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HomeMy WebLinkAboutMN-CLC-2019-04-15 PRESEN Commis OTHER Assistan EXCUSE ABSENT Meeting Review Bakhle - Cornell Mayor M convers Commis biggest holes an property CU bein is an iss If CU wa property through reopen/r nothing done 7 y position Currentl hand, in million. could op all mone The May case to CO CO NT: Chair ssioners (8) S PRESEN nt Hallett-Ha ED: Hall & T: Hago g called to and Appro - all in favor Conversat Myrick: He ation with m ssioners for issues that nd high cos y tax/sales t ng tax exem sue in every as paying p y tax to the an existing renegotiate can be don years ago a is that thes y, the City savings, 1 If, for some perate for a ey it could s yor asked t CU to rene OMMUN OMMIS r Swayze ): Keeler, S NT: Commo arris & McClinse ood order: 6:0 oval of Min r tions: e advised th members re r their servic citizens vo t of housing tax. This h mpt and it is y college tow property tax City (half o g MOU whic e that agree ne. CU ask and is in the se aren’t fa of Ithaca bu 0-20% of th e reason al pproximate still run for 3 hat the he gotiate the NITY LI SSION M Scriber, Hills on Council y 03 p.m. nutes: Mar hat he and egarding the ce and com oiced during g -- all three as been on has a large wn in Amer xes, they wo of city budge ch expires i ement, CU d ked the City e attachme ir/accurate udget is ap he annual o l payments ely 1 ½ -2 m 3 ½ years. hopes the C MOU now IFE MINUTE son, Bryne Liaisons: F rch 18, 201 Dan have c e CU tax ab mmitment to g his campa e are relate ngoing for 3 e and obvio rica. ould be pay et). They c n 2024. Th does not wa y for compa nts that we compariso proximately operating co s/bills/tickets months, in c CLC could and CLC c ES & Bakhle Fleming and 9 Minutes: come to lea batement. o these com aign are: Co ed. Our Cit 3 CU presid ous econom ying approx currently pa he City has ant to reneg arison to oth ent out with ns. y $70 millio osts, which s stopped b comparison play two ro could refres Date: April Time: 6:00 Location: C 3rd Floor, Ci d Lewis, Ex 1st Hillson arn more an The Mayor mmissions. ornell’s con ty is funded dential succ mic impact o ximately $35 ay $1.5 milli tried since gotiate and her institute the Agenda on; the City h is approxim being paid i n, if CU stop oles: assist sh the curre 15, 2019 PM Common Cou ity Hall xecutive n and 2nd nd have a r thanked a The three ntribution, p d and relies cessors, wit on the City 5 million in on to the C 2012 to d legally, es, which w a. Cornell’s keeps on mately $7-1 in the City, pped receiv ting to make ent study, w uncil Chamber all pot on th and City as s 14 we ving e a which rs, Community Life Commission April 15, 2019 2 is 6-7 years old. He stated there are many ways to slice/dice numbers, data, etc., compare contributions, but reviving /refreshing this report but hoping CLC can bring in a human element as well. It has been frustrating trying to work with last three CU presidential administrations considering how they are largest employer/wealthiest corporation/powerful political entity in City, for them to actually realize their own strength, when so few people who in are in positions to make decisions about this number at CU live in the city or participate in the life city. For instance, from the Board of Trustees, and particularly their Finance Committee, to the senior ranks in the administration, most of whom live in Cayuga Heights or other outlying area, and rarely find themselves traveling through the city. The Mayor stated he often struggles with making this case and the CLC, being more than one person, could put a face in the human struggle, a human opportunity to get a larger contribution. Hearing folks on campaign trail, that folks feel left out, if there is a way to capture stories/interviews/surveys/ forums, to paint an alternative. With more people choosing to accept positions and go to school at CU; Cornell depends on us and we depend on them. Dan Cogan: His office is planning on putting together an overview of the budget to all commissions – pulling up last year’s budget, 40% of revenue comes property tax from 25% from sales tax, and then 21% fees, etc., property taxes are the largest chunk of revenue. Total assessed value Cornell value of all city of Ithaca property is to all of the taxable property in Ithaca = this would be an approximately $25 million extra to city if they paid taxes, just a sense of scale. Dan advised that he was not involved in all of these conversations, but has spoken with them recently; they insist we are not making apples to apples comparison – difficult to do this comparison, as every municipality has differences. If CLC were to do any work on this topic to nail these issues down, it would be good to try to come up with something that is more defensible and not so easy to put holes into might help conversation advance. Dan has had a lot of communications with the CU Community Relations and if this conversation continues, they would welcome to come to talk and to give their point of view at future meeting, that way all sides are heard and taking everything into consideration. Ithaca NY is one of the top most tax exempt cities in NYS, Tompkins County one of the most highly tax exempt county in NYS – this effects Ithaca more than other cities in NYS, and CU would say they provide more economic benefit to Ithaca then other city and that is difficult to capture/quantify. They also bring a lot more demand for services – what does CU bring to Ithaca - demand for services and the impact on our infrastructure? Which is hard to look into …industry is educational not industrial. Currently, CU pays $1 million a year per the MOU and the budget built around this and if no $ then money would come from tax payers. CU has said they don’t want to just write a check, to give money for nothing, or no strings attached, CU interested in project-based contributions, or infrastructure project that CU interested in. Martha Robertson, Chair of County Legislature, who took issue with the documents from 7 years ago – she reminded us that CU recently offered to give some money Community Life Commission April 15, 2019 3 toward Stewart Ave repaving – it is the gateway to their University, we have a lot of roads that need attention/repair, when doing road work there is a lot involved and costly. They are interested in giving money for particular projects, basically money with strings; $7 million cost to city to repave a street, including work required for sidewalks/utilities, etc. CU does take care of its own sidewalks, own roads, have their own police, but still rely on City Police, SWAT Team, have their own water and their own zip code. There was recalibration of storm water so those organizations with large systems that feeds into City, will be paying more for that service. Good example of a way of more equitably sharing of costs the City bears. Are there other items? We give them an opportunity for them to contribute? CU provides some items for itself, there was question and discussion of the storm water feed from CU that feeds into city sewer systems as well as other such things that effect City. Sidewalks are another that we could have made into districts and put a fee on those and decided not to. The Mayor open to more fees – Questions regarding does fees/services they take -- does it match up? It is something that really is no way to calculate … His hypothesis that CU is in no way coming close. Fire services tries to come close in the MOU – even those costs don’t match up, there are 55 employees in fire services this $ does not come close to cover the overhead in city. Ideas like tracking who is moving through city – corporations/organizations each having/imputing a fee … tolls logistics, political and legal just cannot be done. Commission to involve community to persuade the university pay more – find commonality (housing issues). Tax cap state passed – if city under, you got rebate check; if similar program capped taxes by CU – raises full tax levy. Byrne wrote a letter to President– based on inflation rate which is pretty stagnant now – population of CU has grown dramatically over past 10-12 years – last year CU states they will be growing, CU brings in more money, increased student population, increased use of roads, 15,000 people driving into county every day, it impacts everything, roads, police, building, planning, etc. Lewis: - Explaining student population - student bringing in money – students that receive financial aid – significant portion receive grant aid, CU one of three underwriters for TCAT is that represented in these payments? Mayor: No. This may present a fuller picture; Lewis on TCAT Board and worked at CU for years; TCAT gets paid by state/federal government for every rider CU contributes towards housing fund $200,000, $100,000 from City and $100,000 from County through 2021, transportation fund gone, $10 million agreement never followed through. Raising tax levy - CU gives more money, City not raise taxes for certain time period – good idea. Fleming will send out document she found to members; How have other municipalities handled this/achieved higher payments in other areas? How have they approached it? Research this area – Every time we say renegotiate, Cornell says no to renegotiating period. Dan stated call other institutes or the municipalities to see how they arrived at the amount what was rational? Community Life Commission April 15, 2019 4 Renewable energy CU commonality w/City - CU currently putting millions into Geo thermal they will have more energy than they could use/need - City look into this. When the last research was done, was this funded, the Mayor and two interns worked on this a little over a month working on this calling and getting info to get data, this was not funded. Would there be staff time, interns this summer, Mayor says yes he could arrange for interns for assistance to help with research and Mayor thinks that could be arranged. He also stated that Tom from the Economic Development Office could help do some footwork as well. IC contributions – one of the projects that the City approved was the extensions of Southill sidewalks which benefit all residents but also IC, what are their contributions to the local community? Smaller portions than CU, they do they contribute small amount to TCAT double amount of busses running at night, very strategic investments. Dan said it would be interesting to look at the correlation of contributions from different institutions. The Chair thanked the Mayor and Dan for coming to speak and background. If CLC has questions email the Mayor he could come back and talk again. Healthy to have separate checks and balances, he won’t be meddling in affairs and trust that we will do the research and any questions should be directed to him. Members gave thanks to Carolyn for her all of her work/research into this as well. Email questions to Chair – thinking to all the info received and tonight’s conversation/info as well. The three points that Mayor gave and how can CLC help, what stick can Ithaca wield presently to make CU listen/come to table? What will get them back to the table? Need to seek common ground, find ways we articulate common ground and mutual benefit they can understand. Think about documents that have just come and tonight’s discussion, email Chair with questions to use as a basis at next month’s meeting instead brainstorming now. Get actual stories, compelling reasons, adding to some practical data will be useful. More info to Scriber regarding common ground of driving into area to work because they cannot afford to live here; tolls/taxing people that are employing/driving into area? Send email to Chair before next meeting, any ideas/suggestions and then CLC will decide how to proceed. Half-Staff Flag Policy: Hall excused from meeting, she emailed her work; County has drafted their policy and Henry from TC was in attendance; Chair stated that proposal starts at #3 and the beginning section is information and how Hall got info but shouldn’t’ be in the actual policy. Questions: What is the difference between the county’s policy/this policy? Henry (quest in audience) stated that advocacy flags flown from a list, but they have to ask. Half-staff policy basically follows state mandate, employees, locally known members Should county and city coordinate policies? If County has one and City has one, we each follow our policies and they have been shared and should be consistent. If County changes policy does City need to change to follow suit? Procedure for proposed changes, recommendation for Half Staff Policy – proposal to City Administration for their Community Life Commission April 15, 2019 5 approval with appropriate edits and completion: Bakhle made motion and Byrne 2nd – all in favor – Chair to do edits/finalize info to make it a bit clearer, chair to send policy to City Administration. CLC already voted on advocacy flag previously. Keeler gave updates on projects: Shopping Cart Ban, he met with Ducson Nguyen and gave lowdown of his prospective and he would like to come here to a meeting to talk to CLC. Currently working with some of the local stores and they have been discussing this and the imposition of fees, what’s in legislation already, etc. Having a discussion regarding supporting community members who need carts? Have conversations regarding all logistics, police fines, etc., how CLC can help? Suggestion is to have Ducson come to future meeting and see what can CLC can do to help this process. Public Arts Sub-Committee – trying to build this subcommittee up and open to suggestions from CLC of who would be good for this RE: funding/research, etc., if any members have suggestion or a good fit, contact Keeler. Lewis updated that Common Council approved the art murals and the next round of mural applications due by May 15th, and will discus at June meeting; report to subcommittee and suggestion of inviting Alex to June meeting; discussion of need for advisors/experts for subcommittee. May Meeting – Possible presentation of the new full time position for City of Ithaca ADA Coordinator; Update that the City Planning Department is currently short-staffed and asked that folks be patient with them. Scriber met with Annisa ; get someone at CU to get someone to help research/talk with FLIC and work together, Chair appointed Commission Advisor – Joy Das – who works at CU and will be coming to meetings as current Commissioner McClinsey to scheduled to graduate and therefore will be leaving CLC. Let Thomas Schelly know about plastic ban in the future, as state just made decision. 7:42 Adjourned Next Meeting: Monday, June 17, 2019, 6:00 p.m., Common Council Chambers, 3rd Floor Adjournment: On a motion, the meeting was adjourned at 7:42 p.m. Respectfully Submitted by, Jody Hallett-Harris, Executive Assistant 1 Request to Cornell University: Cornell’s Commitment to the Community Cornell University makes a number of valuable contributions to the community, from employing thousands of local residents, to attracting extremely intelligent and talented individuals to teach and study here, to purchasing goods and services from area businesses. However, the University provides less financial support to its host municipalities— both the City and Town of Ithaca — than its peer institutions provide to their own. Today, the City of Ithaca, the Town of Ithaca, and Tompkins County have come together to ask, once again, that Cornell agree to an increased annual contribution. We request an initial total contribution from the University of $6,455,725—an amount equal to what the University would owe in property taxes if it paid on only 7.5 percent of its total assessed value.1 We further request that this not be a one time contribution, but rather a formal and long-term arrangement in which Cornell makes voluntary payments of equivalent value to the municipalities every year. Background Like most colleges and universities, Cornell is designated as a charitable nonprofit organization (despite having a $5 billion endowment 2 and a $3 billion operating budget 3), and is thus tax- exempt under section 501(c)(3) of the Internal Revenue Code. The reasoning behind this exemption is that, to the extent that colleges and universities are “organized and operated exclusively for…educational purposes,” they provide a public good, without gaining any private benefit in return, and should therefore receive a tax break.4 While this exemption is well- intentioned, it has a very significant impact on local governments. The loss in property tax revenue, in particular, can be devastating for the other taxpayers of any municipality that is host to a substantial nonprofit sector. In the City of Ithaca, for example, 60 percent of all property is tax-exempt, and nearly 85 percent of that belongs to Cornell.5 For fiscal year 2012 the City forewent $25.5 million—nearly half of its entire budget—in property tax revenue that it would have otherwise received from the University if it were not exempt.6 In order to make up for some of this lost revenue, the other taxpayers of the City have had to consistently absorb the difference, through higher taxes and lost services. The result is long-term upward pressure on the area’s cost of living and cost of doing business. Ithaca is not unique: college towns and cities across the nation are faced with similar issues. The difference, however, is that an increasing number of nonprofit organizations are now taking on some of the financial burden caused by their tax exemption by making alternative voluntary payments to their respective local governments. Universities such as Yale, Brown, and Harvard, for example, have entered into Payment in Lieu of Taxes (PILOT) programs, agreeing to make substantial annual investments in their host municipalities. Unfortunately Cornell has not 2 followed suit, and area residents—including Cornell students, faculty, and staff—have essentially been forced to pay for the University’s exemption through higher taxes. Although Cornell relies on significant services provided by all three of its host municipalities, it only makes annual financial contributions to the City of Ithaca. A Memorandum of Understanding (written in 1995 and amended in 2003) between Cornell and the City established a schedule of voluntary payments to be made by the University every year. Although the actual amount of each payment is determined by the previous year’s CPI, it has remained at approximately $1.2 million annually. For 2012, Cornell contributed a total of $1,225,789 to the City— with $735,473 (60 percent) designated for fire protection and the remaining $490,314 (40 percent) designated for “other municipal services”. 7 Cornell’s PILOT compared to other prestigious institutions The comparisons below serve to show how Cornell’s annual payments to the City of Ithaca compare to the formal PILOT programs of seven other universities: Princeton, Yale, Boston University, Harvard, Massachusetts Institute of Technology, Brown, and Penn State. These seven were chosen because they are all peer universities of Cornell and all have formal PILOT agreements with their respective host cities. Part I compares the voluntary payments made by each university to its host municipality in 2012. Harvard has PILOT agreements with the City of Cambridge and with the City of Boston, which are listed separately in the comparison. Part I also provides a brief explanation of the arrangements between each of the universities and their municipalities. Part II then compares these voluntary payments as relative amounts based on: university endowment, municipality population, university enrollment (total and undergraduate), and university operating revenues and expenses. Cornell’s ranking among the universities is also shown for each comparison, with a higher ranking indicating a smaller voluntary payment. 3 PART I Voluntary Payments to Host Municipalities Note: Harvard-B = Harvard’s voluntary payment to Boston; Harvard-C = Harvard’s voluntary payment to Cambridge Harvard University Harvard has PILOT programs with both Cambridge and Boston, which total to an annual amount of $5 million. Cambridge Harvard is one of the top five taxpayers in Cambridge8 and, on top of that, also makes substantial voluntary payments to the City every year. In 2005 Harvard renewed its PILOT agreement with Cambridge for a 50-year period. The terms of the agreement include a 3 percent annual payment escalation, in addition to a $100,000 payment escalation every 10 years. The University will pay the City an estimated $2,874,000 for fiscal year 2012-2013.9 4 Boston In 2009 Boston Mayor Thomas Menino established a task force charged with developing recommendations for a more successful and more consistent PILOT program to improve relationships between the City and its tax-exempt institutions. As a result, PILOT payment amounts in Boston are now determined by a standard formula, based on organizations’ property values and whether or not they can prove that they provide substantial community services.10 Boston’s PILOT request to Harvard for fiscal year 2012 was $2,121,894.11 Massachusetts Institute of Technology Massachusetts Institute of Technology (MIT) also has a formal PILOT arrangement with Cambridge,12 and is the City’s largest taxpayer as well. Although it had been making voluntary payments for many years, the University did not enter into a written agreement with Cambridge until 2005. The agreement has a 40-year term and includes an annual 2.5 percent payment escalation. MIT will pay an estimated $1,832,000 for fiscal year 2012-2013.13 Princeton University Princeton University makes annual voluntary payments to both the Borough of Princeton and the Princeton Township (which are currently consolidating into a single municipality). The University paid the Borough and Township a combined $1,680,49614 in 2011 and nearly $2,500,000 in 2012.15 On top of its PILOT, in 2011 Princeton also paid $7.7 million in property taxes, one third of which (nearly $2.6 million) was legally exempt.16 While New Jersey state law stipulates that any portion of a facility that is used for educational purposes is qualified for tax-exemption, the University only removes a property from the tax roll if 100 percent of the facility is used for education.17 Yale University Yale University makes the largest voluntary payment to its host municipality among all colleges and universities in the nation.18 Furthermore, the University is one of the top five taxpayers in New Haven and makes other substantial financial investments in the community, such as a $25 million Homebuyer Program.19 In 1991 Yale and the City of New Haven reached a PILOT agreement that had an original base payment of $1.2 million. In 2009 the University then agreed to increase its payments by 50 percent. By 2010, Princeton’s annual contribution to the City reached $7.5 million,20 growing to nearly $8.1 million in 2012.21 Pennsylvania State University Penn State is a public land grant institution. They give about 1.5 million to their host county, local school districts, and municipalities. Their PILOT agreement is tied to CPI. Boston University In 2009 Boston Mayor Thomas Menino established a task force charged with developing recommendations for a more successful and more consistent PILOT program to improve relationships between the City and its tax-exempt institutions. As a result, PILOT payment amounts in Boston are now determined by a standard formula, based on organizations’ property values and whether or not they can prove that they provide substantial community services.22 The City’s PILOT request to Boston University for fiscal year 2012 was $5,329,936.23 Brown University Brown University recently signed a Memorandum of Agreement (MOA) with Providence, in which it committed to invest $31.5 million into the City over the next eleven years.24 As 5 stipulated by the agreement, Brown will pay $3.9 million annually for six years followed by $2 million annually for five years.25 This MOA does not override a 2003 Memorandum of Understanding (MOU) in which the University agreed to make voluntary payments of an average $1.2 million annually.26 On top of that, Brown pays taxes on all educational properties that have been purchased since 2003. Thus, in 2012 the University’s voluntary payments to Providence totaled $6,374,000: $3,900,000 (2012 MOA) + $1,200,000 (2003 MOU) + $1,274,000 (voluntary payments on educational property purchased since 2003).27 Cornell University Although Cornell University is not in a formal PILOT arrangement, it has been making voluntary payments to the City of Ithaca for many years. A Memorandum of Understanding (MOU) between the City and the University contains a schedule of these payments (shown below) and stipulates that, each year, 60 percent of the funds are to be allocated for fire protection and the remaining 40 percent for “other municipal services”.28 Under the original MOU, written in 1995, voluntary payments increased by $50,000 annually (except for a $100,000 increase between 1999 and 2000). Thus, Cornell’s contribution grew from $250,000 in 1995 to $700,000 in 2003.29 The MOU was then amended in 2003 to increase the amount of the annual payments and to extend the agreement (which was due to expire in 2007) another 16 years.30 Cornell’s contribution has since been determined by the previous year’s CPI, however each year they have remained at roughly $1,200,000. In 2012, the University made a total voluntary payment to the City of $1,217,475, with $730,485 allocated for fire protection.31 A summary of Cornell’s contribution under the MOU is as follows: AllocationAllocationAllocation Year Contribution % Change Fire Protection Other Municipal Economic 2012 $1,217,475 2.50%$730,485 $486,990 2011 $1,187,780 1.60%$712,668 $475,112 2010 $1,169,075 -4.00%$701,445 $467,630 2009 $1,173,770 3.80%$704,262 $469,508 2008 $1,130,800 2.80%$678,480 $452,320 2007 $1,100,000 -4.35%$660,000 $440,000 2006 $1,150,000 -4.17%$575,000 $500,000 $75,000 2005 $1,200,000 -4.00%$550,000 $500,000 $150,000 2004 $1,250,000 78.57%$475,000 $525,000 $250,000 2003 $700,000 7.69%$450,000 $250,000 2002 $650,000 8.33%$425,000 $225,000 2001 $600,000 9.09%$400,000 $200,000 2000 $550,000 22.22%$375,000 $175,000 1999 $450,000 12.50%$325,000 $125,000 1998 $400,000 14.29%$300,000 $100,000 1997 $350,000 16.67%$275,000 $75,000 1996 $300,000 20.00%$250,000 $50,000 1995 $250,000 -$225,000 $25,000 Source: City of Ithaca 2012 Mayor’s Budget Narrative, Page 43 6 PART II Voluntary Payment as a Percentage of University Endowment All University endowments in this comparison were found in a 2012 report published by the National Association of College and University Business Officers (NACUBO) and Communfund Institute.32 The amounts used represent the market value of endowments for fiscal year 2011. Voluntary Payment as % University Municipality Endowment Payment of Endowment MIT Cambridge $9,712,628,000 $1,832,000 0.0243% Brown Providence $2,496,926,000 $6,374,000 0.2553% Princeton Princeton $17,109,508,000 $2,500,000 0.0146% Harvard Cambridge $31,728,080,000 $2,874,000 0.0091% Boston $2,121,894 0.0067% Penn State State College $1,953,300,000 $1,500,000 0.0768% Yale New Haven $19,374,000,000 $8,100,000 0.0418% Boston U.Boston $1,159,583,000 $5,329,936 0.4596% Average 0.1110% Cornell Ithaca $5,059,406,000 $1,217,475 0.0241% Cornell’s Rank: 6th out of 9 7 Voluntary Payment as Dollar Amount per Municipality Resident All but two of the municipality populations were found on a United States’ Census Bureau webpage and are current as of 2010.33 The 2010 population for the Town of Ithaca was found in a town profile published by Tompkins County Youth Services 34 and the 2010 population for Princeton Township was found on a New Jersey State document regarding legislative districts.35 The final population listed for Princeton is a summation of the Borough (12,307) and Township (16,265) populations; and the final population listed for Ithaca is a summation of the Town (19,930) and City (30,014) populations. Municipality Voluntary Payment as $ Per University Municipality Population Payment Municipality Resident MIT Cambridge 105,162 $1,832,000 $35.36 Brown Providence 178,042 $6,374,000 $35.80 Princeton Princeton 28,572 $2,500,000 $163.11 Harvard Cambridge 105,162 $2,874,000 $26.15 Boston 617,594 $2,121,894 $3.43 Penn State State College $42,499 $1,500,000 $35.29 Yale New Haven 129,779 $8,100,000 $61.26 Boston U.Boston 617,594 $5,329,936 $8.39 Average $46.10 Cornell Ithaca 49,944 $1,217,475 $24.38 Cornell’s Rank: 6th out of 9 8 Voluntary Payment as Dollar Amount per University Student University enrollments—total and undergrad—were found through a search engine produced by the National Center for Education Statistics.36 All information is based on Fall 2011 enrollment statistics. University Voluntary Payment as $ Per University Municipality EnrollmentEnrollment Payment University Student MIT Cambridge 10,89410,894 $1,832,000 $168.17 Brown Providence 8,7688,768 $6,374,000 $726.96 Princeton Princeton 7,8137,813 $2,500,000 $319.98 Harvard Cambridge 27,39227,392 $2,874,000 $104.92 Boston $2,121,894 $77.46 Penn State State College 38,95438,954 $1,500,000 $38.51 Yale New Haven 11,87511,875 $8,100,000 $682.11 Boston U.Boston 32,43932,439 $5,329,936 $164.31 Average $285.30 Cornell Ithaca 21,13121,131 $1,217,475 $57.62 Cornell’s Rank: 8th out of 9 9 Voluntary Payment as Dollar Amount per Undergrad Student University enrollments—total and undergrad—were found through a search engine produced by the National Center for Education Statistics.37 All information is based on Fall 2011 enrollment statistics. Undergrad Voluntary Payment as $ Per University Municipality Enrollment Payment Undergrad Student MIT Cambridge 4,384 $1,832,000 $417.88 Brown Providence 6,380 $6,374,000 $999.06 Princeton Princeton 5,203 $2,500,000 $480.49 Harvard Cambridge 10,305 $2,874,000 $278.89 Boston $2,121,894 $205.91 Penn State State College 38,954 $1,500,000 $38.51 Yale New Haven 5,349 $8,100,000 $1,514.30 Boston U.Boston 18,140 $5,329,936 $293.82 Average $528.61 Cornell Ithaca 14,167 $1,217,475 $85.94 Cornell’s Rank: 8th out of 9 10 Voluntary Payment as a Percentage of University Operating Revenues The operating revenues and operating expenses for every University were found in their respective financial statements/reports. The amounts listed are for the year ended June 30, 11 2011. For Cornell, we included revenues and expenses for the University’s conglomerate budget and for its Ithaca Campus budget. Cornell—Ithaca Campus Rank: 8th out of 10 Cornell—Conglomerate Rank: 9th out of 10 Univ. Operating Voluntary Payment as % of University Municipality Revenues Payment Oper. Revenues MIT Cambridge $2,750,647,000 $1,832,000 0.0666% Brown Providence $666,510,000 $6,374,000 0.9563% Princeton Princeton $1,426,407,000 $2,500,000 0.1753% Harvard Cambridge $3,777,746,000 $2,874,000 0.0761% Boston $2,121,894 0.0562% Penn State State College $4,264,764,000 $1,500,000 0.0352% Yale New Haven $2,734,218,000 $8,100,000 0.2962% Boston U.Boston $1,654,314,000 $5,329,936 0.3222% Average 0.2480% CU Conglomerate $3,239,008,000 0.0376% CU Ithaca Campus Ithaca $2,021,983,000 $1,217,475 0.0602% 12 Voluntary Payment as a Percentage of University Operating Expenses The operating revenues and operating expenses for every University were found in their respective financial statements/reports. The amounts listed are for the year ended June 30, 2011. For Cornell, we included revenues and expenses for the University’s conglomerate budget and for its Ithaca Campus budget. Univ. Operating Payment as % of University Municipality Expenses Voluntary Payment Oper. Expenses MIT Cambridge $2,571,147,000 $1,832,000 0.0713% Brown Providence $662,508,000 $6,374,000 0.9621% Princeton Princeton $1,426,407,000 $2,500,000 0.1753% Harvard Cambridge $3,907,568,000 $2,874,000 0.0735% Boston $2,121,894 0.0543% Penn State State College $4,264,764,000 $1,500,000 0.0352% Yale New Haven $2,624,550,000 $8,100,000 0.3086% Boston U.Boston $1,551,750,000 $5,329,936 0.3435% Average 0.2530% CU Conglomerate $3,007,129,000 0.0405% CU Ithaca Campus Ithaca $1,822,103,000 $1,217,475 0.0668% Cornell—Ithaca Campus Rank: 8thth out of 10 13 Cornell—Conglomerate Rank: 9th out of 10 Why an Increased Contribution is Vital to the Community and to the University Agreeing to this proposal would make Cornell a national leader in strengthening town-gown relations, and would bring in a new era of more positive and mutually beneficial collaboration between the University and its host municipalities. Furthermore, the University would enjoy the continued provision of vital services by the local governments, as well as the addition of new services and greater cooperative arrangements. In 2003, when Cornell President Jeffrey Lehman proposed to amend the original MOU between the University and the City of Ithaca, he stated: “A strong university and a strong community go hand in hand….We need to recognize the importance of our town-gown partnership. We need to celebrate it. And we need to strengthen it, especially in an era of budget constraints.”38 Unfortunately, not much has improved in the way of this town-gown partnership and, nearly ten years later, Cornell is still not carrying its full weight. For fiscal year 2012 the University would have owed over $86 million to surrounding municipalities if it were taxed on its total assessed property value. Instead, it only paid the mere $1.16 million that was legally taxable and left an $85 million tax revenue shortage, the burden of which was ultimately shifted onto local residents.39 Cornell acknowledges that it has a direct stake in the condition of local infrastructure. On October 6, 2007, during his address at the annual community leaders brunch, President Skorton announced that the University would be investing $20 million over ten years in support of community housing and transportation initiatives. On top of the direct investment, Skorton pledged that Cornell would partner with the local governments to get additional state resources for these initiatives as well.40 The intent of this promise wasn’t simply to aid the local community, but to benefit the University as well. As Stephen Golding, Cornell's Samuel W. Bodman Executive Vice President for Finance and Administration, explained: “our relationship with the area’s local communities is essential to promoting their economic strength, quality of life and cultural vitality, which, in turn, are critical to Cornell’s ability to recruit its next generation of faculty, staff and students”.41 Cornell is fully aware of the ways in which a strong community—with quality public schools, affordable housing, and adequate infrastructure—directly contributes to its own success. Moreover, the University knows that a sustainable local economy, which maintains a low cost of 14 living, is also of great importance. Salaries, wages, and benefits make up nearly 60 percent of Cornell’s operating expenditures.42 Between 2009-10 and 2010-11 faculty salaries increased by an average 2.8 percent largely because, according to Vice President of Human Resources Mary Opperman, it is progressively expensive to live in the area: “[professors’] costs of living are going up…and we have to try to balance that with salary increases”.43 Insert information about salaries for associate and full professors compared with peer institutions. Cornell's compensation is comparable for assistant professors – in the recruitment phase – but low for faculty with longer residence here. It is clear that the local quality of life represents meaningful value, which enables Cornell to retain top faculty without directly compensating them at a level commensurate with its peer institutions. Maintaining a high quality of life requires significant expenses. It is has become increasingly difficult for the local governments to afford the services they provide—those which ensure that Ithaca and Tompkins County are communities in which a top-tier research institution can thrive —without subsequently placing a greater financial burden on their residents. It is neither fair nor strategic of Cornell to starve its host municipalities of needed funds any longer. If the University is concerned—as it should be—with preserving the area’s quality of life and keeping living expenses down, and if the University truly believes in doing the right thing, it will accept this proposal. Services That Local Governments Currently Provide to Cornell In addition to ensuring an excellent quality of life in Ithaca, local governments deliver direct services to Cornell, such as road and trail maintenance, fire protection, and law enforcement. While local residents pay for these services through their taxes, the University receives them, essentially, for free. Local governments are struggling to maintain the quality of life that its residents and the Cornell community have come to expect. For too long the University has failed to support its host municipalities and to pay its fair share. Unless Cornell makes a greater local investment, the City, the Town, and the County will be forced to cut vital services. Since Cornell makes up such a significant portion of the total property in the City and Town, when budget decisions are made and services are reduced or eliminated, Cornell will suffer along with the rest of the City and Town. This may mean slower response times to University requests, less maintenance of trails and sidewalks that surround the campus, or even an eradication of the SWAT team. The Ithaca community can no longer carry the financial burden of providing these services to Cornell without gaining anything in return. 15 The decision to cut local services would be an extremely painful one for the municipalities to make. Hard working citizens would be laid off, relations between Cornell and Ithaca would be strained, and the quality of life for everyone would be in jeopardy. However, without a substantial increase in financial support from the University, these cuts are imminent. Moving Forward The acceptance of this proposal and the ensuing start of a new partnership would greatly benefit local residents, the local governments, and Cornell. With the continuation of existing services and additional cooperative agreements, the University could save millions of dollars and countless staff hours. On the contrary, the rejection of this proposal would put serious strain on town-gown relations and force the discontinuation of many services currently enjoyed by local residents and the Cornell community. It is time for an increased contribution from Cornell, and for a new era of cooperation to begin. Other prestigious universities have reached agreements with their host municipalities, from which they have benefited greatly and received widespread positive publicity. This outcome is far more desirable than strained relations and a large public media battle. The City, the Town, and the County hope Cornell will seriously consider this proposal and work in good faith towards an arrangement that will foster mutual appreciation and strong relationships for years to come. 1 Tompkins County. Department of Assessment. Cornell and Ithaca College – Assessment Data, March 2012. Excel file. 2 Educational Endowments and the Financial Crisis: Social Costs and Systemic Risks in the Shadow Banking System. Boston: Center for Social Philanthropy and Tellus Institute, 2010. PDF file. 3 2012-2013 Operating & Capital Budget Plan. Division of Planning & Budget, Cornell University, 2012. PDF file. 4 Association of American Universities. “Tax Exemption for Universities and Colleges; Internal Revenue Code Section 501(c)(3) and Section 115.” PDF file. 5 “2013 City of Ithaca Budget Outlook.” Official Website of Ithaca, NY. Web. <http://www.ci.ithaca.ny.us/ city-budget.cfm>. 6 Tompkins County. Department of Assessment. Cornell and Ithaca College – Assessment Data, March 2012. Excel file. 7 City of Ithaca. 2012 Mayor’s Budget Narrative. 2011. PDF file. 8 Educational Endowments and the Financial Crisis: Social Costs and Systemic Risks in the Shadow Banking System. Boston: Center for Social Philanthropy and Tellus Institute, 2010. PDF file. 9 City of Cambridge. Budget Department. Annual Budget 2012-2013. 2012. PDF file. 10 City of Boston. Mayor’s PILOT Task Force: Final Report & Recommendations. 2010. PDF file. 11 City of Boston. Assessing Department. PILOT Requests for FY 2012. Updated 2012. PDF file. 12 Educational Endowments and the Financial Crisis: Social Costs and Systemic Risks in the Shadow Banking System. Boston: Center for Social Philanthropy and Tellus Institute, 2010. PDF file. 13 City of Cambridge. Budget Department. Annual Budget 2012-2013. 2012. PDF file 14 Kenyon, Daphne E., and Adam H. Langley. “Payments in Lieu of Taxes: Balancing Municipal and Nonprofit Interests.” Princeton Township. Web. <http://www.princetontwp.org/PILOT.pdf>. 15 Russ, Hilary. “Analysis: U.S. cities wrestle with universities for cash.” Reuters. Thomas Reuters, 18 May 2012. Web. <http://www.reuters.com>. 16 Russ, Hilary. “Analysis: U.S. cities wrestle with universities for cash.” Reuters. Thomas Reuters, 18 May 2012. Web. <http://www.reuters.com>. 17 Education and Innovation, Enterprise and Engagement: The Impact of Princeton University. Office of Communications, Princeton University, 2008. PDF file. 18 Kenyon, Daphne A., and Adam H. Langley. Payments in Lieu of Taxes: Balancing Municipal and Nonprofit Interests.” Cambridge: Lincoln Institute of Land Policy, 2010. PDF file. 19 “Economic Growth & Fiscal Impact.” Yale University. Office of New Haven & State Affairs. Web. <http:// onhsa.yale.edu/economic-growth-and-fiscal-impact>. 20 Kenyon, Daphne A., and Adam H. Langley. Payments in Lieu of Taxes: Balancing Municipal and Nonprofit Interests.” Cambridge: Lincoln Institute of Land Policy, 2010. PDF file. 21 Kiley, Kevin. “A Fair Fare Affair.” Inside Higher Ed 10 Feb. 2012. Web. <http:// www.insidehighered.com>. 22 City of Boston. Mayor’s PILOT Task Force: Final Report & Recommendations. 2010. PDF file. 23 City of Boston. Assessing Department. PILOT Requests for FY 2012. Updated 2012. PDF file. 24 Memorandum of Agreement by and between the City of Providence and Brown University. 2012. PDF file. 25 Fischer, Karin. “Brown U. to Pay Its Hometown $31.5-Million to Help Close Budget Gap.” Chronicle of Higher Education. 1 May 2012. Web. <http://chronicle.com>. 26 Memorandum of Agreement by and between the City of Providence and Brown University. 2012. PDF file. 27 “Brown & Providence: Taxes, Voluntary Payments & Fees.” Brown University. Web. <http://brown.edu/ web/providence/taxes.html>. 28 City of Ithaca. 2012 Mayor’s Budget Narrative. 2011. PDF file. 29 City of Ithaca. 2012 Mayor’s Budget Narrative. 2011. PDF file. 30 Grace-Kobas, Linda. Cornell President Jeffrey Lehman proposes a new agreement for contributions to the City of Ithaca at his first Inauguration Day event. Cornell News. Cornell University, 16 Oct. 2003. Web. <http://www.news.cornell.edu/releases/Oct03/inauguration.City.mou.lgk.html>. 31 City of Ithaca. 2012 Mayor’s Budget Narrative. 2011. PDF file. 32 U.S. and Canadian Institutions Listed by Fiscal Year 2011 Endowment Market Value and percentage Change in Endowment Market Value from FY 2010 to FY 2011. National Association of College and University Business Officers and Commonfund Institute, 2012. PDF file. 33 “State & County QuickFacts.” United States’ Census Bureau. U.S. Census Bureau. <http://quickfacts.census.gov/qfd/index.html>. 34 2010 Profile of Town of Ithaca (including the village of Cayuga Heights). Pub. Tompkins County Youth Services, 2011. PDF file. 35 “Municipalities.” Division of Elections. New Jersey Department of State. <http://www.njelections.org/2011-legislative-districts/towns-district.pdf#page=8>. 36 “Search for Schools, Colleges, and Libraries.” National Center for Education Statistics. U.S. Department of Education. <http://nces.ed.gov/globallocator/>. 37 “Search for Schools, Colleges, and Libraries.” National Center for Education Statistics. U.S. Department of Education. <http://nces.ed.gov/globallocator/>. 38 Grace-Kobas, Linda. Cornell President Jeffrey Lehman proposes a new agreement for contributions to the city of Ithaca at his first Inauguration Day event. Cornell News. Cornell University, 16 Oct. 2003. Web. <http:// www.news.cornell.edu/releases/Oct03/inauguration.city.mou.lgk.html>. 39 Tompkins County. Department of Assessment. Cornell and Ithaca College – Assessment Data, March 2012. Excel file. 40 Skorton, David J. “Community Leaders Brunch.” Statler Hotel Ballroom. 7 Oct. 2007. Speeches and Essays. Cornell University Office of the Provost. Web. <http://cornell.edu/president/speeches>. 41 Lowery, George. “Golding hails new era of town-gown cooperation with $20 million CU investment in Ithaca, Tompkins County.” Chronicle Online. Cornell University, Division of University Communications, 10 Oct. 2007. Web <http://www.news.cornell.edu/>. 42 2012-2013 Operating & Capital Budget Plan. Division of Planning & Budget, Cornell University. PDF file. 43 Camuti, Liz. “After Pause, Pay for Cornell Professors Rises.” The Cornell Daily Sun 18 Apr. 2011. PDF file. Cornell University Ithaca Campus Local economic snapshot - 2018 23,263 Students 9,870 Employees $986 million Payroll $221 million Student spending $75 million Visitor spending $178 million Purchasing in Tompkins County and adjacent counties (by location of vendor). $53 million Construction spending in Tompkins County and adjacent counties (by location of prime contractor). $7.93 million Local contributions to governments, Ithaca City School District, non-profit organizations, and public transit support. $3.6 million Property taxes generated (school taxes $2.3 million, municipal taxes $1.3 million). Taxes paid on Cornell-related properties rank third in Tompkins County. $3.5 million Municipal fees (water, sewer, storm water $2.5 million; other $1 million). Cornell operates its own water system for most of the campus and serves as a backup to municipal water systems. $334 million External federal, state and corporate research funding spent locally. 40%/$750,000 Cornell United Way’s share of countywide campaign, and Cornell goal. $22 million Venture capital raised in 2018 by the companies of Rev: Ithaca Startup Works, founded by Cornell (with Ithaca College and Tompkins Cortland Community College). Rev companies created 81 new local jobs in 2018. $13.9 million Venture capital and investments raised by Cornell’s McGovern Family Center for Venture Development’s Ithaca-based clients in 2018. These companies have created 17 new local jobs in 2018. NOTE: Numbers for students, employees, and payroll are for Cornell’s Ithaca Campus only.