New Funding is Progress in Meeting a $10
billion Clinton Global Initiative Commitment to Action to Invest in American
Infrastructure
New
York
– In the wake of Hurricane Sandy, the New York City Teachers Retirement System
has pledged $1 billion to new investments in infrastructure projects, including
improvements to transportation, power, water, communications, and housing in
New York City and throughout the tri-state area.
While all
projects will be rated on the basis of their return and the fund’s fiduciary
standards, potential investments could range from repairing bridges to
rebuilding housing destroyed by the hurricane. In addition to repairing
and upgrading facilities used by hundreds of thousands of New Yorkers, the
infrastructure fund could create thousands of jobs.
This pledge
is part of a multi-year Clinton Global Initiative (CGI) Commitment to Action
made by the AFL-CIO, American Federation of Teachers (AFT), and partners at the
inaugural CGI America meeting in June 2011. The AFL-CIO, AFT, AFL-CIO Building
and Construction Trades Department, Union Labor Life Insurance Company,
American Federation of State, County and Municipal Employees, AFL-CIO’s Housing
Investment Trust, AFL-CIO Working for America Institute, and other partners
committed to encourage both workers’ capital and skilled labor to contribute to
large-scale investments in the reconstruction of America's built environment.
Working with money managers, asset consultants, pension funds, developers, and
federal, state and local governments, the Commitment to Action will finance the
construction and repair of quality public infrastructure which will result in
at least $10 billion in workers' capital invested in this area within five
years. The CGI Commitment also includes a pledge to invest $10 to $20 million in
energy efficient retrofits and an effort to train 40,000 new apprentices and
100,000 mid-career construction workers in the skills necessary to work on 21st
century infrastructure projects. To date, the commitment has reached more
than $2.7 billion of its total goal.
At a press
conference this afternoon, President Bill Clinton, Secretary of the Department
of Housing and Urban Development and point person for the Obama
Administration’s long-term Hurricane Sandy recovery effort Shaun
Donovan, UFT President Michael Mulgrew, Comptroller for the City of New
York John Liu, and AFT President Randi Weingarten announced the $1 billion
allocation, which will not only create jobs, but also strengthen infrastructure
so New York is better prepared to protect vulnerable populations from the
rising sea levels, droughts, and increased frequency of storms that coincide
with climate change.
“Together
the work will benefit our future not only in terms of more efficient buildings
and reducing the threat of climate change, but also in the lives of teachers,
construction workers, and in lowering energy costs for people all over
America,” said President Clinton. “This is a remarkable commitment. It
represents a very significant step forward in meeting the entire AFL-CIO CGI commitment
to bring Americans back to work, to bring inefficient buildings up to speed,
and in this case, to putting us on the path to a sustainable future for New
York City.”
“The
critical commitment of the Teachers Retirement System at this early stage is one
that I hope will inspire and encourage others,” said Secretary Donovan. “This
infusion of private capital is like seed money that will allow us to address
not only the recovery from Sandy but also the underlying infrastructure
challenges that our communities face.”
UFT
President Michael Mulgrew said: “We have been working for months to create
an investment strategy for the teacher pension fund that will help meet New
York’s pressing needs for repairing and updating our roads and bridges, our
water and power systems, and middle-income housing. Hurricane Sandy has
brought those needs into keener focus, and I am happy to stand here today and
say that the teachers of New York City are taking a leadership role in helping
to rebuild our city and state.”
“New Yorkers
prove their determination and ingenuity in times of adversity,” said New York
City Comptroller John C. Liu. “Sandy hit us hard, but the superstorm will
not keep us down. This innovative plan could help us rebuild the City,
create jobs, and yield solid returns on our pension funds. Together we can
produce great projects that are also sound investments.”
“This
investment is another example of America’s educators stepping up to not only
educate and care for our children but to also revitalize our communities,
create jobs, and strengthen our economy,” said American Federation of Teachers
President Randi Weingarten. “New York City Teacher Pension funds have always
taken a lead in tough times to rebuild our city, from buying city bonds to
avert bankruptcy in the 1970s to investing hundreds of millions in the stock
market to bolster the economy after 9/11when economic activity had pretty much
stopped in lower Manhattan. This investment continues that tradition in the
wake of superstorm Sandy and budget cuts that have stifled investment and is
part of a broader effort by labor to invest in America’s future and create
jobs. I couldn’t be prouder of my home city, my home local, of the labor
movement, and to be doing this with President Clinton and the Clinton Global
Initiative.”
“Infrastructure
investments are critical to maintaining our economic security, as has been
brought into stark relief by Hurricane Sandy,” said Gary LaBarbera, president
of the Building and Construction Trades Council of New York. “Today's announcement
of a $1 billion investment by the New York City Teachers Retirement System in
our infrastructure underscores the leadership role that organized labor,
working with the Clinton Global Initiative and our friends in business and
government, can play in bringing the level of resources to bear that are needed
to collectively meet this challenge and create thousands of jobs.”
Investments
in infrastructure have the potential to provide enhanced fixed-income returns,
while creating jobs, enhancing our nation's competitiveness, and addressing the
threat of climate change and foreign energy dependence. Recent estimates of the
number of jobs created directly or indirectly by infrastructure investment vary
from 18,000 jobs per $1 billion invested (American Public Transportation
Association 2009 study) to 36,000 jobs per $1 billion invested (University of
Massachusetts at Amherst 2009 report).
The Teachers
Retirement System infrastructure investments could take the form of bonds
purchased by the fund from owners of the projects, or in partial ownership of
the projects themselves. Recommendations about actual projects or the form of
investment in them will be made by investment professionals on the
Comptroller’s staff to the trustees of the TRS, who will make the final
decision. The Trustees of the New York City Teachers’ Retirement System (TRS)
are: Chairperson Melvyn Aaronson, United Federation of Teachers; Sandra March
and Mona Romain, United Federation of Teachers; John Liu, New York City
Comptroller; Kathleen Grimm, New York City Department of Education; Carolyn
Wolpert and Frieda Foster, Mayor’s appointees. The New York City Teachers
Pension Fund manages assets of approximately $46 billion for approximately
110,000 in-service members and nearly 80,000 retirees.
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About
the Clinton Global Initiative
Established in 2005 by President Bill Clinton, the Clinton Global Initiative
(CGI) convenes global leaders to create and implement innovative solutions to
the world’s most pressing challenges. CGI Annual Meetings have brought together
more than 150 heads of state, 20 Nobel Prize laureates, and hundreds of leading
CEOs, heads of foundations and NGOs, major philanthropists, and members of the
media. To date CGI members have made more than 2,300 commitments, which have
improved the lives of over 400 million people in more than 180 countries. When
fully funded and implemented, these commitments will be valued at more than
$73.1 billion.
President
Clinton established the Clinton Global Initiative America (CGI America) to
address economic recovery in the United States. CGI America brings together
leaders in business, government, and civil society to generate and implement
commitments to create jobs, stimulate economic growth, foster innovation, and
support workforce development in the United States. Since its first meeting in
June 2011, CGI America participants have made more than 170 commitments valued
at $13.4 billion when fully funded and implemented. To learn more, visit cgiamerica.org.
About
the American Federation of Teachers
The AFT represents 1.5 million pre-K through 12th-grade teachers;
paraprofessionals and other school-related personnel; higher education faculty
and professional staff; federal, state and local government employees; nurses
and healthcare workers; and early childhood educators.
About
the United Federation of Teachers
The United Federation of Teachers represents approximately 200,000 members,
including approximately 75,000 teachers and 19,000 classroom paraprofessionals,
along with school secretaries, attendance teachers, guidance counselors,
psychologists, social workers, adult education teachers, administrative law
judges, nurses, laboratory technicians, speech therapists, and other employees,
along with more than 28,000 New York City family child care providers.
The union actively supports policies, legislation and programs that promote
attaining educational equity, closing the academic achievement gap and assuring
parent and community voice in school governance.
About
the Office of the New York City Comptroller
New York City Comptroller John C. Liu serves as the investment advisor to,
custodian and trustee of the New York City Pension Funds. The New York
City Pension Funds are comprised of the New York City Employees’ Retirement
System (NYCERS), Teachers’ Retirement System (TRS), Police Pension Fund
(POLICE), Fire Department Pension Fund (FIRE) and the Board of Education
Retirement System (BERS) and are collectively valued at $127 billion as of 9/30/2012.
