Next on "Need to Know" will the fast ferry survive hinge on
going public?
What will it mean for taxpayer money.
Mayor Johnson will be on manned.
Towns are passing or have passed budgets.
What are the trends?
We will have that and the weeks' news in business.

>> There's a public venture and this project is not required to
produce any profit for any shareholder.

[Captioning Made Possible by the U.S. Department of Education]
(For "Need to Know")

>> Thanks for being here.
I'm Michael Caputo.
Our report begins with the announcement by mayor bill Johnson
of the plan to save the stalled fast ferry.
Negotiations for a private investor to take over the "Spirit of
Ontario" are not moving fast enough to ward off seizure of the
vehicle so he is saying pay off the creditors and create a
public authority to run the ferry.
That raises a boatload of questions.
Here to answer him it Rochester mayor bill Johnson.
Thanks for being with us.
Let's talk about the private route, the private route with
cats, any other investors.
Is it dead?

>> Pretty much so.
Since September 8 after cats shut down they have had numerous
opportunities to identify new capital, new sources of capital,
and they have had very limited opportunities to do so and
generally speaking I can say that when you look at the deals as
we have looked at them people are generally interested in
something else.
They are either interested in land or in one instance casino
gambling.
We believe the fast ferry ought to stand on its own two feet.
And so that -- there were no other real offers that ever
materialized.

>> When the ferry stopped in September you came on this program
with the president of cats, Cornell Martin, I want to give you
a brief clip from that interview.

>> Back in the 1990's they built frontier field and the promise
was there would be no tax money and we wound out finding out
there needed to be local tax money to keep the stadium going.
My question now is, do we need a public subsidy to keep this
thing going?

>> No.

>> Why not?

>> They are not asking for money.

>> We are not.
And we won't.

>> They are saying if we are -- our hands are being tied and
revenue streams that we could otherwise generate that would
make this a viable or self-sufficient operation are being
deprived.
They are not asking for another handout from the public.

>> What has changed from then to now in terms of getting public
involvement?

>> Well, at that particular time -- and I don't offer this as
an excuse -- I wasn't privy to information that I am now.

>> What's that?

>> People who control this deal, the Australians they have $33
million and they came here to figure out what had gone wrong
and only then did they bring the city into the discussion
because we have a debt on the boat.
We are the fourth secured lender.

>> $15 million I think.

>> No, to ours is only $1.3 million.
The State of New York has $14 million invested and we, because
of our urban renewel agency in the first meeting we were
representing the state.
But as we got more information I could understand why this deal
didn't work.
First they had short-term debt, some that had to be repaid in
six years.
All of it repaid in 10.
They just could not meet their debt payments because of other
expenses they had incurred when they were not discriminating
any revenue.
Secondly, they have a profit expectation that a public venture
doesn't are to meet.
So when you begin to look at a lot of these factors you can now
see why this would be such thin margins and I believe that is
one reason you didn't find a lot of private sector interest
jumping to take it.

>> They were not just selling to break even.
They were returning in the red.
You have to do fundamental things differently, don't you to
make it break even.
What will you do?

>> Part of the reason they were in the red they were spending
money soon are than they were making it.
The original plan called for a start-up of may 1.
They had hired a staff and trained them this April.
They were paying a lot of people.
Head no are you to offset that.
Secondly, they had other things like they did not meet their
truck and bus projections.
Some of that had to do with the fact that they didn't have the
price right and secondly they didn't have people working on it
early enough.
To their credit, they have gone out and really worked hard to
close that gap.
Thirdly, they were paying fees like pound annual fees based on
understandings they didn't think they had to pay them early
on.
They had to pay them.
Because they raised these issues so publicly they are
practically ready to go away.
So a lot of the problems that cats encountered in the first
phase will be removed when we go in the second phase.
And one of the difficulties, mike, is that they said wait a
minute we can run this now.
The problem is had he can't find anybody to lend them any
money.

>> Are you saying we don't need a public subsidy?

>> Yes.

>> Are you promising that is
>> I'm promising you based on a we think are the most
conservative projections in this business plan we believe this
business throws off enough money to support itself.
Secondly, if it doesn't work we can get out of the business
very quickly.

>> Frontier field.
That's what they said about it.
Revenues would pay for expenses.
War member rely that doesn't happen.

>> Let's understand --
>> There are going to be many people saying the ferry -- why
not sell the public on subsidizing this?
Sell it on the fact that it will be a revenue and economic
development generator.
Why not sell them right now?

>> If I thought I had to do it that way I would have no
reluctance.
I'm not one-on-one of those -- I'm not one of those people who
say a public subsidy is not necessary.
We have the war member rely which we subsidize on an annual
basis.
We have high falls which we subsidize.
And I can make a credible claim that that was money well
spent.
But there's a difference 2010 frontier field and the fast
ferry.
That is a tangible asset that has a market in the open
marketplace.
If that venture is not successful, the boat can be sold in the
open marketplace and most the debt can be paid off.
So that is a difference.
You can't sell frontier field.
Somebody has to play baseball at the corner brown street.

>> But it seems like a limited market.

>> But in is no oversupply of these.
There are ferries operating all across the world.
There's a marketplace for the boat.

>> Do you feel taken by cats?

>> No, I feel saddened for cats' predicament because I now
understand a lot of the forces that they were contending W. I
wish they had been a lot more open to us and said these are
things had -- they partially disclosed information.
They believed that because they were a private business they
didn't have to close proprietary information that they believed
would endanger them or injury them -- injure them.

>> As a public element you will have to disclose it.
What is the bottom line dollar amount you need to break even?

>> The business plan -- to break even?

>> Yes.

>> This venture is based on carrying less than 400,000
passengers which is about half of what cats it would node to
meet all of their projections and we can run about 60% of
capacity with freight, trucks, buses and like.
So the business plan is now open.
This will be, terms of annualized operation it is about, when
you figure in the debt, about a $19 million a year operation.
And we show that the venture throws off enough money to cover
operating expenses and debt.

>> What will you do if it doesn't happen in career one?

>> We are building in a reserve.
The plan shows a $4 million reserve from the beginning so we
think that is more than adequate to cover a shortfall.

>> What happens if one of us journalists in year one sees that
you are pulling from the reserve and says this not paying for
itself?
How will you deal with that?

>> Then I can -- let me put it this way.
You need to understand the boat has a capacity of 774
passengers.
On the model running four times a day, 365 days a year, we are
talking about a potential of about $-- a potential of 1.2
million passengers.
We are projecting a break even at 380,000 passengers.
There's no way in a market of over 10 million when you consider
Toronto, southern on Terrapin yo and upstate New York we can't
find 385,000 people year to ride it.

>> The rgrta exists.
Why don't we use them as a public authority?

>> The rgrta there's a lot of controversy surrounding it and
plus we are partnering with the rgrta on Renaissance square.
That is a $250 million project in addition to the normal
workload.
I have spoken with mark ash and Maggie brooks and I hope they
will support us because we think that a limited focused
authority to do only one thing which is to operate a ferry,
transparent to the public, can cut through all of the
controversy that is surrounding this.

>> It will take you a lot to get this done.

>> The state is also a secured lender.
We would not talk about this today if the state hadn't already
given tentative approval to this model.

>> We move from the frir's public solution to the spending of
public dollars.
This time the focus is on the towns, the New York's 900 plus
town ships putting plans this place.
They have struggled to keep tax rates stable in spite of a
lackluster economy.
But as Julie Philipp reports, a recent study shows most towns
are hardly doing without.

>> For instance, take Irondequoit.
Town supervisor David Dave says it is another lean year.

>> Absolutely.
-- David SCHANTZ says it is another lean year.

>> There's no fluff in our budget.

>> There are the usually cost culprits like health insurance
and pension plans.
And nearly 40% of the town's $29 million budget goes to the
public works department which oversees the aging infrastructure
of the town.

>> We have an overall lot under the ground that no one sees
that is in need of constant and ongoing maintenance.
And as well as, of course, above the surface, the streets,
sidewalks, trees.

>> So property taxes are going up in Irondequoit.

>> We are facing a number of challenges that other towns as
they begin to be more fully developed will be facing in that
Irondequoit now is 98% developed.
We are pretty much fully built out.
So that we don't have that naturally expanding tax base to deal
with.
And we do have a police department.

>> Its own $8 million police force.
Even though town taxpayers also pay for coverage by the Monroe
county sheriff's department.
And there's this, a $3.4 million outdoor sports facility being
built over a couple of old softball fields that needed
refurbishing.

>> We felt it was more cost effective even though it was more
costly up front, to develop a state of the art multiuse
recreational facility with the use of artificial turf, proper
lighting.
We have movable bleacher systems so we can con tig the park for
a number of uses.

>> The town is also eying things like Pittsford where a new $9
million library is in the works.

>> The library board is doing an extensive study right now as
to what is the future of the libraries.

>> That's the trend in towns across New York, not just
Irondequoit and Pittsford.
According to this year's annual report by the state
controller's office, towns have significantly increased their
spending on culture and recreation since the early 1990's.

>> The expectation for cultural and recreational opportunities
in communities really has changed drastically.

>> Spending by towns on things like community centers, parks
and libraries has gone up about 60%.
So did spending on public safety.

>> The most important thing we found for people is a secure and
safe community.
To compete with the amenities that other towns are providing we
feel that in competing for the kinds of families and residents
that you would like to attract to your community to put their
roots down here you need to provide those amenities.
It is a tremendous, tremendous challenge today.
It is for those in government who have the responsibility, both
to keep their community up to a standard and at the same time
keep the taxes reasonable enough that people can afford to live
in those communities.

>> Some town budgets like Irondequoit have been approved.
Ears are wrestling with spending plans of how they will pay
them.
To keep this moving we have in the studio with us William
carper the supervisor of the town of -- carpenter and he is the
supervisor of the town of Pittsford.
Let's talk about cooperation among municipalities.
Is that needed now more than ever?

>> Continuing is always needed.
And in Monroe county we are the model for cooperation and
collaboration.
We did a study at the council of governments in 1991 and there
was 38 existing agreements between communities, towns,
villages, school districts, fire districts and we led the way.

>> Why isn't consolidation in the mix?
We don't hear talk about town villages merging.
Why not?

>> I think one there's no proof that there's cost savings.
The cost of the service still has to be picked up.
We can eliminate all 19 towns but you still are have to pave
the roads around plow in the winner.
So we are able to provide that level of cooperation.
I think what works is in each community, each community and its
residents are able to identify what services they want the most
and most emphasis.
One thing in Pittsford is the leaf and yard debris collection.
Some communities have none.
That's the beauty of our system.
We have 19 flavors to choose from and you can choose whether
you want more police services, more recreation services, more
other services.
That is available for people to choose from.

>> But the services have to be provided but the structures
could be eliminated.
That's not going to save you a lot of money if you eliminate 19
towns or reduce the number of towns and villages?
Those structures go away.
Isn't that a savings?

>> There may be some savings but I think a lot of it has to do
with the access.
As the size of the bureaucracy gets bigger the access that
people have to elected officials and department heads reduces.
As I was saying to you before, any resident can come in and
meet with me, I answer my own phone.
If you combine into countywide system that goes away and how do
you deal with the differences when one community wants one
service and others don't and the balance.
I think that the system we have works.
I think when you look at the towns, there's a tremendous effort
on the part supervisors and in providing high quality services
at ream cost.
And just as an example, the total average taxpayer this
Pittsford pays $684 for all the services which is a tremendous
array of services, which is a pretty reasonable number.

>> Let's talk about one of the services supervisor SCHANTZ says
he must spend and we do it because we have to atragget people.
Is that a good way for towns to be spending money, libraries,
rec centers, ball fields
>> I think at the town level we are about services and quality
issues and there's no doubt we are in the midst of building a
library, which received tremendous support in a a referendum 2
1/2 to one supported the $9 million improvement.
I think you can hurt yourself more by not doing something in
the long run.

>> Why?

>> We know that in our library 40% of our residents were using
another library because it was so outdate and underserved and
that is a problem.

>> Does it lead to people leaving?
Could that be ultimate end?

>> I think when people make choices it is on an array of
things, they look at school systems, quality of communities and
I think that the position you are in is you have to make
certain choice bs the improvement with the engagement of
residents because they will tell you whether they are willing
to support it.
And what we find is there are certain services they are looking
for and especially in the cultural services, recreation,
libraries, those are things that bring families together and
make communities whole.

>> Let's truck about the haves and have nots in the towns.
The haves are the ones that have police departments and have
nots those who don't.
They should they pay a little less, those that have police
didn't.
Should David SCHANTZ pay less for the sheriff's department
because he is not getting that kind of service?

>> Well, life is about choice.
People are choosing to have certain services on the local level
and more intense level.
And whether you look at a police service or whatever, there's
no total equity in taxes.
People are paying for things that they may not receive.
A family that has no children still pays school taxes.
So, we are -- we have the Monroe could it sheriff available to
us and everyone is benefiting from the services of Monroe
county sheriff.
So you can't determine -- and we have asked could we pay for
additional services from Monroe county sheriffs if we wanted.
We are very satisfied with that level of service.
But that is somebody moving in may want more police service but
with that comes the price tag.
The same thing with villages.
They exist at the option of the residents that live in them.
I don't think any village resident will vote themselves out of
it because of the services they receive.

>> Do you sympathize though with David SCHANTZ or somebody with
the police department?

>> The issue of taxes is everyone is looking for equity because
of their particular choice and all we are doing is shifting the
burden.
At the town level we are subject to everyone above us in terms
of what they are doing and choices they make.
So, because one community chose not no do that I don't think
that burden should be put on somebody else because they chose a
different way.
With the services you get to choose.
Should the rest of the county subsidize my taxpayers who want
more leaf collection servicis?
I don't think so.
That is something my residents close and I think they are
willing to pay for it.

>> I have about a minute left and I need to ask you about
pension.
How is your town dealing with the cost of pensions?

>> Pensions and medical insurance and medical compensation are
off the board.
We are dealing with right now we are in discussion with our
employees about changing the benefit package we offer and --
>> How are the talks going?

>> Very well.
I think everyone realizes that things will change and we have
been able to come up with a way to offer, you know, a good
stable package to our employees that will be able to stabilize
the costs.

>> Just yes or no answer.
Should the state change the way the pension system is running?

>> I think it is unfair.
It has to be looked at.
Yes.

>> Thank you very much.
You heard from supervisor carpenter and mayor Johnson we want
to hear from you.
Email us at NEEDTOKNOW@WXXI.org, or you can call our response
line at 258-0250.
Now let's turn to the business section with the Democrat and
chronicle.

>> We now bring in Ellen Rosen the business editor for the
Democrat Dell.
Thanksgiving for being with us again.
Let's start with health insurance.
This was a report on it and says fewer people insured by
employers in this area.

>> Blew cross blue shield did a survey and looking at people
where and where they get their insurance.
Fewer people I think it was 1.7% fewer are getting their
insurance from the private employers.
The number of people getting it from the government, Medicaid,
child health cost was up 1% so that not necessarily a trend
that taxpayers or government officials want to see.

>> The government and state government took over child health
plus recently.
So on some level that must have changed those numbers a little
bit.
Right?

>> There's always the possibility that more people are being
identified that were absolutely uninsured before that are
joining the government rolls but there's the issue of health
insurance cost continuing to rise.
Some can't y Ford what the employers are offering.
We saw trends where employers are trying to get spouses off of
employees' insurance so there are a lot of trends.

>> There are so many changes in the way we are getting
reimbursed for the benefits.

>> Yes.
And it is an issue that will continue to rage.

>> Monroe county's unemployment numbers I don't think we are
seeing too much difference this time than last month and the
month before that?
Right?

>> Our employment rate is a numbers game.
Yes, it below 5% for the first time in three years.
On the surface that seems good but what it really is is playing
in the fact that you are playing with a rate number converted
over other numbers and looking at the people that are working.
The workforce continues to shrink.
They define that as the people that have jobs and those
looking.
So we have lost in both areas.
So people are leaving the area, the unemployed have given up
looking for work and they are not being counted any more.
They have left the earpped there are fewer people this jobs.

>> Again it is hard to know what these numbers are telling us.
Yes, it down overall but we don't know why the workforce is
dipping.
We don't know why.

>> We do know.
We have had massive layoffs.
Kodak alone and other places.

>> Where have they gone is the issue?

>> That's the issue.
And if this is something that worries economic developers
because one thing they sell other companies on is we have this
talented, educated highly skilled workforce.
If they are not here it makes it more difficult to entice a
company to come.

>> Rochester discrepancy hospital is expanding.
Talk about that and the fact that it may be a trend.
A development trend in hospitals period.

>> It is a trend.
Particularly Rochester general broke ground on their biggest
project in 20 years or something like that.
It includes a $14 million parking garage.
They had long delayed because of financial problems any capital
investment in the hospital.
They are on solid footing now.
The merger is not going through with unity.
They are going ahead with the things they need to serve
people.
They have had problems with parking, with their emergency room
being too crowded.
Other areas not big enough.
So they are expanding.

>> We have seen strong --
>> Strong and Hylands.

>> And hospitals are doing this across the nation, spending
more to what, attract us I guess?

>> Attract us and also some of the services take more space.

>> Rochester, let's talk about a list that I suppose is
important to us, a list of economic developers on economic
development.
We are losing ground there.

>> Yes.
This is the report that widely read by people that help
companies decide this is a community that I might want to
locate in.
Rochester dropped to 182 out of 200.
All the communities in this region dropped.
Buffalo, Syracuse, Albany.
Rochester, we lost a lot of manufacturing jbs.
We are not looking as good in terms of the workforce.
Again that another thing.
It mixed bag.
We are ranked a lot of different ways in lot of different
surveys.
This read by a lot of people.

>> I want to touch on Kmart and Sears.
Will we see anything?

>> This was stunning news.
They will be the third biggest retailer.
We may see consolidation, some layoffs, some changes.
Kmart is being converted to the Sears grand which we will see
at the Chili location.
So we may Wal-Mart get run for its money.

>> This Sunday.

>> Our 11th installment on Kodak and Rochester and how you
change a corporate culture.

>> That is it for our report.
Next week we get an encore look on electricity and the choice
of state Republicans for their new leader STEVE MINARIK.
We will see you then.