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TRANSCRIPT
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Capital Budgeting for 2030: Achieving the Goals
of PLANYC
Citizens Budget Commission December 18, 2007
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Overview Why does infrastructure matter? Capital Assets in New York City Four Challenges to Achieving
PLANYC Recommendations Expanding PLANYC Achieving state of good repair Employing replacement cycles Justifying expansion projects
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Why does infrastructure matter? New York City is large and growing
8.2 million people 18 million in the region 44 million tourists in FY2006
Foundation of daily activity, government operation, commercial enterprise and public safety
Critical to Citys ability to remain competitive and attract residents, business, and visitors
Neglect of infrastructure can lead to delays, damages and catastrophic results: Grand Central Station steam pipe explosion Minnesota bridge collapse Subway service suspended due to flooding Energy blackouts in 2003 and 2005
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Capital Assets in New York City
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NYC has a vast and complex system of capital assets
20,000 miles of streets and highways 2,027 bridges and tunnels 3 million miles of fiber optic networking 29,000 acres of parkland 130,000 energy lines 324,000 street lights 29,000 public vehicles 6,600 sewer and 6,200 water main miles 6,200 subway cars and 4,500 buses 1,000 public school buildings 90 colleges & universities 2 airports
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Not All Assets Owned By NYC The State, State authorities, the Federal govt. and the private sector all own major assets in
virtually all functions
Non-City Control of Capital Assets in New York City Federal State Port Other Private
Govt. Govt. Authority MTA Authorities Sector
Transportation
Transit
Education
Housing
Public Protection
Health
Parks & Culturals
Sanitation
Energy
Telecommunciations
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New York City Government $60.5 Billion in Capital Assets
Parks, Libraries
and Culturals, $2,581
Water and Sewer
System, $18,436
Social services,
$763 Education, $11,904
Sanitation, $760
Housing, $5,220
Transportation, $6,454
Public Protection,
$3,840
Land and
construction, $4,694
General Government,
$2,935Health, $2,878
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How does the City plan and budget for these assets?
Ten-Year Capital Strategy Released every two years by the
Office of Management and Budget Describes citywide goals, priorities,
policy constraints, financing mechanisms and other assumptions Overviews agency capital programs Is the basis for the capital budget and
capital commitment plans
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PLANYC Plan to improve quality of life in NYC in
anticipation of 1 million more people by 2030 10 broad goals to improve infrastructure, air
and water quality, and sustainability Scope includes non-city entities, most notably
the MTA 127 specific initiatives with milestones and
benchmarks 6 month progress report indicated 104 of 127
initiatives launched Overseen by new mayoral office, Office of
Long-Term Planning and Sustainability
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Challenges to Achieving the Goals of PLANYC
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PLANYC is a strategic planning process that is broad, long-term and
visionary, but does not include all the Citys capital assets.
One:
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Weaknesses of Ten-Year Strategy Ten-Year Strategy is not well-integrated
with other strategic planning initiatives Does not link to Department of City
Plannings Master Plan or Strategic Policy Statement
Does not establish broad strategy goals itself
Does not address assets not under City control
Ten-year time frame is ineffective Too short for some infrastructure systems
Example: Water and Sewer system Too long for credible financial planning
Agencies tend to focus on four-year plan
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Weaknesses of Ten-Year Strategy Where the first four years are generally on target, out-year commitments are dramatically underestimated
Four-Year Total Six-Year Total Ten-Year Total1996-1999 2000-2005 1996-2005
1996-2005 Capital Strategy $15,400 $25,163 $40,562Actual Commitments $16,743 $35,562 $52,305Difference ($1,343) ($10,399) ($11,743)
1998-2001 2002-2007 1998-20071998-2007 Capital Strategy $19,776 $26,900 $46,677Actual Commitments $18,700 $41,861 $60,561Difference $1,076 ($14,961) ($13,884)
2000-2003 2004-2009 2000-20092000-2009 Capital Strategy $22,983 $25,140 $48,123Actual Commitments* $22,759 $58,474 $81,233Difference $224 ($33,334) ($33,110)
Planned vs. Actual Commitments for Ten-Year Capital Strategies(dollars in millions)
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PLANYC: Improvement Upon Current Process
Ten-Year Strategy PLANYC Strategic Goals
Not clearly linked to broader strategic goals Ten clear strategic goals
Time Frame
Ineffective: Too short for long-term infrastructure planning
Longer-term: 25-year plan for water and sewer, transit and transportation systems
Coverage Not comprehensive: Focuses only on City-controlled assets
More comprehensive: Addresses assets owned by MTA, Port Authority, others
SOGR Plan
No timetable or plan for achieving SOGR
SOGR timetable for transit, roads and bridges
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PLANYC does not capture all of the Citys assets
PLANYC Spending in the Ten-Year Strategy (dollars in millions)
SPENDING PERCENT PLANYC Agencies $39,012 47% Environmental Protection $19,485 Transportation 11,106 Housing 4,713 Parks and Recreation 2,653 Transit Authority 767 Education 287 All Other Agencies $44, 653 53%
TOTAL CAPITAL STRATEGY $83,665 100%
Notably absent: Largest capital program $28 billion in spending on schools
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Effective capital planning is hindered by a lack of important information on capital assets
and clear goals for achieving a state of good repair.
Two:
Three: Many assets are not on regular replacement cycles, and ad hoc
repairs are funded through borrowing in the budget.
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How does the City determine the condition of its assets?
City assesses assets in two ways: Agency Evaluations Schools, Bridges and Tunnels, Water and
Sewer System Asset Information Management
System (AIMS) Engineers survey some agency assets on
a four-year rolling basis Recommends capital and expense budget
spending necessary to bring assets to a state of good repair
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Agency evaluations reveal improved conditions
WATER AND SEWER ENGINEER EVALUATION Adequate condition: no major deterioration Will address high priorities in FY2008 BUT need more comprehensive assessments for
major facilities so upgrades can occur on an orderly basis
BRIDGES AND TUNNELS ANNUAL REPORT Based on State standards Very Good to Poor A bridge that is continually well maintained should
never fall below good CY2006: 328 good or very good bridges; 456 fair
bridges; 3 poor bridges SCHOOLS Building Condition and Assessment
Architectural, mechanical, electrical inspections Rated Good to Poor
FY2006 Less than 1% poor; 69% fair; 28% fair to good
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but AIMS Report Shows City Has Not Achieved SOGR
Change in Funding of AIMS Recommendations, Fiscal Years 2000-2008(dollars in millions)
70% 72%66%
58%
41%
48% 46% 49% 49%
Total Recomm. $5,440
Total Funding $2,642
$
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY20080%
10%
20%
30%
40%
50%
60%
70%
80%
Percent Funded Total Recommendation Total Funding Reported
Source: New York City Office of Management and Budget, Asset Information Management System, Fiscal Years 2000-2008.
CALCS
Agency Reconciliation: Funding for Expense Budget Recommendations ($ in millions)
FY2007FY2006FY2005FY2004FY2003FY2002
INFRASTRUCTURE TOTAL$63.7$62.5$60.9$56.6$53.3$46.1
Transportation
Bridges28.613.212.413.89.712.2
Facilities and Ferries2.40.72.91.123.3
Street and Traffic Lighting47.747.645.641.741.632
Streets and Highways000000
NON-INFRASTRUCTURE$54.7$48.7$57.7$53.5$63.6$45.3
All Libraries1.20.41.30.81.91.2
Education12.812.715.914.813.511.2
City University4.84.84.64.84.74.4
Police Department7.26.96.27.26.12.9
Fire Department0.80.9.2.1.1.0
Children's Services0.10.1.0.1.1.1
Homeless Services5.44.65.85.34.82.7
Correction2.22.65.44.24.43.4
Human Resources0.30.80.50.40.30.2
Cultural Affairs
Juvenile Justice0.30.20.10.10.10.1
Small Business Services1.41.23.31.71.50.8
Health & Mental Hygeine1.71.41.31.20.50.5
Health & Hospitals Corp.1144.76.410.57.9
Sanitation0.60.50.60.50.50.4
Parks and Recreation2.44.34.43.112.76.1
Citywide Administrative2.53.23.42.923.5
ALL TOTAL$118.3$111.2$118.6$110.1$116.9$91.5
Source: Asset Information Management System (AIMS) Report, and AIMS Agency Reconciliation, Fiscal Years 2001-2006
Agency Reconciliation: Funding for Capital Budget Recommendations ($ in millions)
FY2007-2010FY2006-2009FY2005-2008FY2004-2007FY2003-2006FY2002-2005
INFRASTRUCTURE TOTAL$1,880.6$1,776.9$1,558.6$1,425.3$2,016.1$2,034.6
Transportation
Bridges943.8915.7856.8803.11,192.71,103
Facilities and Ferries44.339.148.941.43130.9
Street and Traffic Lighting
Streets and Highways892.6822.2652.9580.8792.4900.7
NON-INFRASTRUCTURE TOTAL$528.6$512.3$560.5$324.8$744.2$1,078.5
All Libraries6.12.72.11.14.58.3
Education191.7215.4229.90394.5622.6
City University2.22.9910.718.123.3
Police Department30.623.225.525.526.237.7
Fire Department1.31.60.40.21.92.2
Children's Services0.910.61.10.30.2
Homeless Services25.823.327.525.940.435.9
Correction30.834.419.925.39.323
Human Resources2.25.54.43.53.98.2
Cultural Affairs28.628.930.727.435.831.5
Juvenile Justice1.72.42.62.70.91.5
Small Business Services19.1222819.315.845.6
Health & Mental Hygeine9.99.67.782.22.1
Health & Hospitals Corp.65.550.864.244.767.386.8
Sanitation9.38.915.59.613.317.9
Parks and Recreation4222.427.42723.340.4
Citywide Administrative61.157.565.192.986.491.4
ALL TOTAL$2,409.2$2,289.3$2,119.0$1,750.1$2,760.3$3,113.1
Source: Asset Information Management System (AIMS) Report, and AIMS Agency Reconciliation, Fiscal Years 2001-2006
NOT UPDATED WITH '08
Table 8: Shortfall in Funding for AIMS Recommendations for State of Good Repair ($ in millions)
FY2000FY2001FY2002FY2003FY2004FY2005FY2006FY2007
Total Recommendation$4,200$4,397$4,845$4,941$4,534$4,682$5,192$5,210
Total Funding Reported$2,958$3,173$3,205$2,877$1,860$2,238$2,400$2,528
Total Shortfall in Funding($1,242)($1,224)($1,640)($2,064)($2,674)($2,444)($2,791)($2,682)
Percent Funded70%72%66%58%41%48%46%49%
Source: Asset Information Management System (AIMS) Report, and AIMS Agency Reconciliation, FY2001-2006
FY2007-2010FY2006-2009FY2005-2008FY2004-2007FY2003-2006FY2002-2005
Funding Provided
Transportation Infrastructure$1,944$1,839$1,619$1,482$2,069$2,081
All others (Non-infrastructure)$583$561$618$378$808$1,124
Total$2,528$2,400$2,238$1,860$2,877$3,205
Funding as a Percent of Total Recommendation
Transportation Infrastructure68%65%64%62%83%90%
All others (Non-infrastructure)25%24%29%18%33%44%
Total49%46%48%41%58%66%
Funding Shortfall
Transportation Infrastructure($897)($987)($921)($905)($426)
All others (Non-infrastructure)($1,785)($1,805)($1,524)($1,769)($1,638)
Total($2,682)($2,791)($2,444)($2,674)($2,064)
Source: Asset Information Management System (AIMS) Report, and AIMS Agency Reconciliation, Fiscal Years 2001-2006
INFRASTRUCTURE TOTAL2841.7962825.9462539.9852386.7562495.3792310.308
NON-INFRASTRUCTURE TOTAL2368.0962365.9952142.0352147.2582445.8312534.442
20072006200520042003200220012000
CAPITAL RECOMMENDATION$4,912.8$4,878.64,362$4,245.1$4,680.9$4,672.0
EXPENSE RECOMMENDATION$297.1$313.3320$288.9$260.3$172.74
TOTAL RECOMMENDATIONS$5,209.9$5,191.9$4,682.0$4,534.1$4,941.2$4,844.84396.748$4,200.1
SHORTFALLS TABLE
Agency Reconciliation: Funding for Expense Budget Recommendations ($ in millions)
FY2007FY2006FY2005FY2004FY2003FY2002
INFRASTRUCTURE TOTAL$63.7$62.5$60.9$56.6$53.3$46.1
Transportation
Bridges28.613.212.413.89.712.2
Facilities and Ferries2.40.72.91.123.3
Street and Traffic Lighting47.747.645.641.741.632
Streets and Highways000000
NON-INFRASTRUCTURE$54.7$48.7$57.7$53.5$63.6$45.3
All Libraries1.20.41.30.81.91.2
Education12.812.715.914.813.511.2
City University4.84.84.64.84.74.4
Police Department7.26.96.27.26.12.9
Fire Department0.80.9.2.1.1.0
Children's Services0.10.1.0.1.1.1
Homeless Services5.44.65.85.34.82.7
Correction2.22.65.44.24.43.4
Human Resources0.30.80.50.40.30.2
Cultural Affairs
Juvenile Justice0.30.20.10.10.10.1
Small Business Services1.41.23.31.71.50.8
Health & Mental Hygeine1.71.41.31.20.50.5
Health & Hospitals Corp.1144.76.410.57.9
Sanitation0.60.50.60.50.50.4
Parks and Recreation2.44.34.43.112.76.1
Citywide Administrative2.53.23.42.923.5
ALL TOTAL$118.3$111.2$118.6$110.1$116.9$91.5
Source: Asset Information Management System (AIMS) Report, and AIMS Agency Reconciliation, Fiscal Years 2001-2006
Agency Reconciliation: Funding for Capital Budget Recommendations ($ in millions)
FY2007-2010FY2006-2009FY2005-2008FY2004-2007FY2003-2006FY2002-2005
INFRASTRUCTURE TOTAL$1,880.6$1,776.9$1,558.6$1,425.3$2,016.1$2,034.6
Transportation
Bridges943.8915.7856.8803.11,192.71,103
Facilities and Ferries44.339.148.941.43130.9
Street and Traffic Lighting
Streets and Highways892.6822.2652.9580.8792.4900.7
NON-INFRASTRUCTURE TOTAL$528.6$512.3$560.5$324.8$744.2$1,078.5
All Libraries6.12.72.11.14.58.3
Education191.7215.4229.90394.5622.6
City University2.22.9910.718.123.3
Police Department30.623.225.525.526.237.7
Fire Department1.31.60.40.21.92.2
Children's Services0.910.61.10.30.2
Homeless Services25.823.327.525.940.435.9
Correction30.834.419.925.39.323
Human Resources2.25.54.43.53.98.2
Cultural Affairs28.628.930.727.435.831.5
Juvenile Justice1.72.42.62.70.91.5
Small Business Services19.1222819.315.845.6
Health & Mental Hygeine9.99.67.782.22.1
Health & Hospitals Corp.65.550.864.244.767.386.8
Sanitation9.38.915.59.613.317.9
Parks and Recreation4222.427.42723.340.4
Citywide Administrative61.157.565.192.986.491.4
ALL TOTAL$2,409.2$2,289.3$2,119.0$1,750.1$2,760.3$3,113.1
Source: Asset Information Management System (AIMS) Report, and AIMS Agency Reconciliation, Fiscal Years 2001-2006
Table 8: Shortfall in Funding for AIMS Recommendations for State of Good Repair ($ in millions)
FY2000FY2001FY2002FY2003FY2004FY2005FY2006FY2007FY2008
Total Recommendation$4,200$4,397$4,845$4,941$4,534$4,682$5,192$5,210$5,440
Total Funding Reported$2,958$3,173$3,205$2,877$1,860$2,238$2,400$2,528$2,642
Total Shortfall in Funding($1,242)($1,224)($1,640)($2,064)($2,674)($2,444)($2,791)($2,682)($2,798)
Percent Funded70%72%66%58%41%48%46%49%49%
Source: Asset Information Management System (AIMS) Report, and AIMS Agency Reconciliation, FY2001-2006
FY2000FY2001FY2002FY2003FY2004FY2005FY2006FY2007FY2008
Total Recommendation$4,200$4,397$4,845$4,941$4,534$4,682$5,192$5,210$5,440
Total Funding Reported$2,958$3,173$3,205$2,877$1,860$2,238$2,400$2,528$2,642
Percent Funded70%72%66%58%41%48%46%49%49%
fy00-07
4200.1242957.791340.7042152422
4396.7483172.73340.7216091075
4844.753204.5190.6614415605
4941.2112877.1410.5822744667
4534.0631860.1910.4102702146
4682.0222237.6480.4779234271
5191.9412400.4630.4623440444
5209.8922527.5930.4851526673
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Page &P
Total Recommendation
Total Funding Reported
Percent Funded
Change in Funding of AIMS Recommendations,FY2000-2007
fy00-08
4200.1242957.791340.7042152422
4396.7483172.73340.7216091075
4844.753204.5190.6614415605
4941.2112877.1410.5822744667
4534.0631860.1910.4102702146
4682.0222237.6480.4779234271
5191.9412400.4630.4623440444
5209.8922527.5930.4851526673
5440.0032641.6170.4855910925
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Page &P
Source: New York City Office of Management and Budget, Asset Information Management System, Fiscal Years 2000-2008.
Total Recommendation
Total Funding Reported
Percent Funded
Chart 2Change in Funding of AIMS Recommendations, Fiscal Years 2000-2008
fy00-08 for PPT
4200.1242957.791340.7042152422
4396.7483172.73340.7216091075
4844.753204.5190.6614415605
4941.2112877.1410.5822744667
4534.0631860.1910.4102702146
4682.0222237.6480.4779234271
5191.9412400.4630.4623440444
5209.8922527.5930.4851526673
5440.0032641.6170.4855910925
&A
Page &P
Source: New York City Office of Management and Budget, Asset Information Management System, Fiscal Years 2000-2008.
Total Recommendation
Total Funding Reported
Percent Funded
Change in Funding of AIMS Recommendations, Fiscal Years 2000-2008(dollars in millions)
Total Recomm. $5,440
Total Funding $2,642
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Agencies dont fully fund AIMS recommendations
This indicates there is no clear policy for funding maintenance and repairs and no plan for achieving SOGR
Regular replacement cycles do not guide asset replacement; instead, assets tend to be repaired when they malfunction
Why havent we achieved State of Good Repair?
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Weak ties between AIMS and Ten-Year Strategy
Ten-Year Strategy does not appear to be firmly rooted in needs assessments Information is limited:
For City-owned assets, AIMS does not include: Housing, water and sewer assets Piers and bulkheads and the East River Bridges Smaller assets with a replacement cost of less
than $10 million For assets not owned by the City, little is known
about their condition Where good information exists, it does not
always guide investment decisions Demonstrated by shortfalls in AIMS funding No goal, timetable, or plan for achieving SOGR
An example of where needs are tied clearly to the capital plan: Bridges and Tunnels
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The Citys rationale for pursuing many
expansion projects is unclear or unstated.
Four:
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Expansion Projects: $23 billion 26 percent of the $86.7 billion in planned
investments will be for new capital projects, including Hudson Yards
PLANYC includes major expansions in Transportation, Environmental Protection, Housing, Parks and Energy
Ten-Year Strategy includes additional expansions in schools and economic development
Little or no justification provided for new projects based on data or economic analysis (such as the kind done for Hudson Yards)
PLANYC does a slightly better job at explaining why projects should be pursued or what improvement in service can be anticipated
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Recommendations
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Recommendation: Institutionalize and Expand PLANYC
Institutionalize and expand PLANYC in the context of a tiered planning process Pass City Council bill establishing Office of
Long-term Planning & Sustainability Include PLANYC process in City Charter Expand planning to cover education and all
other agencies Tiered planning process: Longer-term strategic document that can
vary by agency Shorter-term budgetary document for
realizing strategy through specific goals and benchmarks
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Recommendations Achieve SOGR
Develop a systematic plan to bring all City-owned assets to a state of good repair Conduct a fuller assessment of needs Produce a plan or timetable to
achieve SOGR Tie capital plans to this SOGR plan Assess non-City owned assets and
work with other owners to achieve SOGR for those assets
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Recommendation Fund Regular Replacement
Place assets on appropriate replacement cycles and fund their depreciation with operating revenues, not debt Replacement Cycles
Impose greater discipline on capital planning Provides incentives for upkeep and maintenance
Funding from Operating Revenues Steady stream of funds available for replacement Will mitigate debt service costs in the long-run
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Recommendations Justify Expansions
Pursue expansion projects based on clearly explained priorities that reflect better provision of services or high rate of return Economic analysis should clearly
demonstrate anticipated benefits Example: Hudson Yards
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Capital Budgeting for 2030:Achieving the Goals of PLANYCOverviewWhy does infrastructure matter?Capital Assets in New York CityNYC has a vast and complex system of capital assetsNot All Assets Owned By NYCNew York City Government$60.5 Billion in Capital AssetsHow does the City plan and budget for these assets?PLANYCChallenges to Achieving the Goals of PLANYCOne:Weaknesses of Ten-Year StrategyWeaknesses of Ten-Year StrategyPLANYC: Improvement Upon Current ProcessPLANYC does not capture all of the Citys assetsTwo:How does the City determine the condition of its assets?Agency evaluations reveal improved conditionsbut AIMS Report Shows City Has Not Achieved SOGRWhy havent we achieved State of Good Repair?Weak ties between AIMS and Ten-Year StrategyFour:Expansion Projects: $23 billionRecommendationsRecommendation:Institutionalize and Expand PLANYCRecommendationsAchieve SOGRRecommendationFund Regular ReplacementRecommendationsJustify ExpansionsSlide Number 29