INFRASTRUCTURE UPDATE

City Releases a Capital Plan Emphasizing Core Infrastructure

Mayor Bill de Blasio’s Preliminary Capital Budget for the upcoming 2017 Fiscal Year increases investment in core components of New York City’s infrastructure. 

The City's latest four-year commitment plan, released in late January, rose by more than $2.5 billion to $47.4 billion, in comparison to a capital plan update the City published in September. Commitments represent the value of all projects authorized to proceed.

Commitment Plan, FY 16 – FY 19
In millions

 

 

FY 16

 

FY 17

 

FY 18

 

FY 19

 

TOTAL

September 2015 Plan

 

$11,932

 

$12,255

 

$10,998

 

$9,614

 

$44,799

FY 17 Preliminary Plan

 

$12,156

 

$13,899

 

$11,271

 

$10,036

 

$47,362

Increase/(Decrease)

 

$224

 

$1,644

 

$273

 

$422

 

$2,563

Major increases in the plan are concentrated in a few areas. DEP projects constitute more than $1.7 billion of the change. Highlights of the funding increases include: 

  • $540 million for combined sewer overflow (CSO) abatement, notably for the Gowanus Superfund Site CSO retention facility in 2016 and 2017, under DEP’s water pollution control program;
  • $213 million over four years for a “thirty-year state of good repair” program in DOT’s Highways program;
  • $120.6 million for water main replacements “associated with DOT priority projects” for fiscal years 2016 through 2018, along with increased funding for existing water main projects.

Total projected capital expenditures, meaning actual spending on capital projects each year, are also up by $1.6 billion, or roughly $400 million per year on average, compared to the September Plan.

Capital Cash Expenditures, FY 16 – FY 19
In millions

 

 

FY 16

 

FY 17

 

FY 18

 

FY 19

 

TOTAL

September 2015 Plan

 

$7,938

 

$8,814

 

$9,953

 

$10,377

 

$37,082

FY 17 Preliminary Plan

 

$8,385

 

$9,178

 

$10,351

 

$10,754

 

$38,668

Increase/(Decrease)

 

$447

 

$364

 

$398

 

$377

 

$1,586

Compared to the Preliminary Budget released in February 2015, the increase in the budget is even more significant.  This year’s Preliminary Budget contains a $6.3 billion, or 15 percent, increase in capital commitments, and a $2.9 billion, or 8 percent, increase in actual spending over four years.

Financing and Debt Service
The City anticipates issuing $31.5 billion in new debt for its capital program during the four-year plan period. Debt outstanding would rise from $102.2 billion at the end of FY 2016 to $120.9 billion in FY 2020, an increase of 4.3 percent per year. Debt service would rise from 11.5 percent to 13.2 percent of City tax revenues.

The FY 2017 Preliminary Budget maintains the $500 million “capital stabilization reserve” established by the Administration this year. The reserve is described as serving three purposes: early-stage capital planning, scoping and design; defeasement of City debt; and as a budgetary reserve in the event of a downturn. The New York Building Congress is advocating expanding use of this fund for project design and scoping.

Building Congress President Richard T. Anderson said, “The de Blasio Administration should be commended for its sustained commitment to building and maintaining the City's physical plant. The Mayor has ambitious goals for housing, education, and economic development that can only be achieved with these core systems in place.

“At the same time, the City faces budget constraints that limit capital spending at a moment when both the population and economy are growing rapidly, exceeding current capacity to meet this need.  That is why the Building Congress is advocating reforms to the budget planning process, procurement, and project delivery, and the creation of new, dedicated revenue sources to build the infrastructure essential to the City’s continued economic growth.”

    The New York Building Congress is a membership coalition of business, labor, association and government organizations promoting the design, construction
and real estate industry in New York City.