take over
the payments unless the city can first prove that the rate of
inflation can truly be slowed. And even the mayor himself
points out that the city lost one significant solution to Med-
icaid inflation when health care reform collapsed last year
in Washington. Congress' inaction, he notes, is now costing
the city roughly $150 million a year.
Mandate Relief
T
he state dictates many of the city's other budget de-
cisions through laws and bureaucratic mandates. It's
a pattern that many policymakers, perhaps even
Governor Pataki, would like to stop.
The council has compiled a long list of money-savers to
be had if the state would just loosen some of its regulations
and pay its own way more often. If the state covered the full
cost of road maintenance for state highways in New York
City, for instance, the city could save $50 million a year, ac-
cording to the Department of Transportation. If the state
paid the full cost of housing state prisoners in city jails, the
city could save $40 million a year. If the state paid the same
subsidy for the City University's two-year associate degree
programs that it pays upstate, the city would save $23 mil-
lion a year. Faced with budget gaps in the billions, these
measures may not seem like much, analysts say, but they
20/JANUARY 1995/CITY LIMITS
cluding Herbert Berman, the chair
of the City Council Finance Committee, confirm that the
new governor is open to discussing the mandate issue.
Even so, none of this means Pataki will relieve other long-
standing mandates or offer state money to cover their cost.
There are unfunded federal mandates, too. Over the
years, city officials complain, Congress has ordered all sorts
of social programs, but somehow has never appropriated
funding. According to the mayor's federal lobbying office,
seven mandates ranging from requirements for solid waste
disposal to compliance with the Americans with Disabili-
ties Act cost the city a total of $475 million a year.
Of course, many of these underfunded or unfunded fed-
erallaws are the result of long and vigorous campaigning on
the part of activists with important goals in mind. Eliminat-
ing the federal requirement to remove lead paint from hous-
ing, for example, might offer some relief to the city budget,
but it would do nothing to overcome lead poisoning.
Unless new funding sources are found, local and federal
officials looking to relax expensive laws and regulations
will encounter opposition from those who fought for them
in the first place. Giuliani and Pataki could find themselves
on the sidelines watching liberals argue among themselves
over the relative costs and benefits of long-heralded laws
such as the Clean Air and Clean Water acts.
Sharing the Pain
W
hat the city wants most from the state and fed-
eral government is what it's least likely to
get-a return to previous levels of revenue-
sharing. A Lyndon Johnson/Nelson Rocke-
feller-era policy that distributed general funds to cities
without any strings attached, revenue-sharing has dwin-
dled for more than a decade. One of the biggest losers has
been New York City.
"Revenue-sharing takes wealth from the suburbs, from
those people who reap the benefits of the cities, and uses
those revenues to help fund the cities," explains Betsy Mul-
vey, spokesperson for the Fiscal Policy Institute, a union-
backed watchdog organization based in Albany. In 1979,
state officials decided that each year, 8 percent of all state
tax revenues should be divvied up among local govern-
ments, she explains. But the number didn't hold steady;
today, less than 2 percent of all state tax revenues actually
reaches local governments without any strings attached.
With tax reform in the mid-1980s, Ronald Reagan cut
revenue-sharing to the states. In 1987, New York State
turned around and hit the cities. New York City took the
hardest knock, since the distribution formula is based on
poverty figures.
Even as city spending has increased by nearly 30 percent
since 1989, state revenue-sharing has declined from about
$535 million to about $242 million last year. This year,
thanks to an addition by the state legislature, that number
will reach above $300 million once again. If such small in-
creases continue every year, the city would not get the full
amount ofrevenue promised in 1979 until the year 2021.
"That wouldn't be bad if there were a consistent effort
made [by the state] for that long," says Fiscal Policy Institute
executive director Frank]. Mauro,
in the next few years. In fiscal 1995, the city will pay a total
of $2.4 billion in interest and principal on its overall debt,
according to City Council budget analysts. In fiscal 1996 that
number will jump by 39 percent to $3.3 billion. The year-to-
year increases level out to about 7 percent after that.
Many financiers have cooked up proposals to refinance
this debt. But almost all refinancing measures have the
same problem: they create short-term savings in exchange
for a long-term burden.
One tactic used by other cities is called level debt ser-
vice. Basically, it evens out payments over several years.
This would mean delaying early lump sum payments
meant to knock down the principal on some of the city's
debt. Putting off paying the principal makes it easier to
meet short-term obligations, but it also increases the overall
cost of borrowing money by increasing the amount of inter-
est that has to be paid. To buy into this strategy, you have to
expect that the city will pull in far more in revenues down
the road.
Another plan directly involves MAC, which uses its high
credit rating to borrow money on behalf of the city. Cur-
rently, the city has MAC debt bearing interest between 7.4
and 13.6 percent. With the prime rate at 8.5 percent, the
council has suggested the city in effect create a second
MAC to borrow at a better interest
conceding the realities of state
budgetary constraints. This year,
the mayor could lobby the state to
return to late-1980s sharing levels,
but without Cuomo ready to hand
him state revenue in exchange for
his electoral support, this will be a
tough hand to play.
Since 1989, state revenue-
sharing has declined from
$535 million to about $242
million last year.
rate to repay the more expensive
portion of the first MAC's debt. U's
like borrowing from Peter to pay
Paul, only Peter has a cheaper in-
terest rate.
"I'm not an advocate of spread-
ing out debt service over a long
Nevertheless, Mauro says the city should work hard to
get what's coming to it. "Giuliani has worked successfully
with all the other county executives to make the case for
Medicaid," he says. "He needs to work closely with all the
other mayors to make the case for revenue-sharing."
If all else fails to convince the state, there's always the
moral argument. "There's a social justice issue here," says
Mead of the Citizens Budget Commission. "Redistributive
programs should be administered through the highest divi-
sion of government possible, and therefore the widest tax
base possible. That way everyone shares in caring for the
indigent."
Debtors All
D
ebts accrued during and after the historic 1970s
New York City bailout continue to drain city funds.
Since then, the city has paid interest on bailout
bonds to an independent body called the Municipal
Assistance Corporation (MAC), which was created to pull
the city back up on its feet. This year the interest payments
added up to $57 million; next year they will leap to $277
million because of the way the payment plan is structured.
That alone isn't much compared to what we're paying for
the capital funds we borrowed in the late 1980s for infra-
structure projects. Interest expenses on that debt, called gen-
eral obligation debt, are scheduled to bump up considerably
period of time," says City Council
Member Berman. Instead, he says, the city should just stop
borrowing so much money for future infrastructure pro-
jects. "We have to be very selective in the capital projects
we choose to do so we can reduce debt service."
But others, including Messinger, call this point of view
short-sighted. Not maintaining buses or subways, for exam-
ple, can hurt the city by increasing car and cab use. "Capital
investment in the city's future is necessary for both econom-
ic development and quality of life," she says, adding that the
city's failure to maintain schools or build them quickly
enough has caused overcrowding and helped undermine ed-
ucation for a generation of future workers.
Still another finance plan takes advantage of the debts
owed the city by delinquent taxpayers. In fiscal year 1994,
the city sold off its property tax receivables (expected tax
money) to a Wall Street trust for $201 million, essentially
borrowing the money before it had it in hand-
much like an individual getting a loan based on
an upcoming tax refund. The money from the
sale was a one-shot deal, so in fiscal year
1995, the city turned around and sold the
year's receivables once again.
Giuliani's budget plan continues this
practice for the next three years. But now
that the real estate market is improving, the
council has recommended the city hold onto
the property taxes and instead sell off its liens
(claims) on buildings facing foreclosure for
CITY LIMITS/JANUARY 1995/21
nonpayment of taxes. "We had actually proposed that agree-
ment a year ago in response to Dinkins' budget," says Lower
Manhattan councilmember Kathryn
ing exemptions for the Garden and the Chrysler Building
could bring the city $16.8 million a year.
The state legislature also has a
Freed. "One of the things Giuliani
said was that a lot of the proposals
the council came up with made
sense in the long term, but he was
concentrating on the short term,"
Freed says.
The Financial Control Board
describes Giuliani's tax cut
as "a short-sighted, iII-con-
ceived policy."
bill in the works that could re-
move tax breaks below 96th Street
in Manhattan, putting developers
such as the Trump Organization
and Zeckendorf on notice. Public
Advocate Mark Green predicts
For the city to sell off its liens
piecemeal may be lucrative, but
the result could be a frightening trade-off for low income
neighborhoods. Large developers or slumlords might snap
up blocks of the foreclosed housing, pushing out low income
residents and destroying communities. And that's a battle the
city's housing movement has been fighting for 20 years.
Taxes and One-Shots
I
f you thought the climate for raising taxes was bad before,
wait and see what the mayor has done this year. While
some argue that the city could get a cool $300 million a
year just by equalizing its property tax rates for apartment
buildings, condos, co-ops and one-, two- and three-family
homes, Giuliani has gone the other way completely.
According to the City Project budget research group,
New York's small homeowners pay between one-third and
one-fifth the property tax rate paid by their counterparts in
neighboring suburbs. These homeowners own 32.5 percent
of the property in the city, but pay only 11.5 percent of the
city's property tax levy.
Owners of commercial property and apartment build-
ings, as well as condo and co-op owners, on the other hand,
pay much more. Yet while some propose leveling the play-
ing field and raising homeowners' taxes, Giuliani has in-
stead cut $70 million in condo and co-op taxes for fiscal
1996. That's $70 million that could have been used to help
stave off the city's fiscal crisis-at a time when property tax
revenue has already dropped $800 million in two years be-
cause of declining assessments. A recent report from the
state Financial Control Board describes the tax cut as "a
short-sighted, ill-conceived policy."
Ironically, many Democrats, particularly Manhattanites
in condos and co-ops, may be fond of a property tax cut.
But according to the City Project, if each one-, two- and
three-family homeowner paid just $33 more each month on
their taxes, the city could eliminate more than one-fourth of
this year's city budget gap.
Another plan to make money off the improving real estate
market would be to wipe out tax incentives to industrial and
commercial buildings. Madison Square Garden, for exam-
ple, has $8.8 million in annual tax breaks and was recently
sold by Viacom for a reported $1.075 billion. It's hard to be-
lieve Viacom couldn't have afforded to pay its share for the
good of the city, says Messinger, who claims that renegotiat-
22/JANUARY 1995/CITY LIMITS
that delaying the implementation
of the Giuliani administration's
reductions in commercial rent taxes would generate $28
million in fiscal 1995 and $31 million in fiscal 1996.
Green has plenty of other quick-fix suggestions. The city
could save $55 million a year with minor reforms in con-
tracting procedures, he claims. Expanding the red-light en-
forcement camera program to 150 intersections could gen-
erate $138 million annually. A tax on cigarettes? $40 mil-
lion a year.
Some of the council's suggestions are more elaborate.
Forking over $77 million to start an independent recycling
authority could save $28 million in fiscal 1996 alone, ac-
cording to the council leadership. Converting Off-Track Bet-
ting to about 60 individual tax-paying businesses could pro-
duce an additional $15 million. Bucking tradition and in-
creasing the number of medallioned taxicabs for the first
time in 53 years could generate between $15 and $55.5 mil-
lion. If the MTA were forced to buy the Staten Island Ferry,
the city would save the $13.2 million it now loses each year.
Getting Real
F
inally, there are some panic button suggestions. Sell-
ing city-owned airport land, at 1991 estimates, could
raise $1.2 billion, according to the council. The mayor
has already begun to consider this option.
But the real budget imbalance, Messinger stresses, needs
to be addressed head-on before it spirals out of control.
Rather than looking inward to cut budget items year after
year, she argues, Giuliani should start thinking long-term
about what is growing fastest and how to stop it.
Some of these issues are extremely difficult to address,
perhaps even more so for progressives than for the current
administration. For example, with the cost of fringe benefits
for city employees soaring at three times the rate of inflation,
it's time for workers to pay a portion of their own health
costs, Messinger says. Convincing the unions to accept such
a change would not be easy, but it would likely go further in
solving the budget crisis than the mayor's current strategy of
slashing agency staff and programs, she adds.
"The mayor's been trying to bring down [the city em-
ployee] headcount. I assume it's because he really believes
we need fewer city workers," she says. "But it's not the
headcount that's hurting us." 0
!lBankersliust Company
Community Development Group
A resource for the non--profit
development community

Gary Hattem, Managing Director
Amy Brusiloff, Vice President
280 Park Avenue, 19West
New York, New York 10017
Tel: 212 .. 454 .. 3677 Fax: 212 .. 454 .. 2380
you 'Fe 1nU1led!
Family Planning Advocates' 18th ANNUAL
LEGISLATIVE CONFERENCE IN ALBANY
January 23rd and January 24th, 1995
Put your representatives to world
Recent changes in Albany and Washington have made this
year's conference, "Upholding the Spirit of Choice, especially
important. An impressive turnout by pro-choice New Yorkers is
crucial for making an impact on legislators.
Take advantage of this opportunity to speak directly
to your elected representatives! Attend insightful panel
discussions on how to use the legislative process, health care
reform proposals, and teen health initiatives, as well as a work-
shop on confronting the anti-choice agenda of the religious
right. Take action and protect your right to make your own
decisions about your family and your reproductive life.
Join us for one or two days!
Planned Parenthood of New York City has organized buses for
your trip to Albany. Buses will be leaving from Manhattan,
Brooklyn, Queens, and the Bronx. As a member of the PPNYC
delegation, you will receive a free copy of the 1995-96 Guiae
to Your Elected Representatives and a briefing on current
reproductive rights issues.
For more information, please contact us at:
Planned Parenthood of New York City
26 Bleecker Street, 7th floor
New York, NY 10012
TEl: (212) 274-7200 or 274-7348 FAX: (212) 274-7276
Planned Parenthood of New York City
CITY LIMiTS/JANUARY 1995/23
Business as Usual
Even legal methods of city contracting open the door to
widespread abuses-and reform is nowhere in sight.
C
orruption is certainly nothing
new when it comes to the New
York City contracting process.
Every few years, another scan-
dal percolates to the surface, incensing
the public and affording officials the
opportunity to renew pledges to clean
the rot from the system.
But it's not just the usual kickbacks,
price-fixing and bid-rigging that under-
mine the competitive system. There are
several legal contracting procedures
that enable agencies and private ven-
dors to circumvent strict procurement
regulations meant to prevent question-
able and costly deals. By some esti-
mates, such practices are costing the
city hundreds of millions of dollars
each year. In her October 1993 report to
the Procurement Policy Board, the
board's executive director, Constance
Cushman, noted, "The city continues
to hemorrhage money through its pro-
curement system." Citing half-hearted
reform efforts, she added, "Nothing
done so far has even begun to staunch
the flow."
$30 Million
For a case study in government con-
tracting, City Limits set out to explore
the recent contracting history of one of
the city's major garbage-carting firms,
Allied Sanitation. What we found was a
disturbing trend of noncompetitive bid-
ding, public subsidies and puzzling
procurement practices that critics say
are endemic to the business of contract-
ing in this town. Allied is part of a
group of Brooklyn- and Queens-based
companies owned by L&G Realty, a
Nassau County company that includes
Star Recycling, P&F Trucking and
Greater New York Leasing. According
to city records, the L&G group has more
than $30 million in outstanding or re-
cently completed contracts and pur-
chase orders with the City of New York.
While the L&G companies appear to
have won their government contracts
by entirely legal methods, they have
had the good fortune to receive mil-
lions of dollars in city contracts with-
out competing against a single bid from
other local carting firms. L&G also has
a long record of generous campaign do-
24/JANUARY 1995/CITY LIMITS
nations that stretch over the last three
administrations and has received mil-
lions of dollars in tax benefits and de-
velopment subsidies from the city's In-
dustrial Development Agency.
The L&G group has won many con-
tracts from city agencies in which they
offered the lowest price among the
competing bidders. That's the way the
system is supposed to work. But in ad-
dition to these contracts, the group has
also won millions of dollars in less
competitive ways.
Allied Sanitation was the sole bid-
der for four separate Department of
Housing Preservation and Develop-
ment (HPD) contracts worth more than
... ...
[I
$2 million for the removal of trash and
construction debris for fiscal years
1995 and 1996. HPD officials divided
the job into four separate contracts
specifically to encourage competition,
according to Joy Fairtile, HPD Assis-
tant Commissioner of Maintenance.
But, she says, none of the roughly 300
other carting firms in the city bid on a
single one of them.
"There is a tremendous history of
route-fixing and collusion on the part
of carters," Cushman explains. "That's
the cartel," adds Jennifer Kohn, a
spokesperson for Public Advocate
Mark Green. "They decide who wins."
Officials claim there is little they can
do to counter solitary bids. "We can't
force companies to bid," says Fairtile.
But critics charge that the city is not
committing resources to the kind of re-
search and outreach necessary to en-
courage a broad range of firms to com-
pete for city contracts, or to ensure that
public money isn't being wasted due to
collusive industry practices that pre-
By John Gilmore
vent competition.
"No one comes in from the outside
and challenges these things," observes
Elliott Sclar, an urban planning profes-
sor at Columbia University. "And once
you decide you're going to look the other
way, it becomes a billion-dollar problem.
"If you want to have a fair and open
bidding process, you've got to put
money in the budget to pay for it," Sclar
says. The Giuliani administration's plan
to privatize many city services could
lead the city into a contracting mine-
field-where taxpayers will be the vic-
tims, he adds. "These days, everyone's
looking for a free lunch. 'Contracting
out will save money,' they say. But they
don't want to spend the money to en-
sure there are no abuses."
And even when someone does come
in to challenge the status quo, there is
no assurance that anyone will listen to
what they have to say.
"The school bus contracts for busing
handicapped kids have not been let out
competitively since 1979," notes for-
i1 mer City Comptroller Elizabeth Holtz-
S man. "Competition in the letting of
those contracts could save $100 mil-
lion dollars a year. Well, the city's in
the middle of a budget crisis, but I
don't see anyone doing anything about
those school bus contracts."
No Explanation
The city has also awarded Star Recy-
cling, another L&G firm, at least nine
contracts from the departments of Envi-
ronmental Protection (DEP) and Sanita-
tion (DOS) for everything from hauling
sewage sludge to recycling metal and
glass, even though lower bids were of-
fered for each contract. Star Recycling
to date has received at least $6.7 mil-
lion out of a potential value of more
than $21.1 million on the nine con-
tracts. The earliest was signed in May of
1989 during the Koch administration.
The most recent was registered with the
comptroller in March 1994.
Agencies may reject a low bidder for
a variety of reasons, such as if the city
determines a company is not technical-
ly capable of performing a task or if
minimum labor standards are not ob-
served. But, notes Cushman, city em-
ployees responsible for evaluating bids
have not been properly trained to se-
lect contractors. When asked why low
bids were rejected in the awarding of
the contracts to Star Recycling, DEP
spokesperson Ian Michaels and DOS
spokersperson Cathy Dawkins could
offer no explanation.
Agencies can also bypass many
cumbersome city contracting proce-
dures to buy goods or services valued
at less than $10,000 by using "purchase
orders." According to Procurement
Policy Board rules, in order to issue a
purchase order, a city department still
must obtain at least five bids and select
the lowest bidder for any given trans-
action. But unlike business done with a
contract, the comptroller's office does
not review purchase orders. According
to Cushman, while this provides agen-
cies a quicker purchasing tool, the less
stringent review creates "absolutely a
greater level of opportunity for abuse."
Larger contracts-some for hun-
dreds of thousands of dollars-have
been broken up into smaller purchase
orders, each worth less than $10,000,
thus evading the standard procurement
process. "Agencies can and do use
multiple purchase orders when they
want to avoid competitive bidding"
and steer deals to vendors they are
comfortable doing business with and
leaving the door open for kickbacks,
explains an investigator with the In-
spector General of a large city agency
who spoke on condition of anonymity.
In 1992, for example, William Jenk-
ins, then the assistant commissioner of
facilities management with the Depart-
ment of Correction, was convicted of
accepting bribes from a janitorial sup-
ply company to whom he had issued
purchase orders of $9,999 every month
for more than two years. Jenkins was
videotaped accepting bags of cash from
officials of the firm.
Of course, purchase orders can and
are used for thousands of justifiable
transactions every year. But critics say
it's the spirit, not the letter of the law
that is being exploited in many cases.
Last fall, Star Recycling received six
separate $10,000 orders from the De-
partment of Sanitation to provide
sewage sludge clean-up services in six
community boards around the city.
The fact that the services were to be
provided at different locations was
deemed sufficient justification by DOS
to issue purchase orders instead of
a competitive contract, according to
Dawkins.
These purchase orders were also is-
sued on an "emergency" basis, which
allowed DOS to select Star Recycling
without soliciting bids from other
firms. "Emergency" procedures were
also used to directly award Star Recy-
cling a $650,000 contract in 1992
(recently increased to more than
$800,000) to process glass and metal
gathered from the city's curbside recy-
cling program.
Emergency procedures are intended
to allow the city to respond quickly to
unforeseen events, such as putting
extra snowplows on the streets after a
storm or making repairs to a collapsed
roof. But this reasonable provision has
also been abused.
Agencies have learned, "If you ig-
nore a problem long enough you can
declare an emergency and direct con-
tracts to sole-source vendors," observes
Susan Mattei, who works for Public
Advocate Mark Green. The scope of
this problem was identified in a report
last December prepared by then-Comp-
"Contracting
greases
the political
machine"
troller Holtzman, which indicated that
more than $250 million in emergency
requests had been withdrawn or de-
nied in the previous three years be-
cause they were inappropriate.
Generous Donors
These decisions are not made in a
political vacuum. The L&G companies
have been generous donors to political
candidates, giving more than $25,000
to politicians running for city offices
beginning with the 1989 elections, ac-
cording to records compiled by the
Campaign Finance Board.
David Dinkins received the most of
any single candidate, with a total of
$7,600 for his two mayoral races.
Rudolph Giuliani came in second with
$4,500, followed by Edward Koch at
$3,600 and unsuccessful City Council
candidate Pamela Fisher with $3,300.
Currently seated elected officials who
have received donations from the firms
include City Council Speaker and Ma-
jority Leader Peter Vallone ($2,300),
Brooklyn councilmembers Victor Rob-
les ($2,100) and Herbert Berman
($500), and Queens Borough President
Claire Shulman ($400) .
Sclar notes the negative effects that
campaign largesse can have on reform
measures. "It's a big problem," he ob-
serves. "Contracting greases the politi-
cal machine." L&G declined requests to
comment on its campaign contribu-
tions or to be interviewed for this story.
The L&G firms have also received al-
most $12 million in low cost loans and
tax abatements through the city's In-
dustrial Development Agency (IDA) for
the acquisition and development of a
facility in the Greenpoint section of
Brooklyn. IDA programs are adminis-
tered by the Economic Development
Corporation, a quasi-public corpora-
tion headed by a mayoral appointee.
According to EDC spokesman John
Dougherty, the motive for bestowing
these public subsidies was to "retain
jobs in the city."
Keeping Honest
Extensive review and oversight pro-
cedures do exist for city contracting, of
course, and one of the primary tasks of
the comptroller is to keep the agencies
and contractors honest. But while a
source at Comptroller Alan Hevesi's
office characterizes noncompetitive
bidding and abuses of emergency con-
tracts as "hot items" right now,
spokesperson Leah Johnson declined
to provide details of any plans to com-
bat those problems.
At the same time, the Procurement
Policy Board has the power under the
City Charter to change the rules gov-
erning the way New York City con-
tracting gets done. But that, as Cush-
man noted in her report last year, "is
essentially a question of political will."
"The board must live up to its own
mission statement," she wrote in her
blistering report, "and the Mayor and
Comptroller must empower it to do
so." Such unstinting criticism may
have cost Cushman her job, however-
she resigned her post in December.
Meanwhile, the unit within the
Mayor's office in charge of reviewing
contracts and conducting audits has
been all but eliminated. "The way it is
now," observes one insider, "if an
agency wants to get around the rules,
they can." D
John Gilmore is a freelance writer
based in Brooklyn and a former plan-
ner for the City of New York.
CITY LIMITS/JANUARY 1995/25
Freedom of Choice By Bill Lipton
H
ousing activists and organiz-
ers currently face an historic
opportunity to help thou-
sands of poor and working
class New Yorkers become homeown-
ers, never again to be forced out of
their apartments by terrible condi-
tions, landlord arson or gentrification.
Whether or not this becomes a real-
ity depends in part on how tenants
and organizers choose to interpret
statements by city officials about the
Giuliani administration's new push to
rehabilitate and sell city-owned apart-
ment buildings.
Commissioner Deborah Wright of
the Department of Housing Preserva-
tion and Development, which owns
several thousand buildings taken from
tax-delinquent landlords, has outlined
her agency's privatization plan at sev-
eral public meetings in recent months.
There are the usual alternatives: pri-
vate landlords, community groups and
the tenants themselves will all have
the opportunity to manage and pur-
chase buildings. What's significant
about HPD's recent policy declara-
tions, however, is the agency's repeat-
ed assurances that tenants will have
the right to choose which program
they want their buildings to enter, and
which form of ownership will result.
Commissioner Wright has confirmed
unequivocally that she is committed to
tenant choice as an underlying princi-
ple of the privatization effort. Organiz-
ers and tenants should go one step fur-
ther and interpret these statements as a
mandate to organize.
Powerful Effect
In 1935, when Congress passed the
Wagner Act declaring the right of
workers to unionize, labor leader John
Lewis and his fellow organizers went
across the country exhorting workers,
"The President wants you to join the
union." The argument had a powerful
effect; for the first time, many workers
felt that their efforts to form unions
were sanctioned by the powers that be.
Today, whether or not city officials in-
tended it, their public support for ten-
ant choice enables activists to tell ten-
ants, "HPD wants you to determine the
future of your building."
This point may seem minor to some.
But for tenants who may fear reprisals
or be hesitant to organize, the argu-
26/JANUARY 1995/CITY LIMITS
ment that their landlord-the city-
supports their efforts can have a signif-
icant impact.
Yet inadequate notification, poor
information and lack of tenant organi-
zation could easily undermine the
notion of free choice. One thing is
certain: without organizing, the sale of
city-owned housing is a game tilted in
favor of private, for-profit landlords.
such as mutual housing associations.
Leaders from the hundreds of success-
ful tenant-owned cooperatives and
from the emerging Neighborhood Net-
works project can mobilize to give first-
hand accounts of their experiences.
All of this raises the question of how
organizers can get the resources neces-
sary for such a campaign. Fortunately,
there is renewed interest in communi-
ty organizing among
certain foundations.
One of them, the New
York Community
Thust, recently provid-
ed nine neighborhood-
based groups with
funding to hire one or-
ganizer apiece. That's
a good start.
Another way to
raise funds might be
through a collective
~ effort. The Task Force
~ on City-Owned Prop-
~ erty, a coalition of
~ community-based
~ __ ~ i 3 groups, could pave
Does anyone really
believe that inform-
ed, organized ten-
ants of city-owned
buildings would
freely elect to have
private landlords-
be they from West-
chester or from
their own neigh-
borhood-own and
control their build-
ings? Many of these
tenants have already
experienced private
ownership at its
worst; their build-
ings were abandon-
ed by the private
sector, usually after
years of neglect.
In the coming
months, as the city
Bill Upton is an organizer with the
Neighborhood NetworU project of the
Urban Homesteading Assistance Board.
the way. If the task
force were to serve as
an umbrella group,
the combined credi-
moves forward
with its privatization program, some
tenants will react of their own accord.
Others, however, will remain silent
without ever realizing they have lost
an opportunity to determine their own
future. Prospective landlords will cap-
italize on tenants' feelings of power-
lessness and fear, their desperate need
for immediate improvements in ser-
vices and their lack of information
about alternatives. Meanwhile, the city
will allow tenants only 60 days to opt
out of one privatization program and
into another.
On the other hand, with a mandate
to organize, tenants and organizers can
"go movement," leafleting buildings
and holding community-wide educa-
tional forums and training sessions. In
the process, we can begin building
power to pursue other important work,
such as improving HPD's Tenant Inter-
im Lease (TIL) program, which trains
tenants to manage and purchase their
buildings, and promoting alternative
programs that provide tenant control,
bility of its members
could result in addi-
tional successful fundraising.
Combining Expertise
A citywide campaign would neces-
sitate coordination. Organizers who
share resources and ideas and who
evaluate their work as a group can
achieve far more than isolated or com-
peting organizers. By combining the
expertise of its member organizations
and other outside groups, the task force
could coordinate training and the de-
velopment of educational materials.
There are obstacles. Many commu-
nity groups don't share a similar self-
interest. Even those who agree on the
goal of tenant choice still differ on a
number of other questions. My sugges-
tion is that task force members and
other organizations sit down now and
talk seriously about their self-interests
and the prospects for increased collab-
oration. At the end of the conversa-
tion, there will still be a number of
groups at the table, and a lot of orga-
nizing to do. 0
R

A Vision With a Task By Marti Bombyk
Streets of Hope: The Fall and Rise of
an Urban Neighborhood, by Peter
Medoff and Holly Sklar, South End
Press, 1994,337 pages, $16 paper.
Why have so many urban neighbor-
hoods been allowed to crumble over
the last three decades? And what will
it take to bring them back?
Sometimes the best way to see the
big picture is to view a small portrait
and that's exactly what authors Peter
Medoff and Holly Sklar have given us
with their exhaustively researched
book on the fall and rise of Boston's
Dudley Street neighborhood. Their
work, Streets of Hope, offers more than
mere insight and inspiration. It is a
primer for anyone wanting to build a
neighborhood movement from the bot-
tom up.
Above all, this book is about the im-
pact of one neighborhood-controlled
organization, the Dudley Street Neigh-
borhood Initiative (DSNI). Medoff,
who passed away last April, was that
organization's first executive director
and a respected organizer in several
other northeastern cities, including
New York. Sklar is an author and
columnist for Z Magazine. Together
they offer an absorbing analysis of how
the fortunes of a beleaguered neighbor-
hood can be reversed.
They begin their story in the late
1800s, when Dudley Street was an-
chored by the families of early immi-
grant groups, including the Irish, East-
ern European Jews and Canadians.
Later, Italians, Hispanics, African
Americans and Cape Verdeans moved
in. From there, the authors trace a pat-
tern of disinvestment beginning in the
1960s that stripped the community of
jobs, homes and municipal services.
The neighborhood continued to de-
teriorate through the 1970s and '80s
under the grip of predatory real estate
practices like bank redlining and
block-busting. By 1990, the neighbor-
hood had become almost entirely
African American and Hispanic and
was the most impoverished in Boston.
But change had already begun on
Dudley Street. It started in 1984 when
the Riley Foundation set out to orga-
nize the community's traditional lead-
ership base. The Dudley Advisory
Group-a team of Riley trustees and
social service leaders-envisioned "an
organization of organizations" led by a
23-member governing board. At the
group's first community-wide meeting,
however, the audience of local resi-
dents learned that only four board
seats would be reserved for local peo-
ple; the rest were to be controlled by
the same church, government and so-
cial service organizations that had
failed the neighborhood for years. The
audience blew up in anger-and that
evening, the Dudley Street Neighbor-
hood Initiative was born.
Today, DSNI has a reputation for being
one of the nation's most innovative
and successful resident-controlled
community organizations.
Resident Control
By documenting the obstacles fac-
ing DSNI and the organizers' spunky
campaigns to overcome them, Medoff
and Sklar have written a rich case
study laced with valuable strategies
for confronting inner city problems.
Readers interested in affordable hous-
ing development will be fascinated by
DSNI's legal strategy for gaining own-
ership of "The Triangle." This 64-acre
tract, once filled with vacant lots and
abandoned buildings, is the heart of
the Dudley Street neighborhood re-
newal effort. Asserting eminent do-
main, DSNI has reclaimed vast stretch-
To its great credit, the Riley Foun-
dation supported the new incarnation,
which required 51 percent resident
membership on a 31-member board.
r--------------------------------------------------------------,
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saving and will improve service delivery for New Yorkers living with HIV and AIDS; developed through
input from DAS clients and NYAC member organizations. Price: $12.50, NYAC member price: $9
A GUIDE TO NEW YORK STATE COALITIONS
A comprehensive directory of organizations advocating on a full range of issues including: Education,
Housing. Immigration, Lesbian/Gay/Bisexual, Seniors and more. Price: $5, NYAC member price: $4.50
Name: Organization:
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()II hl'lwll' 01 thl' \l'11 'urI. Statl' Dil S. Rl'IIl'lIal
Landair 'lanagclllcnt is plcascd to announcc
The 199495 Housing Development Seminars
January's Seminar Topic:
"Advanced Finance and Legal Issues"
Syracuse, NY: January 10th New York City: January 24th
Buffalo, NY: January 12th Albany, NY: January 26th
For more information and to register for the seminar series
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land -\ir . ProfeSSIOnal Resources to Meet Your Project Needs
CITY LIMITS/JANUARY 1995/27
es of land abandoned by landlords and
the city. DSNI's "Don't dump on us"
campaign, which forced the city to
clean up vacant lots and close down il-
legal transfer stations, will capture the
imagination of readers interested in
environmental racism. And planners
will be interested in Dudley Street's
"urban village" scheme, which shows
how resident participation can vastly
improve neighborhood design work.
The authors also analyze DSNI's
holistic approach to social services,
economic development, the environ-
ment and family life, and sharply crit-
icize those national policies that have
left urban neighborhoods without sup-
port in their efforts to rebuild.
As the authors look at the prospects
for the children of Dudley Street, they
explore the politics of redevelopment
on a macro level as well. They con-
clude that the United States has ceded
urban policy to the police and the
prison builders, undermining the
youth development work that groups
like DSNI pursue. It is important con-
text for all of us seeking to devise new
methods for rebuilding communities.
Their choice of a quote from a 1993
"Only
residents
working
together
can create
a self-
determined
vision of
the future. "
Milton Eisenhower Foundation report
on the state of America's urban youth
is particularly powerful:
"Because the inmates were dispro-
portionately young, in many ways
prison building became the American
youth policy of choice over the mid-
1980s and early 1990s. [Because they
were disproportionately youth of
color,] in some ways prison building
became part of the nation's civil rights
policy. Given that the population in
American prisons more than doubled
over the decade, while funding for
Your Neighborhood Housing
Insurance Specialist
Reif
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insurance to tenants and community groups. We have
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on a careful evaluation of the special needs of our customers.
Due to the volume of business we handle, we can often
couple these programs with low-cost fmancing, if required.
We have been a leader from the start and are dedicated to
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28/JANUARY 1995/CITY LIMITS
housing for the poor was cut...in some
ways prison building became the
American low income housing policy
of the 1980s."
In other words, does the future of
urban America rest with building com-
munities-or building prisons?
Self-Determination
Finally, the authors castigate social
service agencies and community de-
velopment corporations that claim to
represent neighborhood interests with-
out being directed by local people.
Many such groups call themselves
"community-based organizations."
But Medoff and Sklar make clear there
is a distinction to be made: "They are
'based in communities,' but are not
'community-based.'" And it is the res-
idents, they assert, that fire any legiti-
mate community movement.
"Residents ... have been the ones to
stay and struggle as the neighborhood
was being divested in, or made a new
stake where others would not," they
write. "Only residents working togeth-
er can create a self-determined vision
of the neighborhood's future."
Perhaps the biggest accomplish-
ment of Streets of Hope is that the
book exists at all. It is important to re-
member that these memoirs could not
have been written if Dudley Street's or-
ganizers had not kept detailed records
and the writers hadn't had the vision
to tackle this complex subject. So for
activists and urban scholars, one
moral of the story is this: take good
notes. Now and in the future, we need
more books like this one. 0
Marti Bombyk is teaching community
organizing with this book at the
University of Michigan while on a sab-
batical from Fordham University's
Graduate School of Social Service.
JOB AD
COMMUNITY HEALTH OUTREACHlEDUCA
TION COORDINATOR. Coalition supporting
NYC's public health sector seeks person
with community health experience to ex-
pand training. communication and organiz-
ing activities. Strong writing. oral skills; or-
ganizational abilities; some evening/week-
end work; Spanish helpful; word processing.
Up to $35K. Send resume and cover to
Commission on the Public Health System,
c/o Patient's Rights Hotline, 215 W. 125th
St., Room 400, NYC 10027-4426
,
SpeakOut
I am writing to express my sincere
appreciation for your December edito-
rial ("Crain's Delirium"). After being
in the business of providing housing to
homeless people for eight years, one
would think that nothing would come
as a surprise, but the Crain's article
was quite a shock in its level of distor-
tion. However, it is reassuring to know
that there are others out there who ap-
preciate the work that is done by the
nonprofit sector.
Peter C. Campanelli
President
Institute for Community living
America Works, Part III
I feel compelled to respond to Sum-
ner Rosen's letter (November 1994)
about America Works in which he
states "the bulk of the payment occurs
only after the client has held her job
and become a regular employee." I am
not sure what constitutes "the bulk",
however. According to a March 1, 1994
article in The New York Times, Ameri-
ca Works receives $980 for enrolling an
applicant in pre-employment classes
and $3,855 just two days after the
client receives a permanent job.
I, too, have dealt with America
Works. Having referred many clients
to its program, I will agree that Ameri-
ca Works does place some AFDC re-
cipients in jobs. The question is, at
what cost?
Clients at America Works are taught
to tolerate virtually any behavior and
abuse from supervisors. The preferred
method of teaching is repetition and
desensitization. There are no open dis-
cussions of appropriate workplace at-
tire; instead, clients are told what to
wear and are publicly humiliated for
digressions. Is "laying down and tak-
ing it" really what we want to teach
women?
As a fellow social worker, I must be-
lieve Mr. Rosen cares as much about
the means as the end results. I agree
that a private for-profit firm can do
employment training. Where we differ
is that I deem the costs at America
Works to be appalling.
Doreen M. Straka
Manhattan
City Limits is eager to hear from you!
Send your letters to us at 40 Prince
Street, New York, NY 10012, or by
e-mail at HN4360@handsnet.org
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City Limits!
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at (917) 253-3887
WHAT YOU DON'T
KNOW CAN HURT
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CITY LIMITS/JANUARY 1995/29
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Meeting the challenges of affordable housing for 20 years.
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JOB ADS
HOUSING AND COMMUNnY DEVELOPMENT SPECIALISTS. Affordable Housing
Network, New Jersey seeks two highly qualified housing/community devel-
opment specialists. Responsibilities include assessing organizations' train-
ing/technical assistance needs and providing in-<lepth, hands-on assistance
in organization development, community planning, project development and
property management. Requirements: Experience working in community-
based, non-profit organizations; substantial real estate development experi-
ence; experience in community planning/organizing. Statewide travel/flexi
ble work hours involved. Competitive salary/excellent benefits. Minority can-
didates encouraged to apply. Send resume to Martha Lamar, Affordable
Housing Network, P.O. Box 1746, Trenton, NJ 08607.
PROGRAM MANAGER to direct busy New York office of San Francisco-based
nonprofit low-income housing financial intermediary. Requires: proven ability
to work with nonprofit developers and public or private agencies to structure
financing; loan underwriting and packaging expertise; excellent fundraising,
managerial, analytic, communication skills; creativity, initiative, commitment
to low-income housing and community development. Competitive salary
commensurate with experience. Letter/resume to Low Income Housing
Fund/NY1, 605 Market Street, Suite 200, San Francisco, CA 94105. People
of color and women encouraged to apply.
30/JANUARY 1995/CITY LIMITS
SENIOR PROPERTY MANAGER for growing nonprofit portfolio. 150+ units and
2 community centers. Experience with management. CommunitY-<lriented.
AAjEOE. Spanish a plus. FAC, 199 14th Street, Brooklyn, NY 11215.
FIELD ORGANIZER/JRAINER. National Alliance of HUD Tenants seeks full-time
organizer for recruiting and servicing member tenant groups; training ten-
ants, organizers; helping build local coalitions; organizing membership meet-
ings; preparing newsletters, mailings. Preferred experience: tenant, commu-
nity, labor organizing; participatory planning, organizational development,
good writing, speaking skills. Salary: Upper $20,OOOs, commensurate with
experience. Relocation costs negotiable. Position currently funded for one
year. Apply by January 10 to: NAHT hiring committee, 353 Columbus Avenue,
Boston, MA 02116.
LOAN FUND MANAGER. Challenging and exciting opportunity in a growing and
dynamic organization for a seasoned lender with community development
background. Position works closely with Program Officers in loan develop-
ment for low-income housing and economic development projects. Salary
commensurate with qualifications and experience. Very attractive fringe
package. Send resumes with salary requirement to Seedco, 915 Broadway,
Suite 1703, NYC, 10010, Attn: Sal Sanchez. An equal opportunity employer.
JOB ADS
EXECUTIVE DIRECTOR. The Chelsea Housing Group, a community housing ad-
vocacy organization, is recruiting an Executive Director. Responsible for ad-
ministration of the program, including supervision of two staff members.
Much of the director's time will be spent in direct tenant organizing and coun-
seling. Requires commitment to and experience with tenant issues and or-
ganizing. Works closely with board of directors in positive community setting.
Must have basic computer literacy and good administrative skills. Law de-
gree and/or fluency in Spanish desirable, but not necessary. Salary in the
$30,OOOs. Send resume and cover letter to Search Committee, c/ o
Alan Jay Gerson, 505 LaGuardia Place, NYC 10012
ECONOMIC DVB.OPMENT SPECIALIST. The South Bronx Overall Economic
Development Corporation, one of New York City's largest local development
corporations, is seeking an energetic entrepreneurial person for its Com-
mercial, Industrial and Community Development Department. The responsi-
bilities of this position include: 1) aSSisting with commercial and industrial
development projects 2) providing technical assistance to other community
based organizations in economic development planning and program imple-
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Send resume with cover letter to K. Hill, SOBRO, 370 E. 149th St. , Bronx, NY
10455 or fax to (718) 292-3115.
HOUSING SPECIALIST. Citywide nonprofit organization seeks self-motivated,
well-organized person to train/ assist low income cooperatives and TIL build-
ings with management and organizational development. Extremely fulfilling
work, some flexible hours, evening work. Spanish a plus. Salary $25,000.
Send resume to: UHAB, 40 Prince Street, New York, NY 10012. Fax: (212)
966-3407.
ECONOMIC DVB.OPMENT ASSISTANT needed to expand training and employ-
ment programs for tenants of The Times Square, a residence for 652 single
adults, including and formerly homeless individuals. Experience with
business development, venture management and marketing desirable, as is
experience working with people with special needs. Salary will be commensu-
rate with experience. Mail or fax resume and cover letter to John Weiler, Com-
mon Ground Community, 255 West 43rd St., NYC, 10036, Fax: (212) 768-8492.
No phone calls, please. Common Ground is an equal opportunity employer.
PARALEGAUHOUSING DVB.OPMENT ASSOCIATE. Small law firm working pri-
marily with community-based not-for-profit organizations involved in housing
and social service programs seeks part-time paralegal/housing develop-
ment associate. Excellent opportunity to learn about affordable housing de-
velopment and real estate law. $8-$10 per hour, depending on experience.
15-20 hours per week. Requires knowledge of MS Windows, Word and Excel.
Good writing and organizational skills. Fax resume and cover letter to
Dellapa & Lewis, (212) 732-2773.
EXECUTIVE DIRECTOR needed for nation's largest grassroots environmental
t ransportation advocacy group. Responsibilities include program planning,
budgeting, fund raising and membership recruitment. Candidate must be
committed to bicycling, alternative transport. Also important: experience in
advocacy, staff supervision and nonprofit management. Salary $30,000-
$35,000 negotiable including full benefits. Send resume, cover letter and
writing sample to: Search Committee, KEA, 270 Lafayette St., NYC 10012.
No calls or faxes.
COMMUNITY ORGANIZERIVICTIM ADVOCATE. New York City based Pan-Asian
organization, organizing against racism, biasmotivated violence, police bru-
tality and economic injustice in immigrant communities seeks full-time staff
to coordinate community organizing campaigns and victim advocacy. Profi-
ciency in Chinese needed. For details: Committee Against Anti-Asian Violence,
(212) 473-6485.
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