Rolling Over: NYCEDC Wants Project Funding Up Front

The New York City Economic Development Corporation (NYCEDC) plans to roll over 60 percent of this year's budget into fiscal year 2016 and 40 percent allotted for fiscal year 2016 into fiscal year 2017. But NYCEDC President Kyle Kimball said he hopes to end this cycle of pushing unused funding from one budget cycle to the next by getting more financing for projects up front—a move Kimball says would address transparency concerns some have raised.

Multi-year NYCEDC projects often encounter delays, forcing allocations to be spent later than the budgeted year for the funds. In those situations, NYCEDC has to return to the administration and comptroller for consent to spend previously budgeted money. To streamline the process and better account for such challenges in budgets, Kimball said he and the administration are considering extending a project's allocation document beyond one fiscal year to cover the entire lifecycle of a project. 

Kimball used a $100 million project to renovate the Brooklyn Army Terminal as an example during a City Council budget hearing this week. He said the city authorized $14 million in fiscal year 2015 for the first phase of the three-year project, but it will probably not use that money this year. After getting the Office of Management and Budget (OMB) to sign a certificate to proceed, putting out a request for proposal to hire a construction manager and getting the comptroller to register it, NYCEDC is just now contracting design work, which means invoices and money transfers will likely not occur until 2016.

In the case of the Brooklyn Army Terminal, NYCEDC officials said it would have made more sense to get the $100 million up front and then go before the OMB with updates and for “additional signoffs” as more funding was needed. 

“If I have $100 million for [Brooklyn Army Terminal] and it’s given to me in three different fiscal years, I have to go back to OMB each and every time. And it has to get registered by the comptroller each and every time,” Kimball said. “When in reality what you would like me to do is just get the $100 million out the door as quickly as possible… Having multi-year [certificates to proceed ] that recognize that $100 million for [the Brooklyn Army Terminal] is not necessarily three discreet projects, but one project spread out over three years, which is a fundamental shift we think will correct a lot of the problems that you’re identifying.”

Officials added that NYCEDC's projects did not get off the ground as anticipated due to unforeseen delays, leading to the proposal to roll part of its budget over in the next two years. 

This practice of rolling over unused funding from one year to the next is precisely why City Council Economic Development Committee Chairman Daniel Garodnick said the multi-year certificates to proceed make sense.

“Their capital budget is not reflective of reality,” Garodnick said. “If they were able to get the approval for the lifecycle of a project, they could more fairly reveal their true plans.”

Garodnick said he did not foresee the NYCEDC's proposal altering the oversight or regulation of projects.

“It would be an internal change within the administration only,” Garodnick said. “It certainly does allow for more transparent budgeting, and every contract needs to be signed off on, in any event, this is just about the ability to proceed.”

City Comptroller Scott Stringer’s office would not comment on whether it had been cued into the discussions between the de Blasio administration and EDC, or what it thought about the proposed changes.

Maria Doulis, director of city studies at the nonprofit Citizens Budget Commission, said it was not immediately clear whether altering the lifespan of certificates to proceed would change the frequency with which the comptroller’s team reviews projects.

“This is the sort of thing that’s not a science, but more of an art. You want to be able to give agencies the flexibility but you need to make sure …  there are controls there in the process to make sure the money is being well spent,” Doulis said. “It’s a legitimate question to raise, in terms of, are there changes that can be made to city processes that would allow projects to be completed in a more timely way.”