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Q&A - Niagara Falls Mayor Paul Dyster


I had a story in Monday's paper about how much of the low-cost hydropower reserved for Western New York industry has gone unused and been sold by the authority to fund programs and operations that have little to do with our region. I'm following up the next four days on this blog with interviews with officials with varying degrees of influence to change how that hydropower is used.

I'm starting off with with Niagara Falls Mayor Paul Dyster, who has impressed a lot of people since taking office in January. He's smart, well-informed and forward-thinking. If you like progressive Democrats, he's your man.

I'll follow Wednesday with state Sen. George Maziarz, chairman of the Senate Energy Committee; Thursday with Congressman Brian Higgins; and Friday with D. Patrick Curly, a member of the Power Authority's governing board who represents Western New York. I've tried to get Power Authority President Roger Kelley on the record, but his people say he's too busy to talk.

Here's the Dyster interview.

You've been fairly critical of the way low-cost replacement and expansion power has been used in recent years. What's the problem?

"Without any notion of where we should be going in terms of future industrial strategy, we've been easily persuaded that the first order of business is to 'do no harm.' So our tendency has been to keep on allocating power incentives in the way they have always been allocated without stopping to ask 'why.' Even if the best use of some of this power really is to try to minimize job losses at disinvesting companies that are traditional power recipients, we should decide to do that as a matter of policy, not of habit. We need to ask for better explanations from everyone -- new industry or old -- that wants a piece of low-cost power, and be able to explain the strategy behind why we are allocating to one company or industry and not another. We're just starting to do that now."

Does fixing the problem require a tweak or an overhaul?

"Power allocation decisions for incentive power need to be made by business experts, not power production experts, and they need to be made on the basis of rationale and publicly defensible criteria. Whether that's a tweak or an overhaul depends on how badly broken you think the current system is now."

What changes would you like to see?

"Look for new industries, new processes and new criteria for deciding who gets cheap power, but also give existing power users the chance to make their case for continuation. Many are exploring new markets, new products and new processes, and essentially deserve to evaluated as new enterprises.

"We also need to look for opportunities for various types of "double leveraging." For example, if we use 'x' units of renewable hydropower to manufacture materials for construction of solar panels that will produce '10x' units of renewable solar power, we are exponentially increasing benefits. Similarly, we can link incentive power for one part of a manufacturing process to location of other parts of the process in the region -- e.g., by requiring manufacturers of a critical material like solar-panel grade silicon to sell a fixed percentage of their output to local New York manufacturers of the end product. That retains more of the value-added here, where the cheap power that makes production of the component material possible comes from."

The power authority sold unused replacement and expansion power earmarked for local industry for an estimated $161 million from 2005 through the end of this year. What do you think about that?

"If the power was intended to be used here for local benefit, then profits derived from selling any power that is unused should also be retained here. This is particularly critical if someone from outside the region is helping making the decision whether to award the incentive power, since it would be in their interest to sell it instead. It's a classic conflict of interest."

Some folks think that at least of portion of those profits should be coming back to Western New York to promote economic development. What do you think?

"Of course that would be appropriate, especially if the money was earmarked for brownfields redevelopment, or incentives for 'green' industries like retrofitting inefficient buildings, building more fuel efficient or alternative-powered vehicles, developing other renewable power sources (e.g., solar, wind or biofuels), expanding public transportation, or training workers for new jobs like solar panel installation, repair of hybrid vehicles, etc."

How would you use the money?

"See above. Whatever dollars we have to spend in the public sector will go a lot further if we use them to reinforce loans and investments made by private sector institutions, e.g., by reducing the risk in forward-leaning projects where conservative bankers need a little nudge. Loans that become grants if and only if measurable performance targets (for job creation, energy savings, etc.) are met are a better bet than cash giveaways based on empty job-creation or other promises that are never monitored."

You say green is the way to grow the local economy? What's involved?

"We need to stop thinking about the high cost of energy as merely a
problem and start thinking about it as a challenge to be met. Identifying and meeting challenges is what grew the American economy in the past, and meeting the challenge of high energy costs head-on with sound policies and wise investments can provide the foundation for future economic growth. The Erie Canal wasn't dug as a hobby project; it was done to correct a pressing deficiency in the transportation system: the inability to move people and goods quickly and cheaply enough from the East Coast to the interior of the country. Solving that problem created new jobs, new industries and new urban areas. But the world does not stand still. Those regions that adapt most rapidly, efficiently and creatively to changed conditions will prosper, and those that lag behind will suffer. So far, our track record is not exactly stellar."

What does the political, business and labor leadership have to do as a first step to get the ball rolling?*

"Hopefully by now everyone everywhere in the country knows the general outline of what needs to be done to bring our economy into the 21st Century. So the issue isn't so much "what" as "how." Because we have limited resources, we need a strategy that identifies the highest-priority, highest-payoff projects, policies and programs and systematically removes the obstacles to making the right things happen. Want a model? Look at the Apollo Alliance plan for New York developed by a coalition of labor, academic and environmental organizations. It's concise, action-oriented and creative."

Tomorrow's interview: State Sen. George Maziarz.

Our power, their dollars

Niagara_power_project_scenic Back in the 1950s, to settle a vehement argument between Robert Moses and local officials over who would build and operate a new hydropower plant near Niagara Falls, Congress settled the issue by saying the state could have the plant, but industries in Western New York would get more than one-third of what was generated there.

That approach worked well until earlier this decade, when a number of large power customers shuttered their plants and other companies lost part of their allocations because they shed jobs, a major criteria for getting the power in the first place. That left the New York Power Authority with nearly a quarter of the region's share of the low-cost hydropower.

As I report today in The Buffalo News, the authority, working with local economic development officials, were slow to find takers for the power, and instead sold it on the open market at a big profit. I've calculated the return, through the end of this year, at $161 million. Little of the money has come back to Western New York.

Instead, the authority, under orders from the the governor and state legislature, has spent about half of it to subsidize the energy bills of some 700 companies statewide, few of them from WNY. The other half has gone into, among other things, authority operations, including a gold-plated bureaucracy. Read this for details.

These profits are part of the reason why the Niagara Power Project, the nation's second-largest hydropower plant, has posted record earnings the past three years. The plant provides the authority with most of its net revenue.

"It's their cash cow," said George Maziarz, chairman of the state Senate Energy Committee.

He and a number of other local officials are fed up with the situation, saying the money needs to remain in the community and the criteria used to allocate power needs to be amended. While the authority has found takers for almost all of the unused power, it's going to take up to three years for all of it to be put to use, and in the meantime, the authority will keep selling what's unused. Ditto for any power that becomes available.

To follow up today's story, this blog will post interviews the balance of the week with officials with varying degrees of influence to do something about this. On tap are Maziarz, Congressman Brian Higgins, Niagara Falls Mayor Paul Dyster and D. Patrick Curley, who represents WNY on the authority's governing board. I'll start tomorrow with Dyster.

Rally For Reform

Ida_protestThis is supposed to be the year to reform the state law governing how industrial development agencies operate. There's just two weeks left in this year's legislative session and about 40 community and labor activists rallied this morning in front of the downtown offices of the Erie County IDA calling on lawmakers to reach a deal.

The Assembly is already on board working off this bill. The Senate and Gov. David Paterson haven't come out with a position.

Something is likely to happen because of the giant game of chicken that's being played. Construction projects, including non-profits, are on hold until a deal is struck because authorization to use IDA benefits has expired. That means the Senate won't be able to simply not act on a reform bill.

Speakers at today's rally touched on a lot of points, but the one that stuck with me is their call to link IDA benefits to the creation of jobs that pay of living wages - something on the order of $9 an hour with benefits or $11 without in Buffalo.

Their argument - public subsidies should not be used to help create jobs that pay poverty wages. That will do nothing to help lift Buffalo out of its current predicament as the nation's second-poorest city, they say.

"Not just any damn job will do," declared Maria Whyte, majority leader of the Erie County Legislature.

"We want good jobs, not just any old job" said Alison Duwe, executive director of the Coalition For Economic Justice, which organized the rally.

IDAs and their critics have each produced studies to support their points of view on the overall effectivness of the program, which involes about $400 million a year in tax breaks statewide. Take your pick of studies.

But, looking at the bigger picture, is there much argument that economic development policy in general is not producing results for upstate, Western New York in particular?  And IDAs, along with Empire Zones and energy subsidy programs run by the New York Power Authority, are the state's major economic development programs.

Bob Wilmers as economic czar

In 2003, a colleague, Patrick Lakamp, and I did an investigation of the state Empire Zone program, the state's major economic development program. We found that a program intended to promote investment and job creation in distressed areas, including inner-city neighborhoods, had instead been used in Buffalo largely as a tax-abatement program for downtown business interests.

One could make an argument that the misuse of the Empire Zone program has helped make Buffalo the second-poorest city in America.

The list of companies cashing in reads like a who's who of corporate Buffalo. Rich Products. HSBC Bank. Delaware North. The biggest beneficiary was M&T Bank, which, by our calculations back in 2003, was scheduled to enjoy some $17 million in assorted tax breaks and tax credits over a 10-year period. According to more-recent data, the bank enjoyed $1.3 in Empire Zone benefits in 2006, the last year for which data is available.

Wilmers2_2I bring all this up because Bob Wilmers, M&T chairman and CEO, was announced Thursday as the new chairman of the Empire State Development Corp.

On one hand, this is good news, to have someone from the region heading up the state's economic development arm. And make no mistake, Wilmers and M&T have been strong advocates for the region and, in many ways, good corporate citizens.

Wilmers and his bank added hundreds of jobs downtown, bolstering confidence at an important time. They've given money to worthy community causes, from the Westminster Charter School to Shea's Buffalo. And Wilmers has been a leading spokesman for changes in the state's tax and business climate, many of which are on target. Not everyone is thrilled with him - municipal unions, in particular - but you can't say he hasn't hasn't been civically engaged.

But the appointment begs some questions:

-- Does his appointment pose a conflict of interest, as he will now head the agency that dispenses tax breaks to his company? For that matter, do his business and political entanglements with business executives and politicains permit him to be an honest broker among the many interests competing for state assistance?

-- He's been a major power in the Buffalo Niagara Partnership for years, an organization whose mission includes promoting economic growth in the region. Given the state of the local economy, does the Partnership's track record make Wilmers worthy of a promotion to oversee the entire state economy?

-- Are we better off with a banker or a seasoned economic development professional like the departed Dan Gundersen?

People, weigh in.

Listen to Mother

Mother_jones_coverThe current issue of Mother Jones, an award-winning investigative magazine, deals with energy, global warming, etc. The Future of Energy: A Special Report they call it, but I think the headline on the cover says it best:

"It's Behind The War, the Recession, the Ice Caps: If We Don't Confront Our Energy Crisis, We're Screwed."

Lots of good stuff here. Everything from the Seven Myths of Energy Independence to how many dirty diapers the average baby contributes to your local landfill. There are 11 stories in all, although I've got to say that this is easier to digest in the dead-tree edition than online.

Mother Jones editors Monika Bauerlein and Clara Jeffery write:

"Every technological advance of the last 150 years has been powered by a unique, extremely energy-dense, but finite—and, as it turns out, planet-killing—source of fuel. Switching away from fossil energy requires an economic and social transformation at least as great as the Industrial Revolution. And we have to build this new economy on the fumes of the old, hoping that we don't run out of gas, or ice caps, before we get there.

"This change will be painful. Building a new energy economy will require enormous government and private investment. It will involve massive workforce upheaval and possibly physical dislocation. The conservation measures demanded will make victory gardens or Jimmy Carter donning a sweater look like three-day diets.

"Greenhouse gases, geology, and geo­politics give us no choice but to change our ways."

For the uninitiated, the magazine is named after Mary Harris Jones, a rabble rouser labeled "the most dangerous woman in America" by a prosecutor some 100 years ago.

Her battle cry: "Pray for the dead and fight like hell for the living."

My kind of gal.

New player at the Power Authority

Governor Paterson has nominated a retired judge from the North Country to serve on the governing board of the New York Power Authority. If confirmed by the state Senate, Eugene Nicandri would function as the North Country rep on the board, as he would replace Thomas Scozzafava, a business executive from St. Lawrence County.

Nicandri retired in 2004 after 19 years on the bench in St. Lawrence County Court. Prior to that, Nicandri practiced law and at one point worked on establishing a municipal electric district and analyzing costs and allocation plans for hydroelectric power.

Sounds like those are his chief credentials for the authority post. On paper, they're not as strong as strong as the qualifications of the two trustees nominated by former Gov. Spitzer. Let's see what comes out as his nomination is vetted.

How this changes the authority's governing dynamics remains to be seen. In terms of geography, it probably won't be much. But Nicandri represents one more piece in the Democratic puzzle that will soon lead to a new board majority.

Nicandri would make for three Democratic-nominated trustees; the other four are holdovers from former Gov. George Pataki. Spitzer was reportedly frustrated that he couldn't make more changes at the authority after he took office because of resistance from the Pataki people. Patterson will have a majority in another year, when the term of at least one more trustee, Elise Cusack, expires. She represents Western New York, along with D. Patrick Curley, who come aboard last fall.

A number of local pols, starting with Brian Higgins, have advocated for a greater WNY presence on the authority board. So it wouldn't be surprising if Cusack is replaced with someone else from the area.

Progress at LaSalle Park

Last week I reported uncut grass and other signs of neglect at LaSalle Park. I passed through the park this morning on the way to work and what did my eyes see but the grass cut and two county parks employees at work, one manning a lawn mower, the other a weed whacker. I'll mark it down as progress.

Lasalle_park_clean_up_2The bathrooms are also clean, but no thanks to the parks department. County Legislator Maria Whyte and four AmeriCorps volunteers assigned to the Father Belle Center spent the past several days, starting Friday, cleaning and painting bathrooms at the park. The bathrooms had yet to be cleaned for the season and were covered in filth and graffiti. AmeriCorps volunteers James Morrison, left, and Nate Buckley, are shown here at work Monday.

I've exchanged several calls and e-mail with Grant Loomis, spokesman for County Executive Chris Collins, who has this to day today:

"Given current budgets and manpower, all parks are on a 15 to 28 day cut schedule."

"In general, the county executive has stated publicly many times that the current parks agreement does not work in the best interest of either Erie County or the City of Buffalo. The agreement as currently constructed presents serious budgetary and operational challenges. The county executive is looking forward to continued discussions with Mayor Brown and his administration to reach a new agreement that works for both governments and returns our parks to the condition that taxpayers deserve. "

The grass cut every 15 to 18 days? Man, I wouldn't get away with at at home. Should taxpayers and park users tolerate it?

Your tax dollars at play

School_busMy wife is going to say I'm being a grump, but can someone explain to me the educational value of having students attend yesterday's Bisons game?

The Bisons hosted their annual School Kids Day and packed in the biggest crowd of the season, 15,640, including some 10,500 students and 500 teachers and other adult chaperons. Tickets went for $6.75, $11 if you took the food package.

After talking to the Bisons, my math shows ticket revenue added up to about $87,425. In some cases, schools paid for tickets, in other instances, the kids did.

Regardless, that's not a bad take for the Bisons, and it doesn't include revenue from additional concession sales. There are other costs, as well. Teacher pay (I can't imagine riding herd on 25 kids is exactly a walk in the park) and the 250 buses used to transport the kids (photo is file art from the Bisons).

Add it all up and the day at the ballpark cost more than $100,000. And the educational value was what?

About the same, you say, as one of my other favorite school field trips, to Darien Lake?

An interesting approach

I don't know if there's any potential application here, and I don't like to quote from press releases, but the following came to my attention and I found it intriguing.

"In June 2008 British Columbia's provincial government will be mailing all BC residents a $100 Climate Action Dividend. The government hoped that citizens will invest the money in reducing their personal carbon usage. Polls say that most British Columbians will spend their $100 on beer or gas, but we see more potential in that hundred bucks! We are a small group of friends from Victoria that are pooling our Climate Action Dividends this June to see what we can create.

"We are pooling our cheques and are inviting our friends and family to join us. With the money we raise we will be performing “Random Acts of Rebate” in our community. Activities planned include installing clotheslines, distributing energy efficient light bulbs and composters, funding carshare co-op memberships and weekly organic food boxes for families in need in our community. We hope others will be inspired to pool their rebates and have competitions with family members, friends, neighbors or coworkers to see who can get the biggest “bang for their buck” while reducing their greenhouse gas emissions.

“When I first heard about the rebate I wondered, ‘how much can you really do with 100 bucks?’ but then thought ‘imagine if 10 of us pooled our money, what could we  reate then?’”  questions Gordon Hawkins, who first conceived of the Great Rebate  cochallenge. This idea was spawned during a Sierra House Cooling Party, an  nitiative of Sierra Club BC where friends get together to talk about the challenges of climate change and opportunities to make a difference.

“We had read that many British Columbians would spend their rebate at the pumps  or in the liquor store and thought there must be a more fun and creative way to actually put our rebates into climate action” says Hillary Quinn, clothesline enthusiast. Michelle Atkins, another member of the group, envisions themselves dressed up like Superheroes, courageously scaling trees to build their neighbors high quality clotheslines reducing their use of energy intensive dryers.

"We see a lot of potential for British Columbians to get creative and involved in their communities to make greenhouse gas reductions using their Climate Action Dividends as a starting point. Our website and online forum allow people to share their stories and ideas. We want to spread the idea of the Great Rebate Ecochallenge and see who can get the biggest “bang for their buck” with their $100."

... here's the Web site:

Does this inspire any creative thoughts? If nothing else, this strikes me as a much more "with it" approach than, say, the state's STAR property tax program.

Grist is the word

Gristmill is the best green blog I've come across. Good way of staying on top of news developments. It's  smartly organized and well designed.

The parent Web site, Grist, is also quite good.

Grist also publishes someting it calls Smart(ish) Cities - A Special Series on Unexpected Urban Progress, which has particular revelence to our urbanzied area.

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