AUDIT: New York City Is Failing to Accurately Identify Its Infrastructure Repair Needs

 

NYC Comptroller’s audit found that OMB’s annual cost assessment does not properly survey the conditions of the City’s bridges, water & sewer pipes, schools, etc. nor accurately estimate repair or replacement costs

New York City’s annual assessment of its infrastructure and repair needs, the Asset Information Management System (AIMS), consistently fails to accurately depict the costs of maintaining the structural integrity of the City’s major infrastructure assets, a new audit from New York City Comptroller Brad Lander found. As a result, the City does not have an accurate understanding of the true costs to maintain City assets—sewers, roads, bridges, parks, schools, libraries, hospitals, tunnels—that are in need of repair.  

“You can’t fix what you don’t know is broken, and you sure can’t budget properly for repair needs for infrastructure that you did not even inspect,” said Comptroller Brad Lander. “The City’s current annual assessment of its infrastructure fails to provide an accurate picture of the conditions of the City’s infrastructure, and how much it will cost to repair or replace critical assets. We need a more strategic approach, better inspection protocols, and innovative technologies if we’re going to budget properly and maintain our City’s critical infrastructure for the decades to come.”   

The City Charter requires the City to keep an inventory of physical assets that have a replacement cost of at least $10 million and a useful life of at least 10 years. As part of the annual AIMS report, the Charter requires each agency to submit information for:  

• the date of the original acquisition or construction, the original cost and useful life, the current replacement cost and remaining life of the asset, categorized by project type; 
• an agency capital plant inventory with each asset, an update of the above information as well as an assessment of each asset’s condition and a schedule of maintenance activities by year; and 
• updates to ensure the inventory, condition assessments and maintenance schedules are “complete, current and accurate.” 

Every year, the NYC Office of Management and Budget (OMB), working with external consultants and the Department of Design and Construction (DDC), conducts a survey of one-quarter of the City’s physical assets. OMB uses the maintenance schedules derived from the surveys to estimate cost of maintenance, repairs, and replacement. In the Fiscal Year 2023 AIMS Report, OMB reported 5,093 assets within the City’s capital plant, with estimated capital repairs, replacements, and major maintenance costs of $14.1 billion for FY2024–2027 and $14.4 billion for FY2028–2033. The annual cost of producing the AIMS Report is approximately $4 million. 

The Comptroller’s audit of AIMS found: 

1. The AIMS report does not predict the estimated planned costs of projects accurately, and the maintenance schedules and cost estimates are not based on the annual assessed conditions. For instance, the AIMS report assessed the cost of maintaining the Riverside Park Bridge W79th Street Traffic Circle to be $76 million, but when the project went to bid just a few months later, the actual cost was almost double at $149.9 million.
   
   
2. OMB, DDC, and consultants’ survey method limits their reviews to what can be seen on the surface, inaccurately surveying a whole asset. OMB excludes certain structural integrity related items from surveys, especially components not readily observable or accessible such as footings, pavement base, and piles that are below ground or underwater (e.g. a pier bulkhead). In many cases, the decision not to survey conditions that were deemed not readily accessible leads to significantly underestimating the need and cost of repairs.
   
   
3. OMB does not have consistent survey practices and lacks written policies and procedures to govern survey process. The City should create a central guidance for agencies to use in carrying out inspections, which would provide direction on the section scope, rating categories, and schedules. The inspections should be led by agencies, which have the most familiarity with their own assets, rather than with OMB. The auditors also noticed variations in the amount of time DDC surveyors spent surveying different assets, ranging from 20 minutes to inspect a 6,164 square-foot Fire Department (FDNY) facility, to 36 minutes to inspect a 105,000 sq. ft. elementary school).
   
4. Some surveys did not report structural-integrity-related conditions. Between January and August 2023, auditors conducted observations at 10 sampled assets, which agencies last surveyed between December 2021 and June 2022, and found conditions that were not reported in the earlier surveys. Specifically, auditors identified 57 unreported structural-integrity-related conditions, ranging from historical delamination, cracks, and split damage at the door entrance of a Department of Transportation (DOT facility), and steel lintel corrosion and damaged stucco at a FDNY facility. Because these conditions were not reported in the prior surveys, there is no way to know whether they were pre-existing or newly developed.
   
   
5. Assets were not included in the Capital Plant Inventory and others were incorrectly counted in the AIMS report.  
   1. The auditors also reviewed 33 assets that were listed as excluded from AIMS reporting. For instance, the East 91st Street bridge leading to the Department of Sanitation’s (DSNY) Marine Transfer Station has been in use since March 2019, but has not been added to the AIMS Report. The DSNY Section Station 63 has been in use for at least five years but had not been added to the inventory list as of May 1, 2023.
   2. In the auditors’ review of 30 assets that had not been surveyed that measured over 5,300 sq. ft., auditors identified four assets (13%) that were improperly included in the capital plant inventory– two non-City-owned U.S. Coast Guard properties used by the Police Department (NYPD), and two non-structural open spaces within the zoos at Prospect Park and Flushing Meadows Corona Park were improperly included under the Parks Department (DPR). 

Based on the audit’s findings that the AIMS report offers an inaccurate and unreliable depiction of the City’s infrastructure inventory, condition, maintenance, and associated costs, the Comptroller’s Office developed a companion report, The Need for Better AIMS, which lays out best practices for infrastructure assessments that the City of New York should adopt. The report finds that deferred maintenance from delays in identifying and addressing repairs have led to the City spending over $150 million on emergency procurements over the past five years to address structural deficiencies. 

It also calls for the City to overhaul its infrastructure needs assessment, to replace the unreliable and largely unuseful AIMS report with one that enables the City to properly budget and plan for infrastructure upkeep: 

1. Tie capital infrastructure assessments to capital planning. 
2. Prioritize maintenance of existing infrastructure to prevent more costly repairs down the road. 
3. Maintain a detailed inventory of capital assets. 
4. Adopt inspection protocols tailored to specific asset classes. 
5. Use innovative technology to assess the physical condition of infrastructure. 
6. Validate inspection findings conducted by external consultants.  

The new assessment should inform the City’s 10-year capital strategy, identifying infrastructure repair and maintenance costs for the next decade. A new framework should require OMB to estimate costs for all identified infrastructure needs so that the City can make informed planning and budget decisions.  

Read the audit here. Read the report here.