Comptroller Stringer Releases Fiscal Year 2018 Comprehensive Annual Financial Report

  New York City Comptroller Scott M. Stringer released the City’s Comprehensive Annual Financial Report (CAFR) for Fiscal Year 2018, which includes the City’s audited financial statements for the year, outlines important economic and financial data about New York City, and highlights the work of the Comptroller’s Office during the fiscal year. This year’s CAFR highlights the City’s strong economy and record low unemployment rate, and includes new data on the Comptroller’s Office diversity initiatives.

“Accountability and transparency make our City stronger. They’re values that we always hold ourselves to – and our CAFR is a testament to that commitment,” New York City Comptroller Scott M. Stringer said. “The numbers in this report are the footprints of our City and represent the work of dedicated public servants who keep our City running. New Yorkers deserve the strongest level of public data we can provide. I’m proud that once again, the CAFR has met the highest standards for financial reporting. I would like to thank everyone from the five pension systems, the Mayor’s Office of Management and Budget, the Office of the Actuary, and especially the staff of our Bureau of Accountancy, led by Deputy Comptroller Jacqueline Warburton-Thompson, for their work to publish this crucial report.”

In accordance with the City Charter, the CAFR is released annually no later than October 31. In addition to the financial statements of the City as a whole and for each of the City’s accounting funds, explanatory notes to the financial statements, and supplemental financial and statistical information about the City, the CAFR contains the basic financial statements of the City’s five pension systems and closely-related entities such as NYC Health + Hospitals, the NYC Water and Sewer System, and the NYC Economic Development Corporation.

For the 38th consecutive year, the Fiscal Year 2017 CAFR was awarded the prestigious Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association.

Highlights from the FY18 CAFR include:

New York City’s Finances and Economy

• New York City’s economy, measured as real gross city product, grew 3.1 percent, outperforming US GDP growth for the sixth consecutive year.
• For the 38th year in a row, New York City ended the fiscal year with a budget balanced according to generally accepted accounting principles.
  • The City had an operating surplus of $4.6 billion in Fiscal Year 2018, an increase of about $400 million from the previous fiscal year. After certain prepayments and transfers for Fiscal Year 2019, the General Fund surplus for Fiscal Year 2018 was $5 million.
• City tax revenues grew 8.1 percent, after experiencing the lowest growth since FY10 last fiscal year. Growth was propelled by a 19.1 percent rise in personal income tax revenues, fueled by a one-time boost from Federal tax reform. Property tax revenues grew by 7 percent.
• New York City added 76,600 private-sector jobs, driving citywide unemployment to 4.3 percent, the lowest level on record.

The Comptroller’s Office

Bureau of Asset Management – The Comptroller’s Bureau of Asset Management is the investment advisor to the City’s five Retirement Systems.

• As of June 30, 2018 the Bureau of Asset Management had $195.8 billion in assets under management for the five New York City retirement systems.
• The pension trust funds earned $13.5 billion in investment income, net of investment expenses, in FY18, for a return of 8.7 percent.

Bureau of Public Finance – The Bureau of Public Finance works with the Mayor’s Office of Management and Budget to issue bonds to finance the City’s extensive capital program and to refund outstanding bonds for savings.

• The City and the New York City Transitional Finance Authority (TFA) issued a total of $7.42 billion of long-term bonds to finance the City’s capital needs.
• The New York City Municipal Water Finance Authority (the Water Authority) issued a total of $1.5 billion of bonds to finance the capital needs of the City’s Water and Sewer systems.
• Refundings of bonds of the City and the TFA generated $613.38 million in budgetary savings and refundings of Water Authority bonds generated $389.34 million of savings over the lifetime of those bonds.
• As of June 30, 2018, the City’s outstanding General Obligation debt, the TFA’s Future Tax Secured debt, and the Water Authority’s debt together totaled $103.84 billion.

Labor Law – The Comptroller’s Office sets and enforces prevailing wages for contractors on New York City public works projects. In FY18, the office:

• Assessed over $2 million in underpayments and interest against City contractors that violated New York’s prevailing wage laws.
• Imposed penalties totaling $100,000 against those City contractors.
• Opened 108 new cases, resolved 74 cases, and debarred 8 contractors for egregious conduct.

Economic Development – Since 1981, the City Pension Funds have invested in Economically Targeted Investments (ETIs). As of June 30, 2018:

• The ETI program, including real assets and future commitments, was valued at $3.05 billion.
• The ETI program’s ten year overall performance, at 4.94 percent net of fees as of June 30, 2018, has continued to exceed its benchmark.
• Since inception, this program has financed the construction or preservation of over 112,000 units of affordable housing and 432,000 square feet of commercial space in low- and moderate-income neighborhoods.

Bureau of Audit and Investigation – The City Charter requires the Comptroller’s Office to audit some aspect of every City agency at least once every four years. In Fiscal Year 2018, the Comptroller’s Office:

• Issued 74 audits and special reports on the effectiveness and service quality of City programs and financial issues.
• These audits and investigations identified approximately $36 million in actual and potential revenue and savings.

Office of Diversity Initiatives – The Comptroller’s Office of Diversity Initiatives works to develop innovative solutions that expand economic opportunities for all, serving as a watchdog for the inclusion of women and people of color in City business. In Fiscal Year 2018, the Comptroller’s Office:

• More than doubled its spending with minority- and women-owned business enterprises (M/WBEs) achieving 29 percent spending in Fiscal Year 2018, up from 12 percent in Fiscal Year 2014.
• Appointed a Diversity and Inclusion Director in the Bureau of Asset Management, the first time the bureau has had staff dedicated to diversity across all asset classes.
• Introduced Comptroller’s M/WBE University, which engaged 600 diverse businesses in a series of workshops designed to increase access to the Comptroller’s Office and citywide procurement opportunities for M/WBEs.
• Began tracking the number of M/WBEs on the prequalified list of certified public accountants, a list of firms that can provide audit services to the City’s agencies. As of June, 2018, there were 16 M/WBEs prequalified to provide the City with audit services.
• Released its fifth annual Making the Grade report, which evaluates each City agency’s spending with M/WBEs.