Economic Downturn Hitting All Facets of Local Community

Business, Government, Social Agencies & Residents Impacted

by Harold Wolfson; photos by John Gitlitz

(September 18, 2008) The nation’s economic downturn is hurting local businesses, government, social agencies and residents, the Local Summit was told at its September 16 meeting at the Nautilus Diner in Mamaroneck.

As meeting chairman Bruce Schearer called upon speakers, it became apparent that very few had good news to report. One irony did emerge and that was that the county and local municipalities have experienced some increase in sales tax revenues this year from rising oil and gas prices. But this benefit is being offset by requests for winter heating aid from hard-hit families.

The meeting drew an oversized, engaged audience which was reluctant to end the discussion by the official 9:15 am meeting close.

Business Loans Are Scarce

Jeff Rosenberg, a Citibank business loan officer, said that in his personal view, “People are concerned about their investments. There is nervousness in the small business community. It is more difficult for small businesses to get capital and some often can’t get short-term money to cover cash flow needs.”

It has been a slow summer for many local businesses and they are looking forward to November and December to make them whole, he said. “Some are worried about their very existence.”

Mr. Rosenberg has been working with a small group of local business owners to restart a Larchmont Chamber of Commerce which will provide a forum and structure for local businesses to help each other. He hopes the new organization will be in operation by late October. Larchmont Mayor Liz Feld urged all citizens to shop locally.

Government Seeks to Maintain Services

Steve Altieri, Town of Mamaroneck manager, said local governments have gone through economic downturns before and their main goal is to “maintain consistency” in providing essential services. “People rely on local government more in times like this,” he said.

Mr. Altieri noted that property tax income is volatile and the Town’s mortgage tax revenues and investment income are down. With many items, such as heating oil becoming more expensive, there is great pressure on the expense side of the municipal ledger.

Mamaroneck Village assistant manager, Robert Yamuder, concurred and observed that this was a time to keep municipal costs down. He noted that the upcoming completion of the Village’s new fire house will allow the Village to combine two fire companies, a move that will save money. He also reported that the price for wind-generated energy was declining. Mamaroneck Village now receives 10% of its energy from upstate windmills and hopes to double that percentage next year.

Mr. Yamuder said one of the big opportunities for keeping costs down is ongoing and future shared services with Larchmont and Mamaroneck Town. This was seconded by Mamaroneck Town Supervisor Valerie O’Keeffe and Larchmont Mayor Liz Feld.
Ms. O’Keeffe said that the Town planned to be “very careful about adding new programs” that would require funding. “We have to take a holistic approach to what we spend so that we can maintain existing services.”

Request for Social Service Aid Is Up

Anna Dannoy (at left), who supervises social services for both Mamaroneck Town and Mamaroneck Village, said that there were growing problems for families earning less than $50,000 to $60,000. She has been receiving increasing requests to help pay family food bills. Some families are being forced to choose between buying food and paying for medicine or the utility bill. “We will see more of this,” she said.
Normally she receives one or two applications a month for housing assistance, but in the last six weeks she has received 22 applications.

Mariana Boneo, executive director of the Hispanic Resource Center, said that a year ago at this time her agency had provided assistance to 700 clients. This year the agency has already served 1200 clients. “Not all of these are immigrants,” she said. “More people from the over-all community are coming for help.” She urged her fellow social agency representatives to work together to save money by reducing duplicate services.

Kate Bialo, founder of the Furniture Sharehouse, said her agency is seeing an increase in requests for furniture, but her inventory is down. “There is less redecorating going on,” she said. “People today are less likely to throw out usable furniture.”

Sluggish Home Sales; Tighter Credit; Government Cuts & Increased Need

Additional speakers attested to the impact of the credit crunch and the economic slowdown.

• Cary Sleeper, of Sotheby’s, said that while the sky was not falling in real estate, sales had slowed. In the last six months there were 135 single home sale transactions in the Mamaroneck Union Free School District, he said. During the same period a year ago, there were 162. Transactions in high-end houses, those over $1.8 million, have been sluggish. “There has not been selling or buying. These are people who are uncertain about their jobs and bonuses.” But looking on the bright side, he said, by April next year, if credit markets improve, real estate activity will get better. “There will still be babies born in Manhattan whose parents will want to move to Mamaroneck and Larchmont.”
  
  
• Mitchell Steinberg, a home mortgage specialist with Wells Fargo, said that he no longer listens to CBS business news as he drives from Larchmont to his office in White Plains. “It creates too much anxiety,” he said. Until fairly recently almost anybody could get a mortgage, he noted. But now much of the mortgage market has seized up. This is not only bad for consumers, it’s bad for those banks, because selling mortgages is how they make money. Still, he said, “there are a number of large national banks as well as good local institutions that are well capitalized and will offer mortgages.” But qualifications have stiffened. Borrowers need good credit, proof of good income and enough cash for a 15 – 20% down payment. Also, house appraisal values have tightened, becoming “more conservative and realistic.”
  
  
• Judy Myers, Westchester County legislator, reported that the County has seen the economic writing on the wall and has taken action. “Every County department has had to cut back 10%,” she said. Also, there is a plan afoot to reduce employment through attrition by 4%. “Our offices and hallways are darker now as we use fewer light bulbs. You’d be surprised --- it makes a difference.”
  
  
• George Latimer, NYS Assemblyman, said that the state’s income depended on “wealth and transactions,” and both have decreased. As a result, schools and other organizations which depend on state grants will suffer, he said. Severe budget cuts have been made and “next year’s budget will be even worse.” He predicted next year’s budget may be cut by $3 to $5 billion.
  
  
• Richard Allen, pastor at Mamaroneck United Methodist Church, said there was a good deal of anxiety among parishioners about jobs - some real and some hyped. “But perception is reality,” he said. He also noted that non-profits he observed were facing the prospect of lower funding.
  
  
• Jeremy Ingpen, executive director of the Washingtonville Housing Alliance, said that his organization had completed its annual funding cycle in good shape and had a fund of $20,000 to help those in need of winter heating assistance. He said that housing foreclosures have hit this area and his agency has set up a program to help victims. He noted that United Way 211 provided foreclosure guidance as did the Westchester Residential Opportunities Office. He said he personally has increased his knowledge of bankruptcy and is in a position to counsel residents on protecting assets and negotiating with banks. He noted wryly that residents will be helped by the reality that many banks have lost title to properties because many of the mortgages have been chopped up (securitized and sold off).
  
  
• Carol Cauley, executive director of the Food Pantry, said that her organization has accumulated sufficient savings for one year of operations. There has been a 12% increase in families served so far this year. New clients come to every session. Also many clients who formerly came once a month for food now come twice a month. Currently, 260 families with about 350 children are served during the two days a month the pantry is open.

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