REMARKS
Historical context and criticism of the water rental payment mechanism
2:29:46
·
105 sec
Council Member Gennaro provides historical context for the water rental payment system, drawing from his experience working at the Office of Management and Budget (OMB) in 1985. He criticizes the mechanism as a 'Trojan horse' that allows mayors to use it as a cash machine for balancing the budget.
- The rental payment was initially created to address pre-1985 DEP general obligation debt
- A provision was included that allowed the rental payment to continue even after the original debt was paid off
- Gennaro argues this provision was intentionally added to give future mayors a way to generate additional revenue
- He expresses frustration that this complex system is not well understood by the public
James F. Gennaro
2:29:46
I'm not I mean, I and I and I used to work, you know, OMB back in the I was working in OMB back in 1985 in the capital division when they did this.
2:29:57
And I was just a kid back then, but, you know, the the, you know, The joke was that we've got this mechanism because nobody wanted to touch the pre 1985 debt.
2:30:12
And so the new water finance authority is like, you know, the water board is like going at us, like, we're not gonna pay that.
2:30:21
And the city wanted to be, you know, like, like, the, you know, OMB just wanted the DEB Capital budget just to be out of its hair, like, for good.
2:30:33
And so who was going to pay for this huge mountain of pre 1985 DEP GeO debt, and that was gonna be the rental payment.
2:30:42
And so like the Trojan horse that they built in, was that revenue coming to an agreement whereby once the pre 1995 debt is all paid off, the rental payment, which is brought into existence to pay that to pay that debt gets paid down and goes away that the rental payment goes away.
2:31:00
Mhmm.
2:31:02
They put a Trojan horse in, like, whatever state legislature, like, what the state legislature did this in consultation with OMB.
2:31:10
Who the heck knows?
2:31:11
I was just like an entry level person, it wasn't up to me.
2:31:15
But there was a there was a Trojan horse built in there that that the mayor, whoever it is, you know, many, many years down the road, would have a cash machine in the form of a rental payment if you know, she or he needed money to balance the budget.
2:31:31
That is an outrage, and I'm glad you folks are on it.
