Mayor Bill de Blasio
New York, NY 10007
Dear Mayor de Blasio;
As we face unprecedented times and a budget that must-see painful cuts, we should look for possible waste and opportunities for revenues and savings. I have proposed $15.24 billion in potential savings and revenue for our city’s budget in order to invest $827 million in spending on programs that support children, families, seniors, and our planet that will reduce costs and generate revenues.
In 2014, we inherited a $68.5 billion expense budget that has since grown by more than 30% to $92.8 billion. Surely in this $24.3 billion in growth we can find opportunities for cost savings, as we also reexamine the initial $68.5 billion, we inherited. As a city we must seek capital savings, find ways to significantly and responsibly reduce the NYPD budget, and examine clawing back real property tax exemptions, cancelling irresponsible contracts, and maintaining spending for programs that avoid costs and generate revenue.
The city’s budget must continue to reflect our values by investing in our youth, families, and seniors. We must maintain summer programs (summer youth employment & summer SONYC), expand 3-K, reopen parks and beaches, and provide seniors the support they need through their local senior centers.
Recover Billions in Real Estate Tax Exemptions from Developers Who Broke Their Promises ($10 billion, $5 billion in tax revenue and $5 billion in savings)
New York City spends at least $5 billion and loses out on an additional $5 billion yearly in revenue from tax breaks granted for economic development and affordable housing. Now is the time to reexamine some of those very generous deals to ensure our partners are keeping up their end of the bargain through this pandemic, when we need them most.
In 2018, the city spent $1.8 billion and provided $3.6 billion in tax breaks for a total of $5.5 billion in economic development. Combined with $4.4 billion in tax breaks and spending from the state, the Citizens Budget Commission suggested there were “10 Billion Reasons to Rethink Economic Development in New York.”
Hudson Yards alone received an estimated $6 billion in tax exemptions. During this pandemic, we must scrutinize the deals made with these multinational corporations to ensure that they are keeping local employees on staff, and if not, cut their corporate welfare for failure to keep their end of the bargain. Even if they have kept their end of the bargain, it is hard to imagine why the city should not renegotiate these deals before we start furloughing or laying off our own employees.
Many public-private partnerships are managed by the New York City Economic Development Corporation. In some cases, the city can see vital investments in the local economy, city dollars matched by private dollars, and billions generated in economic activity. However, with billions in contracts, just one contract with Small Business Services accounts for $2.1 billion for workforce investment and only $75 million spent to date. Either there is something wrong here or there is an opportunity for $2 billion in savings.
New York City has invested $4.375 billion in affordable housing, with the 421-a tax break costing $1.4 billion a year. While affordable housing developers have received these billions in tax breaks, financing, and incentives ostensibly to provide affordable housing the truth is we don’t know how much return we are getting on our investment.
In 2015, I supported a heroic city employee and member of the Organization of Staff Analysts, Stephen Werner, in blowing the whistle on landlords getting more than $100 million in property tax breaks while failing to register more than 50,000 units with the state. Working with this whistleblower, I authored and passed Local Law 64 which will be going into effect this summer. This law forces bad landlords to register every unit with the city, make empty units available for residents to apply online, and for the first time in a generation, levy heavy fines for a failure to offer the promised affordable housing.
With as many as 22,000 units still unregistered –– despite the best efforts of the city and state over the past few years –– the city should plan claw back tax exemptions of approximately $50 million a year going back to when units were first illegally deregulated. This could take as long as 25 years, to recover up to a billion in back taxes. Additionally, the city should plan on issuing monthly fines of up to $2,000 to generate up to approximately $44 million a month and more than half a billion dollars in revenue next fiscal year, unless bad landlords return the affordable housing units they promised.
Recoup Funds from Emergency Pandemic Procurements ($2.5 billion in potential savings)
During the height of the pandemic, the City of New York was the epicenter forced to bid against states for the personal protective equipment (PPE) and other essentials needed to save lives. We cannot put a price on expenses incurred to save countless lives. However, now that we are on the other side of the curve, now is the time to re-examine contracts, cancel and claw back where we have not yet received delivery, renegotiate prices, and transition to a sustainable supply chain. On May 22nd, Finance Chair Danny Dromm and Governmental Operations Chair Fernando Cabrera joined me in writing to the Mayor’s Office of Contracts demanding that the city begin doing so, which you agreed to begin doing by letter on May 29th.
The Council has identified a minimum of $2.3 billion in Covid-19 related contracts and only $903.8 million spent without counting H+H which is pending FEMA funding, as of June 7. This amount may be as high as $3.2 billion with only $708 million spent on prime vendors as of June 13 according to CheckbookNYC. Whether there is as much as $2.5 billion or as little as $1.4 billion in unspent money, we must cancel or renegotiate as many of these contracts as possible now that we have successfully flattened the curve.
One prime example, would be to cancel the $250 million contract with CrewFacilities.com LLC of which the city has only spent approximately $15 million, and recover $235 million. We can also continue to cancel contracts for supplies that were never delivered.
I am certain that a review of further contracts that may have been good or the best we could at the time will result in billions of funds saved for the taxpayers and the budget.
Defund the NYPD and Reinvest the Savings in Communities Harmed by Over Policing ($1 billion in savings)
Violence and force should only be used as a last resort. The NYPD cannot be the only tool we use in reducing crime and keeping our neighborhoods safe. It starts with investing in our children and in communities that have been harmed by over-policing.
The NYPD annual budget has grown by a billion dollars since I was elected. The NYPD budget now stands at $5.92 billion. The NYPD added 1,297 new officers since 2015 that we in the City Council fought for and won. At the same time, we’ve invested in communities affected by over policing and it has worked. Beginning in 2014, the City Council led the way with Mayor de Blasio to invest $12.7 million in gun violence prevention, including programs like Cure Violence, with studies finding reductions of as much as 63 percent fewer shooting victimizations in our hardest hit neighborhoods.
Mayor Bill de Blasio’s executive budget is proposing doomsday cuts to Summer Camps for 30,000 low-income children, Summer Youth Employment for 100,000 youth, pools closed for the season, and a long list of programs to long to list that will leave our residents, particularly our youth without the resources they need to play, learn, and grow in safe spaces with adult mentorship. At the same time, Mayor de Blasio is proposing no cuts to the NYPD. The message here is clear: we are a city that would rather police our children than care for them.
In a city budget where every dollar counts, with billions in cuts coming, we need to choose where we invest those dollars wisely. We must invest in prevention and diversion over policing. Brooklyn College Professor Alex Vitale, a coordinator of The Policing & Social Justice Project, outlined in the Daily News a plan that I generally support to save $1 billion over the next four years through attrition, reduction of overtime, and by keeping cops out of our schools (I would still fund body cameras, if we can finally see their footage, see repeal 50-a). With no parades, no Yankee games, and crime being way down this year due to coronavirus stay at home orders, the NYPD should be showing hundreds of millions if not billions in budget savings. Meanwhile, our schools are slated for an $827 million budget cut. The New York Police Department now has a total of 36,178 uniform officers and 19,000 civilian employees, a higher number that it has ever been before, despite crime trending down.
As of June 12, Council leadership proposed a plan to cut $1 billion from the NYPD’s spending in the coming fiscal year alone, including reducing uniform headcount through attrition, cutting overtime, shifting responsibilities away from the NYPD, finding efficiencies and savings in OTPS spending, and lowering associated fringe expenses.
With a billion dollars reallocated from the NYPD, our City would have the money to fund our schools, universal 3K, universal after-school, universal summer camp, universal youth jobs, and much more.
Do Not Register Non-Essential Pending Contracts ($1 billion in potential savings)
There are $978.42 million in professional service and unclassified expense contracts that are pending registration, as of June 12 according to CheckBookNYC. This one of the last steps in the procurement process, and an opportunity to stop the spending without incurring any liability. The Mayor can save this money especially given the Comptroller’s frequent objections to registering these and other contracts in order to save for taxpayers. During the Executive Budget hearing the Director of the Office of Management and Budget (OMB) shared that they had worked with the Comptroller to cancel a number of contracts that were pending registration without providing any details. Following their testimony I requested the list of contracts considered along with whether they were cancelled or registered, to which OMB agreed, but still remains outstanding.
Cut Consulting Contracts and Bring the Work in House and Save ($375 million in potential savings)
When it comes to budget savings, the first place to start should always be to reduce planned spending, minimize overhead and costs, particularly from outside contracts.
There is $1 billion in consulting expense contracts spanning 172 prime vendors just for the Department of Information Technology and Communications. It is noteworthy that a majority, some 92 prime vendors, are MWB/E businesses, however their share of this billion is only $377.5 million, closer to one-third than the more than half. Given the continued discrimination against businesses owned by women and people of color, we should closely examine these contracts, but should instead focus on the large incumbent contractors before setting back MWB/E growth, particularly given the disproportionate harm of the coronavirus on communities of color. Of the remaining $624 million in contracts only $249 million has been spent to date, leaving $375 million in savings if these contracts were brought in house. Our city’s largest contracts go to some of our nation’s largest corporations including:
- $127 million – Experis US Inc. aka ManpowerGroup largely for “Citywide SI Class 2:Projects up to $25,000,000” and “Citywide ITCS” as well as contracts for specific positions.
- $84 million – International Business Machines (IBM) for “Citywide SI Class 2:Projects up to $25,000,000” and “Citywide SI Class 1”
- $35 million – Deloitte for “Citywide SI Class 2:Projects up to $25,000,000.00” and “NYS3 CYBER COMMAND PRIORITY INITATIVES Task Order 0003-001B” [sic].
- $30 million – Accenture for “Citywide SI Class 2:Projects up to $25,000,000.00” and “CPR/ Analytics- Production Support/ Development Services.”
- $25 million – Northrop Grumman for “Citywide SI Class 2: Projects up to $25,000,000”
- $24 million – Gartner for “Quality Control Services,” “Business Impact Analysis QC” and various “advisory service” subscriptions.
- $22 million – KPMG for “Quality Control Services”
These contracts far exceed the initial $68 million cost estimate for CityTime and yet, there is no project, or final product associated with many of these contracts to justify nearly two-thirds of a billion in costs. To the extent we are spending millions on “quality control services” this seems like something city agencies could do in house and if a third party were required could be completed by the Comptroller’s office.
Recognize Heat, Light, and Power Savings ($176 million in potential savings)
The city has budgeted $713.5 million for heat, light, and power across multiple city agencies and even major cultural institutions. During this pandemic we have closed the doors on city facilities as we moved online reducing costs to heat, cool, or even light our offices. Similarly, our largest cultural institutions have closed their doors to the public. As we enter our third month we should see up to a full quarter in savings from this budget.
However, the city only recognized savings of $38.7 million this year and only projected $23.6 million starting in July, according to the Council. Given the fact that most city facilities have been closed since March or a quarter of this year, we should recognize as much as $178 million for this year and $60 million in savings for each month starting in July that city facilities and major cultural institutions will remain closed. Taken together, we should plan for a minimum of $238 million in savings, an additional savings of $176 million over current projections.
Recognize Savings from Reductions in Sanitation and Snow to Save Composting (potential savings of $126 million and spending of $24.5 million for net potential savings of $101.5)
New York City saw its least snowy season accumulating a total of 4.8” since 1972-73 at 2.8” far below the average of 25.8 inches. However, the city budgeted $111 million for this year and $101 million for next year. Given the reduced snowfall, the city should recognize 80% of the snow removal budget for this year of $90 million. In addition, despite a fleet of 2,100 garbage trucks and 1,000 light duty trucks that can be mounted with a plow, 360 salt spreaders, 150 dump trucks (used for snow), and 36 snow melters, the city still contracts with 14 vendors for snow removal services for a total of $56 million from 2018 through 2022. We must cancel these wasteful contracts and recognize these savings of $116 million.
The City of New York has at least $5.6 billion in municipal waste export contracts including $2.86 billion with Covanta from 2013 through 2035 and $2.75 billion with Waste Management from 2017 through 2037. During the pandemic New York City saw a decline in residential waste of 20% in April as compared to the previous year, with some neighborhoods decline topping 40%. Despite this dramatic decline over the past 3 months we’ve seen $194.76 million paid so far this fiscal year, 17% more than last year, with 3 weeks left. The city should investigate cost increases given reductions in waste which should see savings of at least $10 million.
In 2002, then Mayor Michael Bloomberg cut recycling citywide choosing to save $56.6 million instead of our planet. At the time, New York City’s recycling rate was 19.8%, following the cut and subsequent restoration in 2003, New York City’s rate dropped to 11.4%, and even a decade later was not back to its peak. Mayor de Blasio please do not repeat Bloomberg’s mistakes. You must overcome our legacy as the most wasteful city on the planet. Instead of cutting composting that has taken 30 years to grow to save a measly $24.5 million in a $89 billion budget, we should push to expand it citywide while people are home and can embrace waste reduction. I know you care about our planet, let’s not trash it.
We must double down on zero waste, save our composting program, and save the billions this city plans to spend on waste. We can save money and our planet.
Recognizing Savings from Cancelled and Reduced Demand on City Services ($84.5 million in potential savings)
In addition, it is worth questioning $84.5 million in construction of 16 new vessels for already costly NYC Ferry service seeing declining ridership during the pandemic. Similarly, the city should evaluate other construction projects that are not tied to immediate threats such as the pandemic, climate change, or related issues like overcrowded school that will make it harder to recover from the pandemic.
Spend on Services People Need Over Exponentially More Expensive Construction Projects
As you know, New York City has multiple budgets, including an expense budget funded from annual revenues such as taxes and fees as well as a capital budget funded from municipal bonds. While the expense budget has few restrictions, the capital budget faces restrictions including not being used to finance the operations of our city. This is an important restriction on spending coming out of the Beame administration in 1975 when the city almost went bankrupt.
Just as our expense budget has grown, our capital budget has grown, with debt growing from $77 billion in 2013 to $89 billion last year. In some cases, our capital budget has been projected to exceed our city’s current debt limits. During previously strong economies, I have personally argued to pull projects out of the capital budget to minimize debt and speed projects along.
The Department of Citywide Administrative Services moved $3.5 million in projects from the expense budget to be covered by capital funds, according to the Council. Every agency should follow DCAS and I am certain there is exponentially more that can be saved.
In the face of this pandemic, we must move as much of our capitally eligible projects from the expense to our capital budget.
Stop Using Racist Materials in the Classroom by Dropping White-Centric and Eurocentric Textbooks in Favor of Free Open Education Resources ($84 million in potential savings)
Textbooks are largely the same across all public schools, even at The Bronx High School of Science when I went there. In fact with many textbooks older than the teachers using them, at 25-years-old and even older, they are largely white and eurocentric perpetuating systems of racism in our public education system. Even the content of new textbooks are widely known to be dictated by the conservative politics of the state of Texas. This calls into question the $84.4 million a year New York City spends on textbooks. Especially with New York States $8 million investment in open educational resources and the United Federation of Teachers recognizing OER resources, it is time for New York City to take advantage of these resources and recognize these savings. Free digital textbooks are available from CK12, Merlot, Lumen, OpenStax, and OER Commons, to name a few with many books freely available from Project Gutenberg. If there is any concern with regards to textbook quality, the Department of Education could consider encouraging teachers to author their own textbooks with additional compensation or facilitating their work in the same way as our New York State’s University with OpenSUNY. With recent expenditures to buy every student an iPad there is no longer an excuse to spend $84 million on old outdated, racist, white, urocentric, paper-textbooks. Adopting digital free digital textbooks for a curriculum that is culturally responsive and reflective of the diversity of our city’s children would be an important step towards the type of systemic change people are marching in the streets to fix.
Invest in Children, Families, and Our Seniors to Generate Revenue and Avoid Higher Costs
Summer Youth ($224.2 million in spending)
Our city has been through a lot over the past few months between the pandemic, stay at home orders, lost jobs and income, skyrocketing food costs, many without money for rent, and the uncertainty of it all. Now is not the time for the city to cut direct services to residents who need them most, our children, families, and seniors.
Remote learning for the school year will conclude at the end of June, leaving 1.1 million children with no education, enrichment, or engagement. Playgrounds and beaches are closed, Summer Schools Out New York City (SONYC) funding has been cut along with 100,000 Summer Youth Employment (SYEP) jobs.
At the same time, we know that coronavirus is not going away in the summer and we have now learned that children are in fact susceptible to multisystem inflammatory syndrome in children or MIS-C, a delayed overreaction of the immune system to COVID-19. New York City has confirmed at least 89 cases of MIS-C, based on the CDC’s definition of the syndrome, as well as another 43 cases under investigation. The best thing we can do to keep our children safe is to provide them with the option of online education, socially distanced enrichment at parks and community centers, or paid internships whether remote or in person. Restoring funds to these programs would cost $124 million for SYEP, $59.3 million for COMPASS and Summer SONYC, and $40.9 million for parks (including pools, fair play, and parks equity).
The alternative is spending more money on NYPD for enforcement, and sadly the cost of providing care at public hospitals, where surely even with the best case some children would perish. A progressive government to do better than putting a price on a child’s life, we need to provide the care they need.
Starting in July parents, including many essential workers will have to choose between leaving small children home unattended or their employment. Those that have lost their jobs, won’t be able to find new ones until the school year starts in the Fall. While some might have unemployment benefits — now up to $1,100 a week courtesy of the $600 increase provided by the Federal government— that additional funding ends on July 31, so that tens if not hundreds of thousands of parents will remain trapped without sufficient income. The best thing we can do for working families is to fund summer programs so that they can get back to work, earn income, pay taxes, and generate tax revenue for our budget.
Safely Educating Children in Person and Online
The Department of Education still has not provided a guarantee for opening in the fall, though they appear to be planning to do so. When we do return students to schools in the fall; we may be facing a combination of the seasonal flu season and a second wave of COVID-19. We must rethink our schools. We must reduce class sizes, not only to facilitate safe social distancing, but because we know it will provide better academic outcomes for our children.
End Segregation with Online Education
If we return to online learning, there is an opportunity to depart from physical notions of geographic proximity that has led to one of the most segregated school systems in the country. Instead, we can create diverse online classrooms organized around students and how they learn with individualized and group instruction.
Rather than find ourselves spending a quarter billion on iPads purchased at roughly two times the market rate, the city should provide every student with an Internet device that includes a keyboard and mouse. The furtherance of the digital divide and homework gap perpetuated by providing low-income students with devices that lack a keyboard, leaves those students hopeless poking away at a screen while their connected peers can type away exponentially faster.
3K for All ($432 million in spending)
Chancellor Carranza recently announced that the city is cutting $111 million from DOE’s current year operations and $471 million from fiscal year 2021. Cuts to the budget include delaying the rollout of 3K for all across the city for a savings of $43 million for this coming school year. Not only should the proposed expansion be maintained with $43 million in funding, but it should be expanded aggressively across all 32 school districts for an additional $432 million.
On April 24, 2017, you announced your plan to roll out 3-K for All over the next four years, in time for the 2021-2022 school year. As of last year, you’ve successfully expanded the program to serve 9,518 families with three- year-olds, spanning 12 community school districts, at a cost of $173 million. This February, you announced an expansion to include four additional districts to serve 26,000 children, spanning 16 community school districts. Though the program will now cover half of the city’s 32 school districts, it will only serve one-third of possible three- year-olds. This leaves two-thirds of three-year-olds throughout our city awaiting expansion and no real plan for universal 3K in the 2021–2022 school year.
Universal prekindergarten has been a huge success and a hallmark of your mayoralty, growing from 53,000 in 2014 - 2015 to an astounding 73,000 in the 2018–2019 school year. Many of us worked with you to advocate and secure funding in Albany and then to recruit and facilitate partnerships with community-based organizations (CBOs). We are willing to do everything in our power to support citywide expansion for all three-year-olds for the 2020–2021 school year starting this fall.
Expanding 3K for all is important as childcare costs soar with costs that often exceed college tuition. Access to child care for a three-year-old can mean the difference between a family thriving or being squeezed out of our city. Now that so many New Yorker’s are either furloughed or unemployed, access to free childcare is even more important as many will have to adapt and adjust to a new “work from home” economy.
Universal After School ($137 million in spending)
It is far less common for children to have a stay at home parent than a generation ago and far more common for parents to work late with New Yorkers working longer hours than anyone else. This is leaving a gap between school dismissal and when parents are home. In New York there are 584,597 children in K-12 that are left alone and unsupervised with 1,151,361 awaiting an available program, and only 632,076 enrolled in after school according to the Afterschool Alliance. After-school keeps young people positively engaged during the hours of 2 to 6pm when research shows that they are most vulnerable to illicit behavior and justice involvement according to the Council for a Strong America.
As a new parent myself, I rely on an extended day and enrichment activities to keep my daughter busy while my partner and I are working. Maslow's Hierarchy of Needs must be satisfied if we want every child to reach their full potential, this means addressing physiological needs with universal breakfast, lunch, snack, and supper, safety needs with child health plus, and finally love, belonging, and esteem through universal after school.
There are 500,000 students in kindergarten through 5th grade enrolled in public schools with only 47,000 COMPASS slots available, some 9%, according to a 2019 Report of the New York City Council. The cost to make elementary school after school universal was estimated at a total cost of $250 million by the Department of Youth and Community Development at Preliminary Budget Hearing in 2019. COMPASS elementary now receives about $150 million in baseline funding, it is estimated that $100 million would fund universal after school for elementary school students.
That estimate was pre-pandemic. The Fiscal 2021 Executive Budget includes $306.6 million for the Department’s largest program area, OST, which funds after school programs for students in grades K-12. This funding level is $40.2 million less than the Fiscal 2020 Adopted Budget of $346.8 million. The bulk of this reduction is due to the PEG that cuts COMPASS and summer SONYC by $42.3 million. ($36.6 million cut to COMPASS and $5.7 million cut to SONYC.) Raising the cost to fund universal after school for every elementary school student to approximately $137 million.
One thing that the pandemic has taught us is that many of these programs can be adapted for remote delivery. Following the stay at home order, COMPASS providers switched to remote programming models. The COMPASS portfolio has 315 citywide programs and all but nine have transitioned to remote services. Providers have collaborated with their home school and developed remote activity plans and are helping support students through distance learning. We can continue to work with providers to find cost savings for remote delivery programs through FY21 and perhaps achieve universal after school at a fraction of the cost.
Support Our Seniors ($10 million)
New York City is home to an estimated 1.2 million people over the age of 60, many of whom rely on City support for meals and other services. Many of these services are provided by senior centers. DFTA provides congregate meals at its 249 senior centers as well as home-delivered meals to homebound older adults.
The Administration must honor its previous commitment to add the second tranche of $10 million in baselined funding for senior center model budgeting by Fiscal 2021. Despite a promise stretching back to Fiscal 2018 Budget Adoption to add the funding by Fiscal 2021, it remains excluded from the Executive Budget. In addition, the Administration should review funding shortfalls among the 38 centers excluded from the model budgeting due to their status as satellite sites, social clubs, or over-utilized large centers.
It is important to acknowledge that some of these savings may be over a number of years, though they are savings, nonetheless. In some places our proposal may be more aggressive than is possible, but if there is savings to be found, then they should be recognized.
Council Member, District
Chair, Contracts Committee
Cc: Dean Fuliehan, First Deputy Mayor
Melanie Hartzog, Director, Office of Management and Budget
Speaker Corey Johnson