MAYOR ADAMS RELEASES NOVEMBER 2023 FINANCIAL PLAN UPDATE

 

As Asylum Seeker Crisis Continues to Grow, Federal COVID-19 Stimulus Funding Dries Up, and Tax Revenue Growth Slows, Adams Administration Takes Strategic, Essential Steps to Responsibly Manage City’s Finances 

With Migrant Crisis Set to Cost Nearly $11 Billion Over Just Two Fiscal Years and FY25 Budget Gap Expected to Surpass Unprecedented $7 Billion, Administration Implemented PEG to Identify Efficiencies and Deliver Balanced Budget as Required by Law 

New York City Mayor Eric Adams today released the City of New York’s November Financial Plan Update for Fiscal Year 2024 (FY24). With the city facing outyear gaps reaching levels unprecedented for this stage of the budget cycle, the Adams administration took targeted but significant and necessary steps to responsibly manage the city’s finances with minimal impact to services New Yorkers rely on and deliver a balanced budget, as required by law. The FY24 budget is $110.5 billion and remains balanced.

 

The November Financial Plan Update was crafted in the face of significant fiscal challenges, with the city having spent $1.45 billion on the asylum seeker humanitarian crisis in FY23 and set to spend nearly $11 billion on this crisis over just FY24 and FY25 without significant and timely state and federal support. Through strong fiscal management and with the limited fiscal tools available — including a successful Program to Eliminate the Gap (PEG) — the administration kept the FY24 budget balanced with minimum disruption to services and without raising taxes on working-class New Yorkers — despite having received limited state and federal aid.

 

“For months, we have warned New Yorkers about the challenging fiscal situation our city faces,” said Mayor Adams. “To balance the budget as the law requires, every city agency dug into their own budget to find savings, with minimal disruption to services. And while we pulled it off this time, make no mistake: Migrant costs are going up, tax revenue growth is slowing, and COVID stimulus funding is drying up. No city should be left to handle a national humanitarian crisis largely on its own, and without the significant and timely support we need from Washington, D.C., today’s budget will be only the beginning.”

 

“Our administration has a legal and fiscal responsibility to come to the table, balance the budget, and make the tough decisions today to ensure a better tomorrow for New York City,” said First Deputy Mayor Sheena Wright. “We cannot ask New Yorkers to balance their checkbooks without city leaders doing the same. These tough but necessary decisions were made to protect the city’s fiscal future while continuing to deliver vital government services. However, New York City should not carry this burden on its own. The federal and state government must play their part in delivering long-overdue support, funding, and resources.”

 

“By law, we’re required to balance our budget, and this November Financial Plan Update successfully does that with minimal disruptions to services,” said Chief of Staff Camille Joseph Varlack. “Our agencies have stretched dollars further than ever before to deliver as many services as possible to New Yorkers while securing our city’s financial future, and I’m grateful to the dedicated public servants who will have to do more with less as COVID stimulus dries up, tax revenue growth levels off, and the asylum seeker crisis continues to eat away at our city’s finances. But we’re not out of the woods yet, not by a long shot. If we don’t get the help we need from the federal government, we’ll have to take more drastic measures to balance our budget going forward.”

 

“We must balance our budget in wake of the $12 billion that we project to spend as a result of the migrant crisis. Our budget has been balanced with heavy hearts. Our administration is outraged to have to implement these cuts, which are a direct result of the lack of financial support from Washington, D.C., which is derelict in its responsibility to institute a national plan to mitigate a national crisis and has instead elected to dump its job to handle this migrant crisis upon the lap of a municipality and its mayor. A national crisis demands a national solution,” said Chief Advisor Ingrid P. Lewis-Martin. “The November Financial Plan Update we are releasing today reflects those realities and continues to demonstrate our responsible fiscal stewardship of this city. I am grateful to our agencies for their efforts to find efficiencies and minimize the impact that New Yorkers will feel, but unless we get the help we need and deserve from our federal partners, things will get worse for the most vulnerable New Yorkers. The federal government should be ashamed for putting those most in need in a more dire situation where services that they depend upon are being cut.”

 

In August 2023, Mayor Adams laid out new projections estimating the cost of the asylum seeker crisis to grow to at least $12 billion over three fiscal years — between FY23 and FY25 — if circumstances do not change. With sunsetting COVID-19 stimulus funding, slowing FY24 tax revenue growth, expenses from labor contracts this administration inherited after being unresolved for years, and a lack of significant state or federal government action on the asylum seeker crisis, the mayor took action the following month, announcing a 5 percent PEG on city-funded spending for all city agencies with plans for additional rounds of PEGs in the Preliminary and Executive Budgets. New city-funded spending was limited to those protecting life and safety, fulfilling legal mandates, maintaining necessary operations, or generating revenue.

 

The FY24 budget has grown $3.4 billion since budget adoption in June, in recognition of $2.6 billion in grant funds and $776 million of better-than-expected revenue growth, primarily driven by income and sales tax collections. Outyear gaps are $7.1 billion in FY25, $6.5 billion in FY26, and $6.4 billion in FY27.

 

To meet skyrocketing costs associated with care for asylum seekers, the city added $6.2 billion over FY24 and FY25 in this plan, bringing total funds budgeted for migrant needs over the two fiscal years to $10.8 billion. The administration added the following on top of previously budgeted funding: city funds of $1.4 billion in FY24 and $4.8 billion in FY25, state grants of $447 million in FY24 and $272 million in FY25, and federal aid of $10 million in FY24.

 

The PEG implemented by the administration in the November Financial Plan Update to keep FY24 balanced was successful, setting up the city to save $3.7 billion over two fiscal years. Every agency met their savings target.

 

Looking forward, asylum seeker costs in this plan contributed significantly to a historically large $7.1 billion FY25 budget gap — $2 billion greater than it was in June’s FY24 Adopted Budget — despite the successful PEG in this plan. By law, this gap must be closed in mid-January, two months from today.

 

Attorney General James and Multistate Coalition Secure $6.5 Million from Morgan Stanley for Failing to Protect Customer Data

 

Morgan Stanley to Pay New York $1.6 Million for Compromising the Personal Information of 1.1 Million New Yorkers

New York Attorney General Letitia James and a coalition of five attorneys general today reached a $6.5 million agreement with global financial services firm Morgan Stanley Smith Barney LLC (Morgan Stanley) for compromising the personal information of millions of customers nationwide. Morgan Stanley failed to decommission its computers and erase unencrypted data in certain computer devices that were later auctioned while still containing consumers’ personal information, including data belonging to 1.1 million New Yorkers. New York will receive $1,658,047 from today’s settlement and Morgan Stanley will be required to strengthen its data security measures.

“No one should have their personal information auctioned off without their knowledge because a company failed to take basic steps to erase it before selling their old computers,” said Attorney General James. “Today’s agreement requires Morgan Stanley to bolster its cybersecurity so consumers will never again have to risk their personal data unintentionally being sold at an auction. Companies, big and small, must all take their responsibility to protect their customers’ data seriously, and if they do not, my office will take action.”

Morgan Stanley hired a moving company with no experience in data destruction services to decommission thousands of hard drives and servers containing sensitive information of millions of its customers. Morgan Stanley failed to properly monitor the moving company’s work, and its computer equipment, some of which still contained private consumer information, was then sold at auction. Morgan Stanley was only made aware of the problem when a purchaser discovered the data and called the company.

In a second incident, Morgan Stanley discovered during a decommissioning process that 42 servers, all potentially containing unencrypted customer information, were missing. During this process, the company learned that the local devices being decommissioned may have contained unencrypted data due to a manufacturer flaw in the encryption software. The multistate investigation found that Morgan Stanley failed to maintain adequate vendor controls and hardware inventories, and that had these controls been in place, both data security events could have been prevented.

As a result of today’s agreement, Morgan Stanley has agreed to pay a $6.5 million fine and to adopt a series of provisions that better protects the personal information of its consumers going forward, including: 

• Maintaining a comprehensive information security program that includes regular updates that are necessary to reasonably protect the privacy, security, and confidentiality of personal information;
• Maintaining an incident response plan that documents incidents and responses;
• Maintaining a written policy that governs the collection, use, retention, and disposal of consumers’ personal information;
• Encrypting all personal information, whether stored or transmitted, between documents, databases, or elsewhere;
• Employing a manual process and automated tools to keep track of the locations of all hardware that contain personal information; and
• Maintaining a vendor risk assessment team to assess and ensure that vendors are in compliance with Morgan Stanley’s data security requirements.

Today’s agreement continues Attorney General James’ efforts to protect New Yorkers’ personal information and hold companies accountable for their poor data security practices. Last month, Attorney General James and a multistate coalition secured $49.5 million from cloud company Blackbaud for a 2020 data breach exposing the data of thousands of users. In September, Attorney General James reached an agreement with Marymount Manhattan College to invest $3.5 million to protect students’ online data. This past May, Attorney General James secured $300,000 from Sports Warehouse for failing to protect the data of 2.5 million customers. Also in May, Attorney General James recouped $550,000 from a medical management company for failing to protect patient data. In April, Attorney General James released a comprehensive data security guide to help companies strengthen their data security practices. In October 2022, Attorney General James announced a $1.9 million agreement with the owner of SHEIN and Zoetop for failing to properly handle a data breach that compromised the personal information of millions of consumers. In June 2022, Attorney General James secured $400,000 from Wegmans and required the retailer to improve data storage security after a data breach exposed consumers’ personal information.

Largest-Ever Counterfeit Goods Seizures Result In Trafficking Charges Against Two Individuals

 

Damian Williams, the United States Attorney for the Southern District of New York, Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the recent seizures of approximately 219,000 counterfeit bags, clothes, shoes, and other luxury products with a total estimated manufacturer’s suggested retail price (“MSRP”) of approximately $1.03 billion.[1]  Two indictments were unsealed charging ADAMA SOW and ABDULAI JALLOH, a/k/a “Troy Banks,” with trafficking in counterfeit goods.  The defendants were arrested this morning and presented before U.S. Magistrate Judge Robert W. Lehrburger.  SOW’s case is assigned to U.S. District Judge Valerie E. Caproni.  JALLOH’s case is assigned to U.S. District Judge Paul A. Crotty.

 

U.S. Attorney Damian Williams said: “As alleged, the defendants used a Manhattan storage facility as a distribution center for massive amounts of knock-off designer goods.  The seizures announced today consist of merchandise with over a billion dollars in estimated retail value, the largest-ever seizure of counterfeit goods in U.S. history.  This is a testament to the commitment of this Office and its law enforcement partners to combat counterfeit trafficking in New York City.” 

HSI Special Agent in Charge Ivan J. Arvelo said: “Today's groundbreaking announcement underscores the unwavering commitment of HSI New York in the fight against intellectual property theft and serves as a testament to the dedication of our team and partner agencies, who have tirelessly pursued justice, culminating in the largest-ever seizure of this kind.  I extend my gratitude to all those involved for their relentless efforts and late nights dedicated to upholding the law.”

NYPD Commissioner Edward A. Caban said: “The trafficking of counterfeit goods is anything but a victimless crime because it harms legitimate businesses, governments, and consumers.  Today’s indictments show how seriously the NYPD and our federal partners take this offense.  And we will continue to work hard to hold accountable anyone who seeks to benefit by selling such items on the black market.”

According to the allegations contained in the Indictments and other publicly available information:[2]

From about January 2023, up to and including October 20, 2023, ADAMA SOW and ABDULAI JALLOH ran large-scale counterfeit goods trafficking operations out of a storage facility located in Manhattan.  JALLOH also trafficked counterfeit goods out of an offsite location in Manhattan.  Searches of premises controlled by SOW have resulted in the seizure of over 83,000 counterfeit items with a total estimated MSRP of over $502 million.  Searches of premises controlled by JALLOH have resulted in the seizure of over 50,000 counterfeit items with a total estimated MSRP of over $237 million.

A photograph of boxes of counterfeit goods seized from the storage facility is below.

A photograph of one of the storage units controlled by ADAMA SOW inside the storage facility is below.

A photograph of one of the storage units controlled by ABDULAI JALLOH inside the storage facility is below.

ADAMA SOW, 38, of Queens, New York, and ABDULAI JALLOH, 48, of New York, New York, are each charged with trafficking in counterfeit goods, which carries a maximum sentence of 10 years in prison. 

The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendants will be determined by the judge.

Mr. Williams praised the outstanding work of HSI and NYPD.  He further thanked U.S. Customs and Border Protection for its assistance and the management of the storage facility in Manhattan for its cooperation with the execution of the seizures.

The cases are being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Henry Ross is in charge of the prosecutions.

The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

[1] The street value of counterfeit goods typically is significantly lower than the MSRP.

[2] As the introductory phrase signifies, the entirety of the text of the Indictments and the description of the Indictments set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Permits Filed For 1678 Davidson Avenue In Morris Heights, The Bronx

 

Permits have been filed to expand a two-story structure into a four-story residential building at 1678 Davidson Avenue in Morris Heights, The Bronx. Located between West 174th Street and West 176th Street, the lot is near the 176th Street subway station, serviced by the 4 train. Isaac Kritzler is listed as the owner behind the applications.

The proposed 52-foot-tall development will yield 7,715 square feet designated for residential space. The building will have 17 residences, most likely rentals based on the average unit scope of 453 square feet. The concrete-based structure will also have a cellar, penthouse, and a 39-foot-long rear yard.

Nikolai Katz Architect is listed as the architect of record.

Demolition will likely not be needed as the permit calls for an expansion. An estimated completion date has not been announced.

Attorney General James Takes Historic Action Against PepsiCo for Endangering the Environment and Public Health With Plastic Pollution

 

Hundreds of PepsiCo Products Found Along Buffalo River, Jeopardizing the Environment and Public Health

AG James’ Lawsuit Charges PepsiCo with Harming the Public and Failing to Warn Consumers of Environmental and Health Threats of its Single-Use Plastic Packaging

New York Attorney General Letitia James today filed a historic and groundbreaking lawsuit against PepsiCo Inc. (PepsiCo) for harming the public and the environment with its single-use plastic packaging. The Office of the Attorney General (OAG) found that single-use plastic produced by PepsiCo contributes significantly to high levels of plastic pollution along the Buffalo River, pollution that is contaminating drinking water and harming wildlife. The lawsuit alleges that PepsiCo substantially causes public harm in Buffalo, has failed to warn consumers about the potential health and environmental risks of its single-use plastic packaging, and misleads consumers and the public about its efforts to combat plastic pollution. Through this lawsuit, Attorney General James seeks to require PepsiCo to end practices that threaten the environment and the public and to obtain disgorgement, civil penalties, and restitution for the damage inflicted upon New York’s communities and environment. 

“No company is too big to ensure that their products do not damage our environment and public health. All New Yorkers have a basic right to clean water, yet PepsiCo’s irresponsible packaging and marketing endanger Buffalo’s water supply, environment, and public health,” said Attorney General James. “No one should have to worry about plastics in their drinking water, plastic garbage littering their scenic riverfront, or plastic pollution harming wildlife. I will never hesitate to take on major corporations that put the health and safety of everyday New Yorkers and our planet at risk.”

PepsiCo’s Plastic Problem  

PepsiCo, which is headquartered in New York state, manufactures, produces, and packages at least 85 different beverage brands and 25 snack food brands that predominantly come in single-use plastic containers. Plastic packaging has become a persistent and dangerous form of pollution along the shores of the Buffalo River and in its watershed. In 2022, OAG conducted a survey of all types of waste collected at 13 sites along the Buffalo River and its tributaries and found that PepsiCo’s single-use plastic packaging was the most significant. Of the 1,916 pieces of plastic trash collected with an identifiable brand, over 17 percent were produced by PepsiCo. PepsiCo’s plastic packaging far exceeded any other source of this identifiable plastic waste along the river, and it was three times more abundant than the next highest contributor.  

From 2013 to 2022, approximately 78 percent of waste collected by Buffalo Niagara Waterkeeper volunteers in the Buffalo River watershed was plastic. Single-use plastic packaging for food and beverages, including food wrappers, plastic bottles, and bottle caps of the types produced by PepsiCo were found in significant amounts every year. Once in the environment, single-use plastic packaging quickly starts to break down and release dangerous microplastics.  

A nationwide study by the non-governmental organization Break Free From Plastic aggregated 2,125,415 items of plastic waste from 2,373 separate collections across the United States from 2018 to 2022. In each year, the study documented PepsiCo as either the number one or number two producer of branded plastic trash collected across the United States. Large quantities of microplastics have been found in the Buffalo River, and an analysis of those fragments has confirmed the presence of microplastics from snack food wrappers and polymers of the type used in PepsiCo’s plastic beverage bottles and bottle caps.

Mallard ducks feeding in a mass of floating waste.

 

Plastic waste collected in April 2022 from the Erie Basin Marina in the City of Buffalo, 

including Gatorade bottles and Lay’s potato chip packaging produced by PepsiCo.

 

Threats Posed by Plastic in the Environment 

Plastic pollution along the Buffalo River poses wide-ranging public health and environmental threats. The city of Buffalo sources its drinking water from Lake Erie, less than a mile from the mouth of the Buffalo River, and microplastics have been detected in the city’s drinking water supply. Microplastics have also been detected in fish species that are known to inhabit Lake Erie and the Buffalo River, many of which are food sources for the local community. Humans consume microplastics that contaminate our food and water. Once ingested, microplastics permeate deep into our bodies, blood, and organs, and can even be transferred through the placenta into unborn children. Exposure to microplastics and the chemicals they carry can cause a wide range of adverse health effects, from reproductive dysfunction to inflammation of the intestine and neurotoxic effects.  

In addition to negative effects on human health, research surrounding the impact of plastic and microplastic pollution shows negative impacts occurring on a wide range of species living in freshwater and terrestrial habitats due to exposure to various plastic polymers. Microplastics contaminate every level of the food web in the Great Lakes, and both plastic fragments and the chemicals they carry can bioaccumulate in freshwater species. At least 206 freshwater species have been found to ingest or become entangled in plastic, with many adverse and even lethal effects.   

OAG Legal Claims 

The lawsuit alleges that PepsiCo has significantly contributed to, and continues to contribute to, the existence of a public nuisance that injures the community living in the city of Buffalo and the environment. PepsiCo has also misled the public about the effectiveness of its plastic recycling and its efforts to combat plastic pollution. For example, PepsiCo’s statements have misled consumers and the public by creating the impression that the company was making meaningful progress toward reducing the use of non-recycled (virgin) plastic in its packaging, but no such progress is being made. On the contrary, for the last four years, PepsiCo’s use of virgin plastic has increased year by year. In 2022 alone, PepsiCo acknowledged that its use of virgin plastic in its plastic packaging increased by 11 percent. Attorney General James also charges that PepsiCo failed to warn its consumers about the risk of harm to human health and the environment posed by its packaging. PepsiCo’s failure to warn consumers and its misleading public statements violate New York General Business Law § 349 and New York Executive Law § 63(12). 

Through this lawsuit, Attorney General James is asking the court to require PepsiCo to cease contributing to the public nuisance it is causing in the Buffalo region, remediate the contamination it caused, and identify and implement measures to reduce the quantity of PepsiCo’s plastic packaging entering the Buffalo River. The lawsuit further seeks to stop PepsiCo from selling or distributing any product in the Buffalo region in single-use plastic packaging that does not contain an adequate warning. The lawsuit also seeks disgorgement, civil penalties, and restitution.   

“Our Buffalo community fought for over 50 years to secure hundreds of millions of dollars to clean up toxic pollution, improve habitat, and restore communities around the Buffalo River,” said Jill Jedlicka, Executive Director of Buffalo Niagara Waterkeeper. “As a Great Lakes city that has been oppressed for too long by the environmental damage left from our industrial hangover, we will not sit idly by as our waterways become polluted again, this time from ever-growing single-use plastic pollution. Buffalo Niagara Waterkeeper has coordinated annual shoreline sweeps for over 20 years, and single-use plastic bottles and wrappers constitute the majority of the items we collect. We are pleased to be able to contribute citizen science data to the actions taken by the New York State Attorney General, and we applaud her for holding producers accountable for this relentless assault on our environment and local waterways.”