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A new City Council will face big challenges 

Rochester's city government will enter 2018 with a major change in its legislative branch. A third of City Council's nine members will be new. And Council will be losing a lot of institutional memory: two of the three members who are leaving – Carolee Conklin and Dana Miller – have each served on Council for 12 years.

Each of the newcomers brings valuable experience. Mitch Gruber is program director at Foodlink and has served on the Governor's Council on Hunger and Food Policy. Willie Lightfoot is a former County Legislator and has deep experience in community work in the city's southwest area. And Malik Evans has served on the Rochester School Board since 2004 and was its president from 2008 to 2013.

City Council President Loretta Scott said last week that she expects "a very smooth transition." Since two of the three newcomers have prior legislative experience, "there will not be as much of a learning curve," she said.

Nonetheless, the newcomers will be joining a Council with a lot on its plate, in a time of big challenges.

City officials start work on Rochester's new budget soon after the first of the year, and Conklin, who chairs Council's finance committee, says they "generally face a structural deficit," right at the outset.

Finding ways to close that deficit and meet the city's growing needs is never easy, but next year may be a particularly stressful one for cities like Rochester. While government officials are still analyzing the full impact of the new federal tax legislation, it seems clear that it will put more pressure on New York's cities.

The budget won't be the only issue facing the new Council. Among the others:

Possible changes in Mayor Lovely Warren's administration. Like some of her predecessors, Warren asked all department heads to submit their resignation. That kind of action is often merely a formality; it doesn't necessarily mean they won't be rehired. But Warren could want to make some changes, and if so, Council would have to approve them.

Police oversight. In response to police-reform pleas, City Council has started scrutinizing the current oversight system, in which police officers investigate citizen complaints about police conduct. Reform activists have pushed for independent investigations of complaints.

Scott's goal is to have Council act on some kind of reform in the spring. And she said last week that she hopes Council will "pull together at least a proposed restructuring" early in the new year to present to the public for comments. "I think we'll have at least the skeletal plan," she said.

Parcel 5 of the former Midtown Plaza property, which fronts on Main Street directly across from the Sibley Building. The site's future has been the focus of protests since Mayor Lovely Warren first recommended a development plan submitted by the Rochester Broadway Theatre League and Morgan Communities for a new theater and an apartment building at the rear.

The city owns the land, and City Council has to approve its sale. After Warren's announcement last April, RBTL and Morgan were to flesh out their proposals and give Warren their final plans – including their financial plans. If they were satisfactory, Warren would then ask Council to sell the land.

So far, that hasn't happened. And Morgan got some negative publicity in September, when the Buffalo News reported that the FBI was investigating a Morgan project there. Since then, Rochester's City Council turned down a request to loan Morgan $1.5 million for an apartment building at the corner of Court Street and South Avenue.

Council members said that the FBI investigation didn't influence their decision on the Court Street project. Instead, they said, they were concerned about the building's small amount of affordable housing and why the loan request came up so late in the project's development. Still, concerns about Morgan could seep into city officials' deliberation about the proposal for Parcel 5.

Also an issue – and it's a big one – is whether the RBTL project has enough financial support. Paychex founder and philanthropist Tom Golisano pledged $25 million, and RBTL president Arnie Rothschild has been seeking additional support, both public and private. But there've been no announcements about funding commitments since Golisano's.

Rothschild has said he hopes for some state funding, but that may be harder to get, given the governor's concerns about the impact of the federal tax bill on New York State. And local officials are likely to be skittish about any local government funding – and about assuming risk with additional big projects, given the financial problems experienced by the Rochester Rhinos.

What should happen if the RBTL-Morgan proposal isn't fleshed out satisfactorily? Leave Parcel 5 undeveloped for a while, says retiring Council member Carolee Conklin. After several years of rapid development downtown, Conklin says, the city needs to let downtown "shake out": let the new developments get completed, fill up, and see what else is needed.

The feds' impact

on Rochester

Rochester has benefitted from a variety of federal funding programs, particularly in the areas of community development and infrastructure. "Most of the work on the Inner Loop was paid for with federal dollars," notes City Council's finance committee chair Carolee Conklin.

Early versions of the Republican tax bill contained serious threats to some of those sources. "There's a great deal of concern and uncertainty," City Council President Loretta Scott said late last week, as it became obvious that the federal legislation would pass. "We're concerned that it may significantly affect our ability to do the kind of projects we've done in the past."

Negotiations seem to have saved some of that help, including tax credits for low-income housing and infrastructure. The final version of the bill also preserves the historic tax credit, which spurred redevelopment of numerous Rochester buildings. But the credit will have to be spread out over five years rather than being used in the first year, which may discourage some developers.

Also still a concern: changes related to the refinancing of municipal bonds. Governments do that to take advantage of lower interest rates, and Rochester finance director Charlie Benincasa points to a refinancing in 2016 that saved the city $2.2 million. The final federal tax legislation still permits the refinancing, but it places restrictions on it and, says Benincasa, "it reduces our flexibility."

City officials are particularly worried about the changes in state and local tax deductions. The final bill allows deductions up to $10,000, but that cap will hurt owners of more expensive homes, including those in Rochester. And that could discourage home-buying and lower property values.

It will also result in those homeowners paying higher taxes, which may cause them to press city, town, and state governments to lower local tax rates. And that would mean less money for vital services in cities like Rochester, and for its school district.

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