Friday, October 30, 2020

Comptroller Stringer Releases Fiscal Year 2020 Comprehensive Annual Financial Report


 New York City Comptroller Scott M. Stringer released the City’s Comprehensive Annual Financial Report (CAFR) for Fiscal Year (FY) 2020, 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 details the impacts that the COVID-19 pandemic and subsequent economic fallout has had on the city’s finances and its workforce.

“Amid a global pandemic and unprecedented economic crisis, our work of holding government accountable continues strongly. The road from this crisis to recovery will not be easy, but my office remains committed to ensuring we build back better,” said New York City Comptroller Scott M. Stringer. “The annual CAFR is a benchmark overview that makes sure the City stays true to its commitments to New Yorkers – which is what our work in government is all about. I thank the dedicated professionals who serve in the five pension systems, the Mayor’s Office of Management and Budget, the Office of the Actuary, and the staff of our Bureau of Accountancy, led by Deputy Comptroller Jacqueline Thompson, for their continued commitment to our office’s work and for compiling this critical 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, 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 New York City Economic Development Corporation (EDC).

For the 40th consecutive year, the Fiscal Year 2019 CAFR was awarded the prestigious Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association.

Highlights from the FY 2020 CAFR include:

New York City’s Finances and Economy 

In Fiscal Year 2020, the General Fund had revenues and other financing sources of $95.058 billion and expenditures and other financing uses of $95.099 billion, which results in a deficit of $41 million, including restricted fund activities. The operating surplus, less restricted fund activities of $46 million as provided by State legislation passed in October 2019, is $5 million.

The COVID-19 pandemic and related shutdowns of business activity affected the last quarter of Fiscal Year 2020.  In New York City, employment plunged by almost 20 percent from February to April and grew by a smaller 3.2 percent from April to June. This nearly 20 percent decline in New York City employment was equivalent to the loss of an unprecedented 910,050 jobs between February and April.

Small businesses in New York City have suffered a devastating blow. Small business revenues declined dramatically in March. Manhattan small business revenue had declined by 70 percent by the end of March as businesses shuttered and commuters stayed home. Despite some recovery, Manhattan small business revenue in early July was still down over 40 percent from the beginning of January.

Outer borough small businesses fared better but still experienced revenue declines of 40 percent to 60 percent by early April. In July, Staten Island and Queens small business revenue remained over 20 percent down from January, while in the Bronx, small business revenue has begun to recover, and is up 9 percent over January.

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, 2020, the Bureau of Asset Management had $213.6 billion in assets under management for the five New York City retirement systems.
  • The pension trust fund assets increased by $5.7 billion in FY20, for a return of 4.4 percent.
  • Launched Boardroom Accountability Project 3.0, a new first-in-the-nation initiative calling on companies to adopt a policy requiring the consideration of both women and people of color for every open board seat and for CEO appointments, a version of the “Rooney Rule” pioneered by the National Football League (NFL). By June 2020, 16 public companies implemented these Rooney Rule policies. In addition, in July 2020, the Comptroller’s Office called on 67 S&P 100 companies that recently released supportive statements on racial equity to publicly disclose the race, ethnicity, and gender of their employees.

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 $7.61 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 $1.81 billion of bonds to finance the capital needs of the City’s water and sewer systems.

  • Refundings of bonds of the City generated $275.87 million in budgetary savings and refundings of Water Authority bonds generated $660.63 million of savings over the life of those bonds.

  • As of June 30, 2020, the City’s outstanding General Obligation debt, TFA’s Future Tax Secured debt, and the Water Authority’s debt together totaled $110.35 billion.

Bureau of Labor Law — The Comptroller’s Office sets and enforces prevailing wage rates for construction work on New York City public work projects and building service work on City funded work sites. In FY20, the office:

  • Assessed over $1.6 million in underpayments and interest against employers that violated New York’s prevailing wage laws.
  • Imposed penalties totaling $46,000 against  City contractors.

  • Opened 74 new cases, resolved 79 cases, and debarred 7 contractors for egregious conduct.

The bureau also:

  • Promulgated new regulations in the Rules of the City of New York concerning civil penalties for employer violations of prevailing wage rate notice posting and pay stub requirements on City public work projects under Labor Law Article Eight.
  • Worked with the New York State Attorney General’s Office on a settlement of nearly $3 million with the developers and landlords of a luxury apartment building in downtown Brooklyn for failing to pay prevailing wage to their building service employees under RPTL § 421-a.

  • Settled a civil action for over $1.1 million against a successor surety on a payment bond issued on City construction contracts.

  • Launched a phone-banking initiative to connect over 1,000 workers with unclaimed prevailing wage awards worth over $2.5 million, partnering with community, labor and news media organizations.

Bureau of Economic Development — Since 1981, the City Pension Funds have invested in Economically Targeted Investments (ETIs). As of June 30, 2020:

  • The ETI program, including real assets and future commitments, constituted $3.07 billion in total assets.
  • The ETI program one-year overall performance was at 7.60 percent net of fees as of June 30, 2020.

  • During Fiscal Year 2020, the ETI program invested in 8,900 affordable housing units, invested in construction loans for 1,138 affordable housing units, and made future commitments to invest in another 427 affordable housing units in order to facilitate their construction.

Bureau of Audit — The City Charter requires the Comptroller’s Office to audit some aspect of every City agency at least once every four years and to audit and investigate all matters relating to or affecting the finances of the City. In Fiscal Year 2020, the Comptroller’s Office:

  • Issued 48 audit, investigation and special reports on the operational and financial performance, effectiveness and service quality of City programs and City contracts.

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 2020, the Comptroller’s Office:

  • More than tripled its spending with minority- and women-owned business enterprises (M/WBEs) achieving 49 percent spending in Fiscal Year 2020, up from 12 percent in Fiscal Year 2014.
  • Allocated $13.2 billion in New York City assets under management to diverse businesses, up from $8.8 billion in Calendar Year 2013.

  • Expanded capital commitments to emerging managers by allocating an additional $600 million to its direct private equity Emerging Manager Program.

  • Increased its goal to allocate 12 percent to emerging managers across each asset class.

  • Continued 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. In Fiscal Year 2020, there were 20 M/WBEs prequalified to provide the City with audit services.

  • Championed a Charter Revision proposal to create a Chief Diversity Officer reporting to the Mayor and one in every agency. The Commission ultimately voted to codify the current citywide director to the Charter and added that the position report directly to the Mayor, which New Yorkers voted to approve.

  • Hosted biweekly Comptroller M/WBE University webinars, engaging 1,600 diverse firms on topics such as available resources and business opportunities in the public and private sector.

  • Surveyed more than 500 M/WBEs on the impact of COVID-19 on their firms. The survey highlighted that 85 percent of M/WBEs believed they could not survive for six more months due to limited access to COVID related contracts and financial aid.

  • Every year, the Comptroller’s Office hosts the Annual M/WBE & Emerging Manager Conference for over 600 M/WBE investors. The conference provides an opportunity to minority and women asset managers to learn how to do business with our various asset classes and speed-networking with pension consultants.

To view the full report, click here.

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