Table of Figures

  • Agencies

  • Structure

  • Trends

  • Budget Calendar

  • Improving the Budget Process and Documents

  • Endnotes

  • Table Listing Record of Further Work and Results

  • Bibliography


    Table of Figures


    Budgeting and policy generation are completely intertwined, for there are very few policies that don't have a price tag attached. The process of prioritizing items in the budget, and selecting which projects to leave out, therefore determines policy. Budget creation and accounting is an arduous and never ending process, where planning for the next fiscal years comes in the middle of wrapping up the previous year, both of which overlap with the year in progress. To complicate things further, there are many players in this process, some of which have conflicting goals. While devising spending plans is difficult, actually using the money can be even harder. Complex approval processes and project delays inadvertently hold up the works. This paper touches on these points as they relate to the Capital Budget. Also included are trends in New York City's capital transportation spending and potential improvements to the budgeting process and documents.

    Agencies

    Mayor
    The Mayor is the city's chief executive, thus is responsible for setting overall priorities. John Dyson, Deputy Mayor for Finance and Economic Development, is supposed to be Mayor Giuliani's liaison for budgetary matters. In reality, Peter Powers, who is both the First Deputy Mayor and the Mayor's lifelong friend, has far more influence. Dyson is an outspoken, insensitive and mean spirited to the point where many despise him. Powers, on the other hand, is a reserved and behind the scenes kind of person who has an extraordinary and conservative influence on the Mayor.

    Mayor Giuliani is, deservedly, getting a bad rap for his deep and nasty budget cuts, though he is not completely to blame. Mayor Dinkins would have been required to make similarly drastic cuts in order to compensate for factors such as unfunded mandates, the economy and tax breaks though he may have made them in different policy areas. A major difficulty with Mayor Giuliani is his inability to reach agreements with the City Council. His October Plan for the budget was withdrawn a day prior to it going before the Council in order to avoid rejection. The Council wanted to devise another plan, but the Mayor was uncooperative. This led to a stalemate that even the courts could not resolve. As a result, the Mayor acted unilaterally, impounding funds, a rarely utilized tactic.

    While the Mayor is in charge of the city, and thus responsible for budget creation and implementation, the Mayor ends up in the back seat as the Office of Management and Budget chauffeurs them through fiscal matters.

    Office of Management and Budget
    OMB is part of the Mayor's executive office and its director is appointed by the Mayor. The agency exists to survey each agency and determine their budgetary requirements. The Director can require departments and employees to produce needed documentation. While the Mayor sets the overall tenor of the administration, they generally have to defer to OMB's expert advice. OMB approval is needed for a project to progress once budgeted. Thus, OMB is the most significant player in budgeting, and hence, policy.

    Department of Finance
    The Department of Finance, who's Commissioner is appointed by the Mayor, has little influence on spending policy because they are responsible for the collection and administration of the City's cash. Their main influence on budgeting is determining how much revenue the City has, or will have, on hand to spend.

    Comptroller
    The Comptroller is responsible for overseeing the city's financial matters, with the goal of keeping things as honest and inexpensive as possible. To carry out this objective, they are given the power to compel testimony under oath and can obtain confidential information. The Comptroller has grounds to critique just about anything the city does because it will have an impact on the city's fiscal situation. Another means to ensure financial integrity and freedom from corruption is done using their power to approve all contracts, thus keeping the contracts both honest and ensuring the City doesn't take on too many liabilities at once. When the Comptroller gives final approval for a contract and the parties sign it, the contract is considered "registered."

    Financial Information Services Agency
    FISA manages the city's financial databases. The Integrated Financial Management System (IFMS) database covers expense and capital budgeting. Capital planning is stored in the Capital Project Information System (CAPIS). FISA is run by three directors appointed by the Mayor. One of the appointees is selected by the Mayor, the second is recommended by the Comptroller and the third is recommended by the other two. These unpaid directors suggest to the Mayor who to appoint as the agency's Executive Director.

    Borough Presidents
    The Board of Estimate used to be in charge of approving the budget. The Borough Presidents, which sat on the Board, thereby had a hand in budget approval and thus a chance to include their pet projects. The board had to be abolished because the Supreme Court of the United States found it to be unconstitutional. The Charter Revision Commission included a concession in their proposal which they hoped would gain the Borough Presidents' support for the new charter. This compromise gave the Borough Presidents control over 5% of the budget by creating what are now known as Borough Allocations. These funds are often used to help community organizations.

    City Council
    Charter revisions that came into effect during 1990 gave the Council power of budget approval. The elected body is growing in strength and conviction since then, challenging the Mayor at times, but such altercations generally result in minor modifications to the Mayor's intent, not enacting the council's own vision. The weight of the Council's counterbalance is increasing with the advent of the Giuliani administration, but not enough.

    In a stronger posture against then Mayor Elect Giuliani, the Council passed a privatization review law, giving it the power to examine city functions the Mayor proposes to privatize. Despite these moves, Giuliani's budget priorities are barely being challenged because Speaker Vallone generally thinks they're good ideas. Council Members, like the Borough Presidents, are presented an opportunity to include their own pet projects in the budget in order to keep the members from holding up the works.

    Community Boards
    The City's 49 Community Boards have an advisory role in budget making. Board members are appointed by the President of that borough, at least half recommended by local Council Members.

    Borough Boards
    Each Borough Board is comprised of the Borough President, Chair of each Community Board and the Council Members serving districts in that borough. The Borough President is in charge of these entities. They have an advisory role similar to those of the Community Boards.

    City Planning Commission
    Part of the CPC's responsibilities include assisting OMB create the Ten-Year Capital Strategy. Their role in the process ends up being a minor one. This commission is comprised of thirteen members, seven of which are appointed by the Mayor, one by each Borough President and one by the Public Advocate.

    Independent Budget Office
    The Independent Budget Office was formed by the Charter revisions passed in 1989, but has yet to be established. The Mayor and the Council, who have their own budget offices, are reluctant to fund it because they are afraid to face a countervailing force. The IBO is to analyze proposed budgets and the fiscal implications of legislation as well as produce any reports on fiscal matters it deems important. Analyses can be requested by elected officials, beside the Mayor, and Community Boards. The office's Director is recommended by an Advisory Board and appointed by a special committee comprising the Comptroller, Public Advocate, a Borough President and a Council Member. The Advisory Board is a ten member panel appointed jointly by the Public Advocate and Comptroller containing representatives of unions, budget offices, community groups and the like.

    Financial Control Board
    The Financial Control Board examines city and city authority operations, seeking methods to increase efficiency. In difficult financial situations, they must approve the budgets. Members of the FCB are the Governor, the Mayor the city and state Comptrollers plus three citizens appointed by the Governor.

    Municipal Assistance Corporation
    The Municipal Assistance Corporation is a state entity designed to bring the city out of the 1970's fiscal crisis. MAC has the ability to issue bonds backed by a dedicated portion of the city's sales tax. The proceeds from such bonds are used by the city. MAC reduced their expenditures by refinancing its bonds when the interest rates dropped. In the meantime, tax revenues kept arriving, so a surplus was generated. MAC uses these funds as bait, getting the city to adopt various cost saving measures or invest in particular areas. Over the years, MAC has pushed for funding the Transit Authority's capital program. The board of this organization is comprised of nine members, appointed by Governor, four of which are upon the recommendation of the Mayor.

    NYC DOT
    The entity in charge of most of the City's roads and bridges is the New York City Department of Transportation. They deal with the day to day planning, construction and operations of these facilities, including the Staten Island Ferry. NYC DOT also provides equipment and partial funding for some private bus operations.

    MTA
    The Metropolitan Transportation Authority is responsible for mass transit planning and operations in this area of New York State. The Long Island Railroad also handles freight. MTA Bridges and Tunnels runs the toll bridges and tunnels in the City. The MTA is an independent authority, so can separate their bonding from the State and City. This separation allows the State, City and MTA to incur higher debt financing levels and/or obtain better bond ratings. The steady positive cash flow from their toll facilities provides them a high debt ceiling and a decent credit rating. Board members are appointed by the Governor and the Mayor.

    The MTA's facilities are in the midst of a massive rebuilding program. Unfortunately, the State and City are withholding significant funds for this work. Cuts in operating assistance from the City and State present the need to lower service and maintenance costs. While the MTA's federal funding levels are determined in large part by the State, the US government pays the MTA directly, eliminating the ability of the State to play games by delaying payment.

    NYS DOT
    NYS Department of Transportation has three regions in the New York City area: 8 contains the counties north of the City, 10 is Long Island and 11 is the City. NYS DOT is very highway centric, ignoring or hampering alternative options such as transit, bicycling and pricing. The State has considerable power because they serve as the conduit of federal funds to the City. These purse strings allow them to meddle in project design and ignore local objectives. They also apportion funds in a way that negates regional planning.

    NYMTC
    The New York Metropolitan Transportation Council (NYMTC) is New York's Metropolitan Planning Organization. MPO's are mandated by the federal government, but they are state level agencies run by a board composed of county, city and agency executives. Each member has veto power, which results in plenty of log rolling. NYMTC is divided into three subregions, each with their own Transportation Coordinating Committee: Mid-Hudson South, NYC and Nassau-Suffolk. These subregions are congruous with the state regions, except for Mid-Hudson South, which includes only the three southern counties of Region 8.

    The MPO's are supposed to play a major role in the funding process, determining which projects to include in the Transportation Improvement Program, a list of projects eligible for federal money. As it turns out, NYMTC's power is usurped by the methods NYS DOT and Region 11 use to distribute funds.

    The State divides transportation dollars up amongst the regions and then each region decides which projects to implement, bypassing the MPO process. As a hypothetical example, say the state has $3 b. for projects in the NYMTC area. The state decides that Mid-Hudson gets $1 b., NYC gets $1b. and Nassau-Suffolk gets $1b. Then Region 11 splits their funds between itself, the City DOT, and the MTA using a percentage agreed upon by three agencies.

    Everyone gets their own pot and that's it. NYMTC does nothing to prioritize projects in the region. The Mid-Hudson and Nassau-Suffolk TCC's refuse to discuss funding allocations with the NYC TCC because they fear loosing big sums to the city.

    US DOT
    The nation's government sets programmatic areas broadly and provide major funding. Much of that revenue goes to State highways, East River bridges and the MTA.

    Structure

    New York City has three separate, though interrelated budgets: capital, expense and revenue. The Capital Budget deals with physical improvements which can be paid through bond issues. Standard equipment and annual costs are covered by the Expense Budget. Income is planned in the Revenue Budget.

    The City has separate accounts to keep its money in. Each account, called a "fund," has a distinct function and its own balanced accounting. The General Fund is used for daily expenditures and revenues, including transfers to the Debt Service Funds. Expenditures for capital projects come from the Capital Projects Fund. The CPF gets is money from City bond issues plus state and national grants. Some work on capital assets, such as repaving and engineering, is done by city employees. In order to pay these workers, money is transferred from the CPF to the General Fund using Inter-Fund Agreements. The Debt Service Funds are used to pay off the City's long term obligations. The City also operates several trust funds for pensions.

    Capital Budget
    Items and projects can be included in the Capital Budget if they are physical improvements or equipment that will last at least five years and cost over $15,000. Scheduled appropriations for a project are required to be adequate for the item's completion without further increases. The Mayor can increase a project's appropriation by 15% if it is necessary to advance the item and other funds are available. The Council must be notified of such increases. Obligations or commitments can only be made during the fiscal year that it is appropriated for, though the Council generally reappropriates funds for all projects that have yet to advance.

    Once a project is put into the Capital Budget, the department must produce a scope for it in consultation with the affected Community Board(s). A Scope of Services identifies the project's purpose, programs at facility, space/bulk, needed consultants, along with an estimated time frame, total cost, construction cost per year, annual operating cost. It also needs to explain any variances from the project's descriptions in the Budgets and Commitment Plans and reasons for delays. This documentation is to be submitted to the Mayor, Council committee, Borough Presidents and Community Boards. The Mayor is supposed to take action on the scope within 60 days, though this deadline is regularly missed.

    Preliminary and final designs can be reviewed by Borough Presidents, Council committees or Community Boards. The Mayor is to ensure the project as designed conforms with its scope.

    To increase accountability, the Capital Budget is categorized into departments and then smaller units defined by purpose. The DOT is Agency 841 and its project types from 1979 to the present are as follows. Franchise Transportation (FT) is the category for purchasing buses operated by private bus companies. FT was split out of Equipment in 1991. Equipment (TD) now deals with cars, trucks, paving equipment and computer systems, though not work stations added later. Splitting out FT projects from the TD category shows the City realized buses serve an important and distinct function and are not just another piece of equipment. Highways (HW) exists to pay for resurfacing and reconstructing streets. Bridges are broken into two project types, Waterway Bridges (BR) and Highway Bridges (HB). HB was created in 1982, before which such projects were a part of HW. The Ferries and Aviation project type (FA) covers the Staten Island Ferry. Traffic (TF) generally covers parking lots, traffic signals and street lights. A small portion of Traffic is for what used to be categorized as Electric Control (GE), a project type that came to the Department of Transportation from the Department of General Services. GE projects include using DOT's streetlight poles to hold lights the illuminate parks and other public places.

    City projects for the MTA are listed under the Transit (T) and Staten Island Transit (ST) project types. The TA's department number is 998.

    Fiscal planning for capital projects takes several forms. The Budget adopted by the Council contains appropriations. An appropriation is a legal procedure by which the Council allows city funds to be spent on item. Just because an item has an appropriation does not mean money is actually going to be spent on it. Hence, the Adopted Budget can be construed as a wish list of projects that the Council is willing to pay for.

    The City's capital program is so large that there is no way all of the projects in the budget can be worked on or paid for at one time. Capital tasks are generally contracted out to consulting engineers and construction firms. These contracts require the contractor to do the work and commit the City to pay for it at specified benchmarks. Registering the contract with the Comptroller is therefore termed a commitment. Commitments is also a colloquialism for the dollar value of registered contracts. These obligations are estimated and scheduled in the Capital Commitment Plans, which come out three times per year.

    Trends

    The following analysis of budget trends looks at planned and actual capital commitments, excluding IFA, from 1986 through 1994. A fiscal year's planned amount comes from the particular year's estimate in the September Capital Commitment Plan issued during the fiscal year being discussed. Actuals come from the Monthly Transaction Analysis, June, Year End reports of that particular year.

    Adherence to Commitment Plans
    Making actual capital spending adhere to planned levels is hard to do. Projects can be delayed by many factors, including hitches in the review process or unexpected discoveries about the site during engineering and/or construction. These delays result in not meeting the year's goal. Commitments for some projects or departments may need to be cut in order to allow other to proceed. Additionally, OMB or the Comptroller can call for all plans to be cut due to the latest economic forecasts being poor. Despite this mayhem, the better the management is, the more accurate estimates become and the closer one keeps to targets, hence the following reviews.


    Figure 1: Variance of Actual Commitments from Projections in September Capital Commitment Plans
      FY    HB    BR    TD    FA    FT    HW    TF     DOT   MTA  TSPT      CW
    
    1986  (61%)  32%  (16%) (96%)       (13%) (55%)   (12%) (13%) (12%)   (19%)
    1987  (42%)  93%  (26%) (80%)       (22%) (31%)   (22%) (43%) (31%)   (31%)
    1988    5%   (4%) 243%  (97%)       (25%) (36%)   (14%) (71%) (46%)   (26%)
    1989  (66%)  74%  (60%) (72%)        (5%) (33%)     3%  (24%) (11%)   (20%)
    1990  (11%)  55%  (59%)   4%        (19%) (35%)   (13%) (41%) (26%)   (31%)
    1991  (36%) (11%) (85%) (17%) (43%) (56%) (60%)   (39%) (14%) (29%)   (43%)
    1992  (58%) (20%) (57%) (17%) (99%) (46%) (61%)   (50%)  (1%) (35%)   (31%)
    1993  (23%) 160%  (45%)  (4%)  (9%) (59%) (84%)   (29%)  (6%) (23%)   (20%)
    1994  (33%)  47%  (43%) (13%) (73%) (20%) (40%)   (15%)  (9%) (14%)   (40%)
    ---------------------------------------------------------------------------
    Mean  (36%)  47%  (16%) (44%) (56%) (30%) (48%)   (21%) (25%) (25%)   (29%)
    Median(36%)  47%  (45%) (17%) (58%) (22%) (40%)   (15%) (14%) (26%)   (31%)
    
    Note: FT was not created until 1991
    

    Waterway Bridges consistently exceed their planned commitments, by an average of 47%. These huge positive variances are quite unusual. Total commitments throughout the city average 30% below planned levels, while the DOT average is under by 20%. Considering the DOT's average, other project types within the department had to be kept far short of their goals in order to let the bridges program proceed as desired, which is borne out by examining the other projects' variances. Poor estimates are a major cause of BR's positive variances. These increases are allowed to pass since many of these projects are desperately needed.

    Another project type given importance is Highways, which stuck close to the DOT variance. This trend is disrupted for three years from 1991 through 1993, when they fall far short of their goals. The disturbance arose when the entire Highway program was scrutinized for unnecessary projects by incoming Commissioner Lucius Riccio.

    The worst project type at meeting commitments was Ferries and Aviation between 1986 and 1991. Its record dramatically improved when a new manager was hired, now they are better than the department as a whole. The honor of being worst is now held by Franchise Transportation.

    The DOT did well at meeting their Commitment Plans from 1986 through 1990. In that same time frame, City commitments for MTA projects fell far short of plans. This shifted in 1991, when MTA related commitments were well managed and the DOT's were not. Throughout the entire time frame transportation commitments stayed close to, though somewhat better than, the city as a whole.

    There seems to have been a tradeoff between prioritizing DOT and MTA commitments, though this may only be circumstantial. This change may have been caused by one of two factors related to the City contributions reducing in size. One factor could be stricter adherence is needed to complete promised projects. The second factor could be that the smaller funding was going into a still massive pool of waiting MTA projects, so if the intended project was delayed another could take its place and use the funds instead. These possibilities are just conjecture and have yet to be confirmed.

    Project Types' Portion of DOT's Actual Commitments
    Waterway Bridges is averaging about 28% of the DOT's program, though it jumps around, with a high of 45% and low of 10%. These fluctuations are likely due to the uncertainties of capital programs being magnified by the large cost for most BR contracts. Highway Bridges has been increasing its share to 25% of commitments and the bridge program as a whole has been doing the same, now checking in at 60%. The growth in Highway Bridge commitments has come at the expense of Highways, which shrank from a high of 60% down to 30%. Adding the total bridge and highway program together produces a steady average of 85%. All the other project types in the DOT are quite small and no significant patterns exist.


    Figure 2: Portion of Department of Transportation Commitments
      FY    HB    BR    TD    FA    FT    HW    TF     HB+BR  HB+BR+HW
    
    1986    4%   34%    6%  0.1%          53%   3%       38%     91%
    1987    9%   11%    6%  1.5%          64%   6%       19%     84%
    1988   11%   20%   14%  0.2%          47%   5%       31%     78%
    1989    4%   43%    2%  0.2%          45%   7%       47%     92%
    1990   25%   18%    4%  6.3%          42%   5%       43%     85%
    1991   22%   43%    1%  1.3%   1.7%   28%   4%       64%     92%
    1992   20%   35%    2%  2.9%   0.3%   37%   3%       55%     92%
    1993   30%   18%    2%  3.1%  22.2%   23%   1%       49%     71%
    1994   25%   34%    2%  1.4%   1.4%   32%   4%       59%     91%
    
    Note: FT was not created until 1991
    

    Agencies' Actual Commitments
    1986 through 1990 was a period of strong growth in commitments for the DOT, MTA and the City as a whole. After that point, the DOT contracted a bit through 1993 and increased dramatically in 1994. The MTA related projects hovered around that level until 1992 when it received a precipitous cut. City Wide spending unsteadily shrank by $1 b. from its peak. It is possible that about 10% to 20% of these fluctuations visible in the graphs below are attributable the variances related to the difficulties of implementing capital projects.


    Figure 3: Transportation Commitments (Excluding IFA)
    Figure 4: City Wide Commitments (Excluding IFA)
    City Funded Portion of Project Type and Agency Totals
    Highway Bridges has a fluctuating, though upward, trend bringing its city funding to over 50%. WB has gradually increased its city funds to the point where they cover 30% of the program. Highways fluctuates between 75% and 85%. The total of highways and bridges averages around 50%. Traffic is oscillating generally above 70%.


    Figure 5: Portion of Commitments That are City Funded
      FY    HB    BR    TD    FA    FT    HW    TF     DOT   MTA  TSPT      CW
    
    1986   44%   10%   87% (454%)        86%   70%     14%   56%   57%     83%
    1987   11%   43%   83%   97%         75%   76%     29%   64%   66%     87%
    1988   61%    7%   13%   72%         81%   55%     26%   59%   53%     86%
    1989   58%   13%   84%  100%         76%   62%     17%   46%   48%     82%
    1990   26%   20%   68%   85%         77%   77%     23%   50%   54%     90%
    1991   31%   13%   74%  101%   89%   85%   59%     19%   39%   42%     91%
    1992   45%   16%  100%  100%  100%   88%   82%     26%   51%   54%     93%
    1993   66%   27%  100%  100%    8%   85%   83%     51%   62%   52%     90%
    1994   53%   31%  100%  100%   52%   73%   69%     40%   52%   54%     86%
    
    Note:  FT was not created until 1991.
    

    Transport Equipment as well as Ferries/Aviation are now totally city funded. There were some years in which Equipment had significant non-city funding, though that changed when Franchise Transportati on, which receives federal funding, was removed from Equipment and given its own project type. Ferries & Aviation contains some years in which it received extraordinary portions of its funds from the city. One year the City absolved a commitment seemingly in exchange for federal funding, resulting in the City's share being a negative 454% during 1986. Similarly, a non-city commitment was removed, bringing the city's portion of commitments to 101% in 1991.

    The City supported MTA projects are 100% city funded. The DOT's share of city funds wavers around and is now a bit over 50%. The entire City program receives about 80% of its funds from the City.


    Figure 6: Portion of DOT Commitments That Are City Funds (Excluding IFA) (See Figures 9 and 10 for instructions on how to interpret this graph)


    Distribution of Non-City Funds
    The DOT obtained 65% of all non-city commitments made throughout the city. These non-city funds primarily went to Waterway Bridges, a bit for highways, a large chunk for highway bridges, plus a smidgen to bus purchases in Franchise Transport. The non-city funds to the DOT peaked in 1989 at $335 m. of which $240 m. went to Waterway Bridges. That same year, the city received $780 m. in non-city commitments. The massive increase, and recent reduction, in City Wide commitments had little to do with non-city funds.


    Figure 7: City Wide Commitments and Source of Funds (Excluding IFA)


    DOT v MTA Spending (Grouped by MTA Capital Program Periods) The Giuliani Administration's September 1994 Commitment Plan intends to cut capital assistance for the subways and buses by 50% during the MTA's Third Capital Program. This cut takes place while the administration proposes to increase the DOT program by 21% and the entire City program by 14% during the same time frame.


    Figure 8: City Commitments for the DOT and MTA: Actuals and September 1994 Plan. (Excluding IFA and Grouped by MTA Capital Program Periods(1).)


    These changes were planned by the Dinkins administration but Mayor Giuliani took them to a new level, cutting an additional 18% from the MTA contribution but only 3% from the DOT's. The new Mayor deferred $245 m. in support for the MTA from FY 95 to FY 98. This move shorts the MTA's Third Capital Program because the FY '98 funds will be needed for the Fourth Capital Program.

    The City wants to pitch in $991 million for the MTA's Third Capital Program, 15% of the Transit Authority's commitments, less than half of the 34% they gave for the Second Program. In addition, this is $697 million (41%) short of the MTA's request.

    This budget proposal puts transit spending at an all time low. The MTA will only account for 4% of the City's capital commitments, though historically it received twice that. DOT commitments will remain around 15%. Underinvesting in transit is likely to have grave consequences. Railroad investments generate returns twice as large as highway investments and accrue positive results three times faster. Maintenance will be deferred, which is what brought the transit system to its knees during the 1970's.

    It is true that some of the DOT funds support transit related objectives. Ferries and Aviation along with Franchise Transportation account for about 5% of the DOT program. The East River bridges, which carry subway service, comprise 25% of the DOT's bridge commitments (Ten-Year Capital Strategy, May 1994). The subways are allocated 17% of the space on those bridges (6 lanes out of 30), thus they are using an estimated 3% of DOT's resources. Adding together the 5% for buses and 3% for bridges, transit gains $236 m., still leaving it in the dust at 28% of transportation spending.


    Figure 9: How to Determine Which Administration Did What


    Figure 10: Instructions on How to Read the Bar Graphs (back to Figure 6)


    Figure 11: DOT Projects: September Capital Commitment Plans and Actual Commitments (Excluding IFA)


    Figure 12: DOT Projects' Portion of Transportation Commitments: September Capital Commitment Plans and Actual Commitments (Excluding IFA)


    Figure 13: DOT Projects' Portion of Transportation Commitments: September Capital Commitment Plans and Actual Commitments (Excluding IFA)


    Figure 14: City Supported MTA Projects' Portion of Transportation Spending: September Capital Commitment Plans and Actual Commitments (Excluding IFA)


    Figure 15: City Wide Projects: September Capital Commitment Plans and Actual Commitments (Excluding IFA)


    Budget Calendar

    This section details major events and documents in the City's fiscal management process. All events are to happen on or before the date noted. Dates in italics denote that it is not set in the Charter.

    July
    30 Days After Adoption of Budget
    Financial Plan
    The Mayor must update the Financial Plan put forth in the Budget Message. Financial Plans covering the next four years are submitted to the Financial Control Board. This edition of the plan is an internal document that does not seem to get formally printed and bound. Additional updates of the Financial Plans can be issued whenever Mayor deems appropriate.

    The numbers shown in these reports only include changes to the previous version of the Financial Plan, so does not contain a detailed listing of every Unit of Appropriation. These changes are called PEG's, from Program to Eliminate the Gap. The Mayor's proposals become Financial Plans when adopted by the Council. These plans, hence, are the Modified Budget.

    July
    Monthly Transaction Analysis, Year End Report
    Transaction Analyses come out every month, tracking both commitments and cash flow for capital projects during that month and year to date. The June edition, published in July, contains the totals for the previous year.

    90 Days After Adoption of the Budget
    September Capital Commitment Plan
    As mentioned earlier, commitment plans are the strongest capital planning tool. The September edition includes the newly adopted budget and is issued at the start of the fiscal year, making it the document to gauge the annual capital program performance against. Included are the new FY plus three out years. The current year is planned out by month.

    September
    Mayor's Management Report, September edition
    The report monitors each agency's performance during the previous fiscal year, including adherence to their Commitment Plans.

    Generally, the agency is given a target of 80% of what is planned in the last plan, though the targets are modified if something very unusual happens. Data about Managing Agency Contracts, which are contracts managed by the agency being analyzed but are paid for by another agency, are also included. The report also shows programmatic indicators, such as lane miles paved or summonses issued, to examine the agency's efficacy and explain what they are doing.

    Executive Management Report
    The EMR is the DOT's own document tracking their work. These used to be published monthly, though are now produced annually.

    15 October
    Report of private revenues and expenditures
    All city entities must file a report by 15 October detailing sources, amounts and disposition of all monies received by that agency, unit or officer thereof, other than money appropriated by council or put into treasury and reported in the Comptroller's Annual Report.

    31 October
    Four Months After End of Fiscal Year
    Comptroller's Annual Report
    This is a detailed accounting of the City's revenue, expenditures, debt service and fund balances for the previous fiscal year.

    1 November (even numbered years)
    Draft Ten-Year Capital Strategy
    The Directors of Planning and OMB are required to jointly produce a plan outlining capital commitments, by project type, for the current fiscal year and the coming nine. The report is submitted to the Mayor, Borough Presidents, Council and Planning Commission. The Charter requires these plans to be made every other year, though with the tighter fiscal situation of late, they have been produced annually. In the DOT, the estimations for most of the project types are just desired targets. The only projects which are thoroughly figured out are those for bridges, and to a lesser extent, highways.

    1 November
    Comptroller's Revenue Certification
    The previous year's actual income needs to be certified by the Comptroller and given to the Mayor. This apparently is accomplished by the Annual Report.

    15 November
    Mayor's Revenue Report
    Revenues from the preceding FY must be reported and any variances from the modified budget need to be explained.

    November(2)
    November Financial Plan
    A new expense budget plan is drawn, containing technical adjustments and budget modifications. These modifications are generally cuts to balance the budget. This edition of the plan is an internal document that does not get formally printed and bound.

    October
    30 days prior to Departmental Estimates
    Community Board Budget Priorities
    This is a list given to the Mayor by each CB containing its priorities in the Expense Budget and Capital Budget. Departments must aid CB's that request help. The Boards are to hold hearings in the process of making these lists. The Mayor compiles the lists from each Board and forwards this report to each agency head and the CPC. Department heads and/or the Mayor need to respond to each request.

    November
    Departmental Estimates
    It is up to each department to determine which programs they will undertake in the coming FY. The operating, capital and revenue implications on appropriations and cash flow need to be determined and scheduled. The agencies have to take into consideration both the targets given to them by OMB and the CB's priorities. The departments' ideas are then discussed/haggled with OMB and CB's.

    1 December
    Report of the Comptroller on Debt and Obligations
    Capital debt and obligations are reported to the Mayor, Council and Planning Commission. This document outlines the obligation and liabilities for outstanding projects and advises the maximum amount and nature of debt that can be undertaken in the coming four fiscal years.

    15 December
    Report of the Comptroller on the State of the City's Finances
    This is a review of the latest Financial Plan, general economic conditions and the City's financial situation.

    January
    Preliminary Mayor's Management Report
    This is similar to the September edition of the Mayor's Management Report, though this one monitors progress of the current fiscal year.

    January Capital Commitment Plan
    The published version contains the current FY and three out years. The fourth out year is worked up by the departments, though not published. The current year includes monthly data.

    Preliminary Capital Budget
    Contains departmental estimates of expected appropriations and cash flow needed in the coming four fiscal years to meet the Commitment Plan.

    16 January
    Preliminary Expense Budget and Financial Plan
    This Financial Plan reports changes to the current fiscal year's Expense Budget, such as supplementary budget requests and budget modifications to meet budget cuts. Included is an analysis of the City's fiscal situation. The ensuing three fiscal years are planned for as well.

    Preliminary Certificate on Capital Debt and Obligations
    Mayor must release the Certificate on Capital Debt and Obligations.

    Preliminary Borough Allocations
    At the same time, the Mayor must notify the Borough Presidents of their Borough Allocations. These set asides give the Borough Presidents control over 5% of the discretionary budget, divided amongst the boroughs by geographic area and population. The Presidents then choose the projects they would like to see done with those funds. They must take into consideration the continuing operational/maintenance expenses that will be needed by a capital project. Such expenses must be covered by the Borough Presidents Expense Budget Allocations or have Mayoral approval.

    Ten-Year Capital Strategy
    The CPC is required to hold hearings on the Strategy. The first four years are the same as the Commitment Plan.

    1 February
    Independent Budget Office Report on Revenue and Expenditures
    This is an analysis of the general economic factors and the Preliminary Budget along with alternative ways to allocate the same funds.

    15 February
    Community Board Review of Preliminary Budget
    Community Boards report the mayor's responsiveness to their requested priorities, in addition they are welcome to make other budget related commentary. These are submitted to the Mayor, Council, OMB and CPC.

    Estimate of Assessed Valuation and Statement of Taxes Due and Uncollected
    The Finance Director must give the Mayor and Council an estimate of how much revenue will be coming to the city next year.

    Tax Benefit Report
    The Mayor has to detail for the Council all tax breaks given by the city, who received how much and why. A list of audits of these benefits for the past two years is included.

    25 February
    Borough Board Preliminary Budget Hearings
    The Boards shall hold hearings on the Preliminary Budget to get input from the Community Boards, residents and those with substantial interests in the borough. Officers of agencies are required to appear if requested by the Board. The results of these hearings are to be consolidated in a report on the budget priorities of the borough and given to the Mayor, Council and OMB.

    1 March
    Statement of Debt Service
    The Comptroller determines the schedule of appropriations required to meet next year's debt service and sinking fund needs.

    10 March
    Council Operating Budget
    The Council estimates its operating budget for the coming year and submits it to the Mayor.

    Borough President Recommendations to the Mayor
    Each Borough President submits proposed modifications to the Preliminary Budget. These recommendations may not increase the net appropriations proposed but may shift funds from one purpose to another.

    15 March
    Independent Budget Office Report on the Preliminary Budget
    The IBO submits their analysis of the Preliminary Budget.

    25 March
    Preliminary Budget Hearings
    Council committees hold hearings on budgetary proposals for the coming fiscal year. The public is welcome to testify. Agency directors shall appear at the request of the committees.

    These hearings have lots of bark but little bite. Commissioners can be relentlessly grilled by Council Members, and some interesting things learned, but the Council doesn't seem to modify the budget much with what they find out. It's more a forum for the Council Members to get their pet peeves across when the commissioners are most vulnerable.

    6 April (odd numbered years)
    Ten-Year Capital Strategy
    Final version of the Strategy is published. The first four years come from the Capital Commitment Plan which will be released in the near future.

    26 April
    Executive Budget and Budget Message
    The Mayor submits the Executive Budget to the Council. Notice is also given to the Borough Presidents of any differences in the total Borough Allocations. If differences exist, the BP's must adjust their projects within seven days. The Mayor must consult with the Borough Presidents while devising the Executive Budget.

    The Budget Message is a separate presentation required by the Charter in which the Mayor has to perform several tasks:

    • Summarize the budget's major programs and objectives.
    • Explain the present economic situation.
    • Discuss existing revenue sources and intergovernmental fiscal agreements along with proposals for changing them as necessary.
    • Itemize actual revenue for the prior four, the current and proposed fiscal years.
    • Explain modifications to the revenue estimates in the Preliminary Budget.
    • List one shot revenues in the current budget.
    • Present a four year Financial Plan.
    • Issue a certificate of maximum debt and reserves needed for capital purposes in the next four years.
    • Determine capital maintenance costs by agency and project type for the previous, current and next fiscal years.
    • Compare each agency's proposed appropriations to the actual spending in the previous year, the adopted budget for the current year, the modified budget for the current year, actual spending in the present year to date and estimated expenditures for the remainder of the current year.
    • List appropriations in each CB by Units of Appropriations.
    • State of how they incorporated the Borough Presidents' proposals and make recommendations for Council modifications thereof.

    May
    May Capital Commitment Plan
    The latest plan contains the next four years plus the current FY by month.

    6 May
    Borough Presidents' Recommendations on the Executive Budget
    The Presidents list which of their requested projects were not included in the Executive Budget and should be considered by the Council. Such requests shall be accompanied by equivalent reductions in appropriations for their borough.

    15 May
    IBO Report on the Executive Budget
    6 to 25 May
    Council Hearings on the Executive Budget
    Officers of agencies and community boards are required to appear if the Council requests them to do so.

    30 June
    Adoption
    The Council can increase, decrease, add or omit any Units of Appropriation for expense or capital projects and can modify the conditions for any appropriation. Each increase must be denoted by object or purpose and the aggregate amount for capital projects can't exceed the amount denoted in the Mayor's certificate.

    The Council must take action on each of the Borough Presidents' recommendations and the Mayoral advice thereto.

    The Budget is effective from the moment of adoption. The Mayor can veto Council modifications within five days. A veto can be overridden within ten days by a 2/3 majority of the Council, otherwise the Mayor's changes shall stand and that considered the Adopted Budget.

    If not adopted by 5 June, the Expense Budget and tax rates in the current adopted budget as modified are extended into the next fiscal year until the new budget is adopted. Under the same circumstances, the capital appropriations from the current fiscal year are considered to be effective in the next year.

    Any differences between the Adopted Capital Budget and the Ten-Year Capital Strategy needs to be explained by the Mayor and included as an appendix to the Strategy.

    During the year, an agency can juggle costs within U/A's. In addition, OMB can move funds between U/A's if the change is less than 5%.

    The Council can amend the Adopted Capital Budget after receiving a written request from either the Mayor or a Borough President. Such changes can only increase appropriations upward if additional funds become available within that project type. Proposed increases by a Borough Presidents must be offset by a reduction of projects in their Borough Allocations. Changes proposed by the Mayor that affect projects of the Borough Presidents need the approval of that President.

    Improving the Budget Process and Documents

    Access to Information
    Most of the City's budget information is readily available in the Municipal Reference Library. There are some important documents that are not, however. They don't have the Monthly Transaction Analyses, not even the June Year End Reports. The November and July Financial Plans are not regularly sent to the MRL. For documents the MRL does obtain, it takes several days for them to arrive.

    Publications not available in the MRL, though on hand at various agencies, should be made readily available to the public. My first two attempts at gathering information from the Transaction Analyses were greeted openly by OMB staff, who quickly provided access to the documents. By the time of the third attempt, that staff person's manager learned of my inquiries and required me to file a Freedom of Information request. The manager's hostility needlessly delayed my research by two weeks.

    Information needs to be better preserved. There is little point in collecting information if it is not going to be kept in tact. OMB is missing several of the IFA Transaction Analyses. FISA has purged some of the OTPS object codes from the IFMS data tapes.

    A release date should be imprinted on all documents, making potential relationships between publications clear.

    While the Metropolitan Transportation Authority has data on actual commitments by agency for each capital program, they don't have a historical record of actual annual commitments readily available. The information I needed had to be printed out from their database.

    Narrate Each Document
    Each budget document needs a detailed narrative explaining the document's purpose and how to read it. In addition, a listing of all budget documents the City publishes, containing a summary explanation of each and the relationships between them, should be compiled and included in the front of every budget document.

    Clarify Documents
    While Financial Plans detail the changes that are going to be made in each department, it would be helpful to include the variance those changes will cause to the Adopted Budget by department and Unit of Appropriation.

    Inter-Fund Agreements are not reported in the same fashion in all budget documents. Standardization should occur in order to make all publications comparable.

         Report                       Contain IFA?   Clearly Marked?
    
         Commitment Plans                  No             Yes
         Ten-Year Plans                    No             No
         Budget                            Yes            No
         Monthly Transaction Analyses
              Report 1                     Yes            Yes
              Report 2                     No             Yes
              Report 3                     Yes            Yes
         Comptroller's Report              Yes            No
    
    Create the Independent Budget Office
    Despite having been mandated by the City Charter nearly five years ago, this office has yet to be created. The IBO is likely to provide both the government and citizens with a perspective that is free of the OMB's and the Council's inbred biases.

    City Council
    It would be interesting if each Council Member took their role of budget modification and approval more seriously, since they are the officials most accountable to the public. For this to occur, the Council leadership will need to loosen its stranglehold. The idea of giving Council Members a bit of discretionary funding for their district is a good one, because they are supposed to be in close contact with their constitutents' need. The only problem, from my understanding, is the dollar value available for all Member Projects is not distributed evenly amongst all members, allowing the leadership to manipulate the Members.

    Budget hearings held by the Council are poorly scheduled. Each agency is questioned at length, far beyond the time allotted. Each time slot needs to be expanded and those limits adhered to. As it stands now, each agency has about half an hour to testify and be questioned. This rudimentary treatment can by no means be considered oversight.

    Miscellaneous
    Transportation providers need to be prioritizing all of the region's capital projects in one ranking system, providing the greatest return for everyone, not just their fiefdom.

    The process of creating Capital Commitment Plans very insular. Public input should be sought and taken seriously.

    Project scopes can be un/intentionally misleading. Each scope needs to be reviewed by knowledgeable and impartial observers. This process will be cumbersome because there are so many projects involved, but it is necessary. Perhaps the IBO can take on this role when it is created.


    Endnote 1

    Diagram of Fiscal Years and how they relate to each other:
    
              Agency      FY Name                1994.1995
    
              MTA         1994           JFMAMJJASOND.
              State       1994-95           AMJJASOND.JFM
              City        1995                 JASOND.JFMAMJ
              Federal     1995                    OND.JFMAMJJAS
    
    (back to text)

    Endnote 2

    If Financial Plans are submitted to the Financial Control Board on a quarterly basis, this edition should come out in October, since the first one was published in July and the next one is done in January. At the time of publication, I am uncertain if this is the plan for the FCB but issued a month late or is a separate document.
    (back to text)

    Table Listing Record of Further Work and Results

    (In reverse chronological order)


    Bibliography

    1982-1993 MTA Capital Program Summary Report of Commitments by Agency by New York City's Fiscal Year. Computer printout. Metropolitan Transportation Authority, 29 July 1993.

    1982-1993 MTA Capital Program Summary Report of Commitments by Agency by Year. Computer printout. MTA, 6 May 1993.

    1992-1996 Capital Program Proposal. MTA, October 1992.

    Actual Inter-Fund Agreements for DOT from FY'79 to FY'83. IFMS printout. FISA, 20 October 1994.

    Adopted Budget. NYC OMB, annual.

    Anagnost, Mr. NYC OMB. Phone conversation. 3 May 1994.

    Annual Report. Prior to 1992 titled: Report to the Governor. MTA, annual.

    Capital Commitment Plan. NYC OMB, three/year.

    Comprehensive Annual Financial Report of the Comptroller. NYC Comptroller, annual.

    DOT Expenditures for Available Budget Codes by Fiscal Year. IFMS Printout. FISA, 7 October 1994.

    Executive Budget. NYC OMB, annual.

    Fahner, John. NYC DOT. Interviews. Various dates.

    Fuchs, Bob.. NYC OMB. Phone conversations. Various dates.

    The Green Book: The Official Directory of The City of New York. NYC Dept of General Services, intermittent.

    Manual for the Use of the Legislature of the State of New York, 1988- 89. NY Dept of State.

    May 1992 Approved Capital Plan Amendment. MTA, c. 1992.

    The Mayor's Management Report. Mayor's Office of the City of New York, twice annually.

    Miller, Robert. NYC DOT. Interviews. Various dates.

    Monthly Transaction Analysis, June, Year End Report. NYC OMB, annual.

    "Municipal Assistance Corporation for the City of New York." Public Authorities Law, Article 10, Title III. McKinney's Consolidated Laws of New York Annotated. West Publishing Co.

    Nessel, Rick. NYC DOT. Interview. 5 April 1994.

    The New York City Charter. City Books.

    New York City Charter and Administrative Code. New York Legal Publishing Corp.

    "New York State Financial Emergency Act for the City of New York." Chapters 868...870. McKinney's 1975 Session Laws of New York. West Publishing.

    The Official Compilation of the Rules of the City of New York. Lenz & Reicker, Inc.

    Operating Budget. New York City Transit Authority, annual

    Operating Budget. Staten Island Rapid Transit Operating Authority, annual

    Operating Budget. Triborough Bridge and Tunnel Authority, annual

    Preliminary Budget and Financial Plan. Mayor and OMB, annual.

    Preliminary Capital Budget. NYC OMB, annual.

    Results of Operations. NYCTA, annual

    Richwerger, Kurt. City Council. Interviews. Various dates.

    Scafa, David. NYC Comptroller. Phone conversations. 25 February 1994.

    Spitzer, Michael. NYC Comptroller. Interview. 16 June 1995.

    Statements of Net Revenue and Applied or Retained Revenues. TBTA, annual.

    Statements of Operations and Operating Deficit. SIRTOA, annual

    Tymus, Paul. NYC OMB. Interviews. Various dates.

     


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