Gotham Gazette http://www.gothamgazette.com/component/tags/tag/108 Wed, 24 Apr 2019 10:36:50 +0000 en-gb webmaster@gothamgazette.com (Webmaster) Uncertain Future for Secretive State Pork Program Tied to Renegade Democrats http://www.gothamgazette.com/state/8461-uncertain-future-for-secretive-state-pork-program-tied-to-renegade-democrats http://www.gothamgazette.com/state/8461-uncertain-future-for-secretive-state-pork-program-tied-to-renegade-democrats cuomo klein via gov

Cuomo and Klein (photo: governor's office)


Few New York residents have probably heard of the State and Municipal Facilities Program, or SAM, but in recent years, it has been one of the top avenues by which state lawmakers “bring home the bacon,” providing many millions of dollars in funding for district projects. Otherwise known as “pork,” these projects include things like new or renovated parks, schools, libraries, and more, with far greater funding going to legislators based on their political power.

However, in this year’s recently-adopted state budget, there are no new appropriations for SAM. And SAM is also different because it is lump sum appropriation, with specific project funding decided outside the budget process by the governor and legislative leaders.

Started in 2013, SAM is a creation of Governor Andrew Cuomo and legislative leaders. It is controlled by the Dormitory Authority of the State of New York (DASNY), one of the state’s many public-benefit corporations, responsible for assisting state and local governments, as well as non-profits and colleges, with construction, financing, and other services. Currently-planned SAM projects include everything from renovations to the Brooklyn Public Library to creation of a skateboard park in Albany to new fire trucks and patrol vehicles in Poughkeepsie.

DASNY’s board consists of five gubernatorial appointees, an appointee from the President of the State Senate, another from the Assembly Speaker, and four ex-officio members: the State Comptroller, Education Commissioner, Health Commissioner, and the Budget Director.  The health commissioner and budget director are both appointed by the governor and the education commissioner is appointed by the state’s Board of Regents.

The program has long been criticized as an unnecessary discretionary fund -- in other words, a politically advantageous “slush fund.” SAM is one piece of the state’s larger capital budgeting, mainly for construction projects.

In his assessment of the 2018 state budget, Comptroller Tom DiNapoli criticized “the state's use of lump-sum appropriations that leave broad discretion for use of funds with limited disclosure.” He specifically cited SAM, which received a 25% increase in appropriations that year, saying “the need for additional discretionary spending authority was not made clear.”

Criticism has also come from good government and fiscal watchdog groups. E.J. McMahon, research director for the Empire Center for Public Policy, said last year that state lawmakers were “basically like teenagers with credit cards” when it comes to using SAM.

“It’s just pork. There is nobody even pretending that there is statewide importance to any of these,” McMahon told The Buffalo News. “There is no process. No airing. There’s complete discretion.”

David Friedfel, the director of state studies for the Citizens Budget Commission, told Gotham Gazette “these lump sum appropriations are not a wise investment of state resources. The allocations are a product of political expediency instead of a thorough analysis of the state’s needs. It’s nice for the communities that receive these grants, but the state taxpayers shouldn’t be footing the bill.”

Surprisingly, in this year’s state budget, there were no new appropriations for SAM. However, Friedfel notes that state lawmakers “have not allocated all of the money previously appropriated so they may have decided to just spend down existing appropriations this year.” There still remains over $1.9 billion in SAM appropriations that have gone unspent since the program’s creation in 2013, and that money is carried over into the new fiscal year 2019-2020 budget that took effect April 1 of this year.

As of April 8, 2019, there are over 1,800 grants currently administered by DASNY under SAM that amount to over $900 million in planned spending. This leaves a little over a $1 billion in discretionary funds for state lawmakers to access, which is more funding than SAM has ever spent in a single year.

Freeman Klopott, a spokesperson for the state’s Division of the Budget, which is under the governor, said in a statement “there were no capital additions to the Budget and, as we have said already, additional capital funding will be addressed in June at the end of legislative session when we have a better sense of the State’s fiscal picture.”

There has been little indication from Albany leaders if there will be additional SAM funding in the capital budget when it is decided. The state’s current fiscal outlook, the availability of reappropriated funds, and the demise of the Independent Democratic Conference (IDC) all appear to make additional SAM appropriations unnecessary or unlikely.

The program’s 2013 introduction coincided with the first state budget following the 2012 state legislative elections, in which Democrats won a majority of State Senate seats. However, the IDC partnered with Senate Republicans to maintain the Republican-led majority. The addition of a new discretionary spending program a few months after the deal was struck was suspicious to many. There has been reporting to indicate, as well as widespread belief, that Governor Cuomo, now a third-term Democrat, preferred and encouraged the creation of the IDC and its coalition with Republicans.

SAM was utilized over the years to benefit members of the IDC handsomely, while the funding also benefited Senate Republicans and Assembly Democrats.

Several years after its creation, in the 2018 budget, an additional $90 million was added to SAM’s annual appropriations. This was a few weeks before the IDC’s dissolution -- a deal Cuomo brokered -- and five months before that year’s primary elections, when six of the eight IDC members were defeated by Democratic challengers.

Former State Senator Jeff Klein, who had been the leader of the IDC, was one of the primary beneficiaries of SAM projects before his loss to Alessandra Biaggi in the 2018 state legislative elections. A 2015 article in Politico New York explained “Jeff Klein’s alliance with Republicans has paid off.” Klein received almost $12 million in earmarks, much of which came from SAM, over three years between 2013 and 2015, according to Politico. Klein’s earmarks were triple that of any other state senator at the time, though other members of the IDC also reaped significant benefits, as did other legislators.

In an April 1 interview with WAMC Northeast Public Radio, Cuomo acknowledged that the capital budget and capital projects were not “fully included” in the recently-passed state budget. He said that “we have to negotiate on the capital side and we’ll do that in the coming weeks.” He also reiterated that the state’s $150 billion infrastructure plan “is the most aggressive infrastructure plan in the United States of America.”

While Cuomo’s major infrastructure projects continue apace, it is unclear what the fate of the SAM program will be, whether the reallocated money will be spent down or whether new money will be added.

On April 12, Cuomo issued 123 line-item vetoes to cut $44 million in capital spending added by the Legislature, in order “to maintain a properly balanced budget,” the governor wrote, and for technical reasons, such as being duplicative or were unnecessarily held over from several years prior.

While SAM is among the largest sources of funding legislators can use for capital projects in their districts, it is not the only source. And according to Friedfel, the final state budget also took out a provision that would have given the state’s inspector general greater oversight of discretionary spending.

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by Andrew Millman, Gotham Gazette

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Uncertain Future for Secretive State Pork Program Tied to Renegade Democrats Thu, 18 Apr 2019 04:00:00 +0000
City Council Fire Department Proposals Don't Match Need for Reform http://www.gothamgazette.com/130-opinion/8455-city-council-fire-department-proposals-don-t-match-need-for-reform http://www.gothamgazette.com/130-opinion/8455-city-council-fire-department-proposals-don-t-match-need-for-reform mayorcommappleton

(photo: Michael Appleton/Mayoral Photography Office)


Last week the City Council presented its response to Mayor de Blasio’s preliminary budget for the fiscal year that begins on July 1. It proposes to add $1.5 billion in annual operating expenditures and more than $1 billion in capital spending to the budget proposed by the mayor. Among the proposals are four that would significantly increase spending on the Fire Department and for which there is no clear justification other than political expediency. Two of them would not only be expensive, but would undermine provisions of contracts agreed to through collective bargaining.

First, the Council would add a fifth firefighter to 20 engine companies across the city. Most fire engines are staffed with four firefighters as is the practice in most fire departments across the country.

The 2015 contract with the Uniformed Firefighters Association (UFA) added a firefighter to 20 companies to be phased in over four years, in exchange for agreement that the absentee rate be kept below 7.5 percent. High absenteeism has been a problem at the FDNY, which contributes to high overtime expense.

The trade-off of adding staffing (and hence, new hires) while offsetting some of the cost through reduced absenteeism is exactly the type of mutually-achieved productivity measure that the de Blasio administration proudly touts as part of its approach to labor relations.

Yet last December, when the fifth firefighter was taken off the engines because the absentee rate rose over its agreed cap, the UFA complained vehemently. The mayor reinstated the staffing after there were media reports about the disagreement. Now, the Council proposes adding another 20 firefighters without any linkage to the absentee cap. The location of the engine companies to be increased and/or criteria for making these additions is not specified by the Council.

It is certainly true, as the Council notes, that FDNY call volume has been rising, but the calls are not for fires for which an additional firefighter to stretch out water hoses would be deployed, but for medical emergencies.

Less than 2% of all calls answered by the FDNY city-wide are for fires. The vast majority of calls are for some kind of medical situation. While engine companies answer most of these calls because they can get to them most quickly, they cannot administer most medical services or transport sick people to the hospital, so an ambulance usually must follow the fire engine to these incidents. Therefore, an additional firefighter does nothing to improve or increase response to the vast majority of fire engine runs as the Council implies.

The additional staff would effectively repeal a labor contract provision. Would the Council ever propose to legislatively overrule a contract provision that is regarded by a union as favorable to its interests? Doubtful.

The FDNY most definitely needs to rethink and reallocate staff to adapt to the fact that it has become primarily a medical-emergency, not a fire-fighting, organization. The last thing it needs is more staff who are not trained to administer to medical needs, hired to increase headcount and the number of UFA members. Not only should the mayor reject this proposal, he should direct the Fire Commissioner to re-institute the contractual link between the current five-staff engines and the absentee rate.

Second, the Council wants to add $17 million in capital funding to establish a third EMS station on Staten Island. But EMS runs for life-threatening incidents have grown less on Staten Island than in any other borough over the last year.

Nor is there justification for creating a $32 million firehouse in Hudson Yards. The UFA has been advocating for a station in this new neighborhood since work on the development began. There are EMS ambulances posted in the area and three fire stations nearby. All of the brand new buildings in Hudson Yards have the latest fire safety technology and there is no reason to expect significant increases in fire calls in the area, yet the Council and the UFA want to allocate 45 new permanent firefighter positions, adding more than $4 million to annual FDNY personnel costs.

Finally, there is a call to “re-evaluate public sector wages across the board and plan to correct disparities.” Among the “egregious” disparities noted are those of emergency medical service technicians and paramedics who earn less than firefighters. The Council calls on the FDNY to reset wage rates for its workers.

No cost estimate for this recommendation is included but raising all EMTs and paramedics to the same salaries as firefighters with the same years of service would cost an additional $67.5 million a year, plus an additional $10.5 million in additional costs for increased pension and payroll tax contributions, according to Citizens Budget Commission. This magnitude of expense should not be imposed outside the collective bargaining process, during which other issues like potential productivity offsets can be taken into account.

It is true that the lower salaries and higher workloads of EMTs compared to firefighters are contributing to relatively high overtime and staff turnover. The FDNY needs to be re-engineered to acknowledge and improve its primary function as a medical emergency service; simply paying EMTs and paramedics much more would just be a band-aid on a larger problem, and a very expensive one.

New Yorkers respect and appreciate the valiant service of our firefighters and our emergency medical service personnel. It is possible that some or all of the additional costs of the Council’s proposals could be offset by reducing unneeded, expensive fire stations, and bills introduced by Council Member Joseph Borelli to require ongoing evaluation of the impact of new development on EMS service would provide real data upon which to base future resource allocation decisions. But the Council’s reaction to changed conditions in its budget response is solely to spend more on everything.

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Carol Kellermann was president of Citizens Budget Commission from 2008 through 2018.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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City Council Fire Department Proposals Don't Match Need for Reform Tue, 16 Apr 2019 04:00:00 +0000
What's The [Data] Point? $175.5 Billion, Breaking Down the New State Budget http://www.gothamgazette.com/state/8416-what-s-the-data-point-175-5-billion-state-budget http://www.gothamgazette.com/state/8416-what-s-the-data-point-175-5-billion-state-budget whats the data point


What's The [Data] Point? Episode 70 -- $175.5 billion, Breaking Down the New State Budget, with Dave Friedfel and Patrick Orecki of CBC [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

cuomo state budgetNew York State has a brand new $175.5 billion budget for the fiscal year that began April 1. Citizens Budget Commission experts Dave Friedfel and Patrick Orecki joined the podcast to break down the new spending plan and what it means, from congestion pricing to new taxes to education aid and more.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

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What's The [Data] Point? $175.5 Billion, Breaking Down the New State Budget Tue, 02 Apr 2019 04:00:00 +0000
What's The [Data] Point? 5, with former Deputy Mayor Alicia Glen http://www.gothamgazette.com/city/8386-what-s-the-data-point-5-with-former-deputy-mayor-alicia-glen http://www.gothamgazette.com/city/8386-what-s-the-data-point-5-with-former-deputy-mayor-alicia-glen whats the data point


What's The [Data] Point? Episode 69 -- 5, with former Deputy Mayor Alicia Glen [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

wtdp alica glen deputy mayorAlicia Glen was Deputy Mayor for Housing and Economic Development under Mayor Bill de Blasio for more than five years, until she recently left the administration after being the chief architect of its signature affordable housing plan, a broad variety of economic development initiatives, and more. Glen joined the podcast (for the second time) for an "exit interview" on her legacy as deputy mayor, key issues facing the city and where the city is headed, the city's overall economic competitiveness, the Amazon deal that was undone, NYCHA, whether she would ever run for elected office herself, and other topics.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

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What's The [Data] Point? 5, with former Deputy Mayor Alicia Glen Tue, 26 Mar 2019 04:00:00 +0000
City’s Flawed Capital Project Process the Subject of Renewed Scrutiny, and Some Reform http://www.gothamgazette.com/city/8381-city-s-flawed-capital-project-process-the-subject-of-renewed-scrutiny-and-some-reform http://www.gothamgazette.com/city/8381-city-s-flawed-capital-project-process-the-subject-of-renewed-scrutiny-and-some-reform mayor bdb 200

(photo: Edwin J. Torres/Mayoral Photo Office)


Many New Yorkers know the city has trouble completing construction projects on time and under budget. Projects like school renovations and the build-out of park facilities are capital projects, the subject of increasing scrutiny and some reform, with more promised, as frustrations persist and residents, watchdogs, lawmakers, and other city leaders seek answers.

Top officials from the administration of Mayor Bill de Blasio to City Council Speaker Corey Johnson to Comptroller Scott Stringer have taken a fresh interest in improving the capital projects budgeting and delivery processes. The mayor’s office has released several plans promising to do just that. After forming a new subcommittee on the capital budget last year, the City Council has proposed reforms and Council members have been critical of the city’s handling of capital spending during this month’s annual budget hearings.

Stringer has proposed three city charter revisions to improve accountability, recommendations to a charter revision commission that will soon propose changes to the city’s central governing document.

There are some areas of agreement among the parties involved, but it is currently unclear if there will be any major substantive changes to the current system, wherein the city’s long-term capital budget planning is lacking in transparency and widely seen as unrealistic, and projects are consistently falling behind schedule and over budget.

Much of the recent attention has come through this year’s city budget process. As part of the reviewing the preliminary expense budget put forward by Mayor de Blasio, the City Council also assesses the preliminary capital budget for next fiscal year as well as the ten-year capital strategy.

At the first preliminary budget hearing of this cycle, Melanie Hartzog, the city’s budget director, said that the top priorities for capital projects over the next decade would be education, environmental protection, housing, and transportation.

In two recent hearings and several recently-released plans, city officials have promised to address many of the long-standing issues associated with capital project delivery, including planning, process, and transparency.

“We have doubts,” said Council Speaker Corey Johnson, a Manhattan Democrat, at the Council’s initial budget hearing. Johnson and other Council members raised several issues about the capital budget and the ten-year plan. He said that the latter half of the ten-year plan “does not take into account the city’s needs,” including both its current commitments and new needs that will arise.

Multiple Council members brought up that the ten-year plan does not include any new school construction after fiscal year 2024. Council Member Vanessa Gibson, a Bronx Democrat and chair of the capital budget subcommittee, called this “unrealistic planning” and noted the city’s history of frontloading its ten-year capital plans.

Gibson specifically cited the budget planning for the NYPD’s capital needs. The current proposal allocates $850 million in capital spending for the first three years of the plan, and only $160 million in the next seven. Hartzog acknowledged the history and said that the city is working to improve. Council members did acknowledge some progress in clarity for what is outlined.

In addition to problems with planning, capital delivery from conception to completion has its own set of obstacles. Recognizing the past-due and over-budget trend, the city’s Department of Design and Construction earlier this year released a strategic blueprint that promises to “fundamentally reevaluate the status quo in City capital project delivery.”

As of the time of the report’s release, DDC was managing 834 active projects valued at $13.5 billion. Since 2004, the annual capital budget has grown by $1 billion to $3 billion each year to keep pace with a growing city, which has also added nearly a million jobs in the same period. DDC deals with most city capital projects outside of the School Construction Authority, which is its own entity dealing with its eponymous subject matter. SCA is known to be far more successful in its planning and delivery than DDC.

The blueprint identifies three internal and external impediments within the delivery process, including DDC’s own business practices, burdensome procurement process rules, and the engineering challenges that come with underground infrastructure that “all complicate efficient delivery of capital projects” in the city.

The report also identifies climate change as a necessary factor to consider in all future planning. Capital projects need to both protect the city from rising sea levels and natural disasters as well as minimize the city’s contributions to global warming, according to the report. The agency is under relatively new leadership as it embarks on this ambitious plan. Mayor Bill de Blasio appointed Lorraine Grillo, who has also continued leading the School Construction Authority, as the new DDC commissioner last July. Grillo has been widely praised for her leadership of SCA, including by City Council members, though the city continues to struggle with school space in many neighborhoods.

DDC is currently undergoing an agency-wide review of its practices and external challenges. Through this review, DDC promises to “modernize how we do business.” These modernizing reforms include standardizing project initiation, managing projects more effectively, enhancing management capacity, and updating internal systems and technology. The plan promises to better identify and prioritize needs, streamline procurement, and restructure contracts to promote meeting deadlines, among other improvements.

Contracts and contractor diversity are also a primary concern for the mayor’s office and the Council, they say. DDC wants to get more out of its contracts and diversify and expand the pool of applicants. Daniel Steinberg, the Senior Advisor to the Mayor’s Office of Operations, said that many minority- and women-owned business do not apply for contracts because of the city’s history of untimely payments. This can also dissuade newer and smaller businesses from participating in the bidding process. Timely payment of contracts is a larger issue that DDC is also seeking to address.

During a February joint hearing, the City Council’s finance committee and capital budget subcommittee considered two bills that aim to improve transparency in the capital projects process.

The City Charter mandates certain reporting on the process to the Council and the public, but Council Member Gibson said these reports “often do not relate to one another or the city’s real spending in a meaningful way.” The two bills, which had the support of the Council members present at the hearing, are intended to address these issues. Gibson said that the proposals would give the Council and public “a wholistic and detailed look at all capital projects that are in progress throughout the city.”

The first, Intro. 32, sponsored by Council Member Andrew Cohen, a Bronx Democrat, would require city agencies to provide electronic notification of any delays or cost changes for capital projects. This is very similar to one of the charter revisions that Comptroller Stringer is proposing. The second, Intro. 113, sponsored by Council Member Brad Lander, a Brooklyn Democrat, would create a database to track citywide capital projects. Finance committee chair Daniel Dromm, a Queens Democrat, said that “transparency in the capital process is key to providing assurances to the public that city resources are being put into good use in an efficient and effective manner.”

While most of the hearing focused on these two bills, it was clear that the Council members had larger issues in mind and thought of the bills as first steps to larger-scale reform and improvements.

Steinberg, of the Mayor’s Office of Operations, said during the hearing that his office agreed with the two bills “in spirit,” but was concerned with components of each bill that he would consider to be “impractical.”

He voiced concern that Intro. 32 would require reporting for all capital projects, which includes everything from equipment acquisition (such as of paper shredders) to building or repairing massive water tunnels. In regards to Intro. 113, he said that it “would be incredibly burdensome to implement while providing little new information.”

Intro. 32 currently has ten Council sponsors, while Intro. 113 has 35 sponsors, well above the threshold required for passage in the 51-seat Council.

Nonprofit watchdog Citizens Budget Commission submitted testimony in support of Intro. 113 at the February hearing, saying that “the capital budget is just as important as the operating budget and should be subject to the same monitoring and scrutiny.” Gibson brought up the bills again at the initial preliminary budget hearing.

The two bills are focused on transparency in the capital projects process, but the sponsors and other Council members also contextualized the proposals as necessary for the eventual improvement of the entire system and not a distinct issue of bureaucratic transparency. During the hearing, Cohen said that “the inability of the city to deliver on capital projects is an epidemic.”

Council members frequently expressed their personal frustration with the process and the length it takes for many capital projects to be completed, some spanning multiple Council member terms. Cohen, who is in his second term, said that he “spends a significant amount of my time on projects that were funded by my predecessor.” Gibson similarly expressed frustration over parks projects commonly taking as long as eight years to complete, which presents an oversight challenge to Council members, who are term-limited to eight years in office over two terms.

A source of frustration for Council members was that only capital projects costing $25 million or more are required to be reported on the capital projects dashboard, a publicly-available transparency tool on the city’s website. Capital projects of that size account for only 300 of the over 10,000 ongoing projects for a year. Steinberg said that the Mayor’s Office of Operations would be open to expanding the scope of the dashboard’s reporting to be more inclusive than the current threshold. After learning that the city does not have an employee assigned specifically to data entry for the dashboard, Gibson said that it was evidence that capital projects transparency “is not a priority in this city.”

Another area of agreement between the Council and Comptroller is the need for individual budget line items for each capital project. This proposal was one of Stringer’s suggested charter revisions and Gibson brought it up at both recent Council hearings pertaining to the capital budget. Stringer is also proposing that the city regularly report on the condition of capital assets, a requirement he wants added to the charter.

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by Andrew Millman, Gotham Gazette

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City’s Flawed Capital Project Process the Subject of Renewed Scrutiny, and Some Reform Thu, 21 Mar 2019 04:00:00 +0000
What's The [Data] Point? 202, with City Transportation Commissioner Polly Trottenberg http://www.gothamgazette.com/city/8378-what-s-the-data-point-202-with-city-transportation-commissioner-polly-trottenberg http://www.gothamgazette.com/city/8378-what-s-the-data-point-202-with-city-transportation-commissioner-polly-trottenberg whats the data point


What's The [Data] Point? Episode 68 -- 202, with City Transportation Commissioner Polly Trottenberg [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

polly trottenberg wtdp march 2019New York City Transportation Commissioner Polly Trottenberg joined the podcast to discuss her tenure and approach to managing city streets and transit, as well as her role on the MTA Board. The conversation touched upon street safety and the city's Vision Zero program, getting the city's buses moving again, bike-sharing, parking placard abuse, L-train repair work mitigation plans, and more.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

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What's The [Data] Point? 202, with City Transportation Commissioner Polly Trottenberg Thu, 21 Mar 2019 04:00:00 +0000
What's The [Data] Point? 4.7 MPH, Traffic & Transit with Nicole Gelinas http://www.gothamgazette.com/city/8358-what-s-the-data-point-4-7-mph-traffic-transit-with-nicole-gelinas http://www.gothamgazette.com/city/8358-what-s-the-data-point-4-7-mph-traffic-transit-with-nicole-gelinas whats the data point


What's The [Data] Point? Episode 67 -- 4.7 MPH, Traffic & Transit with Nicole Gelinas [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

wtdp nicole gelinasNicole Gelinas of the Manhattan Institute is an expert on New York City transit, street use, and traffic. She joined the podcast to discuss her recent report on "decongesting" New York City, MTA improvement, and how to get New York moving again.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

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What's The [Data] Point? 4.7 MPH, Traffic & Transit with Nicole Gelinas Thu, 14 Mar 2019 04:00:00 +0000
Charter Revision Commission Hears Expert Testimony on City Budgeting and Contracting http://www.gothamgazette.com/city/8352-charter-revision-commission-hears-expert-testimony-on-city-budgeting-and-contracting http://www.gothamgazette.com/city/8352-charter-revision-commission-hears-expert-testimony-on-city-budgeting-and-contracting mbdb execb

 (photo: Edwin J. Torres/ Mayoral Photo Office)


The 2019 Charter Revision Commission, which is looking at ways to improve the city’s central governing document, heard suggestions on Monday from community-based organizations, fiscal watchdogs, and former and current city officials about potential changes to the city’s byzantine budgeting process.

Over the course of more than three hours, experts weighed in on the city’s flawed contract procurement system, the severe lack of transparency in spending on capital projects, the possibility of creating a rainy day fund for the city, and measures to generally improve accountability in city spending. There was general agreement that city procurement needs to be overhauled to make it more efficient and transparent, but broader opposition to changes in the budgeting process and the administration’s ability to set revenues and expenditures.

The city’s budget and budgeting processes are one of four areas of focus for the commission, which will sift through the hours of testimony it has heard, and has yet to hear, before releasing a draft of ballot proposals sometime next month. The proposals will go through another round of public input before the final questions are approved in June. The proposals will then be presented to voters on the November election ballot. The commission has already held hearings on elections reform, exploring issues such as ranked-choice voting, redistricting and campaign finance improvements, and another on police accountability measures. The next hearing is scheduled on Thursday, where the commission will look at issues involving finance and governance including the city’s pension system, a Chief Diversity Officer proposal, and issues around corruption and conflicts of interest.

City Contracting
At Monday’s hearing, there was broad consensus from those within and outside government about how the city’s contracting process works, or rather, doesn’t. Advocates representing human-service nonprofits, which receive most of their funding from the city, bemoaned the now well-known sorry state of the system, with contracts delayed for months, threatening their financial security and their ability to provide uninterrupted services. Unlike private contractors, they cannot cancel the services they provide, advocates said, since they fill the gaps where the city is not meeting the needs of vulnerable New Yorkers. “We’ve entered an era for nonprofits that’s very dangerous,” said Janelle Faris, executive director of Brooklyn Community Services.

Michelle Jackson, deputy executive director of the Human Services Council, which represents more than 100 nonprofits, noted that the city spends $6.5 billion on human services each year, which also allows nonprofits to leverage state and federal funding and philanthropic dollars. “We’re an economic engine,” she said. “The sector nationally is larger than the airline industry yet we do not treat nonprofits the same way we treat airline executives.”

Jackson recommended several measures to improve procurement including established contracting timeframes, interest or other penalties on late payments by the city, and more detailed annual reporting in the Mayor’s Management Report, which tracks performance indicators for city services. Marla Simpson, a former director of the Mayor’s Office of Contract Services (MOCS), however, said financial penalties may not be effective and the best solution may be to name-and-shame agencies for their failures. “Transparency and sunlight is a much more important cure,” she said.

Officials from the comptroller’s office and the Mayor’s Office of Contract Services concurred that city contracting is inefficient though they outlined steps they have already taken to improve it and promised that improvements are slowly coming to fruition. “I agree that New York City’s procurement must be overhauled,” said Daniel Symon, acting director of MOCS, in his opening statement. “Reliance on paper, a patchwork of siloed agency systems and a sometimes necessarily risk-averse culture combine to limit achievable results.”

Lisa Flores, deputy comptroller for contracts, said the procurement system is “notoriously slow, bureaucratic and opaque,” and leads to delays that increase project costs for city vendors, which end up being passed on to taxpayers. She noted, for instance, that in fiscal year 2018, 80 percent of all new and renewal contracts submitted to the comptroller’s office for registration came in after the start date (40 percent of those contracts were late by six months or more) and for human services contracts, the number increased to 89 percent. She called for more transparency and accountability, particularly by setting specific timelines for agencies to submit contracts. Currently, the city charter only requires the comptroller’s office to register contracts within a timeframe.

The commissioners recognized that procurement reform is an age-old issue. “I was on the City Council 20 years ago and we were having the same discussions,” said Commissioner Stephen Fiala, though he expressed doubts about imposing penalties on agencies for late submission of contracts. Other commissioners pressed the expert panel on oversight at agencies and the institutional issues with procurement.

Flores suggested more outward transparency for the process and establishing metrics to track whether agencies are working in a timely manner. Symon, though, was wary of creating timelines for agencies that could potentially allow them to delay their work or lead to clashes with vendors. “What I don’t want to do is start with an arbitrary time-frame when we don’t know how fast it can be,” he said. Both agreed that the contracting process needs to be more structured and predictable, with vendors being able to track the progress of their contracts in real time. A time-frame, Flores said, would be an important first step. Advocates agreed.

City Budgeting
There was similarly consensus on the subsequent panels where experts testified on the city’s expense, revenue, and capital budget procedures. But rather than agreeing on ways to improve the budget, they mostly were on the same page in warning the commissioners to be careful about interfering in what is already a strong fiscal management system.

“Changing our fiscal discipline practices will cause unintended and perhaps adverse consequences,” said Chuck Brisky, deputy director for expense and capital coordination for the Mayor’s Office of Management and Budget. He opposed any shift in responsibility for the city’s revenue forecast, which is set by the mayor. Brisky said the mayor is accountable to New Yorkers for providing services and so must be responsible for setting the revenue projections that funds those services.

“If the budget isn’t balanced by even one-tenth of one percent at our current revenue and spending level, the city could lose control of its finances to the Financial Control Board under the Emergency Financial Act,” he said. The state, he noted, doesn’t have the same stringent budget and accounting standards as the city. Brisky also opposed any changes to the mayor’s power to impound revenues, which allows for short-term fixes during times of crisis such as natural disasters, financial recessions or terror attacks.

Preston Niblack, deputy comptroller for budget, echoed that sentiment, as did Mark Page, a former director of OMB, and Anthony Shorris, previously the first deputy mayor under Mayor Bill de Blasio. Both Page and Shorris repeatedly cautioned the commission to tread lightly around imposing new mandates on the administration’s budgeting powers.

Niblack did raise several measures that could make the budget more transparent. It’s “very hard to understand exactly what you’re getting for your money,” he said, noting that the budget process is not linked to the delivery of services. The MMR, he said, is ineffective and does not report measures attached to spending.

When Commissioner James Caras posed a question about the mayor’s ability to impound revenue, Niblack did agree that there could be limits on it to prevent misuse for political reasons. “Right now it’s open ended and should probably be restricted,” he said.

The city’s capital spending process has been particularly fraught, leading to hundreds of millions in cost overruns and delayed projects. At the hearing, Jon Kaufman, chief operating officer at the Department of City Planning, outlined several reforms DCP has implemented and said that his department works with agencies to appropriately plan their future capital needs. But, he said, “I don’t think additional charter mandates are going to lead to materially increased collaboration.”

Independent fiscal watchdogs also bolstered the administration’s argument. Carol Kellermann, former president of the Citizens Budget Commission (CBC), gave the commission two pieces of advice: “First, do no harm...Second, don’t use the charter to do things that can be done by local law.”

This question, what can and should be done by local law as opposed to amending the city charter, has been a theme raised throughout charter revision processes, including the one formed last year by Mayor Bill de Blasio, which saw three charter amendments passed by voters, all of which, some argued, could have simply been passed as local law.

Kellermann and her successor at CBC, Andrew Rein, did recommend that the charter consider a proposal to create a rainy day fund for the city. Though Kellerman noted that it would require authorization from the state as well, she said the charter commission could create the criteria for it and present it to voters for their approval, strengthening the city’s case in front of the state. She also pushed for greater transparency in the capital budget, including by expanding the annual statement of needs that agencies provide to all city-controlled public authority assets.

On a proposal to create independent budgeting for certain offices -- such as the public advocate, comptroller, and the Civilian Complaint Review Board -- Kellerman warned that it would be “dangerous” and could disrupt the city’s budget process by giving other elected officials besides the mayor creeping authority over the budget.

“The City Charter calls for a lot more clarity on programmatic spending and performance in the city’s operating budget than we actually see in practice,” said George Sweeting, deputy director of the Independent Budget Office, a nonpartisan city agency. He noted that the budget includes units of appropriation that are overly broad and that obscure spending, and that the charter should be strengthened to require units to be linked to individual programs. Kellermann also said as much, though she laid some blame at the City Council’s feet. “The Council really needs to insist more on doing this...but the definition in the charter is already clear that they need to be more specific than they are,” she said.

Sweeting recommended that the charter commission start looking at ways to improve the Retiree Health Benefits Trust, which the city uses as a form of reserves, as a means of testing the appropriate way to create a dedicated rainy day fund. That could include specific “rules for when deposits have to be made and when withdrawals could be made.”

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by Samar Khurshid, senior reporter, Gotham Gazette
     

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Charter Revision Commission Hears Expert Testimony on City Budgeting and Contracting Tue, 12 Mar 2019 04:00:00 +0000
What's The [Data] Point? $92.2 Billion, Mayor de Blasio's Preliminary Budget http://www.gothamgazette.com/city/8268-what-s-the-data-point-92-2-billion-mayor-de-blasio-s-preliminary-budget http://www.gothamgazette.com/city/8268-what-s-the-data-point-92-2-billion-mayor-de-blasio-s-preliminary-budget whats the data point


What's The [Data] Point? Episode 65 -- $92.2 billion, Mayor de Blasio's Preliminary Budget, with Sally Goldenberg [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

sally goldenberg wtdp

Mayor de Blasio released his $92.2 billion preliminary budget plan for fiscal year 2020, which begins July 1 of this year, and Sally Goldenberg of Politico New York joined the podcast to break it down and preview what's next in city and state budget deliberations.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

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What's The [Data] Point? $92.2 Billion, Mayor de Blasio's Preliminary Budget Fri, 08 Feb 2019 05:00:00 +0000
Citing Causes for Concern & Promising Cuts, De Blasio Presents Still-Growing Budget Plan of $92.2 Billion http://www.gothamgazette.com/city/8266-citing-several-causes-for-concern-de-blasio-presents-still-growing-budget-plan-of-92-2-billion http://www.gothamgazette.com/city/8266-citing-several-causes-for-concern-de-blasio-presents-still-growing-budget-plan-of-92-2-billion may bill de blasio fiscal 20

Mayor de Blasio presents his budget (photo: Ed Reed/Mayoral Photography Office)


When Mayor Bill de Blasio presented his preliminary budget proposal last year, he issued solemn warnings about the threats posed by cuts in the state budget and from federal maneuvers that could mean fewer resources for the city. On Thursday, de Blasio repeated that message, but in more dire terms, as he unveiled a $92.2 billion spending proposal for the 2020 fiscal year that starts July 1.

While the plan calls for another significant annual increase in spending -- about $3 billion, or 3.4 percent, from the budget adopted last June -- the mayor also said his administration would have to make difficult decisions in the coming months, instituting a new savings program to find efficiencies in city government while ensuring that front-facing services do not suffer.

“We have some tough choices up ahead under any scenario,” de Blasio said in City Hall’s Blue Room. “We will be guided by the need to make hard choices, to find savings and then when we have to choose, we will favor the priorities that we believe are most strategic and high impact. If a program is nobly intended but not as strategically central or not as valuable, that’s where you will find the cuts.”

The mayor’s proposal will soon become the subject of City Council hearings, and the mayor will be in Albany on Monday to testify at a state budget hearing, where he will tell legislators they must help him undo elements in Governor Andrew Cuomo’s executive budget plan, which the mayor said totaled about $600 million in proposed cuts and cost shifts to the city.

The $3 billion in increased city spending outlined in de Blasio’s preliminary budget includes about $1 billion additional spending stemming from recent contract agreements with labor unions, $632 million in added education spending, $358 million in debt service costs, $325 million in fringe benefits for city employees, $113 million in mandatory charter school spending, and $109 million to expand the city’s 3-K for all program.

Overall, the preliminary budget represents a nearly $20 billion increase since the last budget modification before de Blasio took office in 2014.  

But de Blasio cautioned of an economic recession on the horizon, the symptoms of which are already beginning to show and are forcing the city to tighten its belt. The city is projecting that personal income tax revenue would be $935 million less this fiscal year than last year, for instance, with most of the drop off in December and January revenue collections. (Similarly, Governor Andrew Cuomo announced earlier this week that the state is expecting a $2.3 billion shortfall because of lower income tax revenue. De Blasio noted that Cuomo had already looked to the city to make up state deficits before the recently-announced shortfalls.)

Along with those concerning tax receipts, de Blasio pointed to additional pressure from developments at the state and federal levels. He pointed to the proposed Cuomo cuts and cost shifts that the city may have to bear in spending on education, financial assistance and health services for needy families, and spending for at-risk youth. “These are permanent cuts...when these cuts occur in the state budget, it’s not just for one year. The money goes away, never comes back,” he said, promising to oppose them but conceding that some losses may happen despite the city’s best efforts. 

The governor's administration later sought to rebut the mayor's comments on decreased education funding. "We don't know how the City considers a $282 million school aid increase over last year a cut, and a cut from what you ‘expected’ to get is a bizarre concept," said Morris Peters, a Division of Budget spokesperson, in a statement. "The state has a formula that outlines what the funding increase will be year to year – so why the City would expect to get something higher than that is nonsensical and a pure fabrication."

The threat to the city emanating from Washington is far less certain. The federal government faces a February 15 deadline to reach a budget agreement and preempt another disruptive government shutdown. If that agreement fails, de Blasio said the state would lose about $500 million every month starting in May, with the city losing about $110 million monthly. There are the more nebulous effects of the fluctuations in the stock market, which have been partly to blame for lower city revenue, and federal trade policy.

Taking those factors into account, the mayor announced that for the first time since he took office in 2014, he would institute a PEG (Program to Eliminate the Gap), which former Mayor Michael Bloomberg employed to control agency costs. Unlike Bloomberg’s program, however, de Blasio does not plan to institute a citywide percentage-based cut in spending at all or most agencies. Instead, he said he will direct most if not all agencies to cut a collective $750 million in costs by April, including by expanding a partial hiring freeze that the city estimates has saved $448 million since it was announced in April 2017. Each agency will receive a target figure for spending cuts from the city’s Office of Management and Budget, de Blasio said.

The preliminary budget also includes $1 billion in savings across fiscal years 2019 and 2020, and $1.6 billion in savings on healthcare spending in fiscal year 2020, increasing to $1.9 billion in fiscal year 2021. Yet, notably the mayor did not dedicate additional resources to the city’s reserves, keeping them flat over last year -- they include $1 billion in the general reserve, $250 million in the capital stabilization reserve, and $4.5 billion in the Retiree Health Benefits Trust Fund. Budget watchdogs have repeatedly said that while the city has solid reserves, they are not enough, especially as de Blasio continues to increase spending, to truly weather a recession.

The mayor’s preliminary budget includes few major new investments in programs, and continues funding for those that are already underway or have been announced by the mayor in the last few months. Those include $25 million for NYC Care, which will give healthcare access to uninsured New Yorkers. The program is expected to launch in the Bronx this summer and will expand citywide by 2021 at a cost of $100 million annually, serving 600,000 people. The city also plans in next fiscal year to spend $106 million to continue funding Fair Fares (half-priced MetroCards for low-income New Yorkers); $5.3 million to speed up Crisis Intervention Training for NYPD officers; $25 million to expand 3-K for All in the Bronx and Brooklyn; and $2.7 million to increase bus speeds by 25 percent by the end of next year.

Also, for the first time ever, the city’s preliminary ten-year capital strategy reached triple digits, for a high of $104.1 billion, an increase of 8.7 percent. The city’s expense and capital budgets are calculating and presented separately. Every two years the capital strategy is re-established.  

“You’ve all heard the truism that budgets are a statement of values. That’s gonna play out in these coming months,” de Blasio said. “If we get continued good news from Washington, from Albany, from our broader economic context, we’ll have more freedom. If we get bad news, we’ll be ready to make some very tough decisions.”

In the next few weeks, the mayor’s budget proposal will be dissected in a series of City Council hearings, where officials from the administration will be called to testify. On Thursday, the Council acknowledged the city’s difficult fiscal position but indicated that it was ready for tough negotiations.

“We know there are challenges presented by the economy, as well as funding shortfalls from the state, particularly in education and social services. We will work with the Administration to get our fair share from Albany,” said Council Speaker Corey Johnson, finance committee chair Daniel Dromm, and capital budget chair Vanessa Gibson, in a joint statement. “But even while recognizing the challenges, we also know this City’s economy is strong and we will fight for a fiscally responsible plan that protects the social safety net.” They vowed to push for funding for Fair Fares, education, immigrant families, and permanent housing for those who need it. “These are our values and we will never walk away from them.”

Comptroller Scott Stringer also took note of the “warning signs” for the economy and commended the mayor for instituting a PEG, which he has called for repeatedly. “It’s past time for City agencies to seriously evaluate how effective their spending really is in achieving results for New Yorkers,” he said.

Year after year, fiscal watchdogs and rating agencies have praised the city’s responsible budgeting but have also raised alarms about spending trends that could backfire in an economic crunch. Andrew Rein, president of the nonprofit Citizens Budget Commission, reiterated some of those concerns on Thursday, noting that the budget showed “modest restraint” in increased spending.

“Much bolder action is needed to ensure the City is prepared for an economic downturn,” Rein said. “Spending growth should be limited to inflation and reserves should be increased. The PEG announced today should be developed with an eye to making operations more efficient and generating recurring savings.”

Last week, CBC recommended that the city pursue a four-part strategy of lower spending growth, greater reserves, improvements to the capital plan and strengthening the fiscal health of three major public authorities -- the New York City Housing Authority, NYC Health + Hospitals, and the Metropolitan Transportation Authority.

The mayor said his budget did not include any new funding for the MTA, funding for which is expected to be a major source of contention between de Blasio and Cuomo over the next several months.

A state budget is due by April 1, at which time the mayor and City Council will have significantly more information to work toward their next spending plan, which is due by July 1.

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Note - This article has been updated with a statement from a state Division of Budget spokesperson. 

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Citing Causes for Concern & Promising Cuts, De Blasio Presents Still-Growing Budget Plan of $92.2 Billion Thu, 07 Feb 2019 05:00:00 +0000