Chairman's View: Improve our Planning for Town Building Maintenance (Oct 18, 2018)

Chairman’s View: Improve our planning for Town building maintenance

OCTOBER 18, 2018 BY NEW CANAAN ADVERTISER

New Canaan Town Council Chairman John Engel’s weekly guest column. New Canaan Town Council Chairman John Engel

First, let’s talk about the 100-point Pavement Condition Index (PCI). When a road scores above 86% PCI it’s excellent, requiring only corrective maintenance: crack sealing at about a $1 per square yard. Between 85% and 75% PCI a road is “good” and requires micro-thin overlays and cape seals at approximately $5 per square meter. When a road falls below 75% the road shouldn’t merely be patched, it must be repaved or reconstructed at a price of between $22 and $60 per square yard. “Very good” roads should be maintained for minimal investment and stretched to over 30 years of life.

In 2003, New Canaan’s roads scored 77% and in danger of needing reconstruction. Our Public Works department presented a 20-year plan in order to get our score back to 85% with the greatest efficiency. Unfortunately, between 2004 and 2008 the price of asphalt rose with the price of oil from $50 to $92 per ton and even with steady investment New Canaan’s average pavement quality declined to 74% below which roads need complete rebuilding.

And yet every year we challenge Tiger Mann, the head of Public Works, with questions designed to cut that road budget. Every year he patiently explains the math behind our most efficient system to get the Pavement Condition Index (PCI) from a score of 74% in 2009 to a score that is currently 81%. Every year our roads naturally deteriorate 2.5%. If we spend $2 million then the road quality stays about the same. Spending $2.5 million per year has allowed our PCI to rise about a half-point per year toward that goal. The Eversource road-paving investment amounts to about $3 million over five years and allows us to finish our 20-year plan in about 18 years, hopefully by 2021.

We have not managed the maintenance of our buildings with the same discipline and consistency we have applied toward our roads. This has caused some of us on Town Council to ask the obvious question, “Can we put together a building maintenance program, consistently funded at $1 to $2 million per year, that allows us to chip away at our $20 to $40 million obligation to repair and restore the 56 buildings that the Town owns?” 

First, 50% of that budget is Waveny House. If we are serious about Waveny we must wrap our heads around $1 million per year for the next 20 years. The second step is to identify the buildings that the Town should not own. Legally protect (with conservation easements) and then sell those buildings which are inefficient and inappropriate for a town to own and maintain: the Vine Cottage, the Police Station, the Outback, the Irwin House and Irwin Barn, the Gores Pavilion and the New Canaan Playhouse head that list.

Chairman's View: Council Faces Cost of Debt, Capital Projects and Lower Property Values (Oct 4, 2018)

Chairman’s View: Council faces cost of debt, capital projects and lower property values

OCTOBER 4, 2018 BY NEW CANAAN ADVERTISER

A guest column from New Canaan Town Council Chairman John Engel.

New Canaan has the highest per-capita debt in Connecticut at $5,800, double that of Darien because we are a larger town with many more miles of roads and dozens more buildings. Therefore the Board of Finance has presented to the Town Council their recommendation that we reduce our debt service as a percentage of expenses over the next five years from 12% to 10%.

Capital Plan

The Town Council, Board of Education and Board of Finance agreed last year to work on common budget guidance in the fall. Those meetings are still needed. There is a disconnect between current Board of Finance guidance to reduce Town debt service to 10% levels and the new public-private initiatives we read about each week. Your town government needs to have an honest conversation about priorities and scrub the five-year capital plan.

State and local

High net worth taxpayers are continuing to leave Connecticut. The election will have an impact on our budget thinking. We need to vote for a change in our taxes that will have an impact on our budget planning. The latest poll shows Lamont leads Stefanowski by 6 points with a margin of error of 4 points. 40% of Connecticut voters are independent. Stefanowski has gained 6% with unaffiliated this month, but he trails among women by 22%. This race is too close to call.

Congressional elections, transportation  

New Canaan tax base is largely dependent on Wall Street, and it benefited from recent deregulation of the financial sector, federal stimulation and the bull market. But, the latest polls predict a Republican Senate and a Democratic House in Washington. We should anticipate gridlock from a balanced Congress at a time when what New Canaan needs is federal attention on our infrastructure. New Canaan needs multiple good commuting options, particularly faster and more trains. Town leaders are working on the affordable expansion of Talmadge Hill to make more parking available for commuters. This should shorten the waiting lists. I am surprised at how few people are taking advantage of newly available “Boxcar” parking in the St. Aloysius lot. Parking habits are equally slow to change.

2019 Revaluation

The property tax change is a concern for budget planning. In January we will learn that many tax bills will rise between 10% and 20%. Why? The Grand List is predicted to shrink 8% reflecting a reset at the top end of our market and subsequent compression as top tier prices fell and put price pressure throughout the system on lower-priced homes. Those homes will make up the deficit. 

Therefore, the Board of Finance and Town Council must re-evaluate our Tax Relief for Seniors program and its means-testing in light of the coming property tax volatility. We want to retain our seniors as we explore new senior housing options. It’s a small line item but deserves a fresh look.

Chairman's View: Town Inconsistent When Partnering with Private Funding (Sept 13, 2018)

Chairman’s View: Town inconsistent when partnering with private funding

SEPTEMBER 13, 2018 BY NEW CANAAN ADVERTISER

[UPDATED WITH CORRECTION Sept. 14.] Town councilman Bill Bach gave us the Bach amendment in 1997 (Article 2, Chap. 125 of the Town Code) outlining how New Canaan should think about capital projects. In short: “Take no donation that comes with an open-ended liability” or at least costs not fully understood. We do not understand the Bach amendment. Nor do we use it consistently. Consider:

A guest column from New Canaan Town Council Chairman John Engel.

Turf Fields. It’s clearly a Town responsibility to provide fields, yet private money built Dunning Field. This year private money paid for 78% of two new turf fields (Water Tower 2 and 3), zero for the replacement of the original turf field (Water Tower 1), 53% of new baseball fields, and about 17% for the new track and field. 

The Town Council will create a new Enterprise Zone in October that lays the foundation for a public / private mix of fields improvement and maintenance. The goal is to lay out clear standards and responsibilities, encourage optimum use and save money for replacement.

1. Library. Town is paying 74% of operations this year. Their capital budget has always been 100% their own. Now, the Town has helped purchase adjacent land and pledged to be a partner in the new building. Good. How much is fair? And can we afford 74% of a world-class library? Can we afford not to?
2. Irwin House. The first selectman wants to rent it to non-profits as they are priced out of the downtown. What would Mr. Bach say? Irwin capital needs are substantial but we don’t have many options here. It’s not a joint venture; it’s a rental in a park. Same with Brick Barn. Public Private Partnership rules shouldn’t apply to rentals. 
3. Irwin Barn. Could this be the permanent home of Summer Theater of New Canaan? They say they can raise the capital, an exciting proposal. We should be encouraging this kind of proposal in our parks, unlike the… 
4. Brick Barn. The Preservation Alliance proposed trying to take on 100% of the capital needs and ongoing maintenance. The Council split on the vote. The Selectmen promised to work with the Alliance, keeping an open mind if this space could be a community asset.
5. Waveny Conservancy. When the Council slowed trail improvement the Conservancy was there to see it through. This sets an odd but not unwelcome precedent. When Town doesn’t pay, private funds will.
6. Paddle Court. Town agreed to pay $70,000 when it had assurance private donations would pay about $30,000.

Let’s not imply that a high private-money percentage guarantees Town support. While there are no hard-and-fast standards, the Town must provide private partners with more clarity. We should draft a memorandum explaining the considerations the Town Council will take when we consider investment or co-investment.  

The requirement of an endowment fund is too high a bar, whether we are talking new fields or old barns. We need flexibility to achieve common sense results.

Chairman's View: Do The Projects that Do Not Increase Debt (Aug 23, 2018)

Chairman’s View: Do the projects that do not increase debt

AUGUST 23, 2018 BY NEW CANAAN TOWN COUNCIL CHAIRMAN JOHN ENGEL

Affordable housing, senior housing, workforce housing are all needed in New Canaan. Should housing be a concern of the Town Council? Yes, repurposing old buildings as housing begins an intricate calculus getting the Town out of the restoration business. Restore buildings to the tax rolls. Sell Vine Cottage.

To borrow from an old joke, “How fast do you need to run to survive a charging bear?” New Canaan Town Council Chairman John Engel

What can we afford? Our assessor will soon announce the Grand List based on this past year’s sales. Values decreased by at least 7% and will probably be offset by a 7% increase in the mill rate. Nobody wants to see the taxes increase from $17,000 to $18,000 on a million dollar assessment, but it is coming. Given that New Canaan’s per capita level of indebtedness is highest in the state and at a ten year high it seems odd that Town Hall is considering any new projects. Some make sense if they don’t increase debt.

Affordable housing. We have a proposal by our Housing Authority and New Canaan Neighborhoods to grow Canaan Parish by 40 units. The objections are aesthetic, not economic, and overblown. The proposal is self-funded from the housing fund and a mortgage in order to maximize efficient use of the property. We need 100 nicer, larger units. Expect this to pass after more public hearings on design details.

Unimin. On the table is a proposal to spend $10 to $12 million purchasing and repurposing the Unimin building as both police station and school administration offices. Consider savings of $3 million from the BOE lease and $7 million in police renovation costs — the math could work. If the economics are even close this is a very good idea. Sell the old police station to a developer for affordable, senior or workforce housing. It’s a natural extension of the Schoolhouse Apartments. It retains seniors. If a private developer cannot make his numbers work maybe our Housing Authority can. The town wins in two ways: we add a much-needed affordable or senior housing choice on walkable South Avenue and we get an efficient office building as offices. Give it a chance.

Parking. Deck the lumberyard? We wanted this when it was estimated at $8 million. Now, decking is estimated at $12 million. At $48,000 per spot it will take 40 years to pay for it. We can’t afford that. We can’t afford to do nothing. Our Grand List depends on reliable transportation and parking. Sell the development rights to the street front of the property to get estimates back under $8 million. Sell the frontage, hide the deck. Decking the Locust Lot at $4,125,000 for 89 spots ($46,348 each) is not viable. Acquire more spots at the Talmadge Hill and Locust lots for half the price of decking. Do this while working the Lumberyard plan.

Chairman's View: Connecticut Needs Team of Rivals to Outrun the Bear (Aug 9, 2018)

Chairman’s View: Connecticut needs team of rivals to outrun the bear

AUGUST 9, 2018 BY JOHN ENGEL. CHAIRMAN, TOWN COUNCIL

To borrow from an old joke, “How fast do you need to run to survive a charging bear?” 

Connecticut does not need to outrun the bear. We need to outrun New York and New Jersey. Signs of that foot race are taking shape. New York real estate is experiencing decline for the first time in nine years, around 10% annually in price and volume. Connecticut both benefits and suffers when New York catches cold as the best alternative without leaving the area altogether. 

Are August reports showing a rebound in Greenwich harbinger of a trend? Greenwich is always the last to slump and the first to recover. New Canaan, Darien and Westport will follow. Much depends on Tuesday, Aug. 14, for both political parties’ primaries. This election sets us up to outrun the bear.

In heavily Democratic Connecticut (D = 38%, R = 21%, Unaffiliated = 40%), Democrats Ned Lamont and Joe Ganim are running against Trump. Lamont moved further left this year pledging to “stand with labor unions.” Pandering to the left is a response to Ganim’s candidacy. It will help him on Tuesday but hurt him in November when 831,436 unaffiliated voters get a chance to vote.

Five Republicans are still running against Gov. Malloy and his 21% approval rating. They say “It’s the economy, stupid,” but plans differ widely. Tim Herbst mostly focuses on law and order issues. (Tim, psst, it’s the economy!) Bob Stefanowski and Mark Boughton promise to eliminate the state income tax. Is that bold or is that pandering? Stefanowski provides a website full of math. He ran big businesses. Maybe he can run the business of Connecticut? Steve Obsitnik always starts with his 300,000 jobs plan, economic development and knowledge corridors, true to his entrepreneurial high-tech roots. He makes our universities part of the solution. David Stemerman, finance guru, sounds like Mike Handler with his laser-focus on restructuring debt and renegotiating bad contracts. An investor, he talks about attracting investment to transportation and creating public / private partnerships. 

Of the seven candidates running four are successful businessmen and three are mayors. Which will win? Paraphrasing scripture, “It is easier for a camel to go through the eye of a needle than for a rich businessman to win in Hartford.” But, Malloy may have soured the populace this time around on what a mayor can do.

Gentlemen, how will Connecticut outrun the bear? You need both financial and political savvy to get past the primary, win the general and convince an evenly split legislature to implement your agenda.

Connecticut needs bi-partisan cooperation, job growth, radical restructuring of our debt and bold ideas around transportation if we are going to outrun the bear. 

I sincerely hope a “team of rivals” with all their talents can emerge to put us back on track.

Chairman's View: Somebody Moved our Cheese, column for July 26, 2018

If you are one of 26 million people who read the book “Who Moved My Cheese?” you know we are at an inflection point here in New Canaan, a moment where we either wring our hands over the good old days or we take stock of the situation and address the change head-on. We find new cheese. New Canaan will continue to be known for great schools, a good commute, green spaces and parks, top cultural attractions and low taxes. But, some things will change:

-      Politics. In November we will have a new Governor. No matter which of the seven, it will be better. Connecticut needs and will get a new paradigm, and new ideas. New jobs will follow. New leadership inevitably brings with it a new optimism and energy. Connecticut and New Canaan will get a November lift as Hartford starts a new chapter.

-      For Sale Signs. Many of us have had a For Sale sign out for too long. Now at 2004 prices, some are waiting for the market to return. I believe the market will move sideways for the next few years. Town Hall must budget for that. If you can afford to stay, stay. New Canaan is a great option while we wait for the rebound. New Canaan prices are excellent when compared to Westchester and the City. The pendulum is swinging our way. 

-      Revaluation. In November the assessor resets the value of every house in New Canaan at a (more) correct value and new taxes are set. The value of many houses changed considerably since 2013 and this recalibration is about being fair to all. The reset will inevitably help move some unsold inventory. 

-      Debt. We have the highest debt of any town in this area (although our pension funds are 100% funded).  This debt was responsibly acquired to fund necessary long term asset improvements such as schools, treatment plants, town buildings, but it is still debt. Fortunately, our Boards of Finance and Selectmen are now hyper-conscious of that fact. Expect a new debt roadmap and capital plan this November outlining how we deliver top quality services and schools within our means. Expect a move toward 0% growth like Westport, Darien and Greenwich are doing.

-      Senior & Affordable Housing. Our lower-cost housing options were redeveloped during the building boom of the last 30 years. Ranches became mansions. Few condos were built to replace them, and those that were are very expensive. Now, the market responds with large, dense alternatives that scare us that the character of the town might be at stake. (The Preservation Alliance is a key piece fighting for our character but we need a strong P&Z. They put 100 restrictions on the Merritt Village. Good. They rejected the Roger Sherman redevelopment plan outright. Good. Let’s put our faith in P&Z. Give the Housing Authority a fair hearing and remember, “Don’t let the Perfect be the enemy of the Good.” (Voltaire) 

Chairman’s View: Expect a High-Density Development on Pine Street, column for July 12, 2018

Chairman’s View: Expect a high-density development on Pine Street

JULY 12, 2018 BY JOHN ENGEL

By John Engel

Town Council Chairman

The Beval Saddlery building at 50 Pine Street and two adjacent brick buildings may have been sold to a developer.

My purpose is not to report on a rumor. But, if it has not sold then it will likely sell in the not-too-distant future. Don’t be surprised. It is logical to expect the eventual buyers to propose another high-density development in this location. 

There will be hand-wringing about the changing character of our town. What is the best use for Pine Street? Some say New Canaan’s “Magic Circle” loses its magic every time it is diluted by the addition of storefronts on Pine, Grove, Cross and Vitti streets. Others say we must evolve, and new, dense development is consistent with the POCD (Plan of Conservation and Development) and adds to the tax base in a way that makes New Canaan a more complete shopping and dining destination.

Both are correct. I would suggest that we talk about what healthy change looks like in our downtown instead of simply opposing whatever represents change. It is good to remember that we are unlikely to solve any perceived current issues (not enough variety in housing stock, not enough senior-friendly housing, too many retail vacancies, etc.) unless we are willing to consider changing what we currently permit.

Two residents, each in town for at least three generations, stopped me last week with diametrically opposed opinions on whether the Merritt Village project is good for New Canaan. 110 condominiums in 4 buildings on 3.5 acres. One of them cited its consistency with our POCD’s intention to encourage senior-friendly housing within walking distance of train and town.  The other said it was too dense, too ugly, and not in keeping with the character of our town.

The three Pine Street lots represent nearly two acres in the BUS-A zone. Our assessor appraises them for nearly $12 million, currently $140,576 in property taxes. Therefore, there is a good chance that we will see a proposal for development that spans all three lots, is built to the height limit of 40 feet, possibly with parking underneath to maximize building size and make use of the slope. While this should clearly raise the taxable value of the property, do we want more dense housing, possibly senior or workforce housing, maybe mixed-use with retail on the bottom at that location? 

One difference: we won’t see the 8-30g threat as a retaliatory tactic by developers who don’t get their way with Planning and Zoning. New Canaan has been working on a multi-phase plan that already exempts us from the 8-30g threat for the next three years and will hopefully lead to up to eight additional years.

50, 58 and 70 Pine have style. They do not loom. They are set back from the road with green space in front. The parking is hidden. The old bricks are warm with character. 

Almost anything new is better than a vacant building, but, please, let’s actively try to encourage the most benefit for the Town as a whole from these unique buildings.