For Sale: Mt Hope Cemetery
City officials hope to turn over operations of Mt. Hope and Riverside cemeteries to a private entity and eliminate a $1 million-plus annual operational subsidy.
The city is seeking proposals from a private operator to manage and maintain both properties, meaning the firm would handle sales and marketing, building and grounds maintenance. Proposals are due Jan. 8, and the city plans to select a consultant by month’s end — if such a deal makes sense.
Why?
“We have to go through the process and see which proposal is in the best interest of city taxpayers and city residents,” city Budget Director Bill Ansbrow said, noting that a similar analysis is being made of emergency medical service as the city seeks ways to offset rising pension costs and losses in state aid.
So, we are talking about rising pension costs and 20 positions coupled with reductions in State Aid not offset by growth in an annuity stream. A stream designed to pay the operating costs of a million dollars per year.
Subsidy of cemetery operation has ballooned from $147,443 in 1999-2000 to a budgeted $2.4 million in the current fiscal year. The subsidy includes $1.5 million toward a $4.6 million Riverside Cemetery Chapel of Peace. The project marks the next phase of the mausoleum complex and would include both a chapel and a mausoleum, to be constructed in 2010-11. Meanwhile, earnings from a $6.6 million perpetual care fund have fallen from $352,000 to a currently budgeted $18,200.
“Unfortunately the cemetery business, as all business right now, is affected by the economy,” said Richard D. Fishman, director for the state Division of Cemeteries.
A couple of questions
Why are pension costs rising? I mean it isn’t like the cemetery division is growing. There are only 20 people. What financial structural “thing” is causing pension costs to grow? Growth to the point where they can’t be sustained?
What did the annuity invest in? Why has the annuity stream been reduced? Risky investments?
Finally, what exactly is gained by selling the cemetery other than shifting the labor cost on to someone else’s books. We will still pay for the service. This seems like we are selling a a crown jewel to offset budget gaps. Dare I say it a one shot wonder?
I hope a lot of analysis goes into this deal. Analysis that focuses on the long term as opposed to the short term.
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The issue concerning pension expense for cemetery workers is the same one every municipality in NY is currently facing. In the coming years, pension contributions made by every city, town and village in NY will have to rise considerably to meet shortfalls in the pension funds invested at the state level, caused by the stock market decline and underfunding during the years of financial boom.
The reduced income stream from the cemetery care fund is probably a function of the extremely low interest rates, especially for very high grade short term government bonds. New York municipalities are required to invest surplus funds only in the highest grade investments, which is why you don’t hear stories about cities in NY going bankrupt because they were being suckered by snake oil financial managers the way you do in some other less regulated states, but we also suffer when interest rates are as low as they are now.