Strengthen the City’s fiscal health to meet current and future needs
The long-term health of the City’s financial and capital plan is an integral component of resilience. With an annual operating budget of more than $90 billion, City programs are essential to lifting up communities and supporting the social safety net. Improving government operations streamlines delivery of critical services and creates savings.
Over the past five years, the City has dramatically increased budget reserves and maintained a focus on savings, including building long-term savings into the financial plan. Due in part to these efforts, in March 2019, the City received its highest-ever credit rating for issuance of general obligation bonds. Citing a diversified economy, talented labor pool, and strong financial management, Moody’s acknowledged the City has a stable financial outlook, allowing greater flexibility in the event of an economic downturn.
However, we must be prepared to maintain financial stability in the face of shifting national and global economic forces. Reduced support at the State and federal levels, increased trade volatility, and the continued risk of climate change present clear challenges to our financial health. The City is committed to addressing these challenges and building financial resiliency.
The modernization of City operations benefits everyone, including residents who rely on City services, and vendors that do business with us. It also allows us to better practice such shared values as energy efficiency, technological modernization, and cost prudence. The City will continue to develop its cost-saving initiatives to improve internal operations and explore additional opportunities to help build savings. The following initiatives highlight a subset of the City’s recent savings efforts — which include both short-term cost savings and long-term operational improvements:
- Reduce the size of the City fleet and improve its efficiency
The City is transforming its vehicular fleet to reduce emissions and improve safety. The number of electric vehicles (EV) has increased from 211 in FY14 to more than 1,750 today, and will total more than 2,000 by summer. As part of Vision Zero, NYC Fleet has implemented a Safe Fleet Transition Plan to procure safer, more efficient vehicles for all agencies to reduce both crashes and their subsequent claims costs.Despite a growing workforce, the City has maintained the same garage footprint and increased fuel efficiency at a time when strategic priorities, such as more vehicles for community policing, have mandated an increase in overall vehicle count. Fleet initiatives as part of the Citywide Savings Program led to $20 million in savings between 2018 and 2019.The 2019 Fleet Executive Order mandates increased sustainability and efficiency, requiring all agencies to achieve heightened environmental and efficiency targets, with the help of advanced sensor technology (telematics) across all vehicles. These measures will, each year, reduce vehicle miles traveled by 10 million, decrease emissions from municipal vehicles by more than 6,300 metric tons of carbon dioxide equivalent (2.5 percent of municipal fleet emissions), and save more than 500,000 gallons of fuel. These actions will save millions of dollars across City agencies by reducing on-road vehicle units, improving commuting patterns, and downsizing away from SUVs. The City will also accelerate its transition to EV and hybrid vehicles — including hybrid policing units — reducing our total fuel consumption to below 2014 levels.
- Implement strategic real estate planning across the City’s portfolio
In 2018, the City created an initiative led by the Department of Citywide Administrative Services (DCAS) to evaluate its real estate portfolio with the goal of reducing the cost of leased spaces and maximizing the use of owned spaces. The initiative will assess opportunities to maximize space utilization, and establish key performance indicators to improve square-footage allocation and vacancy rates, and decrease leased space by borough over the next decade. These initiatives aim to create changes to building layouts that will not only reduce our overall space footprint, but also modernize workspaces for a more efficient, healthier, and productive office layout. Over time, this team will strategically evaluate purchase and lease decisions across the City’s portfolio of buildings to ensure the City is positioned to deliver services in the right location, at the right time. These initiatives could enable further savings opportunities, including a densified office portfolio and increased employee satisfaction and retention. In FY19 alone, the City has generated $3 million in cost avoidance by declining requests for new space.
- Reduce the cost of procured goods and services
The City is using state-of-the-art vendor management technology to improve the procurement process for both agencies and contractors. As part of this ongoing improvement, the City’s more than $20 billion in annual procured goods and services will be digitized and streamlined through the Procurement and Sourcing Solutions Portal (PASSPort). PASSPort will help make bids more competitive by decreasing the complexity required for vendors to navigate the City’s contracting process. In parallel, these efforts are expected to provide new opportunities for small businesses, including M/WBEs, to better access City resources to grow their enterprises.The City is developing a state-of-the-art procurement platform to reduce the City’s administrative costs in procuring goods and services across 41 mayoral agencies, collect data to strategically source goods and services based on quality and pricing, and consolidate and centralize the City’s purchasing through master contracts that provide discount pricing for bulk purchasing.In procurement’s current state, thousands of agency and vendor personnel interact through paper and email to establish and manage contracts, monitor quality and ensure accurate payment across a $20 billion annual purchasing portfolio.The City is designing the Procurement and Sourcing Solutions Portal (PASSPort) to standardize, digitize, centralize, and streamline procurement practices across the City with the goal of reducing the time and administrative effort that it takes for the City to purchase goods and services.These efforts also benefit vendors and nonprofit providers by decreasing the complexity required for these stakeholders to navigate the City’s contracting process. These efforts are expected to provide new opportunities for small businesses, including M/WBEs, with increased access to City resources and opportunities to grow their businesses.
- Limit avoidable labor costs for municipal workers
The City will reduce labor costs within our own workforce without impeding strategic priorities. The City has already sought ways to cap overtime costs for both skilled trades workers and civilian employees. Through tightened controls and approval processes, these initiatives reinforce the expectation that agencies must minimize the use of overtime. At the same time, the City is smoothing the path to retirement for City workers while opening up advancement opportunities for lower-tenure employees and addressing the challenge of part-time work that can be difficult to fill — at a lower cost to the taxpayer. The Silver Stars program, for example, allows employees eligible for retirement to shift from full- to part-time status at the discretion of their agency while officially filing for retirement. City employees benefit by earning their pension while collecting partial wages. At the same time, it enables the transition of institutional knowledge while expanding opportunities for younger-tenure employees to apprentice or up-skill in a soon-to-be-vacant post.
- Continue to generate savings from City health plans
For the past two decades, health care costs have increased dramatically for employers, including the City. The City has partnered directly with unions, reaching agreements with the Municipal Labor Committee (MLC) that mitigate rising health care costs for City employees, both active and retired. Total savings from the two agreements through Fiscal Year 2022 is $10.3 billion, with annual recurring savings of $1.9 billion in Fiscal Year 2021 and beyond. These savings initiatives not only reduce the per capita cost of care, but also improve the health of beneficiaries and the patient experience.We are also addressing the long-term health and resiliency of NYC employees through worksite programs offered by WorkWell NYC that are designed to support employees with healthy eating, physical fitness, disease prevention and mental well-being.