On Managing New York City’s Pension Funds, Contracts, and Reputation

CITY COUNCILMEMBER Melinda Katz pulled no punches at a Citizens Union/NYU Wagner breakfast forum held at Wagner on April 15. Campaigning to become New York City Comptroller, she offered a stream of provocative notions about the powerful city office. For anyone who might have considered the comptroller’s job to be relatively staid, Katz served notice that in her view the “national holistic meltdown” in finance obliges New York to rethink how it manages its money and its reputation.

Katz, who chairs the Land Use Committee of the New York City Council, celebrated her success in preventing runaway development in distinctive neighborhoods. “We down-zoned 6,000 blocks,” she said, and assured that the West Village, Park Slope, Forest Hills, Dyker Heights and other draw neighborhoods will sustain their appeal as “beloved communities.”  That “character and scale,” she said, keeps New York a destination for ambitious newcomers around the world. She said the same level of vigilance is needed to avoid reckless investment and the fiscal rot it can bring.  “If we don’t create jobs, we won’t inspire confidence nationwide!” she said.

In her remarks, Katz promised she would convert her fiduciary power of the comptroller’s office into a blaze of advocacy. “At a time of bad corporate behavior,” she said, “we need to make sure every dollar that comes down from the federal government creates jobs and housing here.” To that end, Katz proposed to grill fund managers on how companies would use equity and debt to train local workers. She raised the idea of helping bailed-out companies restructure, which she said would draw upon her training as a corporate lawyer. And she pressed for a new ethic in city procurement.

“It’s disturbing when contractors tell me they didn’t have the low bid for a city contract and the vendor who did had change orders that ended up costing the city more money,” she said. “Shouldn’t there be a way to say: this bid doesn’t make sense?”

After assailing rules that she said blind the City Council to Department of Education procurement (“that is outrageous!”) and calling for brighter exposure on all city contracts and rating agencies’ work, Katz sat down with Citizens Union president Dick Dadey to take questions from the audience of students and policy makers. She didn’t dodge.

On the community-based planning process, she called the lack of coordination between local efforts and Council action “unfortunate” and cited her push for a law that would empower the city to move low-income families into complete but unoccupied luxury towers. And she verbally pushed back after an audience member suggested that municipal unions would have to absorb pay cuts to help the city weather the financial crisis.

“I don’t believe it should be an easy fix,” the Councilmember said of the city’s civil service payroll. “And I don’t think that if you cut people who are making 20, 30, 40 thousand dollars a year, it’s going to make the difference.” Knowing her policy-maven audience, she then fired off another proposal: “I would like to figure out as Comptroller, for every job we cut, how much more it costs us in welfare.”

For those keeping score, Katz’s City Council colleague and comptroller-race competitor, David Yassky, will visit NYU Wagner on May 6 for another policy breakfast sponsored by the graduate school of public service and the civic organization.


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