New York City Comptroller Scott M. Stringer released the City’s Comprehensive Annual Financial Report (CAFR) for Fiscal Year 2017, 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.
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 and Hospitals, the NYC Water and Sewer System, and the NYC Economic Development Corporation.
“Accountability and transparency matter, particularly when our City is facing an existential threat from Washington. Public data like this makes our City stronger — and my office will keep putting out the numbers that help explain New Yorkers’ government to them,” New York City Comptroller Scott M. Stringer said. “Once again, this year’s CAFR meets the highest standards of excellence. This report is a testament to the dedicated public servants who keep our City running, and I’d like to acknowledge 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 who worked so hard to put together this report.”
Last year’s CAFR, for FY 2016, was awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association. This is the 37th year in a row New York City has received this prestigious award.
This year’s CAFR reflects implementation of several new accounting standards, most notably ones which measure the liability for “Other Postemployment Benefits” and reclassify certain component units of the City as business-type activities. Implementing these standards resulted in the restatement of the City’s prior year ending net position – the difference between assets and liabilities reported on an accrual basis. There are, however, only modest changes in the City’s prior year fund balance within the governmental funds financial statements, which measure near-term inflows and outflows of financial resources.
Highlights from the FY 2017 CAFR include:
New York City’s Finances and Economy
- For the 37th year in a row, New York City completed the fiscal year with a General Fund surplus. In FY17, the General Fund surplus was $5 million.
- City tax revenues rose at their lowest rate since FY 2010, with robust growth in Real Property Tax revenues offset by declines in Sales, Personal Income, and property transaction taxes.
- The City’s Real Gross Product grew 2.1 percent, outperforming US GDP growth for the fifth consecutive year.
- New York City added 69,600 private-sector jobs, driving down citywide unemployment to 4.8 percent, the lowest rate since FY07.
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, 2017 the Bureau of Asset Management had $182.3 billion in assets under management for the five New York City Retirement Systems.
- The pension trust funds earned $24.4 billion in investment income, net of investment expenses, in Fiscal Year 2017, for a return of 13.0%.
- Employer and employee contributions to the pension trust funds totaled $13.9 billion and $2.9 billion respectively, and the Systems made payments to beneficiaries totaling $14.5 billion.
- Bureau of Public Finance – The Bureau of Public Finance, together with the Mayor’s Office of Management and Budget, issues bonds to finance the City’s extensive capital program.
- The City, the New York City Transitional Finance Authority (TFA), and the New York City Municipal Water Finance Authority issued a total of $11.2 billion of long-term bonds to finance the City’s capital program and refinance higher coupon bonds for interest savings.
- Refundings from FY17 will generate $437.15 million in budgetary savings over the lifetime of the bonds.
- In FY17, the City, the TFA, and the Water Authority together issued $8.4 billion of new money bonds and issued $2.8 billion of bonds to refund a portion of their outstanding bonds at lower interest rates.
- As of June 30, 2017 the City’s outstanding General Obligation debt, the TFA’s Future Tax Secured debt, and the Water Authority’s debt together totaled $100.3 billion.
- Labor Law – The Comptroller’s Office sets and enforces prevailing wages for contractors on New York City public works projects. In FY17, the office:
- Assessed more than $4.3 million in underpayments and interest against private contractors that violated New York’s Labor Law.
- Imposed penalties totaling $770,000 against those companies.
- Opened 70 new cases, resolved 84 cases, and debarred 9 contractors for egregious conduct.
- Economic Development – Since 1981, the City Pension Funds have invested in Economically Targeted Investments (ETIs). As of June 30, 2017:
- The ETI program, including real assets, was valued at $2.96 billion.
- Over the last decade, the ETI program has performed above its benchmark.
- Since inception, this program has financed the construction or preservation of over 105,000 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 2017, the Comptroller’s Office:
- Issued 76 audits and special reports on the effectiveness and service quality of City programs and financial issues.
- These audits and investigations identified approximately $66 million in actual and potential revenue and savings. A further review of claims filed against the City identified nearly $1.5 million in additional costs that could have been avoided.
- Bureau of Accountancy – In addition to preparing the Comprehensive Annual Financial Report, the Bureau of Accountancy works to enhance internal controls, increase accountability on how City agencies spend taxpayer dollars, and safeguard assets through the periodic update and issuance of accounting Directives and Memoranda. In FY17, the Bureau issued updated directives governing imprest funds (Directive #3) and agency cash controls (Directive #11), and revised Comptroller Memoranda governing payment of unused leave balances and improvements to facilities leased by the City.
Financial Reporting Changes
The CAFR this year includes the adoption of new financial reporting statements issued by the Governmental Accounting Standards Board (GASB), including GASB Statements 74, 75, 80, and 82.
- GASB 74 had no impact on the City’s financial statements. GASB 75, however, modifies the calculation of the City’s liability for “Other Postemployment Benefits” (OPEB) – essentially retirement benefits other than pensions, predominantly retiree health insurance – which resulted in a restatement of the FY 2016 OPEB liability on the government-wide financial statements, but had no impact on governmental funds.
- Implementation of GASB 80 resulted in the reclassification of certain discretely-presented and blended nonmajor governmental fund component units as blended business-type activities, including the Brooklyn Bridge Park Corporation, the Trust for Governors Island, the WTC Captive Insurance Corp., and the Tax Lien Trusts. The reclassification of the Tax Lien Trusts resulted in a slight adjustment in the Governmental Funds fund balance for fiscal year 2016.
- GASB 82 addresses certain issues with respect to the presentation of pension-related information. Implementation had no material impact on the City’s financial statements.
To view the full report, click here.
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