With Cart Again Before Horse, New Rochelle City Council Prepares to Borrow $19.6 MM

Written By: Robert Cox

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UPDATE: The Council tonight voted to amend the amount to $25.0 mm to include purchasing additional adjacent properties to add space to move the DPW and Parks/Recreation operations at 40 Pelham Road to Beechwood. Construction is projected to begin in the Fall of 2013. Read more here.

The City Council is scheduled to vote tonight on borrowing $19.6 million to finance construction of a new City Yard on Beechwood Avenue despite having failed to apply $600,000 borrowed earlier this year to design the yard and with no clear sense of what the actual costs will be. The Mayor stated at the Nov. 1st City Council meeting that tonight would be a “drop dead” deadline for voting to bond for the City Yard and a failure to approve bonding would be a significant blow to the Forest City/Echo Bay project. Bonding of this type of amount must be done during the normal budget cycle except in the case of emergency. The impact on taxpayers is expected to be an effective 2-6% automatic tax increase for the next 20 years, roughly $300 or more per year, to cover the cost of the City Yard.

The City Manager sent the following in a memo to City Council on October 26, 2012:

On February 14, 2012, City Council passed a bond resolution to finance the design and planning costs of a proposed new replacement public works facility at the Beechwood site. in the amount of $600,000. The City had previously retained Dolph Rotfeid Engineering, P.C. to conduct a cost comparison between renovating the existing City Yard on East MaIn Street versus constructing a new facility on the City-owned parcel on Beechwood Avenue. which concluded that a moderm public works facility sufficient for the operational needs of our Public Works Department can be accommodated at either site. The study further concluded that the estimated cost of renovating the facility at the existing site on East Main Street is $16,064,260 and the estimated cost of constructing a new facility at Beechwood Avenue site is $13,003,830.

A couple problems here.

First, the City got approval to borrow $600,000 to design the proposed City Yard location at Beechwood Avenue but did not spend that money and did not get back a design for the proposed site. So, what happened to that money?

Second, the cost comparison done by Dolph Rotfeid Engineering does not include the operations at 40 Pelham Road so the Beechwood Avenue site does not accommodate DPW’s the operational needs. The original specifications for a new City Yard site was for a property of no less than 4.0 acres, a size meant to include all DPW operations at East Main Street and Pelham Road. The property that was purchased at Beechwood Avenue was less than 3.0 acres. This was justified under the assumption that the New York State Thruway Authority would lease its adjacent property to the City. This assumption turned out to be incorrect and even if it has been correct it would still not have accommodated all DPW operations. A new solution was found in purchasing an adjacent property, at an additional cost. This property has significant remediation needs which have been estimated at between $2-3 million. This cost is not incorporated in the original estimate or the new estimate.

The Strome memo continues:

The design analysis is complete and the projected costs at both sites have exceeded the original estimate. The attached memorandum from our design consultants, Lothrop Associates, provides an analysis of why the costs are higher than originally anticipated. It is estimated that the total project cost at the Beechwood site will be $19 million and the total project cost at the existing East Main Street site will be $24.4 million.

A couple more problems here.

The woefully inaccurate original estimate was based on work done by Dolph Rotfeid Engineering. Michael Ritchie works at Dolph Rotfeid Engineering. Ritchie was the New Rochelle Development Commissioner from 2000 to 2003 and was intimately familiar with New Rochelle the proposed Beechwood Avenue site. Given this, how could the original estimates been so far off?

The City did not borrow $600,000 to do a “design analysis”. So, how much of that $600,000 was spent on “analysis” which amounts to a two-page memo and a map of the location with a few squares and rectangles drawn on it (in other words, no actually building designs and therefore of little value in determining costs). The money was approved by Council so the City could design a City Yard at Beechwood Avenue. That never happened so now the City does not have an accurate cost figure and no real idea whether $19.6 mm will be sufficient to build a new yard.

From this, the City Manager concludes:

Based upon the foregoing. City Council has several options as follows:

A. Construct the Beechwood City Yard and proceed with the Echo Bay project:
B. Modernize the East Main City Yard and cancel the Echo Bay Project: or
C. Defer action of the City Yard and cancel the Echo Bay Project.

The attached chart details the gross fiscal impacts of each alternative.

The chart is from a presentation made to City Council on November 1st which few residents saw due to the storm (click to see the full presentation).

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From this, the City Manager recommends moving forward with the Beechwood City Yard and the Forest City/Echo Bay project.

There is no hard estimate based on an actual design for the proposed yard, the previous estimate has no proven to be entirely unreliable and there is no accounting for the cost of remediating the property acquired adjacent to the original parcel.

There are more problems.

Currently the Beechwood site is being used a leaf transfer station not just for New Rochelle but for other municipalities in the area. When will be that closed, at what cost and are we taking in revenue from these other municipalities (and will that revenue now be lost?)

5 thoughts on “With Cart Again Before Horse, New Rochelle City Council Prepares to Borrow $19.6 MM”

  1. Second AVENUE? So they don’t even know…
    where they will be?

    So they’re taking over the ironworks through eminent domain? What else are they taking over.

    What a joke.

  2. UPDATE: $25 MM not $19.6 MM
    The Council tonight voted to amend the amount to $25.0 mm to include purchasing additional adjacent properties to add space to move the DPW and Parks/Recreation operations at 40 Pelham Road to Beechwood. Construction is projected to begin in the Fall of 2013.

    1. My apology…
      Looks like I missed this article from Tuesday.

      Jingle, jingle, coins when they mingle, make such a lovely sound.

      Well, I hope the citizens of New Rochelle are happy.

      Wait until it’s all over, let’s see how much it has risen from $25 million.

  3. City Yard
    During the presentation at the council meeting, not once did we hear if this new yard is state of the art. In 5 years from now, will it be in the same condition as the so called “shanty town” of the present city yard. I realize the commissioner of DPW is trying to keep his job, but he should be allowed to give a honest opinion of this plan. I do not see that happening.

    With the mayor having the votes, it seems a done deal. What has happened to the independent members of council? I guess that campaign promise has flowed out to sea.

    1. Good Point
      There is a relatively new facility on the West Side Hwy. / 12th Ave. / 57 Street part of Manhattan used by the City of New York Sanitation Dept. which houses a fleet of trucks, is a wash facility and accomodates a salt area snug into a far corner on the outside all in a single building.

      It would seem a similar design could be incorporated in this new facility on Beechwood giving it greater efficient use of space in an all in one building and thus freeing up outside space for other uses.

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