Category Archives: Fees and Fines

Is New York “Fine” City?

Posted by Doug Turetsky, August, 13, 2013

There may be no greater unifier among New Yorkers than their aggravation with the city’s proclivity for ticketing and fining. Shopkeepers, motorists, dog owners, and a variety of other New Yorkers have reasons to believe that the city is trying to balance its budget by burying residents and businesses under a blizzard of tickets. While the city is knee -deep in tickets, it’s less clear that’s all about the money.

There’s no question that tickets bring in a lot of money for the city. The Bloomberg Administration estimates that fine revenues will total $812.5 million in 2014, up about $13 million from last fiscal year. While that’s about $300 million more than the city expects to reap from the hotel tax and about 13 times more than the city will bring in from the cigarette tax, fine revenue is actually down from a few years ago. In 2010, fines brought in nearly $830 million and in 2012 almost $855 million.

Much of the city’s fine revenues come from a single source: parking tickets. The Mayor expects the city will collect $518.2 million in revenue from parking tickets this year, about $34 million more than last year when Hurricane Sandy forced the city to suspend some parking regulations for a while and city workers who typically focused on issuing parking tickets were redeployed to direct traffic. Yet even with the increase in parking ticket revenue expected this year, the total is about $50 million less than the roughly $568 million generated in both 2011 and 2012.

But it’s not just the amount of money raised from tickets that gives New Yorkers that overburdened feeling. It’s also the sheer number of things for which New Yorkers can be fined and the volume of tickets issued. Despite the Sandy-imposed hiatus, nearly 7.4 million parking tickets were written last year. A quick review of documents from the Environmental Control Board, the city agency responsible for adjudicating many types of tickets (other than parking), makes plain just how many different kinds of infractions there are and how many tickets are written besides for parking.

Under the heading of Park Rules there are about 50 different types of violations—from “unauthorized assembly” to “unauthorized possession of a garden tool or plant.” Of course, being in a park after it’s closed or failing to pick up after your dog can also get you a fine. There are even more ways to be ticketed under the heading of Recycling Sanitation Collection. Among the roughly 80 infractions are “failure to bundle newspapers/magazines/cardboard” in a building with nine or more units and “failure to post comingling notice.”

For these and dozens of other types of violations, the Environmental Control Board adjudicated more than 464,600 tickets in fiscal year 2013. That may seem like a lot, but it’s actually down by nearly 100,000 from 2012. Violations that are related to sanitation and recycling account for more than half of the total number of these tickets—nearly 270,000 in 2013 and 345,600 in 2012.

The number of tickets written for various infractions can vary widely. Take for example two issues that infuriate some New Yorkers: street vendors and noise. Street vendors are frequent recipients of tickets. Street food vendors received more than 12,800 tickets last fiscal year, although down from nearly 14,000 in 2012. These numbers don’t include the increasingly popular food trucks, for which there are special set of violations along with those for restaurants. Street vendors hawking general merchandise were ticketed nearly 1,800 times last year and more than 2,600 the year before.

Conversely, noise elicits relatively few tickets. Last month, The New York Times dedicated 3,242 words to the problem of noise in the city. That’s far more words than the combined total of 461 tickets issued under the heading of Noise in the control board reports covering 2012 and 2013. New Yorkers who seethe over the use of cell phones by audience members at the movies, plays, or concerts may be glad to know that there is an infraction on the books aimed at discouraging such annoyances. But only three tickets were issued for irritating cell phone use at public performances last year.

A 2010 Crain’s story highlighted the burden many small business owners felt from a bevy of fines. But the article also acknowledged the role fines play in deterring behavior that can threaten public health and safety.

While some New Yorkers may think that all this ticketing is just a way to stuff the city budget with additional cash, a 2003 IBO report found that enforcing city health and safety rules are actually a money loser. Only parking tickets generated more in revenue than it cost to enforce regulations and collect parking-related fines. In most other cases the costs of enforcement and collection far outweighed the revenues collected.

Take the thousands of tickets issued to street vendors as an example. An IBO report found, as did a more recent news story, only a small share of the fines are actually collected—not a surprise since fine levels are so out of proportion to the incomes generally earned by vendors. The ticketing may have more to do with public policy and efforts to deter certain behavior or control public space than raising revenue.

New York City: Your Ad Here

Posted by Doug Turetsky, September 6, 2012

New York City itself may not be for sale, but the rights to tie your corporate name and logo to a variety of city facilities and services may increasingly be up for grabs as public agencies look for ways to raise revenues to meet growing expenses and offset city funding cuts.

On September 14, the city’s parks department is scheduled to receive bids from companies for the right to affix their names to 55 dog runs and 631 basketball courts. The city’s 2013 budget anticipates $1.5 million in annual revenue for the naming rights to the dog runs and $3.5 million from the basketball courts in fiscal years 2013-2016. An additional $8.0 million in annual revenue over the same period is expected through more sponsorships, although the parks department has not yet announced what facilities it will offer to potential sponsors. The city’s financial plan expects the parks department to take in $13 million annually in sponsorship revenues through 2016.

The parks department’s effort to sell these naming rights is being done under an initiative it calls the NYC Parks Corporate Partnership Program. Under this program, the agency says, “[C]ompanies can invest in a unique opportunity to promote their brand through NYC parks assets.” The parks department is offering potential partners rights that can stretch from onsite to online.

IMG Worldwide, a major sports and fashion marketing and licensing company, has been enlisted to play a key role in the parks’ partnership program (IMG is the marketer of New York City Fashion Week). The parks department Web site describes IMG as “the exclusive designated agency to develop and commercialize this opportunity.” Proposals for sponsoring the dog runs and basketball courts are to be sent to IMG. For its work on behalf of the parks department, IMG is reportedly being paid by NYC & Company, a private organization that does tourism promotion and marketing for the city. In 2011, about 40 percent of NYC & Company’s $36.4 million in revenues came from city funding.

The parks department is not the first agency to market naming or sponsorship opportunities. The Department of Transportation’s bike-share program, now expected to start rolling in March 2013, is being funded solely with sponsorship money: $41 million from Citigroup and $6.5 million from MasterCard. For its cash, Citigroup will get its name on 10,000 bikes and 600 docking stations around the city. MasterCard is providing the payment system for the program.

Similarly, the Metropolitan Transportation Authority is seeking to take greater advantage of the MetroCard’s ubiquity as well as its iconic link to the city by offering advertising space on the front of the card. The back of the card has already been available at costs ranging from $25,500 for 50,000 cards to $450,000 for 2.5 million cards. Rates for the front of the card haven’t been determined yet.

The transportation authority has also sold naming rights to the Atlantic Avenue-Pacific Street subway stop for $200,000 a year for 20 years to the British banking firm Barclays. The station, which sits under the soon-to-be opened Barclays Center arena in Brooklyn, is now called Atlantic Avenue-Barclays Center (Barclays paid $400 million over 20 years to purchase naming rights for the publicly subsidized arena from the Nets).

At least one other local agency has declared its intention to offer up its facilities for some form of advertising. Last September, the Daily News reported that the New York City Housing Authority was floating the notion of offering billboards to advertisers at its development projects, an idea that provoked unease among some residents and elected officials.

But the housing authority still sees its 2,600 buildings in 334 developments citywide as an opportunity for prospective advertisers. In January, the housing authority released Plan NYCHA: A Roadmap For Preservation, a five-year plan to improve services and increase partnerships and revenues. Although it provides only the barest of details, the plan states that the housing authority aims to “design and launch a plan to offer NYCHA property for advertising with input from residents.”

New York’s streets were once believed to be paved with gold. In the future, they may increasingly be paved with sponsorship dollars.

Two Decades Later, City’s Water Metering Still Not Universal

Posted by Alexis Arinsburg, October 5, 2009

Even as the city ramps up its initiative to install wireless transmitters for water meters across the city, thousands of city properties still have no meter at all or have a meter that is not being used for billing. Two decades after the city’s Department of Environmental Protection (DEP) first began installing water meters through the Universal Metering Program, 49,595 accounts, or 6 percent overall, are still not part of the system.

That’s a bit better than in 2006, when 8 percent of accounts were still being billed under the old frontage system, which uses a schedule of fees based on building size and the number of sinks, showers, tubs, and toilets to determine the water bill. A small number of building owners still pay on a per apartment basis.

The most recent deadline for getting all water accounts metered was June 30, 2009. The deadline has now been pushed out to June 30, 2012. Why the delay and what is the city doing to make water metering truly universal?

In the wake of a severe drought, the city began installing water meters in 1988 as a way to reduce water usage by charging consumers for the amount of water actually used. It also helped the city comply with state water conservation requirements. The Universal Metering Program was to be completed in 10 years.

At the program’s inception, Department of Environmental Protection officials acknowledged that there would be challenges to metering all its customers immediately. Landlords complained about the expected cost increase due to metered bills, especially if they owned buildings that were home to large families or had plumbing in poor condition. Progress on universal metering also encountered some unexpected hurdles, including a 206-count indictment for fraud and labor law violations against the Kentucky-based company the city contracted with to do a large number of the meter installations. Flawed water bills have also been an on-going problem, likely undermining some customers’ confidence in making the transition to metering.

To address owner concerns about a jump in costs due to metering, the city has created several programs to ease the switch. There are currently 29,962 customers in the Transition Program for buildings with six or more apartments. Under this program a meter is installed but bills are still generated based on the frontage system. The idea was that owners would be in the program for up to a year and prepare for the switch to metered billing. The program was supposed to expire in 1997 but was instead extended annually until this year, when the deadline was pushed to 2012.

A New York State audit from 2008 found “no indication DEP was routinely transferring accounts from the Transition Program to metered billing.” It is reasonable to assume that Transition Program customers who remain on frontage billing do so because it is less costly than switching to metering.

There’s also a Pre-Transition program with 761 customers. While similar to the Transition Program, accounts in Pre-Transition had meters installed between 1988 and July 1, 1992, but owners pay a water bill based on $821 per apartment. Additionally, all accounts in the Pre-Transition program should have undergone an inspection or audit to ensure that there were no major leaks, and if leaks were found, they were promptly repaired.

There are currently about 700 owners who, after leaving the Transition Program, have enrolled in the Conservation Program for Multiple Family Residential Buildings. The program, established in 2001, remains a long-term alternative to metering for some owners of buildings with six or more apartments. To be eligible, owners must take steps such as converting 70 percent of a property’s toilets, faucets, and showerheads to low-flow fixtures. Owners are subject to periodic conservation audits by DEP. To encourage additional participation and to reduce the expense of installing fixtures that comply with the program’s conservation requirements, DEP is considering offering rebates for the installation of low-flush toilets, much as it did in the early 1990s.

About 8,600 customers currently prefer to pay a 100 percent surcharge on their frontage bill rather than have a meter installed. These customers, typically single-family residences, don’t qualify for either the transition or conservation programs. The Department of Environmental Protection is exploring ways to encourage these customers to agree to have meters installed and convert to metered billing. As with the accounts that remain in the Transition Program, presumably most of the customers still pay less than they would under metering, even after paying twice their frontage charge.

That leaves 9,500 customers still billed on a frontage basis who are not paying a surcharge nor are they enrolled in the transition or conservation programs. The Department of Environmental Protection provided no further explanation when IBO asked about these accounts.

When it comes to achieving the goal of universal metering first announced more than two decades ago, the city is still swimming upstream.