On social media and in a letter to the editor by former mayor, Ray Watkin, a narrative is being formed that the city failed to properly insure city hall and that expensive, self indulgent, and unnecessary work is being planned. The problem is I can find no evidence to support these claims.
I have always admired Ray. In my opinion he was probably the best mayor of Saratoga Springs in my lifetime. He was an early visionary about the value of historic preservation and much of this city’s success should be credited to him.
Having praised my old friend, I found his letter deeply disturbing. He accuses the current city council of having gone on a ”…a binge of impulse buying to kick off the holiday season: an $11 million renovation of city hall.” Referring to the city’s plan to bond for work on the structure, he offers, “The borrowing is required because the building appears to have been under-insured, the extensive renovation was not planned, and no money set aside. How many members of the Council, let alone taxpayers, have insured their homes for only one third of replacement value?”
On a social media site Bob Turner, past chair of the 2017 Charter Review Commission, asked “Why does the insurance cover only half? Did the city not have full insurance?”
Pat Kane, who was vice chair of the same CRC, opined, “Shameful misuse of taxpayer dollars. Who looks at our insurance policy annually. This REMODEL will cost 15 Million dollars and the city will never get to repair the most essential infrastructure services this city so desperately needs. Fire hydrants, water pipes, sewer lines, water treatment. Live with in (sic) the budget, Repair city hall…remodel..is extreme”
Laying Out The Numbers
This prompted me to contact John Franck, Commissioner of Accounts. As Commissioner of Accounts he is responsible for the city’s insurance. Here is what I learned from him:
What the insurance costs and covers:
- According to Commissioner Franck, City Hall was insured to the maximum allowed. If Raymond, Dr. Turner, or Mr. Kane can refute this they should provide some sort of documentation. There is something called “Insured Interest.” As a rule, insurance policies can only cover the costs for replacing what currently exists (more on this later).
- The city chose a policy characterized as an “historical insurance policy.” This means that special expenses associated with things like architectural moldings, particular woods, etc. are covered. The decision to secure this kind of coverage was critical for reconstructing the beauty of our city hall.
- The coverage will also include the removal of asbestos (the exception to the replacement limitation).
- The city also had purchased a $1,000,000.00 rider under the category of “Loss of Business.” This rider covered the many expenditures related to continuing the city’s operation after the fire made city hall unusable. It paid for the rental of properties to continue the city’s business. For example, the city rented space in the Van Raalte Building. It also covered equipment and furniture. This included things like carpeting and cubicles. If you visit the city’s operation at the Rec Center you will be able to appreciate what went into creating an operational environment for the city’s employees.
- The current estimated amount the city will receive under its policy is $4,600,000.00.
- The key areas that sustained the most damage were the areas along Lake Avenue. These include the Accounts Office, the City Council Chambers, the offices on the second floor where assistant chief Catone and other management from the police department were located, Commissioner Scirocco’s offices, and areas of the music hall.
Additional Costs Not Covered By Insurance
So as noted above, insurance only covers replacement costs. Any improvements the city makes in the building are not covered. It should be noted that making many of the improvements the building needs has been stymied in the past by the need to displace staff while the work is done. It makes simple logical economic sense to take advantage of city hall being totally empty and the walls taken down to the studs to make as many improvements as possible.
Here is what is planned:
- HVAC: The city had an antiquated system for heating and cooling. It used window air conditioners for cooling. The plan is to install an effective heating, venting, and air conditioning (HVAC) system. This will have great long term benefits. It will be far more energy efficient than the current systems. It also will assist in addressing air quality issues. (If you have ever attended a city council meeting with a full house during the summer you will be aware of just how problematic the air conditioning in city hall can be.)
- The music hall on the city’s top floor has not been able to be fully utilized. To begin with, due to the problems of sound and the fact that it is located directly above the courts, it has not been able to host events when the courts are in session. In addition, because it is on the top floor and not air conditioned, it has not been able to host events during the summer. The area becomes too hot to accommodate people comfortably. This has meant that the city has lost events and money it could have earned. The new HVAC system will allow this space to be used year round and will enhance the quality of life of our city.
- The city is extensively redesigning its wiring system. This will have the advantage of not only more efficiently providing energy throughout the building but will allow it to design the wiring to minimize the cost of maintenance. The city will benefit from more reliable wiring and will reduce the cost of maintenance.
- The city will be installing an additional elevator that will provide greater security and safety for the public when moving prisoners up to the courtrooms. The elevators will also be compliant with the requirements of the American Disabilities Act.
- The court system has been pressing the city for a number of years to expand the courtroom facilities to include a second courtroom along with greater administrative space. This plan has gotten bogged down in the enormity of the problems that reorganizing city hall entails. The city is now able to go forward. One nice benefit is that the New York State Administration On Courts will pay for the interest of the bonding required for this part of the city’s rehab saving the city money.
- Similarly, the city had been struggling to find additional space for the police department. Many will recall the substantial cost estimates that were under consideration when it was thought the city would need to secure a separate facility. Through better planning along with the fact that the law library on the city hall’s third floor will be moved to Ballston Spa, the city will now have a solution.
Responsibly Prioritizing Rehab:
I mentioned to John Franck that there was suspicion that these renovations would be exploited by the Commissioners for personal purposes. He told me that the only change in his offices was that the deputy’s office would be reduced slightly to deal with an enlargement of the bathroom. The current bathroom is not compliant with the Americans with Disabilities Act (ADA). The door needed to be enlarged to handle wheel chairs.
Costs: The latest estimate of the cost of the entire rehab is $10,000,000.00. $4,600,000.00 will be covered by insurance while the balance of approximately $5,400,000.00 will be covered by bonding.
People can and should scrutinize all these plans. What I find disturbing is not only the indifference of Ray, Mr. Kane, and Dr. Turner to providing any concrete information to support their claims but the tone of contempt and anger that characterizes much of what they write. I find John Franck’s explanations credible. Maybe the cost will rise from the current projection of $10,000,000.00 to the $15,000,000.00 projected by Mr. Kane. We would all benefit, though, if Mr. Kane would offer some explanation as to how he arrived at his number. Criticism is important but it should be based on rigorous analysis and done civilly.
A Smooth Transition
The readers of this blog should also consider how smoothly addressing the crisis of the fire and now the rebuilding of city hall has proceeded. One could have expected the process of relocating the entire city government and now re-configuring city hall could have resulted in all kinds of conflict between departments and dragged on for months. What is clear beyond doubt is that the extreme attacks on the commission form of government characterizing it as virtually non functional have not been born out in this crisis. Great credit for this must go first to Mayor Kelly who has headed this process but also to the other commissioners who have cooperated closely with her.