FY 2027 Executive Budget Hearing (OMB & Comptroller) Committee on Finance · June 9, 2026 · 5hrs 36m Source: https://hearinghearings.nyc/hearings/committee-on-finance-executive-budget-hearing-am-2026-06-09/ ================================================================ (00:00:16) Good Director. (00:00:16) Good morning and welcome to today's New York City Council hearing on the Committee on Finance. At this time, please, no one approach the dais. Please silence electronic devices. (00:00:25) Chair, we begin. Good morning and welcome to the final day — well, technically we have the public testimony tomorrow, but the final day of the Fiscal Year 2027 Executive Budget agency hearings. And CM Linda Lee, I still have all my hair and did not get too grey in the process. So we are joined by... we will be commencing the hearing today with the Mayor's Office of Management and Budget, followed by the Comptroller, Department of Finance and the Independent Budget Office. At this time I would like to introduce my colleagues. Of course, we are joined by our Speaker, our Deputy Speaker Williams, Majority Whip Pinks, Majority Leader Brad, CM Dinowitz, CM Luis, CM Krishnan, and I think that is it for now. (00:01:19) So if... oh, and Council Member... (00:01:21) Thanks. So before we start, I would like to extend my sincere gratitude to the dedicated staff of the City Council Finance Division for their tireless efforts in preparing for today's hearing. I know it was a lot of long hours. This work does not happen on its own and I want to acknowledge the mighty team of dedicated professionals who make it all possible: Finance Director Nathan Tota, Managing Director Jonathan Rosenberg, Deputy Director Amri Dev, Paul Simone and Isha Wright, Chief Economist and Assistant Director Delauria De Monaco, Supervising Economist Paul Sturm and Andrew Wilbur, Directors Aaliyah Ali, Julia Haram, Florentine Kabore, Caitlyn Oh, James Reyes and Jack Story, Chief Counsel Nicholas Connell, Senior Counsel Nadia Jean-Francois and my Committee Counsel Brian Sarfati, my Senior Adviser Athena Say, and many finance analysts, economists and support staff who have worked behind the scenes to bring everything together. Welcome, Director Sherif Soliman, you and your team, and thank you all for joining us today to answer our questions. Before I go any further, I want to invite Speaker Menin to give her opening remarks. Thank you. (00:02:33) So much, Chair. First of all I want to also thank our incredible Council Finance team who has logged such long, hard, dedicated hours. We have been an unbelievable team and I just want to thank each and every one of you for your amazing work. So good morning, everyone. I want to welcome you, Director Soliman, and your whole team here today on the penultimate day of the hearings on the administration's proposed Executive Budget for Fiscal Year 2027. Nearly two and a half months ago, when you were last before this Committee, we mentioned a number of issues that the Council had with the preliminary plan that had been presented to the Council. I was very clear that the idea of increasing taxes for all New York property owners was not something this Council was willing to consider. Drawing down annual reserve funds would threaten the City's financial stability. I want to thank you for taking those concerns seriously. The Executive Plan no longer includes revenues from an increase in the property tax, nor does it draw down on the annual reserves. Additionally, the Council wants to thank you for taking the Council's response to the preliminary plan seriously. I note that the current plan includes over 20 of the recommendations the Council presented in our budget response, providing alternative resources rather than tapping reserve funds or increasing property taxes for all New Yorkers. We hope that the administration's acceptance of so many of our proposals is an indication of how budget adoption can be achieved. Council staff has spent countless hours analyzing this financial plan and the underpinning economic assumptions that drive your revenue forecast. As with every economic forecast, slight variations in assumptions can lead to differing revenue projections. Today, my office released the Council's updated revenue forecast for Fiscal Years 2026 through 2030. The Council's economic outlook foresees steady growth with a slight improvement from the forecast. As a result of this improved outlook and stronger than predicted current year collections, the Council's revenue forecast now includes nearly $2 billion more in tax revenue than in Fiscal Years 2026 and 2027. The Council's updated forecast also shows that once you adjust for the year reserves, the Fiscal Year 2028 gap falls from over $7 billion to a more manageable gap. With these additional funds as well as the additional proposals presented in our budget response that were not included in the Executive Plan, the Council and administration can agree to fund many programs for the success, health and safety of all New Yorkers, including the expansion of the Fair Fares program, which has been a top priority for the Council, bringing the parks budget in line with historical spending, implementing an expansion to the New York City Kids Rise program, the allocation of funding allowing the FDNY to reinstate the fifth firefighter, increased funding for the Department of Consumer and Worker Protection, increased funding for the Department of Investigations and other priorities. I will not list our whole exhaustive list, but the Council has prioritized crucial areas of the City and the record speaks for itself. Over the past decade, the Council's forecasts have had the best performance in estimating the actual tax revenue available to the City. Just as we have confidence in the next, we are confident that this winning track record will continue. But we also understand that forecasting is as much an art as it is a science. There is higher uncertainty, we know, in the economy, largely due to actions taken by those in Washington, D.C. For that reason the Council also believes that some of this nearly $2 billion surplus should be used to bolster the City's rainy day fund to protect our investments and City services from the inevitable downturn. We have come a long way since the release of the preliminary plan. The State budget has been adopted and the City is now receiving closer to its fair share of resources. I hope that as a result, we can move forward and adopt a budget that is both financially sound and also provides for the critical services that all New Yorkers require. So we look forward to hearing from you today about the administration's Fiscal Year 2027 Executive Budget. Thank you. I am now going to turn it back over to Chair Lee. (00:07:14) Thank you, Speaker. So yesterday the Council released, as the Speaker just mentioned, our economic and tax forecast for the Fiscal Year 2027 Executive Budget. New York City's economy continues to show resilience with higher tax revenues than projected over Fiscal Years 2026 and 2027, even though our economic growth continues to lag the longer run average. The City Council's tax revenue forecast remains largely the same as our previous forecast, with shifts in the timing of revenues. We project that the City will collect a total of nearly $2 billion more in tax revenue in the current and next fiscal years than OMB has projected in their May plan combined, driven by stronger personal income tax revenue growth and higher collections in property, personal income tax and unincorporated business taxes. Additionally, we project greater tax revenue collection in FY 2029 at 4.1 billion and 4.9 billion in FY 2030. The Council sees tax revenues set to grow at an average of 4.3% annually through the forecast period, which, while trending the right way, remains below the 5.5% annual growth the City saw in the prior decade. The Council remains optimistic in the City's financial outlook and we will continue to ensure that we are using every resource we have on hand to improve the lives of New Yorkers. We continue to have what we need to preserve the cornerstones and lifelines of... (00:08:39) ...our City and to protect the essential services that keep New Yorkers on their feet. The more we invest in our fellow New Yorkers, the more our City will get back, and I look forward to seeing how our discussion today can help guide us towards discussions that improve the lives of New Yorkers. I have to say this before every hearing, which is that we will be taking public testimony for all agencies on the Executive Budget tomorrow, Wednesday, June 10, beginning at 9:30, so we are going to go all day, which includes testimony for all the different agencies. Please join us tomorrow. Make sure you sign up. Tell your community members to sign up for public testimony at 9:30 a.m. We will see you all there. I will now turn it over to Brian Sarfati, our Committee Counsel, to swear in the witnesses. Good morning. (00:09:38) I do. First Deputy Director, I do. I do. Senior Deputy, I do. Deputy Director, I do. Deputy Goldstein, I do. And Deputy Hoffman, I do. (00:09:54) Just really quickly, I just want to recognize we have also been joined by CM Ariola on Zoom, CM Wong, CM Morano and CM Gennaro. Sorry. Now you can go ahead. (00:10:04) Sorry. Thank you. Thank you, Chair, and good morning. Good morning, Speaker Menin, Majority Leader, Chair, members of the Finance Committee and all members here with us today. Thank you for the opportunity to testify today about the Executive Budget for Fiscal Year 2027. I am joined today by First Deputy Director, Deputy Director, and Deputy Directors Josh Goldstein, Nathan Guster, Liz Hoffman and Patrick... When I testified on the preliminary budget, I spoke about significant and chronic under-budgeting across many areas and the approach that our administration took to introduce transparency, predictability and less risk in the City's budget. Addressing billions of dollars in known expenses in the preliminary budget was a prudent, fiscally responsible and necessary step to take, but it meant that we needed to confront a staggering $12 billion gap over Fiscal Years 2026 and 2027. We immediately went to work and applied a variety of strategies to address this inherited challenge. Through a combination of savings plans led by newly appointed Chief Savings Officers, additional tax revenue and significant financial support from our partners in State government, we eliminated the gap and presented a balanced Executive Budget — one that puts the City back on a strong financial footing, one that invests in an affordable, safe and vibrant City and one that continues core government operations that New Yorkers depend on. We balanced the $124.7 billion Fiscal Year 2027 budget without raising property taxes, without drawing down the rainy day fund or the Retiree Health Benefit Trust Fund and without slashing services. This morning I will discuss in greater detail the multifaceted approach we took to close the gap, focusing on three main areas: recurring savings initiatives, significant State aid and restructuring unfunded pension liabilities. The Executive Budget includes $1.77 billion in savings from Chief Savings Officers and vacancy alignment over Fiscal Years 2026 and 2027, all without slashing services. By category, Chief Savings Officers saved $24 million from giving up on new space, consolidating leases and other leasing savings and efficiencies; $28 million from modernizing City technology, software licensing efficiencies and other technology savings; $94 million from pursuing better contract rates, terminating contracts in favor of insourcing and other contract savings and efficiencies; $368 million from improving the efficiency of public services, managing overtime and phasing out unused programs and other program savings; $947 million from improving our financial management, claiming revenue that the City is owed and accurately estimating expenses; and finally $307 million from the vacancy alignment exercise. This is the first phase of this exercise. Executive Order 12 is now embedded into agency operations and our Savings Officers will continue to work with OMB and the Office of the First Deputy Mayor to find savings and efficiencies. As I noted, $307 million of the savings was achieved by reducing vacancies. This savings exercise was paired with a removal of the 2-for-1 hiring restriction that has largely been in place since COVID and slowed down the hiring process in many agencies. Agencies can now move quickly to hire up to their funded personal services budget, which will improve service delivery. On top of savings achieved through the Chief Savings Officers initiative and the vacancy alignment exercise, in the Executive Budget we implemented policy changes to contain rapidly escalating costs in due process cases and the City FHEPS program. In the Executive Budget we have made investments to address the underlying systemic issues which have led to a shortage of services available to special education students in the public school system. This includes adding $150 million for special education pre-K and ensuring that children in private schools have access to service providers, which are a less expensive alternative to the private market. At the same time, we will improve the administrative procedures for due process hearings. We know that City FHEPS is a lifeline for thousands of New Yorkers leaving the shelter system and seeking stable housing. As both the stewards of the program and an administration that firmly believes in its purpose, we want to protect it by placing it on firm financial footing. That is why we are pursuing reforms such as centralizing support functions and implementing administrative improvements that protect the program's future. We can curb spending growth without cutting vouchers and at the same time develop strategies to improve the program. I look forward to discussing this with the Council in the weeks ahead. Next, I would like to express my deep gratitude to Governor Hochul, Majority Leader Stewart-Cousins, Speaker Heastie and members in both houses for supporting the significant package of State aid that helped address our budget challenges. I would also like to thank you, Speaker Menin and Chair Lee and the entire Council for your advocacy on behalf of additional resources for the City. The Governor's Executive Budget included an additional $383 million in foundation aid and a provision to allow the City to decouple from certain corporate tax cuts that have been included in HR 1, that will generate approximately $700 million in Fiscal Year 2027. State support continued after the Governor's Executive Budget with a $1.5 billion commitment from the Governor on the day before we released our preliminary budget, that included $500 million in one-time unrestricted aid, a recurring restoration of cuts including $300 million per year on youth programming, $150 million per year to reverse the sales tax intercept for distressed hospitals and $60 million to reverse lower reimbursement rates for public health funding. An additional $97 million in school aid was also realized. Finally, the enacted State budget included approximately $4 billion more, restoring the State share of line of duty survivor benefits, State authorizations such as a more flexible schedule for class size compliance and new revenue from the State's first pied-à-terre tax for non-primary resident homes valued at over $5 million. It has long been understood that the property tax system is inequitable. This reality manifests itself in many ways, including the... (00:17:58) The regressive way that the luxury market is taxed, the pied-à-terre tax, will remedy some of that inequity for high-value homes over $5 million and will generate $500 million in recurring tax revenue that will support much-needed City services across the five boroughs. The enacted State budget also authorized the restructuring of unfunded pension liabilities in the City's retirement systems, subject to approval by the trustees of each retirement system, to ensure that we are making predictable and even payments over time. The restructuring proposal allows a short five-year extension to a 22-year payment schedule that began in 2010, which required employer contributions to pay down unfunded actuarial liabilities as calculated by the Office of the Actuary. The original amortization schedule was back-ended, with annual payments beginning at roughly $4 billion and climbing to about that level at the end of the amortization period in 2032, when the cost would plummet to zero. There is a better way to finance long-term obligations: flat dollar level payments. That is what the pension restructuring proposal accomplishes. Instead of completing payments in 2032, we will get there in 2037, with no impact — I underscore no impact — on retiree benefits. Smoothing the pension payments over time will generate $652 million in savings this fiscal year and fiscal year 2027, and roughly that amount annually in the remaining out years of the plan. Our retirement systems will remain fundamentally sound. The average funded ratio for the five retirement systems is 86%, higher than the 79% national average. This reasonable funding policy and the multi-year savings it will produce will ensure that New Yorkers have a local government that is more financially stable, while ensuring a continued pathway to a 100% funded ratio for the City's retirement systems. I thank the Council for including this proposal in its preliminary budget response. Now I would like to share technical details about the Fiscal Year 2027 Executive Budget. Fiscal years 2026 and 2027 remain balanced. The fiscal year 2028 gap is in line with historical averages. The gaps in fiscal years 2029 and 2030 are lower than during the Great Recession years, as a percentage of gaps over revenue. We will continue to identify structural solutions and make long-term systemic changes to improve the City's long-term fiscal outlook and reduce out-year gaps. Our administration is committed to rebuilding and maintaining high levels of reserves to ensure that we can weather an economic downturn. We replenished the rainy day fund to $2 billion and the Retiree Health Benefit Trust Fund to $5.2 billion. As a percentage of revenues, our reserves are approximately 8%, higher than the prior 10-year average of 7.3%. Turning now to our revenue forecast: we recognize headwinds, including the ongoing war in the Middle East and a subdued labor market, but also economic strengths, including continued market momentum, financial and artificial intelligence investment and elevated commercial leasing activity that is driving down vacancies. The result is that before accounting for changes in savings and tax programs, the tax revenue forecast in the Executive Budget has been revised up by $75 million in fiscal year 2026 and is unchanged in fiscal year 2027 as compared with the preliminary budget. We incorporated the Council's proposal to reduce the unincorporated business tax credit, which will generate $68 million annually. Also, as of fiscal year 2027, by virtue of our strong fiscal management, we have made new critical investments in New Yorkers that are focused on retaining our tax base, taking preventative measures to save money down the line and spending more efficiently to deliver faster results for New Yorkers. From a big-picture perspective, we added roughly $1.7 billion in new spending across the preliminary and Executive Budgets, with just $1.39 billion, or 8%, attributable to programmatic administration initiatives, with the rest going towards addressing chronic under-budgeting for known critical needs and core government operations like snow removal and IT costs. In terms of programmatic investments, our administration has baseline needs that were typically deferred to adopted budget negotiations and funded for just one fiscal year. In the Executive Budget, we baselined funding for the library system, the Parks Department, Fair Fares and cultural organizations. This removes the uncertainty many New Yorkers experience every year around ongoing access to their neighborhood library, cleanliness in their parks, the cost of traveling to and from work or their doctor and accessing public art, and preserving CUNY as an engine of upward mobility. We also made investments to improve the lives of our youngest New Yorkers by increasing child care provider rates, expanding the New York City reading program and funding the Little Apple, the City's first-ever municipal daycare program. We also deepened our commitment to a safer New York with investments in the newly formed Office of Community Safety and an 800% increase in funding for the Office of Prevention of Hate Crimes, and staffing within the CCRB and the Fire Department. The Mayor also expanded his commitment to safer streets and deepened funding for waste containerization. We have boosted economic justice and worker protections with support for street vendors and commercial lease legal assistance, and expanded capacity for the Department of Consumer and Worker Protection to grow their head count by 181 positions and $18 million over the next three fiscal years. We are also investing in domestic violence services, seniors and access to mental health care. I think we could all agree that these are necessary investments that improve the quality of life for New Yorkers across every borough and community. Turning now to the capital budget: the five-year capital plan totals $171 billion, growth of $4.1 billion over the preliminary capital plan. The affordability crisis is exacerbated by an acute housing crisis, and the administration's block-by-block housing plan addresses the crisis head on. That is why we invested an additional $4 billion in HPD agency capital funds over the five-year plan and $500 million more in fiscal year 2031 to build and preserve affordable housing across the five boroughs. We have also invested an additional $500 million in fiscal year 2028 for comprehensive NYCHA renovations, and we are allocating $256 million from this fiscal year through fiscal year 2028, along with funds from the expense budget, to restore vacant units so more families can move into safe, stable homes. The capital plan includes a total of $5.6 billion for nature — the most City capital devoted to nature in recent history. I look forward to working with you as partners to address the fiscal challenges ahead and identify resources that support our mutual priorities, including keeping New York safe and clean, promoting education and public health, taking on the affordability crisis and making this City livable each and every day for the people who built it. Thank you again for the opportunity to testify. I am happy to answer any questions that you have. (00:26:24) And I will turn it over to Speaker Menin first for her questions. (00:26:26) Okay. Thank you so much for your testimony today. I have a number of questions. So first of all, just a process and timeline question really coming from our finance team. So after our preliminary budget hearing on the 25th, the Council sent a follow-up letter requesting additional information regarding the budget. That letter was sent and we did not receive a response until June 2nd, nearly two months later. So we want to get your commitment moving forward that that will not (00:26:56) happen again and that we get timely responses to the Council's requests. Yes, we will work on making sure we speed that up. Great. (00:27:05) Okay, so moving to the substance. So Fair Fares, which as you know is one of the top priorities — and expansion of Fair Fares is something the Council has put forward. So some questions on that. What does the administration estimate it would cost to expand the eligibility of the Fair Fares program to 275%, 200% and 250% of the federal poverty level? (00:27:32) So let me start, Speaker, by saying we are proud that we were able to fund in the Executive Budget $25 million that had been put up at the adopted budget as a one-shot in the Fair Fares program. We know that there are calls to increase the percentage of the federal poverty level. If we were to go to 200%, depending on utilization, it can be anywhere between $150 million to $300 million. (00:28:02) And what do you estimate would be the increase in the number of clients enrolled in the program for these expansion scenarios? (00:28:09) We have estimates that can be upwards of over a million riders. It really depends (00:28:19) on utilization. During the hearing we had on the General Welfare Executive Budget, it was testified that through the first three quarters of fiscal year 2026 for Fair Fares, only about half of the Fair Fares budget had been spent. So do you expect the entire budgeted amount for the program will be spent? If not, why not? And how much will be unspent? And overall, the concern is that underspending has been the case for multiple years, which is concerning. So what outreach and education efforts will the administration take to address that? (00:29:00) Sure, Speaker. I think you have heard the Mayor say on numerous occasions that a program on paper is of no use to New Yorkers. We need to be able to get the word out as much as possible. You see ads all over the subways, you see ads on NY1, you see ads elsewhere. We know as well that the agency participates on a frequent basis in outreach events, either in the subways or wherever they can connect with New Yorkers. So outreach is key to this program. There will be some underutilization that is expected for this fiscal year. The goal is to fully utilize this (00:29:43) program. Okay, thank you. Moving along to a different topic. In April 2026, leaders of the Brooklyn not-for-profit BRAGS Home Care were indicted on federal bribery and embezzlement charges. Rather than cut ties with BRAGS, the administration has appointed an independent monitor to oversee the group. BRAGS was awarded two new multiyear contracts, which start on July 1st, worth $186 million for shelter and social services. Can you explain the administration's decision to continue its relationship with BRAGS considering the recent federal charges? Well, as you noted, Speaker, the vendor has a corrective action plan. We are working with the Department of Investigation to make sure that there is a monitor and that those protocols are in place, and we will stay working closely between the agency and the Department of Investigation to make sure that corrective action is taken according to that corrective action plan. (00:30:40) Why not just cease interaction with this organization and select a new provider? Again, the (00:30:46) safeguards are in place with the Department of Investigation in the mix overseeing and having a corrective action plan and a monitor for this provider. (00:30:57) Who is the independent monitor and how were they selected? I would have to get back to you on (00:31:02) that. Okay. If you could get back to us this week on that. And then also, did the appointment of the monitor require a new contract? Is it additional funding? If so, how much did the monitor cost? Are the funds in the budget allocated to the monitor? Let me turn that over to (00:31:20) Patrick. We did not add new funding for that. There is funding allocated within each agency's budget for vendor monitoring. (00:31:28) So it was within that. Okay. So if you could get that information to us. I do want to express my strong concern with this decision. Why continue to contract with this entity? I want to make sure we are saying that. And I do want to say it is not the first time concerns have been raised about a not-for-profit organization contracting with the City. In 2025, four employees at a different shelter provider were indicted for wire fraud, bribery and money laundering. So what steps is the administration taking to address systemic deficiencies in contract oversight to ensure that public dollars are (00:32:03) being used responsibly? We continue to work with our agencies and we continue to work with the Department of Investigation to ensure that if there are any contracts that are not being implemented in the appropriate way, there is appropriate action taken. (00:32:30) Okay, moving along to DOE contracts, which is also a top priority of the Council. In both our preliminary budget follow-up letters, we requested additional information on contracts. Neither DOE nor OMB provided this information in your responses, and then we received a partial response from DOE late last week that was unclear. At yesterday's Executive Budget hearing on education, DOE blamed technical issues and staff capacity for not being able to provide responses to the Council. I do want to note that DOE has the largest agency budget of any agency. So the idea that there is not staff to address what are literally rudimentary questions about providing contract information is, frankly, not credible. We appreciate (00:33:21) the fact that the Council has surfaced and raised contracts at large as an opportunity for the City to realize savings. That is why the Chief Savings Officer, in our savings plan, we begin with $30 million in savings from contracts in fiscal year 2027, ramping up to $200 million in fiscal year 2030. We know there is more to do. We want to partner with the Council to be able to do that. With respect to the information that was provided, there was a summary of contracts that was provided. We know you want the actual contracts and we will work with you and the Department of Education on that. The summary, I would note as well, has about the contracts that were requested in terms of what are the contracts that have not been competitively bid. There are a couple in there like the custodian services and the New York City school bus contracts. So I think we are willing to obviously take a deeper look with you on that as we pursue our shared goal of being able to find contract savings without disruption to services. (00:34:35) So when can we expect to receive the contracts? We will (00:34:40) work with you on that. We know that they answered yesterday that it will take a certain amount of staff time. We will look to see how quickly we can work together on that. (00:34:50) Okay, moving along to the Department of Consumer and Worker Protection, which is also a top priority of the Council. On the campaign trail, the Mayor had pledged to double the budget of the agency. But the fiscal year 2027 Executive Budget proposes only an increase of just 4.4% from the fiscal year 2026 budget adoption. The fiscal year 2030 budget at the end of the plan still needs $53.6 million to achieve a doubling of its budget. So how is the administration still committed to doubling the increased funding? Because this agency has been asked year in and year out — and I want to be clear — by the Council to do more work. We have so many important Council bills that were passed in the last few years that add additional work to this agency. As someone who ran that agency, I just want to raise a red flag. I am very concerned about the agency's ability to do everything that we are asking it to do. (00:36:02) I know you know the agency well, and we both share the goal of what the agency can do and what it can be. We have made a significant investment in this Executive Budget to bring (00:36:16) their head count, when fully ramped up, to 281 new positions to address multiple facets of their responsibilities — existing responsibilities and new responsibilities through the local laws that you referenced, Speaker. So we look forward to having the continued discussion with you over the next few weeks about appropriate resources for the agency. (00:36:38) Okay, so is the administration still committed to doubling the agency's budget? (00:36:44) We want to give the agency the resources that it needs. We work very closely with the Commissioner to understand what he needs both in the short term and in the medium term, and this Executive Budget provides a significant start. We are happy to talk to you in the next few weeks about if there is anything more that is needed. (00:37:03) In January 2026, with Executive Order Seven, the Mayor established the Office of Mass Engagement. The existing Public Engagement Unit budget was incorporated into this new office. We would like to get a better understanding of the work of the Office of Mass Engagement and how it will specifically operate. So what is the total budget and head count for the Office of Mass Engagement? And I want to say that this is an entity that Council members and community boards are on the front lines of dealing with in terms of community outreach. This is why we really want to better understand these various functions. So what is the total budget and head count in fiscal year 2027 and in the out years? (00:37:53) So the total budget for the Office of Mass Engagement is $53 million, and that includes in this Executive Budget $2.8 million in new funding for staff in fiscal year 2027 and the out years. As you noted, there are multiple offices that are included in there, and so the additional funding would fund an additional 20 lines. (00:38:19) Did you say $53 million for the Office of Mass Engagement? (00:38:23) That is the overall budget for all of the offices within it — $53 million total. Okay. But how much of that budget is for each office? We can provide you a breakdown (00:38:34) across all the different offices. And what are the new offices? (00:38:51) Responsibilities. Well, I think that the Community Assistance Unit, as has existed, as you know, connects government with communities and being able to inform New Yorkers and all communities about what services government provides, so on and so forth. In an acute housing crisis as well, there is outreach to various communities to inform them about assistance in their housing needs, for example. So these are the kinds of things that the office, even before there was the creation of the Office of Mass Engagement, has existed to do. So there is a continuation of those efforts and really a ramp-up of those efforts. (00:39:35) To reach New Yorkers in their communities. So in the Executive Plan we can see that, and dedicated budget codes for it, which includes the 20 positions that you mentioned. From conversations Council Finance staff has had with you, we understand there is additional funding and headcount that is not so clearly delineated in the budget. Why is that? So I am going to turn it over... I believe it exists within one or two budget structures within HR. Right, so it is not that. (00:40:12) You know, it is not hidden or anything, and I think the budget is approximately $24 million and we... (00:40:16) Can provide those codes to your staff. (00:40:18) And the last question I have on this topic is: what safeguards are in place to ensure that this office is not engaging in political work or other outreach that would be a conflict of interest? (00:40:33) Government offices cannot participate in political activities. That is very clear from the very beginning, and so employees are instructed as such. Whether it is through Conflicts of Interest Board training, employees understand what their roles and responsibilities are. This is a government office, not a political operation. (00:40:52) Okay. And so all the employees have taken Conflicts of Interest Board training? (00:40:56) I know that I will get back to you to confirm who has taken it or not. Okay. Okay, I have more questions, but I am going to turn it back over to Charlie and I will go in the second round. Thank... (00:41:06) You so much. (00:41:08) Perfect. Okay. So starting with the State budget assumptions. The Executive Plan was released, obviously as you know, prior to the adoption of the State budget, and now we have the State budget. So what assumptions does the Executive Plan include regarding State actions or funding, and were all of those assumptions included in the final adopted State budget? (00:41:26) Yes, I think it is another opportunity to really thank Governor Hochul, Leader Stewart-Cousins and Speaker Heastie. What was committed to was provided, and so we are confident in what we put in the Executive Budget in terms of what the final product was. (00:41:48) Okay. And are there other actions in the adopted State budget that will affect the City's financial plan that were not included in the Executive Plan? (00:41:55) There was one particular area, Chair, and we had put in the financial plan $110 million for what we anticipated would be the cost impacts from pension enhancement legislation — the Tier 6 legislation and a couple of other pension bills. It turned out in the final analysis that Tier 6 was more costly to the City. So we had not booked that extra amount. I believe year one was $36 million more, and there were a couple of other pension bills as well. So that is something that we will have to reflect based on those fiscal notes. (00:42:35) Okay, so that was $110 million total? (00:42:38) $110 million we put in the financial plan, right. But it turned out that Tier 6 was, I believe, $36 million more. (00:42:48) Okay. (00:42:49) Perfect. Also, just really quickly, we have been joined by CM Sanchez, CM Restler, CM Morano and then on Zoom we have CM... come on. (00:43:00) Okay, so really quickly, moving to units of appropriation. One of the ways to improve transparency and rebuild trust in the budget is to align the units of appropriation with the programmatic spending areas, especially where there are real issues in cost containment. In our budget response we called for the creation of a number of new units of appropriation to increase transparency. So does the Executive Plan include any of the new units of appropriation, and if so, could you please provide a list of the new ones and also what was the rationale behind their creation? (00:43:34) Sure. There were new units of appropriation in the Executive Plan — the Office of Mass Engagement, for example. There were also new units of appropriation for the City Council in the sense that there were new committees, the Committee on... the Committee on Disabilities, et cetera. Also, there were new units of appropriation for the Office of Community Safety that was created. As always, we look forward to discussing with the Council new units of appropriation. (00:44:07) Okay. And just while you are on that topic, with the Office of Community Safety, because I know that this came up in a few of the City agency hearings that we have had throughout the budget process, where I think there is just a lot of questions and confusion around the Office of Community Safety and what that is going to look like. I know that there is a whole restructuring that is happening, and my understanding — correct me if I am wrong — is that we are sort of taking programs that were under perhaps different City agencies and putting them in, so it is not necessarily new funding that is being allocated. But do you know if there will be increased funding required for the Office of Community Safety in the future, and how does it look right now in terms of the coordination and staffing... (00:44:45) All of those things. Sure. So the creation of the Office of Community Safety is really an exciting step for the administration to be able to... (00:44:55) Move forward in this space, to be able to create an office in City Hall under a new Deputy Mayor. So what we were initially doing was taking $260 million that were from existing offices that would come under the umbrella of the Office of Community Safety — the Office of Community Mental Health, for example — and so that was the fiscal 2026 number of $260 million. What you have in fiscal 2027 is a drop-off based on grants that did not extend into fiscal 2027. So we invested... (00:45:36) $41 million in new funding, and the new total for fiscal 2027 is $271 million for the Office of Community Safety. Clearly we are going to want to build on that as we move forward, but there was not money added to go beyond the $260 million that we said we were taking in. (00:45:57) In fiscal 2026. Yeah, because my understanding — I know up until now it has been just sort of reshuffled funding — but my understanding was that it would eventually require more funding in the out years. And so... (00:46:09) So next year, for fiscal 2027, we are seeing $41 million, and then do you know in the out years how much that will... (00:46:15) Increase in future out years. We are looking at additional investments as the office takes further shape in the vision of Deputy Mayor François. (00:46:24) Okay, continues to take hold. (00:46:27) Sorry, took a little detour. (00:46:27) So currently — I am sorry, going back to you — the City's reserves are held in one unit of appropriation in the miscellaneous budget, which also includes judgments and claims, various transit subsidies and other citywide fixed costs. So do you think it would be better and provide more transparency for the City to budget its reserves in dedicated units of appropriation rather than just... (00:46:51) Altogether in a lump sum. Yeah, I think... look, we are happy to have a conversation with you about it. I think that there has been certainly a greater focus and attention on reserves now. I think everyone knows down to the penny exactly what we have in reserves because there has been so much discussion about it. But of course we are happy to talk to you about ways that we can improve that level of display of... (00:47:20) Okay. And then moving to the tax revenue growth in out years. (00:47:25) So the financial plan shows large out-year gaps of $7 billion, as you mentioned in your testimony, to nearly $10 billion in 2030. However, this partly appears to be a function of the assumption of very slow tax revenue growth in those years. The plan only expects tax revenues to grow at an average of just 2% a year, which is slower than the forecast for inflation during the same period that you mentioned. And after adjusting for inflation... (00:47:57) The plan expects the City to generate less tax revenue in fiscal 2030 than it will in fiscal 2027. (00:48:01) So that is something that usually happens only during recessions, and so I just wanted to know how you came up with this forecast and is this a product of just being more conservative on the budgeting? (00:48:17) So first, I think we have to look at what we have in the tax forecast for fiscal 2026 and fiscal 2027. You are looking at forecasted growth in fiscal 2026, and collections are coming in on plan at 0.1% this year and then around 4% next year. We continually monitor, obviously, market conditions, economic conditions and headwinds, as I noted in my testimony. When you start looking out into the out years, we have basically a forecast that is not too aggressive because we want to make sure that we are not forecasting revenues that do not materialize. (00:49:06) So then I would ask what you think is a more realistic outlook, then. (00:49:11) I think, you know, statistically as you go out into the out years, the degree of certainty is smaller, right? You have a much larger room for error. So in terms of how we do it, as the Budget Director said, we typically try to get the best forecast for the current year and the... (00:49:35) Next forecast year, and then we do have a wider band of variance. So we are on the less aggressive side, right? We are taking into account a lot of risk out there. We want to make sure that we are accounting for it because, as you know, the risk is asymmetric on the revenues. If you forecast too aggressively and the money does not come in, then we are forced to cut. Hopefully there is room for improvement or increases. Absolutely. Okay. (00:50:12) Perfect. Okay, property tax increase and reform. I am glad you said it is inequitable. As we know, the property tax system is inequitable. The Executive Plan does not include property tax increases, and I am glad that you are not including it. But as you have been thinking through and looking at property taxes, what insights has this budget process so far given in terms of where changes need to... (00:50:48) Take place. So I think, as we have said before and continue to say, I think there is near universal agreement that the property tax system is inequitable. We know that we need reform. We are working on a reform proposal that largely builds on the recommendations of the Advisory Commission on Property Tax Reform established by former Mayor de Blasio and former Speaker Johnson. So we are making sure that we are looking at not only the structural recommendations that are included in those findings from the commission, but also looking at homeowner relief programs, taking the holistic view. We know that, looking at other classes of properties, we are looking at multi-family properties, large rentals and commercial properties. So we are taking a comprehensive, holistic view on property tax reform because that is what is needed to address the system, and we are working on that proposal to be able to introduce it in the State legislative session next year. (00:51:52) Oh, and they say okay, the next State legislative session. Got it. (00:51:54) Okay, because I know that this year in Albany I think you had mentioned that the proposal would be released in weeks, which was in... but did you mean for next year? Because we were just trying to get a sense of where the timeline is. (00:52:06) Yeah. Yeah, I think we are definitely working on the proposal. Again, we are taking a comprehensive view and we look forward to being able to have a proposal that is ready for action in Albany next year. (00:52:20) Okay, great. And will the tax lien sale remain paused until after the property tax reform gets accomplished? (00:52:27) The tax lien sale — we paused the fiscal 2026 tax lien sale, as you know. We are initiating, or in the middle of, a six-month review on tax liens. We know that there is legislation that has been passed earlier this year. There are all kinds of different policy looks and policy changes that could be made, including the utilization of land banks. So we are looking at that to be able to have an alternative pathway to what we have seen in terms of the lien sale, which is a program in need of reform. Okay, so... (00:53:15) What I am hearing — and correct me if I am understanding correctly — is that you would pause it until... does it go hand in hand with the property tax reform? Is that what you are saying, or... (00:53:25) Would not necessarily relate. I mean, it is related in the sense that it is both property tax, but the steps that we are taking on both sides are not really interrelated in that same way, right? So the six-month review is what we are engaged in now on the tax lien sale, and then the property tax reform proposal is also being worked on in parallel. To the extent that the two will intersect, we will obviously incorporate what our review finds. (00:54:02) Okay, so there is a chance that it will be unpaused, I guess? (00:54:09) For next year, the six-month review will dictate, and the recommendations from there will dictate how we move forward. Okay. (00:54:16) Really quickly, going into streamlining and hiring approvals to reduce staffing delays. I know that one of the things we have heard across a lot of the agencies is around staffing and the reports that it does take a while to obviously go through the approval process, and that it sometimes causes internal bottlenecks to hire folks in the social services space. So what steps have you taken to streamline the hiring and budget approval process so agencies can fill positions in a timely manner and maintain the staffing levels needed to deliver essential services? (00:54:56) Sure. One of the first things that I heard when I came to OMB was that one of the frustrations from agencies was about the personal action request forms not moving in an expeditious way. So we immediately went to work to try to figure out where those bottlenecks were, and we have been making significant improvements. One of the main things we have done is eliminate the 2-for-1 hiring restriction. Under the 2-for-1 restriction, you would need to wait to get a monthly allotment after we understood what your attrition rate was. That is now eliminated, and so agencies are now able to hire up to their position budget. What we sometimes encounter when we are looking at personnel action requests is that there is a misalignment between the vacancy and the appropriate funding, or maybe there are multiple sources of funding that tie to a particular employee line where we have to go back and forth with the agency on that. But we are committed to streamlining the process as much as possible. In fact, we are looking at a dashboard that we can have where we can really look at where a PAR is across the system to see if there are bottlenecks, and looking at whether there are particular agencies that have an issue where we have funding issues because they have more capital funding, for example. So all of that is on the table. We are looking to move it quickly, and in fact we have moved it quickly. I think between May 1 and June 6, we moved forward and approved about 1,400 PARs. In fairness, a couple of those — I mean a piece of those 1,400 — have been for new classes in terms of civil service titles that are coming online. But there have been agency needs that have been met, and so we are continually working on that and committed to improvement. Okay. And sometimes I know the delay can happen with the background checks, and sometimes the background checks can take upwards of six months. (00:57:17) To complete. And so how have you factored that into the streamlining of the hiring process, and is there a way to shorten that timeline? Do agencies manage background checks themselves, or just manage them? I know in some cases external contractors are involved in the background check process as well. (00:57:38) So, yeah. OMB is not involved in the background check process. So when we get a PAR we are looking to move it forward as quickly as possible, as I noted. Okay, and... (00:57:51) Then just in terms of the same sort of line of thought around streamlining — one of the comments and feedback we have heard from a lot of the related housing projects is that there is a very arduous process with the term sheets, and then they have to go through another very arduous, long process with OMB. I know last year the Council worked with the administration to update the term sheets that in some cases had not been updated for years. This is critically important because out-of-date term sheets required ad hoc approvals from OMB that added considerable delays. So what is your role in approving preservation and new construction projects, and is any of OMB's role duplicative of agency-level approvals at HPD? (00:58:43) I am going to turn it over to... it is hard to speak to that. Okay. (00:58:48) Thank you for the question. So as it pertains to the requirement to approve the certificate to proceed, as part of that analysis we are looking to make sure that all of the funding is eligible for capital, but we are also looking to ensure that the project is within the term sheets that we agreed upon. Oftentimes when there is a perceived delay, it is because the project is coming over and then we are working with the agency to make a determination about how to bring the costs down over the years. When we have found those projects over term sheet, that funding does not come back to the general fund or the capital budget, but most likely stays with the project itself. So what we are trying to do is increase additional affordability or raise the reserve level to make sure that that particular project is more viable in the long... (00:59:39) Would that not be included there? Because my understanding is that it was updated so that we could sort of move these projects along faster. And all I know is that from my own minuscule experience with a nonprofit capital project, it can sometimes take like eight to ten years. And it is not necessarily... with that, the cost and everything else increases. So with housing being such an important part of the City's affordability issues, how do we make sure we can speed this up? The team at OMB that works on housing is extremely dedicated and I think that, for the most part, you are looking at housing staff in addition to budget people. The process that we take on is concurrent, so we are not adding additional time to the whole development process. (01:00:35) Because I was told that it is sequential, not concurrent, so I guess that was my question, because that would seem to make the process even longer. But you are saying it happens at... (01:00:45) The same time. It happens at the same time. (01:00:48) Okay, all right. I have more questions as well, but I will save them for round two because I want to make sure that others... (01:00:57) Can ask questions. So first we are going to go to Richards. We will come back to the Deputy Speaker when she comes back, and then Majority Leader Lira. (01:01:08) Thank you, Chair. I just have one question. On the campaign trail, the Mayor supported the expanded use of daylighting. During our executive budget hearing, however, it was said there is no funding budgeted for daylighting in the executive plan. Has there been any discussion about providing funding to expand daylighting? There has obviously been a back and forth about the needs. I think we know that we have the $400 that has been budgeted, and we know that when we do bike lane projects, as part of that there could be daylighting included as part of those projects. It is something we look forward to discussing with the Council in the weeks ahead. We are also making investments in street safety overall. We are committed to street safety. We are putting funding in for Sammy's Law, we put funding in for more bike lanes, we put funding in for pedestrian centers on the side of medium duty trucks. So we are committed to street safety and we look forward to having a discussion with the Council about additional investment. And my... (01:02:16) At the executive hearing, I did mention that we are grateful for funding in certain areas like the ones you have mentioned. However, I am disappointed in the lack of funding for daylighting, given that the Mayor campaigned on this issue and it is something that we see no funding for specifically. Advocates are calling for $15 million for daylighting. What has your engagement been with the advocates and what is your... (01:02:39) Estimate of the need to meet those goals? I defer to the agency in terms of engagement with the advocates, but I do, again, look forward to having the discussions with the Council about additional investment in daylighting. Thank you. (01:02:54) Director, thank you. Okay, I am sorry about that. Deputy Speaker Williams, followed by Majority Whip Hanks. (01:03:11) Thank you. Hello. I just have a question about the cultural funding. In the Council's budget response, we called on the administration to baseline the $30 million that was received as a one-shot last year to adequately fund the ongoing needs of the City's cultural organizations. (01:03:30) The executive plan thankfully included $10 million baseline, but we wanted to know if the administration would be adding the remaining $20 million in baseline funding to the adopted budget. We all value our cultural institutions together. I know we all agree on that. We were happy to put the $10 million into baseline. I do think that we look forward to having the discussion with the Council on additional funding moving forward, obviously with the overall fiscal constraints in mind, and to try to figure out how we can provide more to our cultural institutions. Okay, and I just wanted to have a little bit more understanding as to why you all chose the $10 million to include in the executive budget, which I am sure forces a lot of the cultural organizations to continue to operate year to year with a lot of budget uncertainty. It was a matter of just looking at the total funding envelope of the executive budget and, with the commitment to ensure that we could put up funding for the institutions that we care about and not sort of wait or defer them to adopted budget negotiations. So we had picked the $10 million because of the funding envelope, but we recognize that it is also a significant priority for the Council. We share the fact that we want to invest in our cultural institutions and we look forward to those discussions over the next few weeks. (01:05:06) Okay, just to jump around a bit and tease this out — I definitely have a ton more questions on this topic as well as libraries. So on the racial equity plan, it states that the agency intends to develop tools by 2027 that would allow City agencies to incorporate equity principles into budget requests and planning for the fiscal year 2028 preliminary budget. What specifically will those tools look like and how far along is OMB in developing them? (01:05:34) Thank you for your question. As noted in our plan, we are committed to having a rubric that OMB uses to systematize how we are looking at making investments that align with the racial equity plan and making sure that we have a way to screen those new needs that are coming in, to be able to say: does it meet this need, does it meet this need. So we are developing that framework now. We have committed in our plan, which was published in the preliminary racial equity plan, to have that ready for the next budget cycle. So for the next preliminary budget, it would have been informed by this new framework. (01:06:18) So we are happy to be able to talk to you about it in greater detail as it gets fully developed, but we are committed to having some system and framework for being able to assess whether a new need comports with the racial equity goals that we put forward in the plan. (01:06:36) I know that your office created a climate assessment. (01:06:40) To look at the City's... I think we are looking at climate budgeting as something that could be instructive for how we view the racial equity plans. As you noted, it is something that exists. It is something that screens for a particular goal of government to be able to understand how funds are being invested, so there are parallels there and we will look to that to be instructive in how we develop our plan. (01:07:15) Thank you. (01:07:15) Okay, Majority Whip Hanks, followed by Council Member Ariola on Zoom. Thank you. (01:07:20) Chair, good morning. Good to see you. Good morning. So my line of questioning is about the right to counsel pilot of the Department of Small Business Services. The executive plan includes an additional $4 million in fiscal years 2027 and 2028 for a right to counsel pilot program designed to provide negotiation and settlement support for small businesses experiencing commercial lease-related harassment. My question is: how did the administration arrive at this estimate for the cost, and how will this program differ from the commercial lease assistance program that currently... (01:08:00) Operates? Sure. Thank you for the question. The commercial lease assistance program is really designed to be sort of pre-... it is like the advice and assistance we can provide to small businesses before they are going into negotiating a lease, to make sure that they are best positioned to be able to get the best deal for that particular small business. The right to counsel comes in after the... (01:08:33) Fact, right? So it is sort of about where it lands in the process. The right to counsel will come in if there is a dispute and there is a need for counsel at that time by the particular small business. I think that we came up with the number — again it comes back to the funding envelope overall. We said: can we make an investment here? This is a real need to support businesses, and that is how we arrived at the $4 million. (01:08:57) Thank you so much. So does the administration have any estimate of when the request for contracted legal services will be issued in order to get these services ramped up for fiscal year 2027? We will work... (01:09:10) Closely with SBS to make sure we understand what their timing is. This is something that the administration believes in — that is why we are making the investments — and making sure that they can access these services, because we want small businesses to thrive in our City. Thank... (01:09:23) You so much. One more question, Chair. The New York City Economic Development Corporation is the agency whose mission is to encourage economic growth in each of the five boroughs. We are now six months into the new administration, yet we do not have a president of the Economic Development Corporation. What is the status... (01:09:45) Of the administration's search for a new president, and could you speak on why it is taking so long? The search is ongoing. It is a priority. At the same time, we know that the agency continues to work on a number of projects that have been in the pipeline, so whether it is the SPARC project and Kip's Bay, we know the Kingsbridge Armory is another project that continues. Obviously the work that they are doing to prepare for the World Cup, and on free grocery stores as well — all the work continues in that... (01:10:30) Agency. Thank you, Chair. (01:10:32) Thank you. Okay, Council Member on Zoom, followed by Council Member Schulman. Council Member Ariola, are you... (01:10:42) There? Yeah. Okay, can you hear me? Yep. Okay, because I am not getting... okay, great. So thank you, Chair. I wanted to go over a couple of things that we discussed at the executive budget hearing for fire and emergency management. In your testimony, I did not hear anything about the fifth firefighter expansion that has been proposed by the Speaker and the Council, pay raises, and I would like to know what you plan to do with both of those topics, as well as taking out-year money and making it available now for firehouses that are in terrible disrepair so that they can be fixed sooner rather than later. Sure, Council Member... (01:11:37) Thank you for your questions. So on... (01:11:40) On the fifth firefighter, we look forward to having that discussion with the Council. We know that fire safety is of paramount importance. We know the Council put forward a proposal. We know that prior to that the union had put forward a proposal. Again, we look forward in the next few weeks to having that discussion. On parity, this is something that the fire commissioner believes deeply in and has testified to that fact. I think the Mayor has also publicly talked about the challenges that are faced. We look forward to working with the new union leadership. There is a new president that was elected for that local. There are conversations between the Office of Labor Relations and that local, and we look forward to having a collective bargaining discussion where we can hopefully make progress on the last contract round. And then finally, on your question on firehouses, we were proud to include in the executive budget capital funding to renovate six firehouses. That will obviously be determined in terms of which are most in need of state of good repair. So we are proud that that was a start. Your suggestion about looking at out-year capital funding to accelerate — we will take a look at that. We are constantly looking at our capital plan and seeing what kind of opportunities exist to advance funding. But we put up funding for the six firehouses as a start and we want our firefighters to be in state of the art facilities as best as we can, and we want to invest to do so. (01:13:31) Right. And just one last question: the money that you appropriated for the six firehouses — is that immediate money or is that out-year money? That is... (01:13:43) Something we are looking at again, per your suggestion, seeing what can be advanced. (01:13:55) Okay, thank you so much. Thank you. Great. We have also been joined by CM Pierina Sanchez and CM Selvena Brooks-Powers. Next we have Kalman, followed by Dinowitz. (01:14:03) Thank you very much. The executive plan includes savings associated with long-term vacant positions, which reflects ongoing efforts to manage fiscal constraints while maintaining public health services. How does OMB evaluate whether vacancy reductions can be achieved without impacting service delivery and core public health functions? Sure, thank you for... (01:14:30) Your question. We have extensive engagement with the agencies to make sure that this exercise should not in any way result in any reduction to services. We leave the flexibility to the agency to understand how they would effectuate the 50% vacancy reduction. I would also note that in other ways we are adding funding to the Department of Health and Mental Hygiene for the staff that they need, whether it is the community teams that will do outreach to make sure that folks are signing up for health insurance access and other needs, and what we have added from mobile food vending, et cetera. (01:15:09) What funding and staffing requests submitted by the agency remain under review ahead of budget adoption, and what public health investments, if any, does OMB expect to be added to the adopted budget? (01:15:22) That is a conversation we look forward to having with the Council. We had extensive engagement with the agency in the lead-up to the executive budget. We were able to meet some needs, including funding disease surveillance. We are also funding maintenance for the new public health lab that is opening up. In addition to the other investments that I noted in the first part of my answer, I think we are constantly talking to the agency. If anything develops over the next few weeks, we will share that with the Council as well. (01:15:53) The executive plan includes a baseline $17.6 million increase to support disease outbreak resilience and sustain core public health functions previously supported through temporary federal grants. As the federal government continues to reduce funding for New York City, has the State included any funding in its enacted budget for any... (01:16:17) Of this? One of the wins this year is that we were able to reverse the Article 6 public health funding cost reversal, which had existed for many, many years. We were able to do that, which is worth about $60 million a year to us, through our advocacy efforts and through the partnership with the State. So that is an example of additional State funding for public health. (01:16:39) What assessment has been conducted of the potential risk to disease surveillance and outbreak response resulting from the loss of federal public health funding? (01:16:50) Well, I think that is exactly why we thought it was important to make the investments that we made in the executive budget for disease surveillance, et cetera. I think it is important that we never lose sight of the fact that we are only a handful of years away from a once-in-a-century pandemic, and we also see outbreaks whether it is hantavirus or Ebola. So we need to make sure we are always in a state of readiness, and that is why we made that investment. (01:17:20) Chair, I just have one more... go ahead. Thank... (01:17:22) You. I just want to follow up a little bit on the Speaker's question about the community engagement unit. Up until recently, every Council district was assigned somebody from the community engagement unit, and that does not really exist anymore. So what is being done to make sure that that continues to happen? Because without that, it is very difficult to get things done unless some of us have relationships with certain people and are assigned a particular unit person. I am... (01:17:58) Happy to take that back, Council Member, and talk to leadership for the Office of Community Engagement about that. (01:18:02) Okay. And just for the record, Article 6 was something that I came into office and pushed for, and we were able to do that. We worked with the State. We appreciate the support of the administration, but I just wanted to state that for the record. (01:18:16) Thank you for building the foundation for us. Thank you. (01:18:22) Okay. We have been joined by Council Member... and next, actually, sorry, Erik. We have Council Member Cabán on Zoom, followed by Dinowitz. (01:18:30) Thank you very much, Chair. I know that we are tight on time, so I am going to ask both of my questions up front. They are very different topics, so I apologize for that. But I am going to start with a question on gender affirming care. I would like to know what policies and resources the administration is prioritizing ahead of adoption as a contingency plan because of the federal government threats to further protect gender affirming care in the City, particularly for youth. Then my other question has to do with ACT. In your testimony, you mentioned that the City is improving New Yorkers' health and well-being by supporting access to mental health. Last year, the Council secured an additional funding of $15.5 million to expand the mobile treatment teams and create the step-down program, and then we were informed a few months ago, very surprisingly, that the funding has yet to be implemented. I hope that we can agree that the City cannot afford to bargain with funding for effective mental health care services, which is a priority for the progressive caucus. Can we expect the restoration and baseline of that at adoption? I just want to clarify that the money that we are seeing put in by the City is to address the fiscal cliff left by the federal government and not actually doing anything additional to make more headway on the wait list that currently exists. (01:20:00) Thank you, Councilmember, for your questions. Let me first take the first one. We added in the preliminary budget $15 million over fiscal year 26 and fiscal year 27 for gender affirming care. We look forward to working with the (01:20:18) Health and Hospitals Corporation on how that funding will be utilized. I will just say that is not nearly enough. Advocates are saying that the need is great, in the ballpark of more like $60 million, and also there needs to be money earmarked specifically for youth services, because gender affirming care — not every practitioner can provide that at young ages. Every major medical organization in the country has said that it is integral, life-saving medical care, including for children 13 and under, to service that population. (01:20:53) Yes, Councilmember. It is a start. We hope that within the fiscal constraints that we have, we invest additional resources there. I think that this is a start and, of course, it is an important start given the health needs that we know exist. So I think the next piece of your question was related to ACT, and your point we will take back in terms of the baseline question. But just in terms of the four and a half million and the $11 million in one-time adds for ACT, we are looking forward to the discussion as part of adoption in terms of ongoing funding for that. We look forward to having those conversations with you and your colleagues. (01:21:44) Yes, and just before I pass it back to the Chair, I just want to say, in terms of the fiscal challenges, most of the people on Rikers live with a mental health diagnosis and could benefit from an ACT team. We need this medical care coverage for our transgender youth and trans neighbors in the City. We got money for 500 more cops in this executive budget but we do not have money for health care for trans kids. I think that is a question of priorities. Thank you, Chair. (01:22:13) Thank you, and yes, I agree. ACT teams do incredible work, so whatever we can do to try to uplift them would be great. Okay, Councilmember Inuits, followed by Councilmember Luis. Sorry. (01:22:27) Thank you, Chair. Good morning. Yesterday we held our executive budget hearing with the Department of Education and yesterday they testified that they submitted a new needs request for K-12 special education programming, including their AIMS, NEST and Horizon programs. Notably, this budget does not include increases for K-12 special education. They testified additionally that these funds would reduce due process cases, Carter cases for tuitions at private schools. That was their testimony and therefore it would reduce the cost to our City's budget by doing what we are supposed to be doing, which is educating every child first. How much did the DOE request for this and why was this request not funded? So we are obviously continuing to talk to them about their new needs overall and particularly on the due process cases. As you know, we have made — as I mentioned in my testimony — we made investments to the tune of $150 million in special education at pre-K. Speaking specifically about K-12, yes, absolutely. You are talking K through 12, but I am just saying that we did make investments of $150 million in special ed in making sure that we are having lower costs in terms of children that need services. We are looking at K through 12 and we are looking at the overall funding envelope. Ultimately, we have made many investments within our executive budget. So we are looking at the available funding and we are happy to talk to you in the next few weeks. Okay, to be clear... (01:24:06) They did not... how much money did they request? Liz, do you know exactly? The new need was... I do not have (01:24:14) that on me, but I will get it for you. (01:24:16) Okay, we can get that today. That is in an email somewhere. We are (01:24:22) happy to follow up with you. (01:24:23) Today? Yeah, I can do it right now. Thank you. Thank you so much. (01:24:26) It was around $40 million. (01:24:28) Okay, thank you. And to be clear, they testified that for AIMS, for example, there are 510 seats but 2,070 applicants. That was just for the AIMS program — fantastic graduation rates, attendance rates, success rates. Similarly, the executive plan includes a cut to the number of budgeted school safety agents and a failure to restore $6 million in restorative justice programming, which is functionally a cut. The DOE testified yesterday that over 25% of schools would lose restorative justice programming without this funding. So how are you supporting school safety and why was this funding not included in the executive budget? So the school safety agents have a headcount of about 3,801 in the executive plan, with a vacancy rate of roughly 8%. The total budget is about $283 million in fiscal year 27. This is a conversation that we want to have with you. We did add dismissal agents to address the busiest times and just hired a class of 100 school safety agents who are anticipated to begin soon. On restorative justice, the executive plan includes funding to create the Office of Community Safety and within that we intend to address restorative justice proposals and programs. Okay, well, I am not sure how you do that with a cut when 250 of the roughly 960 schools that have this programming would lose it. (01:26:07) One more. The Mayor ran on a promise of affordability and rent freezes, but notably that rent freeze excludes our City-managed properties, including our City-run Mitchell-Lamas. The City oversees and manages these developments — over a hundred developments — having approval and authority over operations. How many asset management staff are dedicated to ensuring the health of City-managed Mitchell-Lama properties and what role does OMB play in ensuring that developments remain affordable and healthy for low and middle income New Yorkers and co-op owners in these developments? I want to highlight Tracey Towers in my district, which over the next four years faces a 30.6% rent increase, and over the last four years faced a 22% rent increase, which is about as opposite of the mayoral promise that he campaigned on as you can get. We are happy to look into that and have a discussion with you. (01:27:13) Councilmember, can you (01:27:14) describe OMB's work to make sure not only that the investments we allocated in City funding and the State provided are going towards these buildings, but OMB's role in ensuring that rents do not skyrocket, so the residents of Tracey Towers and our other City-owned Mitchell-Lamas can live affordably and with dignity? We are not involved in the oversight or review of rent increases. We will be happy to talk to and look (01:27:45) at their oversight and supervision of the program and happy to have a discussion about how services can be focused on that. Okay, thank you. We will continue the conversation. Thank you for the extra time, Chair. (01:28:00) Great. Okay, Councilmember Luis, followed by Councilmember Wong. (01:28:10) Good morning. Good morning. Thank you, Chair. Two questions — I am going to join them together. The Mayor's housing plan commits more than $22 billion in housing capital funding over the next five years, with approximately $4 billion in new capital funding as part of the broader $22 billion housing investment strategy. So I wanted to know how does this level of capital funding compare to the prior administration's housing plans on an annual basis, and what specific portion of these funds represent truly new capital investments versus previously planned commitments? My second question is: does the administration's housing capital plan also include funding specifically dedicated to studying and advancing housing development on top of existing City-owned property, and if so, are agencies expected to absorb planning and redevelopment costs within their own capital budgets, or is there a centralized funding source to support feasibility studies, design (01:29:15) work and so on? Sure. Let me start and I am going to turn it over to our first deputy director to address that. I think on your second question with respect to agencies and City property, we have the LIFT task force that is specifically focused on ways that we can seize opportunities to build on City property, and so there is a team together that is constantly looking at ways that we have property across the City to be able to build there. I do want to turn it over to address your first piece of the question in terms of how our capital investments rank in terms of housing plans. (01:30:08) Thank you. There are a few aspects to your question. In terms of whether agencies would be anticipated to absorb the cost of that additional development, unlikely — that is more of a development proposal as opposed to an agency operational need. So when that need would be identified, it would either be funded out of the capital budget or, if it was an environmental study required, we would look at it within the expense budget. In terms of how this ranks compared to annual funding from prior administrations, we would have to take a look at that. What I can tell you is that the vast majority of funding in the five-year plan is going towards housing. The $22 billion is on a base of $117 billion in total. All right, thank you, Chair. (01:30:54) Thank you. Great. Thank you. Okay, Councilmember Wong is actually not here. So Councilmember Wang, followed by Krishnan. Thank you. (01:31:04) I have a question about the DOB on cutting inspector positions. The executive plan includes seven new positions at the DOB but also includes savings as a result of the elimination of 16 positions at the department, for a net decrease of nine positions. This is extremely concerning as the DOB plays a critical role in inspecting building hazards. My question is: how many inspector positions were part of the reduction in the executive plan, if any, and can you confirm that no inspector vacancies will be reduced as a result of the headcount decrease in the executive plan? Thank you. (01:31:49) Sure. I think the first thing is that when we did the vacancy reduction exercise, we ensured that there would be flexibility for the agencies to make decisions based on their front-line headcount. At the same time, we wanted to make sure that revenue-generating positions were not also being swept up in the vacancy reduction. The DOB received seven new positions solely to help them execute the recommendations of the speed report, and so the vacancy reduction exercise again... (01:32:25) Revenue-generating positions are exempt, so it is up to the agency to make that determination. Would you have anything to add? (01:32:31) That is correct. It is up to the agency to make that determination, but inspectors is something that the agency does prioritize. It would be self-defeating for us to pull inspector vacancies out of the agencies, and they do have 58 vacancies at the moment. I see. Thank you. (01:32:50) My second question also regards sidewalk sheds. Earlier this year, sidewalk shed reforms were announced to be implemented by this summer. These reforms would extend the timeline for inspections an extra year, create an abbreviated filing program for lower-risk, well-maintained buildings through every 12 years instead of five, and mandate sheds only extend to a maximum of 40 feet away from buildings. My question is: when would these new regulations be implemented and how many sidewalk sheds does the administration hope to remove this year and in the next four years? Can you answer that, please? (01:33:33) So the DOB is currently in the rulemaking process to be able to move forward on meaningful reforms on sidewalk sheds, and we know that there are sufficient resources that the agency has to make sure that they implement the rules on sidewalk sheds. So we look forward to talking with you more once those rules have been promulgated. Okay. Thank you, Commissioner. Thank you. (01:33:59) Thank you. I have one question for round two. Thank you. Great. Okay. Krishnan, followed by Nurse. Thank you so much. (01:34:07) Chair Lee and Speaker Menin. Just a few quick questions. Good to see you, Budget Director, and the team. The Department of Investigation has a detailed history of rooting out corruption, especially under the last administration. The last administration also slashed their budget year after year, but its mission is both one of independence and also very sacred for the work of City government. What we heard from the DOI executive budget hearings is that once you take out the fundamental payments they have to make — rent and things like that — they are only left with $175,000 in public funds for their budget, which is very, very little, and it forces them to have to look to core operations, which is also drying up. So I know we have talked about this before: how is OMB thinking about increasing funding to make sure they have the resources they need for their mission? (01:35:08) Thank you, Councilmember, and thank you for your advocacy here. I have met with the Commissioner on a couple of occasions and her team and we have gone through their budget in great detail. I have seen the actual trajectory of their asset forfeiture funds and how they are being used to cover sort of basic day-to-day operations, and we know that it is true that they had significant reductions in their budget over the last several years. We are committed as an administration to rooting out corruption and waste, fraud and abuse wherever it exists across government. We look forward to having the conversations with you and with the Council on making sure that we have a well-resourced DOI. I am confident that we can get there in this adopted budget. (01:35:55) Great. I am glad to hear that and look forward to the continued conversation. Similarly, there is a $4 million need to be able to do the investigation and publish the report on the 9/11 knowledge that the Giuliani administration and Bloomberg administration had of toxins in the air on 9/11. So how are we looking at that? Can we commit to putting that $4 million in this budget? We also look forward to having those conversations with the Council in the next few weeks, fully recognizing that that is separate from — but clearly related to — their day-to-day needs and what they need for their operating budget. Glad to hear it. Switching gears (01:36:38) for a minute. I know we share the same vision for increasing our Parks Department funding and how crucial that is. There are still PEP officers, for example, about a third of them, that do not have the funding in place yet once their funding expires on June 30. There is a larger question of making sure Parks overall gets more funding to ultimately get to a place where they have a budget proportionate to the overall City budget and to other cities across America. So how do you all see increasing the Parks budget in this budget and specifically supporting worker lines that are expiring on June 30? Sure. We were proud to put forward $15 million and be able to baseline that for Parks, and we identified some titles that it would cover. We know urban park rangers, forestry management and parks maintenance workers are included. We know that there has been a highlight on PEP officers. We look forward to having that discussion with you and with the Council in the next few weeks. (01:37:39) Great, thank you very much. Thank you, Chair. (01:37:43) Thank you, Councilmember Nurse, followed by (01:37:45) Banks. Good morning. Thank you, Chair, and thank you, Director, and all your leadership. Next, we can win this. The City's (01:37:55) support... the City's support for Health and Hospitals relies largely on supplemental Medicaid payments that directly depend on a federal match. If that match shrinks, does the City have a plan to protect the health care of those who rely on it the most at H+H? Thank you. (01:38:18) CM, as you know, we are grateful to have a Health and Hospitals Corporation that is a safety net for so many New Yorkers who need to access health care. This is something we are focused on to make sure that the hospital system can continue to thrive. We know that we have been in conversation with the State. Clearly a lot of the Medicaid funding flows from the federal government to the State and down to us, so we need to make sure that whatever the State's plans are to address the impacts of HR1 will be, and what the trickle-down effects will be on the City, so we know how to fully sustain our Health and Hospitals system. Thank you for that. (01:39:01) On FEMA reimbursement: the Executive Plan includes an additional hundred million in the Health and Hospitals budget in fiscal year 2026 as federal reimbursement for costs incurred during the COVID pandemic. How much FEMA COVID reimbursement funding has Health and Hospitals received to date? How much longer do you anticipate receiving this reimbursement funding? Is Health and Hospitals being reimbursed at a sufficient level for the costs incurred during the pandemic? Does OMB work directly with FEMA to determine the reimbursement amount and address any issues in receiving it? (01:39:50) So the Health and Hospitals Corporation has closed — FEMA has closed really the vast majority of the City's FEMA COVID portfolio. Health and Hospitals has received over $2 billion in reimbursement for eligible costs during, or against I should say, the COVID grants. (01:40:18) So I heard the Speaker start talking about shelters, but I have one question for you. How come during the height of the migrant crisis, when we had all the migrants coming in, we had less money for homeless services? Now we have more money in the budget for services for the homeless in our City. So which direction are we going? Are we putting people in permanent housing or do we plan to continue using shelters to serve the population that we have in New York City? (01:40:58) I think, as demonstrated in our block-by-block housing plan, we are committed to moving full steam ahead on an ambitious housing plan — 200,000 new affordable units as our goal, 200,000 units and homes preserved as well. The plan is chock full of strategies to be able to address that. Our primary goal is to connect New Yorkers with permanent housing. That is the goal. That is where we want to be. We also have an obligation to serve the unhoused, and that is why you see the Department of Homeless Services budget and so on and so forth. We addressed what had been, as we discussed, chronic under-budgeting primarily in the social services area by adding billions. Really, when you look at the City's costs that had been under-budgeted — cash assistance, shelter, those are among the top six areas that we talked about in terms of addressing chronic under-budgeting. But the goal is permanent housing. That is what we need to focus on. (01:42:12) I think that is the best way to go. Let us win this. Nice. CM Banks, followed by... (01:42:21) Morano. All right, thank you, Speaker. Good to see you, Director. When it comes to NYCHA, the Executive Capital Commitment Plan includes an addition of $500 million in the capital budget for RAD/PACT conversions. We heard from NYCHA last week that this amount was determined by OMB. Can you explain how it was determined that $500 million was the appropriate amount for additional funding for PACT? The plan includes an additional $90 million in capital funding for Section 9 compared to the $500 million for PACT. What criteria does OMB use to determine how to balance investments in NYCHA Section 9 versus PACT? Has the administration considered adding larger sums of funding for alternative capital improvement programs such as Comprehensive Modernization and the Preservation Trust? (01:43:34) Thank you, CM. So I will start and then I will turn it over, and if you cannot answer the question fully, please do it in writing. Absolutely, we are happy to follow up with you. But actually, why do I not turn it over to Tamar Barak to talk you through it. (01:43:50) So in terms of the funding that went to Section 8 conversions, the $500 million — we looked at which projects were shovel-ready. We looked at what the plan was in terms of what the agency wanted to do with both PACT as well as the Trust. Another factor was that the funding for PACT and the Trust kind of falls off in the out years, so we had to make sure to give them another lifeline to keep that pipeline going. In terms of the total amount of funding that we have for NYCHA, it is well over $5 billion. In fact, the money that we have going to Section 9 exceeds what we have going to PACT and the Trust. So if you look at fiscal years 2026 to 2032, $2.7 billion is going to PACT and the Trust and $2.8 billion is going to NYCHA Section 9. Well, currently we are talking about the next fiscal year, which is fiscal year 2025-26, so in fiscal year 2027... (01:44:39) And in fiscal year 2027, what is the dollar amount that is going into RAD/PACT or privatization compared to what is going into Section 9? (01:44:48) There is a billion dollars that is going to Section 8 conversion, but that is split between PACT as well as the Trust. (01:44:55) And then there is an additional... just to repeat: what is the total amount of money going into RAD/PACT for fiscal year 2027 compared to what is going into Section 9? (01:45:06) As I stated, it is a billion dollars going to Section 8 conversion. That is split between PACT and the Trust. So as NYCHA comes to us... (01:45:15) With how much is going into... (01:45:17) Section 9? $801 million. Now, the last part of your question, I believe, had to do with Comprehensive Modernization as an alternative strategy. So generally speaking, that is not a model that we see as one that can be easily replicated because it does not draw down on Section 8 federal resources. It basically means that NYCHA and the City would have to pick up the full freight of the development cost, and we are trying to do this in a more efficient manner. (01:45:46) Well, while the Comprehensive Modernization fund... the City can invest in that fund, am I correct? (01:45:52) The City has opted not to. I think that we are looking at a whole series of strategies in order to bring down the cost. Part of that is PACT, part of that is the Trust, part of that is developing updates to Section 9. How much funding has been invested in the Preservation Trust? (01:46:10) That is within the... (01:46:11) Section 8 conversion pipeline, so it is going to be a total of $2.8 billion between fiscal years 2026 and 2030 combined. With that fact, how many developments will be converted, or will we not get the opportunity to go through the Trust? We will have to get back to you just to tell you about what is going through the pipeline, but if you can give us some clearer numbers as to how much is going into each, we would appreciate that. (01:46:36) We can see that you have abandoned Comprehensive Modernization, which is something that has worked and continues to preserve public housing, and you have continuously put more money into privatization of public housing. That is definitely concerning and that leads me to my next question. If the Mayor's housing plan recognizes NYCHA's critical role in addressing New York City's housing crisis, and I have heard that continuously, why does the administration... (01:47:11) ...continue to rely heavily on private development partnerships and RAD/PACT conversions rather than advancing a comprehensive strategy to reinvest in and preserve traditional Section 9 public housing? It seems contrary to that philosophy. (01:47:29) I think if you look at the numbers it tells a clear story. In terms of the total budget amount, a total of $22 billion is going to housing. A full quarter of that amount is going to NYCHA. Of that amount, you have over half going to Section 9 preservation, and within the balance that is going to PACT and the Trust, a substantial amount will be going to the Trust, which is fully within NYCHA management control. (01:48:00) I just want clarity. The administration continuously uses the word "comprehensive" for NYCHA renovations. Is that just a code word for privatization of public housing? (01:48:16) Of public housing? I think that actually refers to the level of upgrade that is going to be done to the developments, as opposed to... so that term that is being used, it is not privatization. (01:48:31) I could not really speak to where you are seeing the term being used in general. If you are talking about this, it was in the Director's... the Director is here as well. (01:48:40) I believe if you are looking at Comprehensive Modernization, you are really looking at hard costs within the developments and what it takes to upgrade... (01:48:48) ...each of the apartments. And my last one — can I be informed in round two? Is that okay? I am sorry. (01:48:52) Christina. Thank you, Madam Chair. (01:48:54) CM Epstein. Thank you, Chair. Thank you for your leadership and endurance during these hearings as well. It is greatly appreciated by all of us. Thank you for your testimony, Director Solomon. Your testimony stated that this administration inherited a $2.2 billion budget gap in fiscal year 2026 and a $10.4 billion budget gap in fiscal year 2027. We talked about a $12 billion gap that we inherited. So for the benefit of the committee and the public, can you identify the five largest components of that fiscal year 2027 gap? More importantly, what I am trying to get at is: were those costs genuinely unforeseeable or were they known obligations that simply had not been fully budgeted? (01:49:48) We talked about the six big unbudgeted or under-budgeted areas. We talked about cash assistance and shelter. We talked about City effects — that is in the social services bucket. We talked about due process cases, judgments and claims and the City's subsidy. Those six accounted — because we added the funding — for seven and a half billion dollars that were unbudgeted. So the administration came in and we said we need to be transparent. We need to level with New Yorkers. We need to be able to budget what are known expenses and known trajectories in programs that we have observed. When I came in to speak to all these teams of professionals, they told me these are the actual costs, and we assessed it. (01:50:45) We saw it was not a forecasting problem. It was a transparency problem in our budget. Yes, it was not put forward. So I definitely think New Yorkers are eager to know not only what was inherited but what happened afterwards. Of the fiscal challenges facing the City today, how much is attributable to obligations inherited from the prior administration and how much is attributable to policy choices... (01:51:12) ...made since January 1? What we have talked about is in this Executive Budget — what you see, over the course of the Preliminary and Executive Budget, is $17 billion that has been added in expenses, which is a very large amount. Because a lot of it again was the chronic under-budgeting, and 92% of that is to address the under-budgeting and the core government functions that the City needs to run. That is snow removal, that is these programs that are mandated in many cases by either the federal government or State regulations and State law. So that accounts for that. So just 8% of that has been added for programmatic investments. (01:52:09) Before I wrap up, Chair, Comptroller Mark Levine's budget analysis released this morning concludes that fiscal year 2027 may not actually be balanced and instead contains approximately a $1.65 billion gap. Does OMB disagree with the Comptroller's analysis? If so, what specific assumptions does the Comptroller make that OMB believes are incorrect? (01:52:37) We believe we have accounted for under-budgeting and think the Comptroller actually confirmed that and actually applauded OMB and the administration for making sure that we put up unbudgeted costs in a way to be more transparent. In terms of additional costs that the Comptroller is highlighting that they assert are not in the budget, we are happy to have that discussion and see what they are seeing and what they feel is not reflected. (01:53:09) We can move forward, but we have what is effectively chronic under-budgeting in the City's budget system. Thank you. And for round two, I have some questions about veteran services, so stay tuned. (01:53:23) Great. We have been joined by CM... Next we have CM Epstein, followed by Restler. Thank you. (01:53:33) Thank you, Chair, and thank you all for your time and patience. So I want to follow up on what the Speaker raised earlier about the funding. We saw that DCWP needed 321 lines to be able to match all the additional work the agency is going to be responsible for. Now we talked about 77 lines this year, in total over 180 over the next two years. It does seem like, based on what the DCWP report said, that would still be close to 150 short to keep up with the needs that the agency has. I am wondering how you square those two decisions. We have in this administration worked with the new Commissioner, who has done sort of a top-down assessment along with a full review. This... (01:54:18) ...has been flagged as a priority, obviously, for the Mayor and the Commissioner. We worked with him to understand what his agency's needs were and with the legislative mandates that apply to the agency, and that was the number that we were able to do, which the Commissioner also testified was sufficient for being able to carry out the duties required by those local laws. (01:54:42) Look, when we had the hearing with the Commissioner, we talked about whether these additional staffing levels would result in no backlog, people not waiting. He could not commit to that. If we see that there is going to be a backlog, is OMB committed to trying to get additional staff lines so New Yorkers who have a wage or overtime violation do not have to wait six months to be able to speak to someone — not even the timeline it would take to actually prosecute a case and get them their money back? The Mayor has been very vocal and is committed to ensuring that there is restitution achieved for workers who have been subject to these actions. That is what the department will do — continue to assess what the department needs. If there are constraints between the headcount they have and their ability to fulfill the full mandate of the local laws they have been entrusted to implement, we will address that. (01:55:44) I noticed there is no money in this budget for people who are advocating for delivery workers or vendors who are doing the outreach. I am wondering why there was no funding put in to ensure that the appropriate outreach and language capacity by the organizations doing this work is supported. We will look at it. (01:56:04) I mean, we did add... I know you mentioned specifically delivery workers. (01:56:12) Delivery workers, street vendors, people who are doing... street vendors. We did add funding over a number of agencies. (01:56:19) Including... no, I am talking about funding to do the outreach in multiple languages. I am talking about nonprofit organizations who have the relationships already with the... (01:56:27) ...street vendors and the delivery workers. Those are the people who are the critical infrastructure here and there is no funding in the budget to ensure they have the resources to talk about the additional laws. (01:56:37) Well, the direct funding that would go towards organizations will be a conversation first — Schedule C — as direct funding to those organizations. But we did make sure that we went through Small Business Services to make sure that they have the money and the funding they need to ensure that they can do outreach in multiple languages to the mobile food vending... (01:56:57) ...communities. If I can just quickly, Chair — just on capital money. I know Chair Gennaro mentioned capital money for Mitchell-Lamas. Is there capital money put aside to give to Mitchell-Lamas who are struggling? We have a lot of Mitchell-Lamas facing 20% increases and it is because of the capital needs. Is there any money in the capital budget for these Mitchell-Lamas? We will get back to you. I will note that the State budget included $60 million in capital funding for Mitchell-Lama developments, but we will get back to you on a couple of points. I appreciate that. And then the Animal Welfare Office in the Mayor's Office — was there any increase in funding for that office? Thank you. (01:57:44) I am going to have these conversations with you. I appreciate that. Thank you very much. (01:57:47) Thank you. Okay, CM Restler, and next we have CM Gennaro. (01:58:00) Thank you, Chair, and good afternoon. Good afternoon. I have a question about pension amortization. The State budget included a provision that will push off or re-amortize some required pension payments over the next five years — the unfunded accrued liability. While the maneuver is estimated to generate as much as $2.2 billion in savings, it could cost an additional amount over the next 10 years. Additionally, changes the State made to improve pensions for workers in Tier 6 is estimated to cost another amount over the same period. What are the administration's next steps towards pension amortization and what is left to be negotiated with the municipal unions? How will the City plan to close bigger gaps in the out years of the financial plan owing to this amortization? Do you believe that there are any risks to the City's bond rating as a result of the... (01:59:18) Amortization. Sure. So thank you for your questions, Council Members. As I noted in my testimony, amortization is a prudent way to pay down what is a long-term debt obligation by flat, level dollar payments. The figure you cited about the cost over the plan is for all employers in the pension systems. It is not only the City of New York. It is Health and Hospitals. There are different employers that participate. So the cost over time to the City would be $5 billion. But the savings as well for the short-term fiscal stability is also significant. In terms of the status, the State law requires that it be approved by the boards of trustees of each of the systems. We are pleased to report that the Board of Education Retirement System has approved. We know that the NYCERS board is coming up on Thursday and then the other boards will come up for the remainder of the month. So we look forward to those votes being approved by the boards of trustees to actually effectuate the proposal. In terms of the rating agencies, we have been in constant contact with the rating agencies as we do after we release every plan. I met with the rating agencies last week and we had a very positive discussion on what this proposal does. We talked about the fact that it was level dollar, flat dollar, and we talked about the funded ratio for each of the pension systems. New York City's five systems are at 86% versus the national average of 79%. (02:01:12) Thank you. Thank you. Okay, Council... thank you, Charlie. Good to see you, Director. (02:01:20) First of all, I just want to commend you all for balancing the Executive Budget. It was no easy feat, and I think in particular it took impressive skill in navigating Albany and securing significant support up there. That did not happen by accident, and you and the First Deputy Mayor and others deserve a great deal of credit for accomplishing it. I would like to try to cover two topics today: child care vouchers first of all. We have 25,600 children on a waiting list today who are in desperate need of child care support, and we have not yet heard any commitment from the administration about whether they will begin to invite children on that waiting list to access child care vouchers. There are a couple of things that I would like to just get clarity on and then see if we can get some support today from you on this. Firstly, there are 31,000 children who are enrolled in mandated vouchers today. For some years we have been getting estimates from HRA. They anticipate reaching the 63,000 threshold again of children on mandated vouchers. First we heard that it was going to be in fiscal year 2028. Most recently, they testified last week that it is not until fiscal year 2028 that we are going to hit that threshold, which means we have significant resources available for the non-mandated voucher population — low-income vouchers that our families need. These families on the waiting list: can you identify how much savings we have as a result of the delay in the take-up on the mandated vouchers? Secondly, it was recently reported that the City has only spent $105 million of the extra $350 million that the State has allocated for voucher funds. This is the maintenance of effort funding. Can you confirm that every penny of that $350 million will be spent? And then thirdly, just to keep it simple, what I have been advocating for with some colleagues in the Council and child advocates is that we spend money this year on the vouchers — special child care funding vouchers that are a one-year commitment instead of a multi-year commitment until children age out at age 13. Can we be open to working with us on a one-year model to use the extra funding that we have identified and just, you know, confirm it exists, to expand child care vouchers for this coming fiscal year? So thank you. (02:03:42) Thank you, Council Member, and thank you for the kind words. So first on vouchers writ large: yes, you cite what we were able to accomplish in Albany and the additional funding that we got for the vouchers. The City tax levy funding that you speak of to meet the maintenance of effort will be met. We will put up that funding and we intend that we will spend the full amount of what is provided by the State and what is provided in City tax levy to continue to fund vouchers for the eligible population as it exists right now. (02:04:22) You mentioned the wait list. The wait list does exist. We would like to get there within the existing funding. We think that we can cover the existing population. However, if there should be attrition in the existing population, or should we see that overall State market rates go down, there may be an opportunity for us to, with existing funding, be able to reach into the wait list. Your market rates will not go down, but the State has delayed implementation of the increase in the market rate, which is helpful, and the attrition rates we have seen have been steady. So we know what resources we have. We can make the evaluation today: can we add families for a one-year voucher commitment instead of a multi-year commitment? I get that it is a major financial commitment for the City to say we are going to enroll a child after age four and that they are going to have support until they are 13, but it is less of a commitment to say this year we know we have the money... (02:05:15) ...because the mandated take-up has been dramatically slower than OMB had anticipated. We have extra resources we can spend in fiscal year 2027. Can we start to offer children on that waiting list vouchers to help connect them to child care for this coming fiscal year? (02:05:30) We are happy to talk to you about your suggestion and look at it in the next few weeks. (02:05:35) I appreciate that. I am more... but I think I am in round two. Yeah, around to cheerlead. Thank you very much. A longer list for round two. Okay, CM Brewer, followed by CM Sanchez. Thank you. (02:05:43) Thank you very much. It is nice to hear answers. For the last four years we did not have any answers. I will be honest with you, I say it like it is. In terms of DORIS: I know you have met with the Commissioner, but my question is, did that include the $4 million for the 9/11 Discovery? (02:06:04) It did. So you are going to pay that? (02:06:07) We are going to look forward... (02:06:09) ...to the conversations we are going to have with you too. I think what we were able to do is — I met with her on two occasions to look deeply at where they were in terms of an operational standpoint and then obviously compliance with the resolution passed by the Council, by your Council Member, to basically fund the effort that is needed for the 9/11 toxins investigation. (02:06:39) We look forward, again in the next few weeks, to talking about how we have a well-resourced... it is an order of magnitude question, right? So we have to be able to work together and figure out what that order of magnitude will be given the funding envelope that we have. (02:06:52) Okay, so small issues. DORIS — I love DORIS and they have the FOIL responsibility. They need $255,000 to codify their open records portal, which will help us with FOIL. Is that something that you will fund? It is something we look forward to discussing with you in the next two weeks. Okay. (02:07:10) And then also COIB, another agency that pays attention to corruption. They need $450,000. I know that you are paying for new powers for them — terrific — but they need extra to have better staff salaries and to hire an attorney. Is that something that you would fund? (02:07:26) They are all part of the conversation that we intend to have. (02:07:32) Okay. And then in terms of electric vehicle purchasing power, DCAS probably has the best Commissioner — she is smarter than everybody else. Well, you know, I am not kidding. So in that case, do you have... (02:07:44) ...an additional expense? Capital will be needed to purchase 640 vehicles every year to ensure the annual electric targets are met. Is that something that you are focused on? We have in the five-year capital commitment plan more than just vehicle spots — also projects that reduce greenhouse gas emissions — and in there we also have funding, I believe, for electric vehicles. We can follow up with you on the exact amount. We do have medium-duty electric vehicle purchases in fiscal years 2027, 2028 and 2029. We can have a discussion about whether that includes the vehicles that you are talking about. (02:08:32) The Buildings Commissioner is a good Commissioner, but she managed to upset everybody — not just one, but every single member — with her new ideas about some of the after-school programs. Is that a cost-saving issue or just thinking that you are doing the right thing when it is really not? (02:08:53) I do not think it was a cost-saving issue. I do not think it was either. I think it was the release of a... (02:09:01) Is that something that you could look at, or is that just not in your... (02:09:05) ...bailiwick? We are looking at it with the DYCD Commissioner. (02:09:10) Okay. It really upset every single person imaginable, so I would just start over. (02:09:16) Suggestion noted. I know that you are focused on CUNY and we all love CUNY. Those programs need to be fully funded. Is that something that you are focused on as well? We all love CUNY... (02:09:30) ...sure of it, but we have to fund it. Yes. Well, we did put up the $15 million in baseline. Yes, you did. That is great. (02:09:36) And we also put up $50 million in capital for state of good repair — the most that they have received for that over a decade — so that was an important investment. In terms of the programs which we know work, like ASAP and Reconnect, we look forward to having that conversation with you and your colleagues. (02:09:54) In terms of health care, there is no number yet, but we are all concerned about whatever Trump is doing with Medicare and Medicaid — mostly Medicaid — in terms of people getting cut off. I do not know whether they go to NYC Care. I do not know if they just show up at the emergency room. It is obviously going to cost more. (02:10:12) Yeah, I think as I mentioned we are working closely with Health and Hospitals and with the State because we need to understand what the State intends in terms of Medicaid funding that may be cut from the federal government. At the same time we know that SNAP is also a real concern and that is why we made strategic investments — whether it is the Community Food Connection program, whether it is Groceries to Go, whether it is Get the Good Stuff, whether it is investing in SNAP eligibility specialists. We are committed to making sure that we have food assistance for those who need it. It is an ongoing conversation. I think it has been said before that the City does not have the capacity to backfill the magnitude of those kinds of cuts, but where we can, we will act and make those investments in partnership with the Council. (02:11:01) Thank you. Great, thank you. And I know the Commissioner is working hard in terms of the after-school... hard enough. (02:11:09) Yes, well, hopefully we will hear some good news. Okay, great. So we have CM Sanchez followed by CM Brooks-Powers. Thank you. (02:11:18) Thank you, Chair. Good afternoon. I hope somebody is passing around some sugar — I do not know, I saw a granola bar being eaten by CM Restler. Hint. Could somebody get them some sugar? Okay. The New York Post published that Mayor Mamdani signed a $1.9 billion three-year no-bid contract to house homeless households in New York City hotels on an emergency basis. Homelessness, we know, leads to community instability, family trauma, more disrupted childhoods and more families in crisis. Does the administration believe a $1.9 billion contract to house homeless families in hotels over the next three years is a good investment for the City of New York? (02:12:10) So let me start, Council Member. Thank you for the question and I will pass it over as well to Patrick. I think as was mentioned before to another Council Member in our previous session, our primary goal is to focus on... (02:12:23) ...housing, and I know this is an area that is near and dear to your heart. We need to make sure that is the first approach — that is the first goal. At the same time, we have a legal obligation to house the homeless, and we know that over the years there have been capacity constraints that required the reliance on hotels. We have, as part of our cost containment, looked to move as many families as possible from those hotels into where shelter capacity exists. There is more to do, clearly, but we also have to fulfill our legal mandates as well. Patrick? (02:13:07) I am okay. So short on time, but... (02:13:08) Thank you. Thank you, Director. (02:13:11) I understand that these funds will be dispersed as needed. If the administration agrees that this kind of sheltering is not optimal, what steps is the administration taking to ensure that we use as little of this contract as possible? And I am just going to sneak in my next question, which is a clarifying question from... (02:13:25) ...the General Welfare hearing. Is this a fair characterization: City FHEPS houses roughly double the number of people at roughly half the cost of shelter, not accounting for this no-bid contract I just mentioned — about 82,000 people with $3.2 billion being spent in shelter contracts and staffing, versus 153,000 people — double the number of people — at $1.8 billion for City FHEPS? Is this a fair characterization? The Commissioner did not answer my question during her hearing, so I am hoping that you all will. (02:14:02) So I think that with respect to the City FHEPS program, we know that it is a lifeline for many New Yorkers. We know that we want to be able to focus on how we can sustain the actual program. We know as well that we have seen the shelter census continue to increase in certain populations. The families with children population began to decline, but we have seen single adults continue to increase. As the City FHEPS voucher program continues to rise and had not been budgeted for, as you know, as we discussed, we have not seen those savings on the shelter side. We would like to see that happen and we are actively managing with all of the new leadership that we have, both at the agency level and at City Hall. It is something we are constantly focused on. So we want to move out of hotels, we want to be able to connect people with permanent housing — that is our goal as we look to move forward as an administration. (02:15:08) Thank you. City FHEPS houses double the number of people at half the cost of shelter — fair characterization or not? (02:15:16) I would respectfully say that we agree that City FHEPS is a lifeline for New Yorkers and we will continue to work with you. I know you are passionate about this issue and we are having productive... (02:15:27) ...talks. Thank you, Director. I do not know if that is a demotion or a promotion. These are numbers that the agencies are putting out, so it would be helpful to make sure we just have the same understanding. So thank you, Director. Okay, great. (02:15:41) I am going to take a brief pause because the Speaker does want to... (02:15:45) ...introduce a special group. Yes, I am so excited to interrupt this very important budget hearing to welcome a school from my district. Hello! PS 147. And I just wanted to send a special shout-out to the student council. I visited, I think last week or the week before last, and they were very excited. They said they had tried to get a tour at City Hall. One person was actually graduating and I was like, let us make it happen. So shout-out to student council members Holly Stevens, Kay Prince, David Pierce, Michael Friend and Donna Tessa. Thank you so much, Chair, and of course to our own Director for allowing me to interrupt. (02:16:34) Thanks for coming. Thank you. Okay, we have three more folks and then we will take a quick break after that. (02:16:39) So we have CM Brooks-Powers and then CM... thank you, Chair. (02:16:45) I have already put my name in for round two, so in round one I will focus on my district and in round two I will focus on my chairmanship position. It is good to see you, Director. First, the Rockaways. I am going to ask you all three questions and then you can respond. For a trauma center, we have been able to secure $50 million in capital funding as well as a publicly owned site for the facility. Rockaway residents are closely watching whether this administration plans to invest in the trauma center. Can this administration explain why there is no funding in the Executive Budget for the trauma center and whether you intend to rectify the situation in the final budget? The next one: Senator Sanders has allocated $1 million dollars towards the trauma center but has been told that he cannot move the State capital funds to Health and Hospitals for this project. Health and Hospitals has informed us that OMB is not allowing the transfer to move forward. Can OMB please explain why the funding that is already secured in the State budget cannot find a home within Health and Hospitals? And lastly, the Council appropriated $10 million for the Brookville Park Recreation Center in fiscal year 2024, yet that funding was later removed from the capital plan. Subsequent commitments to restore those funds have only been partially fulfilled, resulting in roughly $22.5 million currently budgeted despite a combined Council and administration commitment of $32.5 million. Why did OMB remove funding that had already been appropriated? Why was I not notified before these changes occurred? And when can the community expect the remaining $10 million in committed funding to be restored in the capital plan? (02:18:54) Thank you, CM. I know that we have had a couple of conversations about the trauma. Really, yesterday, but also in the hall when we had a little brief conversation. Yes, I do agree that this is something that we need to look into. I know that we spoke about the money that was existing in the budget. We talked about what else would be needed. We talked about whether or not the actual estimate was correct vis-a-vis what we had said versus what was put out there in terms of the overall dollar cost. So I am evaluating all of that with the team and looking at exactly what the estimates are. So we are talking about what the actual numbers are that we can all agree on. We need to agree on a number as a first step and then talk about how there is available funding and the funding envelope. (02:19:43) I am sorry. I will say, while it is one thing to look at the final dollar tack, which I do not expect the administration will cover out of love for you guys to cover the full balance, but I doubt it. So at the same time, what is the administration's commitment in this fiscal year in terms of funding in the final budget for the trauma hospital? The previous administration had provided $50 million, not including funding that the Council has also found on the expense side of this. I want to know what this administration's commitment is going to be. (02:20:23) That is obviously a conversation that we will be having with you over the next few weeks. My point was that in order to make a determination about, particularly when it comes to capital, because with capital funding, as you know, if a project is not fully funded, you cannot do the certificate to proceed. A capital project cannot stand. So we need to figure out what is actually needed. We need to have an agreement on the numbers. You had mentioned that H+H said it may be this, and we knew that our team was saying something else. So I am going to talk to the parties about it and figure out what the actual number is. Then we need to look at the funding envelope. It is just a matter of funding to see what is actually doable. I will look into the Senator Sanders $100 million as well in terms of the rec center. We also discussed that and we will be going back and looking at, as part of discussions that happened in the past, what was the change to that funding that went from, I think, $10 to $25 million. (02:21:22) Yes. This is a balance of $5 million now. Director, we did, to your point, speak about this yesterday. So you had a preview of what I was going to ask today. So I would imagine that you would have some sort of an answer for me right now, under oath, in this hearing. I do not, but I am happy to follow up with you. Can I ask why you are not prepared when we spoke yesterday and you knew that I was going to ask these questions? This is the beginning of a conversation and I am happy to continue over the next few weeks with you, but I have been asking this question since the preliminary budget. (02:21:53) Understood, and there has been (02:21:54) no progress and no indication from the administration that we are moving beyond this statement that I am getting right (02:22:01) now. Understood, and we also talked about a provider for the actual facility and (02:22:06) we spoke about the provider being a part that is happening simultaneously with the securing of the funding. I do not want this administration to hide behind that as an excuse when we have been successfully securing funding in the last several budgets and prioritizing this. Mayor Mamdani has shared with me privately that he understands the need in this community and the fact that health care is a human right, but I am not seeing that demonstrated in action. So I do ask that, Chair, if possible before this hearing is done, that I can get an answer, because I did preview these questions and I think it is unacceptable to not have an answer to basic questions. I want to know if the administration is going to commit to some level of funding for the trauma hospital as well as restoring the $5 million that was removed from the Brookville Park Recreation Center. Thank (02:23:07) you. And we will work with you on hopefully getting some sort of answer on that. We have also been joined by CM Hankerson as well as CM Mealy, and we will hear from CM Marte and then Hankerson. (02:23:22) Great. Thank you so much. I want to start with immigrant legal services. Last year, thank you for baselining the $33 million at the preliminary. Last year we had a $53 million that we have not seen the restoration of this additional funding for this year. A portion of that funding was used to restore the lost federal grants that we have seen for legal services in particular. I have to press that the funding restoration that happened of those $53 million around making those designations to service providers is something we would definitely like to continue. Can we receive a commitment from the administration that it will continue to fight for that $53 million, particularly at this moment in time where the federal government continues to harm immigrant communities and threatens on a daily basis to flood New York City? (02:24:33) Yeah, we are happy to continue to work with you on this. I know that the immigration legal services funding is at $54 million in fiscal year 2026 and $71 million in fiscal year 2027. As you noted, we had added in fiscal year 2026 and baselined it in fiscal year 2027 and out. So we did baseline it. It is a significant sort of down payment on what we know is needed, particularly at this time. We appreciate your advocacy on this issue, which is always important, and we look forward to working with you more in the next few (02:25:14) weeks. Great, and again it was a great partnership with those designations. We would like to continue to do that work together. Surely on NYCHA vacant unit readiness, one of our favorite topics. Thank you for your collaboration in trying to address this profound issue of the 6,200 units that remain vacant throughout NYCHA campuses. Obviously we have been pushing to obtain $100 million in capital and $70 million in expense to really be able to meet that full need and obtain the full scope of getting those units ready and online for New Yorkers. Can you tell me what progress is being made in expanding those commitments to meet that goal? (02:26:09) Sure. We agree, obviously. That is why we added the most funding that we can add, given the funding envelope, to the budget. It is also something that is highlighted in the block by block housing plan as something that we really want to lean into. We have allocated nearly $374 million to the vacant unit readiness program in total, in terms of $256 million in City capital funding across fiscal years 2026 to 2028 and $118 million in expense funding across fiscal year 2026 and fiscal year 2030. When you really put this in perspective, it is an historic amount of funding for the program. We know there is always more to do, but I think given the backdrop of the fiscal challenges that we have, the fact that we stepped forward with this investment shows meaningful progress. (02:27:04) Yeah. Thank you for that investment. I think we will continue to push that. New Yorkers and NYCHA residents cannot wait until 2030 to be transferred out of an apartment that needs to get front-loaded now. Or at least we need to try to maximize in the short term the amount of units that we are able to turn over. We still feel like we have not hit that right threshold. We are still far behind and not as urgent in this funding. Again, this would house thousands of New Yorkers immediately. We do not need to build new buildings. We do not need acquisition. These are New Yorkers that can be housed today, within two years, not 2030. So thank you. We will continue to have that conversation and keep pushing to maximize that investment in the immediate, because when we do the numbers over the long term, it is a bump up, but it is not where we need to be. Thank (02:28:05) you. Great. CM Marte, followed by Hankerson. (02:28:11) Thank you for being here. I want to plus what CM Avilés said about NYCHA and continue on that front. The mayor's block by block housing plan notes that the capital investment in NYCHA since 2023 has begun to slow the growth of NYCHA need for the first time in recent history. The most cited number that the authority needs is approximately $7.8 billion from 2023. Is there a more updated number than this 2022-2023 figure, or is there a number going to come out soon that is more recent to make a better assessment? (02:28:47) As of January 2026, the estimate is at $7.8 billion, and so it is a slight decrease from the 2025 estimate of... (02:29:00) Yeah, and how did you determine that? What factors led to the slowdown? (02:29:11) The physical needs assessment is done by NYCHA, not by OMB, but in terms of how they are attributing the decrease, it is really the progress that has been made on the developments. So everything that is happening and will be happening with the Trust, with PACT, with the renovations to Section 9, helps to bring down the cost and bend the curve. (02:29:32) Okay. You know, we were excited about the news about the call center, which is based off the OMB call center model. But I just wanted to know, what is the total fiscal year 2027 budget for the call center? For fiscal year 2027, fiscal year 2028, and then 2029, it is $2.5 million, and obviously we will see how the out years go with respect to funding. (02:30:00) Okay. And I have a question about the out years because we see a drop as well. I think they are funded at $7.5 million for fiscal year 2027 and 2028, but then it drops in 2029 and 2030. Why does this funding decrease in those (02:30:24) outer years? Yeah, so that is the one that we just referenced, but in terms of the funding dropping... (02:30:31) In fiscal year 2029, I think the first two years there are some one-time costs that are being picked up and then we will be reevaluating on a year-by-year basis. All (02:30:41) right. Thank you. Thank you. (02:30:44) Okay, CM Hankerson, followed by CM Mealy, and then we will take a break. I am sorry about that. (02:30:47) Thank you, Chair. Good afternoon, Director. The Council has for many years called on the administration to baseline one-shot funding for a variety of initiatives within the Parks Department, specifically for headcount, including PEP officers, Parks Enforcement Patrol workers and Green Thumb workers. We were happy to see the executive plan included baseline funding for some of the remaining one-shot positions in the budget, which would include PEP officers, which are desperately needed right now, as well as Green Thumb (02:31:18) programming and tree removal programming, which is near and dear to my district in Southeast Queens. (02:31:24) Thank you, CM, for your question. We were proud to put up the $15 million for Parks and to baseline it and not wait until adopted budget negotiations to be able to deal with that. We have funded Urban Park Rangers, going to fund forest management and other parks workers. We know that it has been highlighted that PEP officers also need funding. We look forward to discussing that with you and with the Council in the next few weeks. From your estimate, do you believe that the administration will baseline? We are happy to talk about more investments in Parks. The mayor has always talked about more investments in Parks. We know we have a 1% goal that the mayor has committed to during his mayoralty, before the end of his mayoralty. So we continue to talk about ways to invest in this great public (02:32:21) amenity. Well, I am glad that you brought that up. So given that the mayor did make a commitment to getting Parks to 1%, what is the administration's plan to get there within the term? (02:32:34) We obviously came into office facing a staggering $12 billion gap, as mentioned in my testimony. We worked really hard to make sure that we were able to stabilize the City's finances. Now that we have done that, we have done that without increasing the property tax, we have done that without raiding reserves, we have done that without slashing services. So as we become more fiscally stable, we can talk about the investments that we need to make. We have still carved out, of all the expenses that we have added, this funding for Parks. We have carved out money for libraries, for cultural institutions, things that would typically have waited, and we baselined it because we believe in those investments in our institutions. Not to cut you off, we will get there. (02:33:25) I believe that, but what exactly is the plan? You spoke about what you all have done, which I think is amazing. But given that you have been able to do that, I am sure that there is some plan to be able to get to where we need to be with Parks. (02:33:41) This is the beginning of putting up the $15 million in the executive budget. As we move forward, the plan in terms of the overall budget is to continue to pursue savings and opportunities and then look at where we can free up funding to make those investments. (02:33:56) Just one final question. How can you say that we will get there within the term if there is no plan to get there within the term right now? If you are saying we need to see where we can pull from, but the commitment has already been made now twice, once that we would get to 1% and now that we will get to 1% within the term, but there is no plan. (02:34:18) I am not lost here. Our goal is to meet that 1% before the end of the mayor's term. At the same time, the twin goal is to make sure the City is financially stable and to be able to make the kind of investments that both you and I agree need to be made in our parks. So it is an ongoing effort and we are going to work with the Council as partners on that. Thank you. (02:34:41) Great. CM Mealy. (02:34:44) Okay. Older adults and SNAP benefits. Many low-income older adults rely heavily on SNAP. The federal H.R. 1 expands SNAP work requirements and now adults up to 64 years old who are deemed able-bodied are subject to the same work rules as younger recipients. People between the ages of 16 and 64 who did not previously have these requirements could lose their SNAP benefits if they are not working. This is the first month where people will lose their SNAP benefits if they do not meet the work requirements or obtain a waiver. What is the administration doing to address the potential impact of the work requirements on older adults between the ages (02:35:45) of 62 to 64 years old? So this is something that is a focus of ours. We know that through our Deputy Mayor for Health and Human Services, she is looking at ways that we could mitigate the impacts of what is to come based on the federal government's actions. We have invested in more SNAP eligibility help. We have a number of SNAP eligibility specialists. We will get that for you as I continue with my answer. (02:36:10) So the demographic of people that need this... Do you know what this would happen to 60 to 600,000? And that is why we need to do this already before this budget passes, in order to not have our seniors have to get a job to get SNAP benefits. That is life and death. So there is no plan. You do not know how much you are going to put in extra, right? (02:36:35) Now, we have invested in the Community Food Connection program, we have invested in the Groceries to Go program, we have invested in the Get the Good Stuff program. So we are investing in food assistance. How many people do you feel are going to get a waiver to not work? (02:36:50) That you can estimate? (02:36:51) That is something we are working on with our Deputy Mayor for Health and Human Services and our agencies. (02:36:58) That is kind of unacceptable. (02:37:00) I do not know the number of SNAP eligibility specialists off the top of my head, but in this plan we added nearly $70 million for staff. So in addition to doing away with the... they are hiring up rapidly for these benefit access frontline critical positions. (02:37:16) They have also identified a specific phone number for SNAP so you can call and (02:37:19) make sure you are getting your benefits. There is a lot of outreach. So they are doing a lot. (02:37:23) Well, I am going to follow up with you about the home delivered meals. Is the administration considering adding funding to the New York City aging budget to support a higher reimbursement rate for home delivered meals to cover the true costs? Right now it is $14.07, but when the administration gets reimbursed it is really $16.17. How would you reimburse them with that gap? (02:38:00) So as of the executive plan, we have the program's contracted budget at $81.1 million and increased the per meal rate by $1. We regularly address the changing costs as appropriate. (02:38:17) So what is the appropriate cost now, $16 or $17? (02:38:22) We continue to discuss that with the agency to make sure that we are covering what is appropriate. We know that there is outreach in this area, so we are working with the agency on it, but (02:38:30) you notice it is half of what they really need. (02:38:38) That is not fair to the providers either. Thank you. (02:38:45) Okay, great. So we are going to take a five minute break and then we are going to resume with the second round. Thank you. Can we find our seats? Okay? We want to make sure you guys do not stay until dinner time. We want to get you guys out, so we are going to go right into second round questions. Okay, where do I begin. So I am going to start with the HR SNAP state and federal funding cost shifts. At the General Welfare Committee's executive budget hearing, I brought up the SNAP cost shifts resulting from HR One. We had hoped that the State would step up and include this funding in its enacted budget rather than shifting the burden to localities. The first and most imminent cost shift is $111 million for the City's share of the State's new SNAP costs. The executive plan does not appear to include this funding in HRA's budget to support this. At the General Welfare hearing, HRA testified that this funding will likely need to be added in a future financial plan. So can you confirm that no funding was included in the enacted State budget to support this? There is no funding provided, but at the same time we have not heard from or received a confirmation from the State that this $111 million would be passed along as a reduction to the City. So I have no confirmation from the State that that will be passed along. (02:53:42) Okay. And if not, have... (02:53:43) There have been... so you just mentioned there have been conversations with the State. What did they say anything about appropriation of funding towards this in the future? They did not. We, obviously, in the lead up to the enacted budget had several conversations, and the result, of course, as we talked about... but this was not something where they indicated or confirmed that this was going to be a reduction to the City's budget, in the same context that we were talking about ways that we were going to receive additional State aid to help us with gap closing. Okay. (02:54:22) And do you think that we will need to be adding this into the fiscal year 2027 adopted budget? (02:54:28) Well, I have to wait and see what confirmation comes from the State. There was nothing again in the enacted budget, so we do not have anything confirmed from the State for us to act on in our budget. But if it comes to pass in a future plan, then we will have to reflect it. We would obviously want to make sure we are engaging with the State to be able to convey what the hardship would be with that $111 million if we had to absorb that... (02:54:53) ...reduction, right? Because this is definitely going to be a huge impact to the community in New York. So we have got to figure this one out. One of the many conversations we will be having in the next few weeks. Okay. (02:55:06) Additionally, starting in October 2027, there will be an additional cost shift that could result in a 15% increase in the cost of SNAP. The rate will depend on the State's error processing rate, and HRA testified that the State noted that this cost shift would likely affect the City's budget. We are continuing to look at that with the agency and also with our administration colleagues who are looking at all the actions coming out of the federal government, and so we do not have any confirmed information to act upon at this moment. (02:55:47) Okay, is there any possibility that the implementation of this would be delayed? Not that we know of. Okay. Um, okay, so a couple of questions on health care accountability, which the Speaker, as you know, had created an office for. In 2023, through the passage of bipartisan legislation that the Speaker championed, the Council made it easier for New Yorkers to understand their health care costs with the creation of the nation's first municipal... (02:56:23) Okay, sorry. I thought I was going crazy. Okay. It made it easier for New Yorkers to understand their health care costs through the Office of Health Care Accountability, and to understand health care costs and hospital pricing practices. The law would revolutionize health care in New York City by bringing transparency to prices and empowering New Yorkers with the information they deserve. And as someone who has been on the provider side, I can definitely tell you that this is totally true in terms of the higher costs. So what is the current budget and head count for the Office of Health Care Accountability? First, I mean, it is an important function of this office in terms of introducing transparency around hospital pricing and other ways that a consumer can be more informed. The budget has been established within the Health Department and it is fully funded at $2 million per year. It is fully staffed at the moment, and there is a report that was published last year by the administration after significant sector collaboration and assessment. So we are proud of their work in this area within the Department of Health and Mental Hygiene, and they are working on the next iteration of the report as we speak. (02:57:42) Okay. (02:57:43) And when is the next report due? I am sorry, we can come back to you on an exact timeline. Okay, great. (02:57:52) And then on childcare workforce development. With the expansion of two-K, there is a growing need for trained and certified early childhood educators to support the growth. CUNY has requested that the administration allocate an additional $6 million for various early childhood education training and certification programs, including an apprenticeship program. So what investments has or will the administration make in supporting the training and certification of early childhood educators in anticipation of the expansion? (02:58:30) I mean, I think CUNY, as an engine of upward mobility, also plays an important role in terms of workforce development. I know this is a big priority for the Chancellor. In my time there, I certainly heard him talk about this a lot. CUNY can really be a catalyst with this kind of work. So we are evaluating the request and we look forward to having those discussions with you in the next few... (02:58:56) ...weeks. I would also note, just in general, I know this is not the same issue but it is related in the sense that we were happy to put up $40 million in the executive budget to increase child provider rates. We know that between the other investments that we have made in pre-K and then the launch of two-K and before, across districts so far, we know that this is an important piece of the puzzle that we look forward to working on, because you need a workforce to be able to accomplish the goals that this administration set forward. (02:59:34) Right. And I know that, again, to my earlier question, I think the process takes a while in terms of the background checks and all of those things, and so I think that will help us streamline and get more folks in the pipeline. So whatever you all can look at to speed that up, that would be great. I know that we were also talking yesterday about parity across the board with early childhood programs, and so if you could work to make sure that we look at that holistically, whether you are a community-based provider versus a school-based provider, I think there are differences in the contract amounts there. So that would also be great if you could look at those numbers as well with DOE. (03:00:15) Okay. And then lastly, on the citywide grocery stores: the fiscal year 2027 executive capital commitment plan includes $70 million for the development of City-supported grocery stores. As we have heard, two of the five proposed sites have been identified already, one at La Marqueta in East Harlem and the other at Hunts Point in the Bronx. If the City plans to open City grocery stores, is it going to be run by contractors, or what are some of the other options that you are looking at? (03:00:46) In terms of the sites and spaces, we are looking at spaces that make sense to house these sites across the City. We will obviously have specifics at some point about any lease negotiations and specifics in terms of where they will exist. I would say that optimal program design is still under consideration, but we are making sure that we are looking at the parameters of store operations and making sure that it also comports with the vision that was initially set forth. We are making sure that we are committed to economic justice, addressing affordability, workers' dignity and neighborhood visibility. So we hope to make more progress and share more information soon. (03:01:41) That would be great. And if you could just let us know as things progress, who is going to be selected, the type of workforce that you are going to be engaging, and all of those things would be... (03:01:52) ...great. Surely. Okay, I am going to... okay. (03:02:00) Sorry, just another note. We are moving the next two hearings into the committee room next door at 3:30. For those in Chambers and listening via livestream, I just wanted to let you all know that at some point we are going to have to get kicked out of this room and we will move to the committee room to prepare for an event here tonight. (03:02:18) Okay. And with that, I am going... (03:02:19) ...to move on to Deputy Speaker... (03:02:23) ...Williams. Thank you. Back to libraries. Given the substantial backlog of capital needs across three library systems, including aging facilities, roof repairs, upgrades and other state of good repair projects, how did you determine the level of capital funding included in this year's executive plan and how much in capital needs remains unfunded? Yes. So I think, Deputy Speaker, this was, you know, we had to look at this in terms of available capital funding that we had. We had the submissions from the libraries in terms of what they were looking for. I think what we tried to do here was to say $50 million spread over one project for each of the library systems, understanding that moving forward in the next few weeks we will have a discussion about potentially additional investment based on the overall funding envelope that we have. Okay. And another issue that the library systems raised was the APECKA program. We know it was negotiated as a mandatory City health benefit. Obviously it is an unfunded mandate and so the library systems have to pick up the cost. We just wanted to understand why these costs went unfunded and why the independent library systems have to absorb the cost. Sure. We are looking at the numbers now with our team and we will be able to communicate soon about the parity funding that comes out of the health funding piece. Okay. Thank you. We obviously all want individuals to have access to all of the things that APECKA comes with, but it does feel like we are forcing them to have to absorb that cost. I am thankful for the baseline funding, but this of course creates additional needs for the library systems. Okay. More questions on my favorite topic, the racial equity plans. Okay. So OMB has developed a fairly robust climate budgeting framework that evaluates capital investments through the lens of emissions reduction, flood resiliency and heat resiliency. Is there currently a comparable framework within OMB for evaluating racial equity or environmental justice impacts when budget decisions are made? I know you are working on it, but wanting to understand again if anything... (03:05:03) ...exists currently. Yeah. I mean, I think that we are... yes, we are developing the plan. We have our preliminary plan just to get there for the next budget cycle. But the absence of a particular specific rubric or framework does not mean that we are not being attentive to investing with respect to the needs of disadvantaged communities in areas where we know there has been targeted underinvestment over the years. There are areas in this budget where that sort of bears out. There was an announcement earlier this year about the Community Parks Initiative, for example. We know that we have funded in this budget the New York City Her Future program. That is just another example. We know, for example, in the two-K siting, and really looking at where those districts will be, we look at the housing plan and really how we can make sure that the block-by-block comprehensive plan, the 200,000 new affordable homes and the 200,000 preservation units, where that investment is happening and how we can integrate an equity lens into that plan. So something that is structural and formal, to say let us go through this perhaps in the way that climate budgeting, as you noted, actually does, would look to be informed by existing models to be able to improve what we have. (03:06:35) Yeah, and on that note, it is my understanding that OMB works really closely with the Mayor's Office of Climate and Environmental Justice to integrate climate considerations into the annual budget process. So, again, already existing, you have this formal structure. So wanting to understand if a similar coordination process exists with the Mayor's Office of Equity and Racial... (03:07:03) ...Justice. Yes. I mean, I think it is in the same way that climate budgeting is inextricably linked to the administration's environmental justice work. I think it is sort of similar, right? We want to make sure that our budget is representative of the decisions and the choices and the investments that we make to tackle a systemic issue, right? So we are making sure that we are looking at it in the same way that we would look at environmental justice or investment in fossil fuel reduction or decarbonization tools that exist there. What are the tools that we can employ here vis-à-vis investment for where we know there has been a paucity of resources devoted to either services or amenities or public institutions? That is what our focus will be. Okay. (03:07:56) So the plan establishes a goal of having agencies use equity budgeting tools and strategies during budget submissions. Will there be any accountability mechanisms for agencies that fail to meaningfully incorporate equity considerations into their requests? Yeah, it is... (03:08:13) ...something that we are attentive to, attuned to, and making sure that it is a two-way street, right? I mean, that is the goal here. OMB is clearly going to do its part in the framework, but we want to make sure, and again the racial equity plan really charges all the agencies with thinking in this way as well, which is to say if a new need is going to be submitted, at... (03:08:36) ...its inception, how does it comport with the racial equity plan? How does it advance those goals? It will make the process much more aligned and compatible if we know the front end is also matching up with the back end. So we are committed. I know agencies are committed as well, and we will have a good product when we are working together in a two-way... (03:08:56) ...street. Okay. Just a few... (03:09:00) ...more questions. Because one of the great things about the racial equity plan is to see it, but you have a dual role, because you manage the budget and sort of hold agencies accountable, but you are also an agency. So just some questions specifically about your agency and how you are going to advance racial equity within the functions of... (03:09:22) ...your agency. So the agency's long-term racial equity goals include advancing pay equity and incorporating the City's true cost of living measure into pay parity analysis. Can you identify any existing disparities within your agency's workforce and what corrective actions are being considered? We are looking at ways to achieve... I mean, the pay equity piece is also a citywide effort. Within our agency ourselves, we are looking internally to be able to say how could we offer more opportunities, either promotional opportunities or hiring opportunities, to make sure that we have an effective and diverse cross-section of employees across our agency. We spend a lot of time on professional development as well. I know my First Deputy Director has been big on that long before I even got there, having an OMB Institute to basically make sure that there is a pathway, an upward pathway, for OMB analysts to be able to develop in the agency and get promoted. So we are committed to that work and making sure that the agency makeup is representative of the diversity we would like to see that exists, frankly, across our City. (03:10:34) Yes. So, to that point, do you believe that your agency and its leadership structure reflects the diversity of the City it serves currently? Do you believe that your agency reflects... (03:10:45) ...that? I think we have a diverse leadership in the agency. I think that we look for the best and the brightest, but we also look to have, again, a leadership structure that is representative of the diversity that we see in our daily lives. So I am committed to that, and the opportunities that exist will foster and make sure that we continue to build a solid OMB team that is also... (03:11:13) ...diverse. Thank you. (03:11:18) Okay, great. Majority Whip Hanks, followed by CM Brooks-Powers. Thank you. (03:11:23) Chair, to kind of piggyback off of Chair Lee's questioning regarding the community grocery stores. I do not know if this question has been asked: has the administration conducted any studies on how the community grocery stores will impact small businesses, particularly bodegas or local grocery stores? We are attuned to those issues. I know in speaking with them they are also... yeah. We also know that throughout our small business services we are investing in as much as we can to help small businesses. This program is something that directly relates to the affordability agenda and the time now is even more salient when we see costs going up and the fact that SNAP eligibility looms large. There are so many factors that are playing into the need for growth for grocery stores in this proposal, so it does not have to come at the expense of small businesses. (03:12:33) Thank you so much. So does the administration have a plan on how they will engage Council members whose districts these grocery stores will... (03:12:38) ...reside in. We are happy to take that back to our intergovernmental teams and our leadership. Please do this. (03:12:46) Thank you. Okay, one more question. Over 40% of New York City public school families speak a language other than English at home. The DOE's immigrant family communication and outreach initiative is a $4 million program that helped immigrant families get important information about their child's education through strategies such as sending paper notices, calling and texting families and collaborating with immigrant-facing CBOs. The executive plan — pardon me — does not include this funding in fiscal year 2027 or in the out years. Can you speak to that? (03:13:25) We will definitely be discussing that over the next few weeks with you and the Council and also with the Department of Education to see how we can support these... (03:13:32) ...services. And what would the programmatic results be if this $4 million in funding is not restored in fiscal year 2027? (03:13:41) It is an important service. We have to see how we can talk about it in the next few weeks in terms of the adopted budget. Having language access is critically important and so we will work with the New York City public schools to see how that goes. But Liz, I do not know if you have anything to add on that. (03:14:04) No, I can just say we will continue to look at this towards adoption and we are happy to continue conversations with you. (03:14:10) Okay, so one more: if they supported this program, have you given any indication why this funding was not included in the executive plan? (03:14:22) It is just a question of the overall funding envelope. We made a lot of investments. We also know that there was found aid that was supported by the State that also funded programs, et cetera, in terms of the weights. So from our perspective, the fact that we need to have a public school system that can communicate is important and we have to talk about that in the next few weeks on how the funding envelope can support that. Thank you. (03:14:51) So much. Thank you. (03:14:53) Thank you. Okay, CM Brooks-Powers, followed by Sanchez. Thank you. (03:15:01) Chair, I am going to again ask a couple back-to-back questions in the interest of time, but this is focused on the space of criminal justice. Regarding the Rikers Island closure: the Independent Rikers Commission has issued its blueprint to close Rikers Island, which lays out numerous recommendations for investments that would assist in lowering the incarcerated population. These programmatic recommendations are a critical component of the borough-based jails plan. But despite the Council's advocacy, they did not receive adequate attention in the prior administration. How have these recommendations been incorporated into this plan? One example of a program that has not been sufficiently funded is justice-involved supportive housing. In 2019, the City agreed to add 380 more units, bringing the total to 500. Currently there are only 250 units online, half of which are supplemented with funding from the City Council to stabilize the reimbursement rates. When does the administration plan to fund and bring the remaining 380 promised units online at the higher reimbursement rate? Also, alternative-to-incarceration programs operate at a fraction of the per-person costs of Rikers and have been shown to be effective, but the executive budget does not increase the funding for them. Can you explain that? And then lastly, in terms of Department of Correction technology: at the hearing on the Department of Correction executive budget, Commissioner Richards testified that it is a priority of the Department of Correction to modernize the agency. Is there money in the department's budget to fund new technology? One of the Council's priorities is the development and implementation of an online scheduling system to facilitate visits to incarcerated individuals per Local Law 43 of 2025. OMB originally estimated that developing this software would cost $2 million. Have those funds been included in the department's capital budget? This technology would be transferable to borough-based jails and therefore meet the five-year lifespan requirement. I can repeat any question you need me to. (03:17:43) So let me start first, writ large, about Rikers in terms of the Rikers closure and the borough-based jails projects. We are committed to those and we know there are various locations that are in progress in terms of the different sites. At the same time we made sure that we made investments in Rikers now in terms of maintenance. So we invested in cell doors, for example, to make sure that they are workable and other maintenance that is required at the facilities. With respect to justice-involved supportive housing, as you noted we currently have 120 units and we hope to bring the City's total number to more than 350. We know that the Health Department has updated the rate for the new units and we urge providers to be able to apply. So our goal is to basically increase the number of units that are there and again we encourage providers to apply. With respect to technology, I am... (03:18:55) Sorry, Commissioner, before you move on — the question was when... (03:18:59) ...does the administration — because I know the administration has been verbally supportive, but... (03:19:05) ...when does the administration plan to fund and bring the remaining 380 promised units online at the higher reimbursement rate? (03:19:12) Sure. We are going to stay close with the Health Department because the RFP is out there and so we need to understand what the responses are and be able then to plot a plan forward based on those responses — to say when will these contracts be in place and when we can move forward with funding. (03:19:27) So will the funding be included in this fiscal year... (03:19:31) ...budget at all? It depends on what the outcome is with the Health Department. The RFP — I believe it is rolling, so you can apply as the applications come in and you fill all the units with the dollars available. (03:19:45) That was my understanding. I believe it is rolling, so there is no timeline in terms of the funding and when... (03:19:58) Well, my understanding is in the past there has been an RFP out there but there have not been responses, so we need to basically find out how we can invite people. Please, with your assistance and partnership, please get out the word using your committee to basically say, look, we need... (03:20:18) ...providers to be able to respond to this RFP. And then to the last administration — because you know, this is a new administration — so again, if you are saying that the funding is going to be tied to an RFP that does not have a deadline, there is no commitment for the funding. I am trying to get an understanding as to when the administration plans to fund and bring the remaining 380 promised units online at a higher reimbursement rate. (03:20:48) So the funding was added in the baseline. So the funding exists. As the applicants come in and are awarded, they will be awarded such that we reach... (03:20:56) So the money is there. It is just a matter of when the applications come in, and when they come in you release the funding. (03:21:04) Yes, when you sign a contract. Thank you for that clarification. Sorry, Director — technology. No worries. So on technology, we are assessing the funding availability and the necessary upgrades. We have been in conversations and I think that during the executive plan the department is able to self-fund a new project for visitation software. So we are glad that that is going forward. We have also approved certificates to proceed for various technology projects — the offender and jail management system to manage intake through discharge as well, and then we also have the Workday software platform which replaces the old agency legacy system for HR and payroll. So we are working with them on their technology needs. We have made some improvements and there is more to do. (03:21:59) And do you anticipate more money by the final... (03:22:05) ...budget? We are happy to talk to you about that in the next few weeks as we look forward to the adopted budget. Thank... (03:22:12) ...you, Chair. Great. Okay, so we have CM Wong, followed by J. Sanchez. (03:22:16) Okay, thank you. I have a question about the executive budget. Your own budget package says fiscal year 2027 is balanced, but the out-year gap jumps in the year after that. What recurring spending is not permanently aligned with recurring revenue instead of just pushing the problem into fiscal year 2028? Because as I see it, this is just kicking the can down the road. (03:22:49) Could you answer that? Well, I think, you know, number one — when we look at what we have added over the preliminary and executive budgets, we have added $1.7 billion in expenses because of chronic under-budgeting and you see how that propagates out through the system. And then when you look at the revenue forecast, as my colleague talked about, which is more of a conservative estimate in the out years — there are a lot of recurring savings in here and recurring State aid from the reversal of cuts and cost shifts that actually go into the out years and help us. So there is a lot that has been baselined. But you see in fiscal year 2028 a managed gap. That gap is more in line with historical numbers. We know that there is continued work to do on savings in the out years that will fall to the chief savings officers and revenue-generating strategies that we need to continue to pursue so we can fund the affordability agenda. Okay. (03:23:45) Thank you. Let me squeeze in one more question. Water revenue versus rental payments: your financial plan projects total water and sewer charges for fiscal year 2027. Separate from that, the City is also extracting a rental payment of about $303 million in fiscal year 2026 and $312 million in fiscal year 2027 from the water system for general budget use. My question: how do you justify asking ratepayers for more in charges over two years while diverting hundreds of millions of dollars away from the... (03:24:33) ...system? Our world-class water system needs to be invested in. That is why we have the Water Authority, obviously, and rates go to fund the improvements and maintenance that make sure the system reaches its intended result, which is water access and delivery that we critically depend on. I think that with respect to the rental payment, the rental payment was already included in the revenue forecast. If we were to back out the rental payment, that would be a $300 million hole in the budget that we would have to make up elsewhere. Yeah, but the concern here is that this is for general budget use. It does not say that money has been taken out for maintenance and repair of the system. That is why it is concerning to me. The rental payment has existed as part of the revenue forecast and has no impact on what the overall maintenance of the system will be. It was already put into the forecast and to take it out would mean that we would have to make up that... (03:25:43) ...funding elsewhere. Do you have anything to add? All right, thank you. I will follow up with you. (03:25:47) Thank you. Thank you, Jeff. Great. Okay, CM J. Sanchez, followed by Louis. (03:25:53) Thank you so much, Chair. First I wanted to start off with this: there is extensive infrastructure being built out for containerization, yet a lot of the garage infrastructure that is much needed to house our trucks and do all the things that we need to do to run our system are being pushed out into the out years. Has there been any conversation on whether the pace of truck procurement will be aligned and... (03:26:23) ...available to deal with planned garage capacity? Sure. We have had conversations with the Sanitation Department about this to make sure that their replacement projects — we understood the timing that they would come online for those projects to be able to move forward. We distributed by fiscal year based on the schedules and the cash flow of what we anticipate with the agency. We are basically not just expanding the fleet of side-loader trucks as related to containerization. We are also reducing the fleet of rear-loader trucks that offset the need for the additional space. So we are evaluating our options where space obviously presents a challenge. We are working with the department, understanding the timing and the cash flow of when those projects need to happen. Now, funding for the garage replacement itself — I think that we need to understand how, within the capital project envelope, this has been mentioned as existing in outer years that could be advanced as a possibility, or in other areas where we can repurpose some of the conditions that we see in the garages that clearly need capital investment. There is no doubt about that. So we are committed to working with the agency and with you in the next few weeks to see what is in the funding envelope that could be provided. (03:27:50) Containerization is arguably a really great thing for the City. I want to make sure we are not putting the cart before the horse and that we have the actual tools to make sure that once we are fully into containerization, New Yorkers are not just bombarded with sanitation trucks all over their streets because there is no place to put them. Speaking of sanitation workers: the previous administration had put in one-time funding for 21 sanitation workers in the Hub on Third Avenue. It is the second most visited place in the City of New York after Times Square on a daily basis. The current administration just approved a third charter school within three blocks, adding over a thousand new students. So I really want to understand where the conversation is with maintaining these 21 sanitation workers to ensure that as we are continuing to build out the Hub, we actually have the ability to clean in the Hub — given that, in addition to all of that, it is the center of the opioid crisis in the City of New York. (03:28:53) Yes, I appreciate that, Council Member. I think that we have to work with the department to figure out what the overall resources are that are devoted there. We understand that that was a particular area of focus that the department had in the past. We will understand staffing levels and understand... (03:29:08) ...how we could work towards that goal. That is a super important point. I think I have time for... (03:29:15) ...one more. (03:29:16) And finally, the Hunts Point Produce Market: this administration has made a concerted effort to really talk about food insecurity and food access with the expansion of the community grocery stores. However, the Produce Market, which feeds much of the East Coast, is in the middle of a contract negotiation in which, if they do not get it signed with the City in time, we lose our Produce Market. So has there been any conversation about adding additional funds to the Produce Market... (03:29:45) ...and being able to make sure that we do not lose a vital critical resource for our City? (03:29:50) I am happy to look into that further. There is $130 million in City capital in the Hunts Point Produce Market and we are expecting $505 million in other grant resources, including $230 million from... (03:30:10) Thank you. Okay, Louis, followed by... (03:30:14) Thank you, Chair. I am back again. I will make it quick. The mayor has taken major action on the deed theft crisis by establishing the Office of Deed Theft Prevention to protect vulnerable homeowners in central Brooklyn and southeast Queens. Part of my question is: how does this office interact with mortgage assistance programs at all, and how does the office differ from the enhanced existing services provided through citywide Council initiatives such as the estate planning and resolution initiative and foreclosure prevention programs? Is the administration committed to working with the Council to scale up and design the Office of Deed Theft Prevention? My last question: the City has historically struggled to fully execute its capital program, with the capital commitment rate falling from 78.3% to 67.7% in fiscal year 2025. As we expand the size of the capital plan, what reforms are being implemented to ensure that agencies can actually deliver projects on schedule? Has OMB considered that increasing appropriations without improving delivery capacity will continue to inflate project costs and delay community benefits? (03:31:40) That is all. Thank you. So you are reaching back into my prior lives on these two questions. It is a good thing. Yeah, so deed theft when I was Commissioner was a big focus as well at the Department of Finance. It was really a holistic view, and I have no doubt that you will hear from Commissioner Lied when he testifies that it is a holistic approach. Of course we work with other agencies if they have information that can be brought to light that helps us combat deed theft. We know that working with the Sheriff's Office under new leadership as well, we can look at that. The land records division within the Department of Finance — can we see whether there are... is there technology that could be used to be able to see the land records and patterns that are being flagged when a deed sort of transfers over? There was, I think, a proof of concept to look at things like blockchain technology to look at that. So there are a number of things that could be brought, including creative technological tools, but then also working with other agencies and clearly law enforcement for those investigations and how they are supported. So it is a commitment and I have no doubt that the Commissioner will talk about the broad strokes of how they are going to approach it. With respect to your second question, I think that this is something we are continually improving on in terms of delivery of capital projects. I oversaw a capital process reform task force that brought together leaders from the industry and all stakeholders, labor and our capital construction universe, to say how can we streamline certificates to proceed. Can we have greater visibility into where the blockages or logjams are in those submissions? There is a new system where we communicate regularly with agencies and say, hey, this is outstanding, you owe us some information on X, Y, Z, let us figure out how to get that and move that along, along with the number of questions and time period to get to those points. We looked at things like blanket capital eligibility and so on. So there are a lot of things that are going on to improve. Clearly more to do, but the word is out with the agencies that we could speed things along, and also our responsibility to make sure that when a certificate to proceed is on my desk, we are moving it as fast as possible. (03:34:09) All right, so we look forward to that. Thank you for your response. Thank you. (03:34:12) Thanks. Great. CM Brewer, followed by Banks and then Morano. Thank you. (03:34:15) Very much so. A couple of issues about buildings. We toured some of the courthouses, particularly the one in the Bronx Family Court, and there are leaks everywhere. So my question is, what about courthouses in terms of renovations? Maybe not all of them, but is there any thought towards the courthouses and capital funding? (03:34:36) We have met with the Office of Court Administration recently with our Corporation Counsel, and I know that we have had visits. I know that our friend, DCAS Commissioner, has also been with us working there and has toured some of the facilities as well. So we need to have the facilities of our justice system in a state of good repair. We will see within our capital envelope what we can produce to be able to invest in them. I can follow up with you about what is exactly in the capital plan for that, but just to let you know that we are having those conversations and we are tuned to those needs. (03:35:14) I think a little bit before this is about the decarbonization. How much is allocated — I think it is in the capital budget — is that for schools and hospitals and public buildings specifically? And later on, could you break it down? I think your number is not correct. (03:35:33) Yes, $4.7 billion for decarbonization and basically $25 billion for projects with elements of supporting our net zero goals. So you look at the five-year capital plan, for example, seven and a half billion to address flooding, and projects totaling over $1 billion to address extreme heat. The capital plan also includes $41 billion for resiliency elements. We are also developing the Comprehensive Climate Action Plan that will be released in the spring of next year, so there will be more on that soon. But we are also looking at reconstructing docks at the City's asphalt plants, purchases of heat pumps, clean energy and so on. So there is quite a bunch of investments here. There is clearly more to do, but we do have some solid investments. (03:36:34) I have more on a different topic. So Executive Order 12 required the Chief Savings Officers to focus on recurring savings and efficiencies. As you know, they will provide updated assessments every six months. Can you provide some of the largest examples of agency efficiencies? When are the next round of assessments due? Should the Council anticipate seeing them either at the adopted budget? And do any of them include improving agency performance? I hope so. (03:37:09) So during the break, Deputy Director Nathan Gustav was very sad that no questions came his way. And he was overseeing the Chief Savings Officers exercise, so I would love to turn it to him to be able to address them. (03:37:29) Thank you. I am glad I am not sitting up here for nothing. So just to start out, as you noted, CM, this exercise has five categories that we have used to frame efforts that will continue to operate throughout the process. You have probably seen these numbers, but in the current savings across the two fiscal years, we have $24 million in savings from agencies giving up unused space, consolidating leases and other leasing savings. (03:38:04) A $28 million in savings from renegotiating software licenses and other related IT savings. I think of particular interest for everyone here, $94 million in savings from pursuing better contract rates and insourcing functions rather than relying on outside consultants, $368 million from increasing the efficiency of public services overall, including things like overtime management, phasing out unused redundant programs and other programmatic improvements, and $947 million from improved financial management, better estimates and revenue improvements such as better grant claiming. (03:38:53) OK, and of course you feel strongly that in terms of how are we going to hear about all of this — seeing the savings coming up — is this what is going to be... is that what you are saying? (03:39:03) So yeah, we continue to track all of these savings to ensure that they will be realized. Some of that is simply a matter of making sure that our estimates are accurate. Some of them do require implementation and overseeing that in partnership with the Office of the First Deputy Mayor. And then in terms of the ongoing nature of the exercise, the Executive Order does require six-month check-ins, but the reality is that we are in touch much more frequently than that in order to continue working on all of these savings products. (03:39:34) And you think agency performance will improve as a result? (03:39:38) Yes. It has been such a priority to avoid service reductions and find efficiencies that we should see better agency service go hand in hand with the savings, because they are targeting efficiencies. (03:39:50) Okay. Thank you. Quick question: water fountains. I know this is minutia, but the water fountains in the schools often do not work, and you cannot get them fixed because you cannot fix a standalone fountain — you have to be part of some big project, which is unnecessary in order to fix a water fountain. That is stupid. We look forward to talking to you about working water fountains for sure. (03:40:14) Thank you. And then also, sorry CM, I have to move on. Times are constrained, so sorry. Thank you, but we are going to follow up with all the members' questions. And if we can just make the questions and responses brief. Okay, CM Banks, followed by Morano. Thank you. (03:40:32) Madam Chair, I know the Emergency Housing Vouchers has been something that has been of concern, and obviously the impact has been close to 5,200 NYCHA residents, some of the most vulnerable in public housing. During the last week's hearing, we heard that NYCHA is conducting outreach to the 5,200 voucher holders, and approximately 1,200 had actually been signed up for the Section 8 waitlist. This leaves approximately 4,000 households with an uncertain future with the EHV funding, which is set to expire. Is OMB aware of any state funding that would help cover the $124 million, which is the annual cost for these households? And is the City prepared to cover any shortfall that might arise to ensure that these residents are able to retain their housing? (03:41:49) We knew that this was an important issue that we had to confront in the face of the federal government cuts here in this area. So what we have been able to do is work with our agencies. We have looked at reallocating alternative federal funding, notably the HOME Tenant-Based Rental Assistance Program, and we were able to do that so that we can use basically this rental assistance program to assist the households that are affected over a two-year transition period. (03:42:20) This rental assistance program to assist the households that are affected over a two-year transition period. Okay, so you know, I think the long-term outlook we have to really focus on still as well, because the problem will come right back where we need to make sure that we are addressing it head on. (03:42:30) But we went to work to find that alternative, as you noted, that will work for the short term. And are you looking at any vouchers that residents might be eligible for? I know NYCHA has been known to use the Housing Choice Voucher for a lot of residents, or project-based Section 8. If they choose to leave or opt out of project-based Section 8, they have given NYCHA residents the Housing Choice Voucher. Is that an option as well? (03:42:45) Looking at any vouchers that residents might be eligible for? I know NYCHA has been known to use the Housing Choice Voucher for a lot of residents, or project-based Section 8. If they choose to leave or opt out of project-based Section 8, they have given NYCHA residents the Housing Choice Voucher. Is that an option as well? (03:43:08) I mean, I think we take a holistic approach. If we can assist households in any way, if they do not match up with one particular voucher and they need assistance, then our goal is to try to help as much as possible. (03:43:23) You will cover the shortfall? (03:43:26) We will look at it. In terms of covering the shortfall, what we are talking about for that specific gap is the EHV loss, right — Emergency Housing Vouchers lost — through the Tenant-Based Assistance Program. (03:43:32) But if there were any other gaps to fill that would not be covered by what we have talked about, we will look at other voucher programs. We just do not know if there is a match for every household. (03:43:48) Just want to make sure the 5,200 — or the remaining 4,000 — households are all covered and protected. (03:44:00) Sure, we will work with NYCHA to make sure that we can do what we can. And one last question... (03:44:05) Yes. One last question. NYCHA's capital needs assessment is estimated at $80 billion, and I know it was lowered — you had mentioned outside of $78 billion. Given that a significant number of developments have already been converted over to the RAD PACT program — I believe close to somewhere between 27,000 or 30,000 units have been converted — and it is about 62,000 units that are yet to be converted with this new RAD or expression of interest that is going to be released, what impact is that having on the NYCHA capital needs assessment? Or the $78 billion of capital needs — has there been an impact? (03:44:55) And is conversion really decreasing the capital needs of NYCHA? This goes back to the Physical Needs Assessment. (03:45:05) There was a 2026 update and it shows, as we talked about before, a slight decrease from what we saw last time of about 0.08%. It showed that PACT conversion reduced it by $3.2 billion and other completed projects was a reduction of about $500 million, but then there were other new needs and inflation offsets which kind of kept the number pretty stagnant. And the reason why I want clarity on this is because NYCHA gave testimony to my committee that when a development is converted over, it does not impact the capital needs. So what you are giving is a different answer — it is contradicting what they gave me. This is a concern. (03:45:48) The technical report for the Physical Needs Assessment is outlined on NYCHA's website, so you can see the complete breakdown in detail in terms of how they arrived at that number and how it changes over time. All right. Well, I look forward to hopefully getting some clarity, and hopefully the administration and NYCHA can be on the same page when it comes to what the actual impact PACT is having on the capital needs. Thank you. Thank you, Madam Chair. (03:45:59) Thank you. Morano — versus... sorry, not versus. Sorry, I am thinking tennis and sports. Morano versus Restler. Sorry. (03:46:12) My money is on Lincoln in that matchup. That is right. Morano, then Restler. (03:46:25) Thank you, Chair. Thank you, Director Solomon. I have the honor of serving as the Chair of the Veterans Committee. The Department of Veteran Services represents only a tiny fraction of the City's overall budget at $6.6 million. How did OMB determine where savings could be achieved without affecting services to veterans? What specific metrics or performance indicators were used to make that determination? So the first thing is that we really looked at — and you just heard this from the Deputy Director — we made sure we insisted to agencies: do not submit anything that is going to be a service cut. And if they did submit something that was a service cut, we would explore deeper as to how the agency felt it would be not a service cut but an efficiency or program effectiveness or whatever other category it fit into. In this particular case there was $60,000 that was the only proposal in the savings book that dealt with a planned parade that was supposed to take place, and that was the sole savings initiative that was accepted. There is — I believe there was one time-funded item that was added last year at Adopted. That is a separate issue that was not an issue related to the Chief Savings Officer exercise. So based on that we had confirmed that it was an event and it was not anything related to cuts to veteran services. And in fact, we look forward to discussing with you moving forward, not only in Adopted but overall long term, how do we enhance services to our veterans. It is the least we can do and we look forward to the conversation. As do I. So that is $60,000. You alluded to the executive plan — does it include the same savings target imposed on other agencies, or was there a different standard applied because of the circumstances that you just alluded to with the parade? So that was the sole piece. In terms of the vacancy alignment exercise, they really did not have funded vacancies to be able to take, so they were exempt from that particular exercise. They had maybe two, but it was a very small amount where it would not have made sense for us to apply the vacancy alignment exercise. So that was something where they were exempt. So really we felt as though there was not an action that was taken as part of the savings exercise that would have any real impact on the department. (03:47:10) A service cut. And if they did submit something that was a service cut, we would explore deeper as to how the agency felt it would be not a service cut but an efficiency or program effectiveness or whatever other category it fit into. (03:47:12) Submit something that was a service cut, we would explore deeper as to how the agency felt it would be not a service cut but an efficiency or program effectiveness or whatever other category it fit into. In this particular case there was $60,000 that was the only proposal in the savings book that dealt with a planned parade that was supposed to take place, and that was the sole savings initiative that was accepted. There is — I believe there was one time-funded item that was added last year at Adopted. That is a separate issue that was not an issue related to the Chief Savings Officer exercise. So based on that we had confirmed that it was an event and it was not anything related to cuts to veteran services. And in fact, we look forward to discussing with you moving forward, not only in Adopted but overall long term, how do we enhance services to our veterans. It is the least we can do and we look forward to the conversation. As do I. So that is $60,000. You alluded to the executive plan — does it include the same savings target imposed on other agencies, or was there a different standard applied because of the circumstances that you just alluded to with the parade? So that was the sole piece. In terms of the vacancy alignment exercise, they really did not have funded vacancies to be able to take, so they were exempt from that particular exercise. They had maybe two, but it was a very small amount where it would not have made sense for us to apply the vacancy alignment exercise. So that was something where they were exempt. So really we felt as though there was not an action that was taken as part of the savings exercise that would have any real impact on the department. (03:49:23) Just to reiterate and be clear: can you guarantee that no veterans seeking assistance with benefits, housing, mental health services, employment assistance or discharge upgrades will experience longer wait times or reduced service as a result of these savings? The Chief Savings Officer exercise does not impact any of that. Thanks very much. (03:49:52) Thank you, Chair. And I am very happy to not be competing with CM Morano. I wanted to focus on the Progressive Caucus's campaign for Rentals Within Reach. As you know well, Director, we saw a disgraceful 12-fold increase in vacant NYCHA units under the Eric Adams administration, from just 486 when he came into office at the end of the de Blasio administration to well over 6,000 when Mayor Mamdani came in four years later. Similarly, we have seen the number of vacant supportive housing units that are in the City's control and HRA-funded supportive housing units increase dramatically over these recent years. There are 1,157 vacant HRA-funded supportive housing units today as of a report from a month ago. So combined we are looking at close to 7,200-plus vacant units that the City funds, that are in our control, that are for the poorest New Yorkers who need housing the most. We want the City Council to champion putting more resources in to activate these units. What do you think is the best way for us to fill, renovate and get activated these NYCHA units and the supportive housing units? If we give additional funding to NYCHA to hire additional staff to fix up the units, is that the best approach? De Blasio had a shelter repair squad a decade ago that fixed up shelters that were in substandard conditions. Should we bring resources together from other agencies to fix up NYCHA apartments? How can we break through and ensure that it is not just the same number of vacant units a year from now? (03:51:32) Thank you for your leadership on this issue. I know that you have also focused on this for many, many years as well. We know it is a priority of the caucus and we know that from our perspective what we added in the executive budget we think makes some meaningful progress. We know there is more to do. We want to be as ambitious as we can be. The block by block housing plan outlines how ambitious we want to be. A vacant unit does not serve anyone. We need to be able to invest in ways that we can bring more apartments online and address repair and maintenance in terms of mold and leaks. We have the center as well, but the vacant unit piece again — we talked about the numbers a little bit earlier. I know that it will make meaningful progress and when you look at sort of the recent history, it is probably the most significant combination between capital and expense. I know that you are talking about more like strike forces or a yes squad — that kind of approach. We can do it and it could make a difference because when we hear from NYCHA, when we have talked to them, they have said that with the additional funding the City is putting in, which we are grateful for, all we are going to do is stop the bleeding. It is going to be the same number of vacant units a year from now. It will not improve because it is getting worse every year. That is just the status quo. Having 6,000 vacant units a year from now is not a win. So we want to hear from OMB what is the investment that we can make that will make a difference. If the Council is willing to lead on this — and I cannot speak for the Speaker — but if that were to happen, what is the investment in vacant NYCHA apartments and what is the investment in vacant supportive housing that you and your team believe would make the greatest difference, so that we could house potentially 20,000 New Yorkers who are desperately in need of affordable housing this year if we renovated these units? I think it is a conversation we will have over the next few weeks and we can tie the investment into working with NYCHA to understand for every dollar spent what it buys in terms of units coming online. (03:53:33) We have not had the easiest time scheduling some of these follow-up meetings. So we would love to — it is good to hear that you want to continue those conversations. Hopefully that will make it a little easier to get things on the books. (03:53:43) Thank you. I was going to make a joke, but I will not. Okay. (03:53:46) CM Pierina Sanchez, and then Mercedes. (03:53:46) Hello? We are still here. Okay. So, considering my questions around the STEPS program at the General Welfare executive budget hearing last week gave us some insight into the cost containment savings in the executive plan. The plan includes savings of $280 million in fiscal year 27, $336 million in fiscal year 29 and $381 million in fiscal year 2030 across City, State and federal sources. These savings will be generated through a cost containment plan for the STEPS program and shelters, where the aim is to more effectively maximize the use of non-City-funded housing subsidy programs, ensure long-term shelter residents obtain subsidized exits and improve shelter diversion at intake. Can you walk us through how OMB worked with DHS to develop the cost containment plan, what specific indicators were used to estimate the projected savings starting in fiscal year 27, and if I have time, one last question. (03:54:54) Sure. Thank you for your question. Let me start and then I will turn it over to Patrick Stefano to continue. We worked on — and I alluded to some of this in my testimony — but we looked at certain things in terms of centralizing central support, operational support and finding other efficiencies. So there were a few things that we talked about. Rent reasonableness, for example — we talked about comparing legal rent against the Division of Homes and Community Renewal legal rent data list. We talked about how we can potentially use arrears, for example, renters' arrears through one-shot funding, to be able to create a different pathway for families that are... (03:55:47) ...facing eviction. So we talked about all of those things. The north star here was doing this without cutting vouchers. At the same time, we looked at ways — and this is a one-time savings in terms of fiscal year 27 — where we can look at ways to vacate some of the hotels and move into shelter capacity where it exists. That achieves savings in fiscal year 27. Patrick, I do not know if you want to add anything. (03:56:26) All the things the director said fit into this very holistic view of what we are doing here. (03:56:28) Even before that, before you get to the front door, we have invested more in right to counsel — $20 million, $40 million more for that. So we are trying to prevent evictions. We want to get people through every step of the process so they are not entering shelter. And when they do get into shelter, if they get a voucher, they have education and training opportunities to be more self-sufficient. So holistically, we looked at every aspect of it and that is how we arrived at these figures. (03:56:56) Thank you. I am going to make a statement instead of a question, and to the extent the chair will allow — I think it is fair to say that settlement negotiations around the STEPS expansion need there to be a number in the budget this year in this negotiation. So I am hoping that with the Comptroller and the Council's more rosy projections for revenue this year, and with these savings that are being identified — and maybe more savings that are being identified — that we really get there in terms of being able to expand vouchers for families that need it. I think we can do so much more. Just on my question before: I do want to make sure that we get on the same page that permanent housing is cheaper on a per-person basis than shelter is. I believe that you and your colleagues in this administration want to focus on permanent housing. I believe that you mean that. I believe that this administration and this Council can think big together and that we can be the first administration to pivot the City from fulfilling our right-to-shelter mandate through shelter and do that instead in housing. We can be the beginning of a tidal shift. So I just really wanted to emphasize that, and thank you, Chair, for the extra time. (03:58:14) Thank you, Chair. And then we can be the catalyst for this process and make sure it happens. (03:58:18) Thank you. And thank you for your time. Usually people get tired at a certain point, but I am chair of the Hospitals Committee and an ER nurse for many years at a level one trauma center. I want to really put my support behind the trauma center we are talking about on the Rockaway Peninsula. The peninsula has needed one for a long time and I hope that we can address this. More than a hundred thousand people live on Staten Island and they only rely on one single hospital for service. We lost a police officer because of the time it took, and you know, in an emergency it is a tick-tock — every moment counts and you can be gone. We do not want that to happen. So I am hoping that you look into this very important issue. Now, coming back to my district, District 46, NYCHA has lived through a lot. When we are talking about gun violence, our youth and our kids really want to have a rec center and they have been asking for it. I played basketball in the court with them and that is all they asked me — when are we going to have a rec center? We do not have a swimming pool and I think that is a great opportunity for us to address those needs. This is prevention. As a nurse, we do preventive care — we have to prevent things from happening. So I hope that we can work together on this. I already have seed money, half a million dollars, and I am hoping that if there is anything anywhere in your budget, you can put some construction dollars to help us out to save our kids. Thank you for raising that. I am happy to talk to you more about it. You know, it is the next generation of mixed players on that basketball court. I am a mom — what can I tell you? I grew up with them and I am still playing basketball with them. So I do not want them to die and I am sure you do not want that either. You are smart people and you know prevention is better than curing. So I hope we can sit down and discuss that and find a way forward for both projects. They are very important. Thank you. (04:00:33) CM Maloney, thank you for being here. I have some questions around economic development. The economic snapshot from May 29 was generally upbeat, but net business formation was down 4,000 year over year and down 1,000 from the previous quarter, and more businesses have closed than new businesses were formed. In your assessment, what is causing the net business closure in New York? I will do a rapid fire for time: are there specific industries that are struggling more than others, and how are the administration's priorities supporting small businesses and economic growth incorporated in this budget plan? (04:01:17) Sure. Thank you for your question. Overall, I think we are clearly going to work with and have been working with the relevant agencies to drill down on the challenges related to the business community. I think that when you look at the executive budget and what we have been able to do with Small Business Services — providing support there, whether it is the BST program, the acronym we have for the services provided to small businesses — we invested in that in the preliminary plan. We also invested for Small Business Services now in terms of commercial lease assistance as we talked about. We talked about right to counsel. Obviously we are also funding their efforts on mobile food vending. So we are able to focus on small businesses at large. I think that overall we are looking at the investments that we have in the universal child care space. We are looking at affordability at large, the housing plan, the block by block housing plan, where you are talking about the creation of 30,000 construction jobs and the permanent creation of 12,700 jobs. There are a number of ways that we can support the creation of businesses within the City through our affordability agenda and our focus there. (04:02:46) Thank you. Has OMB conducted any analysis on the incentive programs that we have for business relocation — taxes like REAP — and what that has done for revenue for the City? Have you considered expanding, reforming or replacing any of those models? Do we have a sense of what businesses have been bringing revenue to the City? Just that line of questioning. (04:03:13) Yeah, absolutely. We are looking at those. I think it is important to take a fresh look, coming in. I know that many of these incentive programs have existed for many, many years and they are extended at four-year intervals, at least of late. So we need to look at the original inception and the value proposition when they were first created, what they have produced for economic development, what kinds of industries have thrived under those or which industries have not, which industries need the incentive and where across the City it makes sense. So we are looking at that. We will look at that with the Economic Development Corporation and with the Department of Finance as well. (04:04:03) And which office, if any, is in charge of reviewing savings and how we structure those tax breaks? (04:04:11) For economic development but also for housing. So on the economic development piece, obviously you know that there is a Chief Savings... (04:04:20) ...Officer. With respect to the effort to look at the tax incentives, it is cross-cutting across many different portfolios. So the Office of the First Deputy Mayor and OMB, with the respective agencies that this impacts, are all looking at these together. You could have situations as well where there is an incentive that impacts a particular industry, whether it is manufacturing et cetera. So we have to look at where other portfolios are involved and we will invite them in to be able to look at those as well and get that perspective. So it is a multitude of different parties that will come to this conversation. (04:05:03) My last question — thank you, Chair — is around the revenue driver of tourism. New York City tourism was projected to reach 76 million visitors by 2026, but the City is roughly 10 million short of that projection right now. The plan has $28 million in the current year, which is decreasing from $23 million in fiscal year 27. So why is the City decreasing support for tourism and conventions, especially in this economic environment? Can you commit to at least increasing the budget to prior years' levels? And just so we can speak to the administration's support for increasing tourism to help drive tourism revenue... Sure. So we are in receipt of the request from NYC Tourism for additional funds. We look forward to discussing that with you and the Council in the weeks ahead. Of course we want to make sure that we have more tourists coming here. Obviously a mix of federal policy and other reasons may be leading to not exceeding what previous levels have been. We have been investing — we have invested, obviously it is not a permanent thing — but with the World Cup we put more into tourism that is being used for advertising, particularly to international destinations, to make New York an attraction. We are obviously looking at more permanent investments and how we can bring tourism here on a regular basis in a way that endures to the benefit of the City because of the tax revenues. So we want more tourists to come and we will be looking at that budget request along with you. (04:06:59) The last point I will make is that cities that are much smaller than New York with far fewer hotel rooms are spending two to three times as much on their marketing budgets for tourism. So I think it is something we should definitely have more conversations about. Thank you very much. Thank you. (04:07:13) Thank you. Okay, really just a couple of quick last-round questions. So in March 2026, the administration signed a $1.8 billion contract with the City's hotel trade group for shelters over the next three years, which is a little concerning. We know hotel shelters come at a higher cost to the City compared to purpose-built shelters. Can you verify that the City entered into such a contract? If so, was this a new contract or a renewal of an existing one? (04:07:45) Sure, Chair. Let me turn it over to Patrick Stefano to address this. (04:07:49) This is a renewal of an existing contract. The term... (04:07:53) ...of the contract is such that it can be terminated, I think, with a month's notice. (04:07:57) So you are just paying for the rooms that you have and it streamlines the process when there is a shortage of rooms in the shelters. Obviously we want to get out of the hotels, but in the short term it allows us to have sites available. (04:08:11) Okay. So after the three years, is there an option for extension? If so, for how many years? (04:08:16) I do not believe there is an option for extension after this one, but we can double-check. (04:08:20) Okay. I will say that some of these were supposed to come to an end in certain areas, so if we could really look at some of these and look at the purpose-built shelters, that would be great. And was this contract competitively bid? If not, why not, and how was it prepared? (04:08:39) I would have to get back to you on that specifically. Since it is a renewal, it was a right-to-renew situation, but I am not sure of the origin of it. (04:08:44) Okay. And then also, before you renewed it, what was that process like? Did you look at whether there were any complaints or any issues with the contracts? (04:08:54) Again, because this is sort of a master agreement or an umbrella contract, it is really so that DHS can quickly get in and out of sites. It also eases the burden for the providers because they are not negotiating directly when they have to jump to a new site. So I do not know that there would be another parallel entity that could provide the service. (04:09:16) Okay. And what are you doing to reduce the use of hotel shelters in the coming years? (04:09:22) So this is part of the cost containment plan as well. Obviously we have seen the family population decrease slightly over time. We are doing a number of different things like we spoke about — front door, making sure people do not get evicted, increasing right to counsel, every aspect for families and individuals so that they do not enter the shelter system. (04:09:44) Okay. And then really quickly, with the cost containment we were just talking about, how did OMB work with DHS and how are the savings amounts calculated? (04:09:57) Sure. I mean, we — and I will kick it back to Patrick as well — but we convened really then, you know, new leadership, the new commissioners. We had really all of the players across the board in terms of the Corporation Counsel, the Deputy Mayor for Health and Human Services, and we really just took a look at what we can do across the board that was within our own control. We knew that we had a state agenda. We knew that we had things that we could not do on our own, that we needed the state to intervene. But what are the things we were able to do? Once those were identified, along with the housing team and again, Health and Human Services, Corporation Counsel, City Hall, we then started to estimate, just like we would estimate any cost containment proposal. We looked at what the trajectory would be if we made this change, using available data from the Department of Social Services for example, and then we used that data to make reasonable assumptions about what the results would be. So we are confident they are real savings, they are recurring savings. Again, the program itself, in terms of City help, is a lifeline for many New Yorkers. We think that this will strengthen it while also making some reasonable operational efficiency adjustments. (04:11:18) Are there any concerns that the strategy will slow down some of the application review processes, and do you anticipate more overhead support will be needed? (04:11:31) Though, when we have worked with the agency on this, we think that the level of administrative support, overhead, things like that, are in place. Like I said before, we did add a significant amount of funding for staffing in this plan so that they are able to hire up. Some of the IT they are putting into place should improve the process, so we are confident that it is not going to make it longer. (04:11:52) Hopefully it is the other direction, right? Okay. I think that is it actually. I just want to note that CM Brooks-Powers did mention she wants us to look at the $5 million in the budget as well as Senator Sanders' dollars towards the trauma center, and if we can get a timeline — I think she wanted it by today if possible — but if we can get a timeline on that, that would be great. I just want to thank you so much, Director Solomon, and your team, and also thank you to our Comptroller in the back for waiting so patiently, and your team as well. Thank you for giving us the extra time. We really, really, really appreciate you. Thank you. Thank you very much. Thank you. (04:12:35) Okay. I think we are ready to go now. Okay, I want to make sure I get everybody. So we are going to continue on. Good afternoon and welcome to the final day (04:19:46) Thank you, Charlie, and members of the Finance Committee and City Council. I know it has been a long day — I have been there. I promise I will keep it energetic. I am pleased to be joined today by Executive Deputy Comptroller for Financing and Economics Francesco Brindisi and Deputy Comptroller for Budget Krista Olson. I really appreciate this opportunity to share my office's assessment of the Fiscal Year 2027 Executive Budget and the financial plan for Fiscal Years 2026 through 2030. This is a time of enormous contradictions in New York City's economy and budget. On the one hand, our City's economy is strong today by most measures. On the other hand, we are now heading into a period of greater economic uncertainty than any time in recent memory. On the one hand, the stock market is near an all-time high. On the other hand, private sector job creation in the City has essentially come to a halt. On the one hand, our budget is being bolstered by a significant increase in tax revenue. On the other hand, we face extremely large out-year deficits. How can all those things be true at once? I will attempt to square these contradictions in my testimony. I will also assess the extent to which the Executive Budget addresses our most pressing fiscal challenges, and I will suggest measures we can and should take now to prepare us for the uncertainty ahead. First, the state of our economy. Wall Street has just continued to show record strength. This has helped power our tax collections, which are 6% over last year. My office was thus able to revise our tax forecast upward by $927 million in Fiscal Year 2027 since the preliminary budget. After the blowout first quarter, Wall Street's profits in calendar year 2026 are now projected at $54 billion, below last year's record $65 billion, but still quite high by historical standards. Our jobs picture is more complicated. We are in what some are calling a low-hire, low-fire economy. Thanks to the relatively low pace of layoffs, the employment-population ratio in New York City is actually at an all-time high. But due to limited hiring, the private sector here, excluding educational and health services, has shed nearly 6,000 jobs so far in 2026. Inflation in New York City is rising at a worrying pace, hitting 4.6% year over year, the steepest in three years. Gas is up 34%, food up 5%, electricity in the Northeast region up 12%, all putting an even greater affordability burden on New Yorkers who are struggling. Wage growth here has been strong, but here again there are two stories. The highest-paid industries, where workers make an average of $225,000 annually, saw wages grow by 5.7% over the past year. For the two-thirds of New York City private sector workers in lower-paying jobs, real wages have declined. What does all this mean for our budget? I am relieved that today we are reviewing an Executive Budget which no longer calls for a property tax increase and no longer drains our rainy day fund. I am also pleased that after years of uncertainty, the plan baselines funding for a variety of important programs. This includes $269 million baseline for Fiscal Year 2027 for technology, the Learning to Work program, support for all library subsidies and foster care contracts, as well as an additional $25 million for Fair Fares. How is it that, given the dire warnings about our budget gap that I and others issued, we have been able to make so much progress in recent months? By far the biggest driver is the surge in City revenues, both collected and forecasted, which totaled nearly $7 billion since the preliminary plan. We reached a much-needed increase in funding from Albany, which we are grateful to the Governor and Legislature for providing. The Mayor, to his credit, has committed to a number of efficiencies and savings measures. But all this was not enough to fully close the gap. The budget is in fact balanced with a great deal of temporary fixes. The plan relies on a slew of one-time measures and short-term savings, which altogether total $6.1 billion in Fiscal Year 2027. These are measures which, by definition, will not be available next year. They include the re-amortization of the unfunded pension liability, accounting adjustments to prior year accrued expenses, in addition to the $500 million already budgeted in the preliminary budget, nearly one billion from the more gradual timeline to achieve the class size mandate, and from the clawback of H+H pension re-amortization savings, $200 million, and one-time lower subsidy to the MTA, in addition to the $500 million already included in the preliminary budget. Beyond the one-time measures, the Executive Budget plan also dramatically draws down prepayment of next year's expenses from Fiscal Year 2025 — roughly $1 billion in Fiscal Year 2026, a 72% decline year over year, the largest single drop since 2002, right after the 9/11 attacks. Taking the reduced prepayment and the re-estimate of prior year expenses together means that we are spending more than we are bringing in in this fiscal year, continuing a worrisome trend. Next year, the general reserve stands at just $100 million and we are already seeing reductions in prior year expenses, setting a new precedent for using these types of measures even before the start of the fiscal year. I also have to note that some of the savings in the plan are really just targets at this point. The plan still carries roughly $600 million in unidentified efficiencies from various agencies, plus over four years, three new cost containment targets — City shelters, and dealing with special education due process cases — all still lacking implementation plans. In plain English, this all means that we are kicking a very big can into next year. Just how big is that can? The Executive Budget projects a gap of no less than $7.1 billion in Fiscal Year 2028 and rising steadily thereafter. My office, of course, runs our own calculations about out-year gaps. When we plug in our tax forecast and our estimates of under-budgeted costs and unmet program needs, including overtime and child care vouchers, the Fiscal Year 2028 gap widens even further to a whopping $8.8 billion. We will face that gap without the option of the many one-shot measures that we have used up this year. We will not be able to re-amortize our pension again. We are unlikely to be able to further delay class size implementation, et cetera, et cetera. And all of this is predicated on a strong economy. Our baseline forecast does not assume a recession. It does not assume an AI-driven labor dislocation or the popping of an AI investment bubble — outcomes which, according to our recently released analysis, could lower revenues relative to baseline by between $9 billion and $14 billion over the period of the financial plan. This plan assumes continued strength in the securities (04:27:59) industry, in the pool of bonus payments, and the volatile foundations of our personal and business income tax collections. The City's bottom line in Fiscal Year 2027 depends, in a real sense, on the bull market continuing for another year. Any of those assumptions can break. If we do hit turbulence ahead, our reserves are nowhere near adequate. The City will finish this year with just $2 billion in the Revenue Stabilization Fund, also known as the rainy day fund. This leaves us with an extremely thin financial cushion relative to the scale of our budget. Even if you count the funds in our Retiree Health Benefit Trust — which I will remind you is an offset to roughly $100 billion in long-term liabilities in health care for retirees, though it has been used as a de facto rainy day reserve — we are still far below the amount we need to weather a typical recession. Among the 10 largest cities in the nation, our reserves relative to revenue rank us ninth, ahead only of Chicago. Looming over all of this, our credit rating agencies — Moody's, Fitch and S&P — sent us a warning sign when they lowered the outlook for the City's credit from stable to negative. I do not expect any immediate further actions from them, but the risk of a downgrade in the months ahead remains. The structural gap, the low level of reserves and the repeated reliance on one-shot measures all increase the risk of future credit rating downgrades. We should do everything we can to avoid this. One critical step we can take is to establish formal rules for our rainy day fund. I laid out a plan to establish a target balance for the fund of 16% of tax revenues, with a 10% floor, a deposit formula when revenues exceed trend, and clear, narrow criteria for withdrawals. In other words, rules that require we put money in when times are good and only take money out when times are tough. I will be proposing a Charter amendment to establish these rules in the coming days and hope you will join me in this effort. If we were to adhere to that formula for a rainy day fund this year — a year in which the economy is strong and tax revenues are up significantly — we would be adding $854 million to the fund, not leaving it flat as the current plan does. I urge you to find ways to add to the rainy day fund as you work to finalize the budget. On the priorities and initiatives in the final budget as well: you should — I fought for many of these investments when I was in the Council. My ask is that you avoid adding even more one-time shots to the budget as you find ways to offset the additional expenses you are fighting for. New York City has many strengths to draw on as we navigate these challenges. Our economy is strong, our workforce is supremely talented, our tax base is the envy of other cities. Yes, we face real economic uncertainty ahead. Yes, we face a structural imbalance in our budget. But we have all the raw ingredients we need to solve this and we still have time. Let us act decisively. Let us seize this moment. Thank you and I look forward to your (04:31:32) questions. Great, thank you. We have also been joined by CM Maloney. Okay, (04:31:36) so really quickly, I just have a few questions on class size compliance. Do you agree with the administration's $122 million estimate to meet 70% class size compliance next year? So we estimate that (04:31:54) ultimately this will cost us a billion a year on the expense side by 2030. I think at that point they have it in there for $800 million, so we do see a shortfall at that point. For Fiscal Year 2027, I also believe we have a slightly higher estimate. The (04:32:08) ... I am sorry, but what is the billion for 100%? (04:32:10) I believe that we peak at a billion for 2030. Correct. Right? That is right. (04:32:15) We assume it is going to be what they originally said, of a billion dollars in 2030. Got it. Okay. For Fiscal Year (04:32:22) 2027, the $122 million should be sufficient to hire the thousand teachers that they have said they need, but we are waiting for their class size report that comes out later this month. (04:32:32) Okay, to confirm. (04:32:35) Do you have an estimate for the cost of the proposed differential payments to teachers in exempted classes? (04:32:41) I do not think we have an estimate because we are waiting for the class size update, which I think could happen any day — it is supposed to come in. But I think it would be on the order of high single-digit millions. Am I in the right range? For the differential, we calculated just based on those exempted classes last year in the current year and found it to be about $25 million, but again, as the Comptroller said, we are waiting for the (04:33:08) update from this report and the number of exempted classes going forward. Okay, great. (04:33:14) And with an extended timeline, do you have a new estimate on the cost to meet 100% compliance? (04:33:19) That is the $1.03 billion number. Yeah. Okay. That will be a billion a year. By the way, the capital costs as well, right? Because we have to build out for some schools. (04:33:30) The administration originally projected that as an $18 billion capital expense. Now I believe they offered an update saying they found some more efficient use of space that would run at about $14 billion. We have nothing like that currently in the capital plan. I believe it is about a billion and a half in there, so by any measure on the capital side we are going to need to put more money in. Okay. And then moving on to AI — I know that your office just released a report on AI and New York City's fiscal future. The issues related to AI have multiplied over the last few years as its capability has increased dramatically. As with many new technologies, government is often years behind in learning how to deal with new advances. So what lessons should we have learned from the past in how we deal with this industry? Can you summarize the scenarios presented in your report and how they affect the City's revenues specifically? (04:34:26) What a good way to frame the question, Chair. The City has been reshaped again and again by technology — from steam to electricity to railroads, to automobiles, to container shipping, to the internet. It rebuilt the physical structure of the City and in some ways we met that well. Sometimes we managed that well and sometimes we failed to. We ignored the arrival of container shipping and we no longer have major ports in New York City. We lost that to other places who adapted quicker, just to give you one example. I think the internet on the whole has probably made us stronger as a global financial hub and hub for knowledge work. I think AI is going to be by far the biggest transformation yet and I think we should assume it will change the City and change the economy in powerful ways — potentially very good and also potentially very bad. It is hard to exactly predict where we are headed because the experts themselves do not agree. The technologists do not agree with the economists and the economists do not agree with each other. So we decided to embrace that uncertainty and we developed a forecast that included five different scenarios and we ascribed a percentage likelihood to each. They range from very positive, where we could see an uptick in the market and a net increase in jobs, all the way to very negative scenarios, which include potentially a rapid loss of a quarter of a million jobs in a matter of months. We also forecast that these could potentially take a hit to the budget — for example, if the bubble pops, we estimated between 9 and 14 billion, just talking about the budget hit. So I think we need to prepare for these eventualities, both good and bad. How do you prepare for uncertainty ahead? How does a family prepare? How does a small business prepare? How does the government prepare? We need to build up our reserves and savings, as a family would say. We have (04:36:32) such a small amount relative to the scale of the budget. So we believe this should add to our urgency of building the reserves now, so that if we do see the bubble pop we can avoid cutting services, and if we do see people unemployed we can help support them. That is what we called for in our analysis. So that is the perfect segue to my next question, which is about the rainy day funds. (04:36:54) So the administration's preliminary plan included a drawdown of the City's rainy day fund, and the City Council and Comptroller were in agreement that such an action would be detrimental to the City's fiscal stability. So the new Charter Commission created by Mayor Mamdani is considering proposals that would provide more guidance. I know you have spoken about this, but what rules would you say for the usage of the rainy day fund and do you have any recommendations as to how deposits into the reserve fund should be managed? (04:37:26) Big picture here. We are coming off a very long run of a successful economy in New York. Other than COVID, essentially going back to the financial crisis, we have had a 16-year bull market and we basically have nothing to show for it in our reserves. We have a rainy day fund of $2.125 billion, so it is just a crying shame that we have had all those good years go by and we did not save enough. The first thing that the formula we are calling for would do is set targets, so that when you have a good year in the economy, when tax revenue is growing, you are required to put more money in or deposit into the fund. We call for 20% of what is over 3% growth to go into the fund, plus a look-back on average over the last six years — 40% from the look-back — so that we are putting money in every year. To give you a sense of the scale, that would mean this year, when the economy is at the moment very strong, we would have to put about $830 million, give or take a little. But there also needs to be rules about when you can take out, because we were about to take out now when the economy is good, which is not the purpose of a rainy day fund. This is not a rainy day from an economic perspective — the sun is shining. So the conditions should be either a recession, which is a little bit hard to measure in real time but we defined it as consecutive quarters of job loss, or some sort of catastrophe — a natural disaster, a pandemic God forbid, a massive terrorist attack. What we called for in our report is we should add major AI disruption to the list, and that probably requires a change to the state legislation. How big do we want it to be? We believe it should be 16% of our annual tax revenue. That is not an arbitrary number. That is the amount that we would need to cover in a normal recession so we did not have to cut services. That is our goal — if we enter a recession we want to protect services. If we have a reserve fund of 16% of our tax receipts that would allow us to avoid cuts, and I think that is about 12 billion now... 13 billion, 13 and a half by today's budget. (04:39:53) Got it. Okay. (04:39:56) And then in terms of the floor, the minimum amount that the City should keep — would 10% be the floor? Again, we are at $2 billion in the rainy day fund, which is I do not know, 1.7% or something. So we are way below the target. 10% would give us essentially the first half of the recession, the first two years, so it would give us some time to cushion the blow. (04:40:19) Okay. Moving on — on April 15th, when the pied-à-terre tax was announced by the Governor and Mayor, the claim was this would raise $500 million for the City each year starting in fiscal year 2027. I think your office has put out a report finding that the revenues could actually be substantially less than that. So the exact contours are now public based on the legislation passed as part of the final state budget. Now that we have the true outline of the new tax, can you tell us how much money you think it will raise next (04:40:53) year? So, Madam Chair, this is a moving target because you can define the rates but we do not know yet how many people will seek exemptions, how many people will contest their assessment, how many people will change their behavior — maybe they have a relative move into their home so that they are no longer considered a pied-à-terre. Certainly if we look at other cities that have implemented this, that has happened, which is why when the initial proposal was released we gave a slightly lower estimate for what we thought would come in, because we assumed some of these factors. But once the final language was printed in the Bill, we can say with a little more certainty that we are actually quite confident that we will at least meet our baseline of $500 million, and that potentially it could be much more than that. If you assume no behavior change we would be at a billion, which we do not expect. But we are confident enough — and you heard me express some doubts about some revenue in the budget — we are actually not putting uncertainty on that. We think we are pretty confident that even with the change in behavior and people contesting, we will still hit the $500 million target. (04:42:03) Okay. And I know some have raised concerns — to your point about behavior changes — that this tax could negatively impact the real estate market and property values. So how much of this are you concerned with, or what sort of (04:42:15) thoughts do you have on that? Look, we do not know yet and we are going to have to watch what happens to sale prices and the number of sales. I think it is logical to assume that you could have an impact on sale price if you have an additional cost — calling it a surcharge now, technically not a tax — but we really will not know yet and that could have an economic impact. We certainly will be watching for that in the Comptroller's office. (04:42:45) Okay. Moving on to the school budgets and the hold harmless. So I know on Sunday the DOE Chancellor announced that deal — we would hold initial school budget allocations harmless for the 2026-27 school year. The City has been holding initial school budgets harmless in recent years as enrollment has declined citywide. So I wanted to know if your office has an estimated cost for holding initial school budgets harmless and will this funding be added at (04:43:10) adoption? Yes. To remind people of the big picture here — we have had a very large drop in enrollment in New York City public schools. We are down probably a quarter of a million students and the budget has gone up every year. Part of the reason for that is a policy that was put in place during the pandemic for understandable reasons at the time — that even if an individual school lost enrollment you did not want to cut the budget. This was COVID. There was so much stress on the system that we just wanted to protect schools. But we are now five or six years after that and some of these schools are pretty far off their pre-pandemic enrollment. You have schools that are 10 or 20 or 30 or 40 or even 50% off. The mismatch is getting quite big and what it means is it is a lot of money per kid — a heavily enrolled school that is overcrowded, which you might think would want more help, is actually getting less per child. So I believe that we are going to eventually have to resolve this and frankly do it pretty soon because of all the strains on our budget. Not in a way that would shock these schools from one day to the next — you do not want them to endure catastrophic cuts. This could be phased in in a fair way that is predictable. You want to protect services to kids first and foremost. But we believe that today it is about a $260 million difference, again because we are waiting for this all-important assessment of enrollment that is coming (04:44:41) soon. We do not actually have an exact figure for you. And then to your point about phasing it in — what do you think would be a fiscally responsible timeline to phase that in? I am not sure I would get something specific. I would be happy with almost any plan to phase it in. Right now we are just on this indefinite path of allowing greater and greater differences between budget and enrollment, and I would be comfortable with any plan that just got people on track. I also have to say, Madam Chair, that we now have 200 schools with under 200 kids in their schools in such a big city with 8 million plus residents. That also carries a big budget cost because obviously you have a lot of fixed costs for a school. Some of these schools are so small it is not even good for kids — they cannot even field a sports team. So I do think that as part of our effort to find savings we should look at combining more schools. It is tough and it has to be done sensitively. Parents need to be part of the process. But this too is weighing on the system as we have this mismatch between a growing budget and declining enrollment. (04:45:59) Okay, great. And then as we know the due process cases cost quite a bit. Have you conducted an analysis of the due process case cost containment savings item included in the executive plan and the DOE's budget? If so, do you believe the $149 million in savings in fiscal year 2027 is realistic? (04:46:18) Well, first, big picture — we have had such a rapid rise in this line. In 2019 we were spending $500 million on so-called Carter cases. It is going to hit one and a half billion — that is a tripling in six or seven years. You do not really see that in government very often. It has got to be contained and I do applaud the Mayor for articulating a plan to do that. It has not really been defined yet. I think the vision is that we will offer more services in schools so that kids can receive what they need in the public schools and not have to go to private schools. That is definitely a good strategy which I totally support. But it is a little bit hard to exactly pin down the savings because you have to account for additional money we spend if we need to spend on additional services, and it could be that we spend money on services today and do not get the savings right away. So it is a little hard for us to assess this exactly, though again I think the Mayor is absolutely right that we need more services for children with learning differences in the public schools so they do not need to go to the private system. (04:47:31) Okay, perfect. And then before I hand it off — I know the Speaker wanted to be here but could not come back — so I just wanted to ask a few questions on her behalf. Okay, so the fiscal year 2028 gap in your budget analysis of the preliminary budget would have been assuming that the property tax increase did not happen, which thankfully it did not. So now the updated executive analysis shows a gap in fiscal year 2028. That is a $5 billion change — a large change — even if you account for the pension amortization savings of about that amount in that year. So how did your outlook change and why did the delta change so much? And then with such large variances in the forecast, how can we be sure that it does not change so drastically, and what measures are you taking to look at that? (04:48:25) Okay, very good question. Very important question. You know, Madam Chair, forecasting turns out to be a little challenging because it is hard to predict the future. But we had no choice but to do our best and we came out with a forecast of just over $88 billion. Give me the exact number, please — what is our total tax revenue forecast for next year? For fiscal year 2027. So we have that as revenue for the coming year. That is a little lower than the Mayor's projection, so we are just a tad bit more cautious. Now there are other fiscal monitors that have also given assessments, including the Independent Budget Office, which is about another half billion below us. There is the State Comptroller, which I think was right about where the Mayor was, and then there is the Financial Control Board, which is about where we were. So we are clustered within about a billion of each other. The Mayor's office is the most optimistic. The Council came out with its forecast today, which I am excited to review. All are about a billion and a half above the Mayor's projection. Any of us could be right. (04:50:00) I hope the highest possible (04:50:02) projection is right. It really depends on what you think will happen on Wall Street — that is kind of the core assumption. I mentioned that Wall Street had its best year on record, the most profitable year on record, the biggest bonus season on record. What we assumed is that next year Wall Street has a good year but a little bit off that record. That is how we played it. It is possible that we break the record again and I hope we do. But as you heard in my testimony, I see some reasons to be cautious out there. I will also add that while we really commend the Mayor for ending this era of drastic under-budgeting of major expense lines that we knew we were going to incur, we still do have a difference of opinion on a few budget lines. They are nowhere near as drastic as prior years. But if you consider both that we are slightly less optimistic on the revenue and that we have some slightly higher numbers on the expenses, we go up from — I think the Mayor had it at about $7.1 billion for the fiscal year 2028 out-year gap — we have it at about... and that explains why we are just a little more concerned about the scale of the gap. (04:51:20) Okay. And then I think your office's forecast assumes that revenue growth will fall from a 5.5% growth rate this year to just 2.2% in fiscal year 2028, which is around the rate of inflation if not below. So what leads you to believe that tax revenue growth will slow down so much and are you projecting a recession? (04:51:45) We are not projecting a recession. In terms of tax growth, again, we are not assuming a repeat of the record profits on Wall Street from the past year. Again, that could be achieved. But if the bubble bursts there will be an impact. If the impact of the war and oil prices and higher interest rates are felt in the City it could also lead to a slowdown. I think most economists do put the chance of a recession in 2027 at about 35%, and some that I trust would probably say closer to 40%. So for all those reasons we were a little more cautious. (04:52:27) But I will ask the Deputy Comptroller if he would like to weigh in on the growth versus inflation. Well, in terms of inflation going forward, we see that historically after years of steep growth, tax revenues tend to moderate. Overall, our growth rate is 3.3% over the forecast horizon. So there can be fluctuations year to year but essentially we are on a slightly less optimistic growth trajectory than the Council, which is at 4.3%. And as to the gap — it was the property tax and then there is the amortization, and that total is about five and a half billion, which is about how our fiscal year 2028 gap sorts out. So most of it is explained by those two factors. Okay. (04:53:35) And just — sorry — your last question. OMB has had a tradition of conservative budgeting and based on your analysis it appears that your office has a more conservative outlook on the City's budget. Why is that and how much upside risk is there that the budget gaps will not be as big as you say? Well, we are talking about very large numbers and we are within less than 1% of the OMB projection. As I said, we are (04:54:02) About 500 million below on an $88 billion base, and we have reasons to be cautious. Either of us could be right. There are benefits to being cautious, though, right? Because if the cautious estimate is wrong, then you end up with a little more cash at the end of the year that you can put into vital programs or put into the reserves. If the more aggressive estimate is wrong, then at the end of the year you are in a hole and then you have to make very tough decisions. So this is a balancing act and we are doing our best to get it right. Look, I will just say that as long as I have been in government we have had a very strong economy. I have been in government 12 years, with the exception of COVID, where we had so much federal money come in that from a City budget perspective we did not really endure the pain. I think this year is different. The economy today is strong. I do believe that, but we are under more fiscal strain than we have been at any time in my 12 years in government and I personally see more economic uncertainty on the horizon than at any time in recent memory. So for all those reasons we are landing on the slightly more cautious side. (04:55:18) No, I totally get it. I will say I have got to give a special shoutout to our finance team and our economists because I know that the Mayor's Office, your office as well as the Council, we have different sorts of projections than we usually have, but I am proud to say that they have been pretty good. So that is great. Hopefully we will see what happens, obviously, but please take a look at the report and let us know. Would love to have more conversations with you about that. OK, so I am going to pass it off to my colleague so they can go. First up we have our Deputy Speaker, followed by our Majority Whip. Hi. (04:55:58) Nice to see you again. So I actually passed the Bill that required the City to establish a task force to review and report on impact. I do not know the status. I literally have texted our compliance division to follow up because I have been asking them for the status of this, because it would essentially task the City to create a task force to really look into a whole wide range of things — workforce impacts, all of those things. How is it going to impact the... (04:56:33) City. So your report warns that it would significantly impact employment, wages and City tax revenues. So what specific steps do you think we should take to ensure that AI-driven productivity gains translate into broadly shared economic benefits rather than deeper inequality? Thank you for leading and issuing that legislation. It is an important report. We would love to help make sure that the task force comes together and would love to be part of it. (04:57:07) I appreciate that. I should say you should be a part of it. I do not know if I have to check to see if the Bill requires, you know, these task forces — sometimes we are required to appoint someone citywide — so we will have to see. Absolutely. (04:57:22) Look, I am really worried about the economic disruption. I am worried about the job disruption. The Chair asked about historical perspective and the City lost a million jobs in the... it happened over 40 years, though. As painful as it was, there was more time to adapt. We do not know precisely where we are headed, but we could lose jobs much more quickly and we need to be there to support people for that. It is hard as a City because so much of the leadership we need has to come from the national government, and we are not getting that right now. But I would absolutely support plans to give the American people ownership stakes in some of the companies that stand to make millions of dollars from this technology. I support ways to ensure that no one is left behind right now, and we are potentially going to need new economic models to do that. I have asked what can we do as a City. We have some ability to support people who lose their jobs, maybe by some limited income assistance, perhaps by retraining. We have none of that in the budget right now and when I see that we are already running a gap and we have very little money in our reserves, if this hits in six months or 18 months, I am worried that we are not going to be ready to respond quickly enough. So in the report what I called for was adding economic disruption, in addition to natural disasters and other things, to the list of uses for reserves, so that if we have a hundred thousand people unemployed we can help support them economically, we can help retrain them and so (04:59:07) much more. Yes, I love that response. If my memory serves me correctly, DeBlasio had testified and said that they are somewhat working on this. It was not clear. So I am still very interested in what internal assessments they are doing to make a determination — maybe some City employees need to be reskilled or upskilled to maintain their jobs — and that just has not been clear to me. So your report also suggests that the City, as you mentioned, should roughly double its reserves. What objective measures or triggers should we look at to determine when accumulating additional reserves becomes less valuable than investing those dollars into various things that we care about, like workforce development or digital literacy or other interventions that could reduce related economic and work disruption in the first place? (05:00:09) Yeah, it is a fair question and I think, considering the uncertainty, building the reserves really is not a choice. That is why I want an actual formula there. But I am all in for rethinking our retraining in the City, including from K to 12 and CUNY, where we are giving people very limited education in the kind of emerging AI skills that employers are asking for. I talk to employers all the time. It is part of my job. They are not so much telling me yet that they are slowing down hiring, although I feel that beginning and I can talk about that from anecdotal evidence, but they are saying to me they are hiring people with skills now. I look at what we are doing in K to 12 and what we are doing at CUNY and I feel like we are way behind in pivoting the curriculum. So I think we need to move now, quickly, and I would love to work with you on that. (05:01:06) Okay. Just a couple more quick questions. As you know, New York City agencies are now required to develop and implement racial equity plans that are supposed to be tied to the budget. Yet one of the persistent challenges is ensuring that those plans are reflected in the actual budget decisions and resource allocation. As the City's chief fiscal watchdog, what role do you believe your office should play in measuring whether agency spending aligns with their racial equity commitments? Are there additional tools, reporting requirements or accountability mechanisms you believe are needed to ensure these plans result in tangible outcomes rather than simply compliance (05:01:47) exercises? I mean, you have been leading on this, Deputy. I am really grateful for that. The City has a very, very long and shameful history of underinvesting in communities in need, in communities of color. This is well documented and we do not want that to happen on our watch. So we do need to ask very serious questions about where and how our money is spent and who is benefiting, and is there equity — geographic equity, racial equity and more — and I would love for my office to be a resource here. We have talked some about this. I would love to find ways to help make sure that this information is accounted for and public so we can do the right thing here. Okay, last, very final question, just about Southeast Queens flooding. So one... (05:02:39) of the things — and I have not really spoken to your office about this, I should have added that to my list of things that I spoke to you about when we met — is the claims process. I know it is tricky because it involves legal documents, but I just wanted to know if your office has done anything to advance on making sure communities who are seeking to file complaints for flooding-related issues have the proper resources to do (05:03:06) that, and if you think that the City's capital investment adequately prioritizes those communities. Yes, this is... not everyone knows that our office manages claims, and you obviously know if you live in Southeast Queens. This is something I really want to partner with City Council Members on because technically my office is not allowed to help people fill out their claims because we are adjudicating them, so it would be a conflict. What we want to do is empower you and every Council Member to help provide that assistance in your offices. We are actually launching an effort now to go to every Council Member. My wonderful team, led by Deputy Comptroller Alan, is already working on this. We really would like to partner with the whole body so that you know how this works, you can help educate people and also give us feedback if we can make the process easier — that we can do for sure. So I really want to work with you on this. (05:04:09) Awesome. Thank you. Sorry, I do not know if I said we have been joined by CM Maloney as well. So next we have our Whip, followed by CM Nurse. Thank you, Chair. (05:04:20) Good afternoon. Hi, Council Member. Oh yeah. So I have a few questions. The Comptroller's Office regularly identifies risks and inefficiencies within City spending through audits and oversight reports. Based on your office's recent findings, which agencies or areas of City government present the greatest concerns regarding fiscal accountability or operational inefficiency? What areas of City government present the greatest concerns regarding fiscal accountability or operational (05:05:00) inefficiency? Okay. My office oversees the contracting process, as you know. We review and certify contracts. There is a special case at the Department of Education, which has authority for contracts under $25,000 that do not have to come to us for registration — they can self-register there — and that creates a little bit of a blind spot for us. They do eventually show up in Passport. I say "eventually" because 95% of the contracts start before they are registered, so we do not often have real-time eyes on them. A report came out from the DOI that there are some challenges there. So we are looking into this. There are a year's worth of these small contracts being used. I was surprised when I heard that number. But again, these are under $25,000. There is not as much control and so this is something we are looking at. (05:06:09) Well, I just ran a not-for-profit, so I completely understand that. But thank you for that. The City's capital process continues to face delays in moving projects from funding to actual construction. From the Comptroller's perspective, what reforms are most urgently needed to improve capital project delivery and ensure neighborhoods with long-standing needs are not continually left behind? (05:06:35) It is an absolute scandal that it costs $5 million on average to build a Parks bathroom, that it costs $200 million to install elevators and ramps in a subway station. This is limiting our City's ability to thrive and to build for the future. There are generations of policies which have accumulated to make this happen. It is all of them well-intentioned — it is concerns about environmental protections, about community input, about safety, about design criteria, et cetera. The accumulation is costs that are just out of control and we have got to rein it in. We made a big step forward thanks to the Governor and the State Legislature on reining in SEQRA in the budget that was just passed. That is going to help expedite review, but there are just a myriad of other obstacles that have to be cleared away that I would love to partner with you on. We could do an entire hearing on this topic, but it is an urgent priority. (05:07:44) Thank you so much. Thank you, Chair. Great. CM Narcisse, followed by... (05:07:48) Thank you, and thank you to your team for being here to answer our questions. Thank you, Chair. On the formal formula for our rainy day fund, I will join you, definitely. Do not forget to add — because with the crackdown and all the things affecting us in New York City, sometimes we have to take money out, especially as the Black and Brown community has been suffering and when we need to address that. I will say we can add that because the epidemic is a big deal too. The homeless services budget is now higher than at the peak of the migrant crisis. As the office that audits City contracts, are we getting value for what we pay when we pay the shelter providers? (05:08:42) That is when you noted the budget claws back Health and Hospitals' share of the pension savings. I have to ask, what does that do to a system already facing hundreds of millions in federal cuts? The general reserves next year sit at $100 million. Is that adequate for a big city like New York City? Okay, all really good questions. On the homeless services budget, it has gone up a lot, first because we have more people in the shelter system than ever. We are at over 90,000, I believe, at this point, or close to it — maybe high 80s a night — and that has helped increase the budget. But also we are spending more per person now. That is in part because we have been relying on hotels as a kind of emergency stopgap because we do not have enough purpose-built shelters, and hotels are no one's preferred solution. They are also very expensive. This is part of the cost. But maybe implicit to your question is, I do think we need to scrutinize the contracts with providers and make sure that we have performance metrics and that we are getting good value for our money. This is something that I would like us to focus on and we would love for you to work on as well. You asked a question about Health and Hospitals. There are some savings in here related to the fact that the pension re-amortization also applies to Health and Hospitals. To use a technical term, they also pay into the pension system because they have workers there who are part of it. Essentially the idea is that the money that they would be saving from the re-amortization would be passed back to the City. Is that an accurate statement? (05:10:40) Yes, it is the amount that the City is assuming in the plan for the first two years, fiscal year 26 and 27, and it equals Health and Hospitals' pension savings over the course of the life of the plan. (05:10:55) And just very quickly on your question about $100 million — this is the in-year reserve. This is not the long-term rainy day fund. We hope we never use it, right. I hope the rainy day fund sits there for a long time and we have no more pandemics. But this in-year reserve could be used any day and goes up and down a lot. We are going to start the year with only $100 million. That is an unprecedented low number and so the answer to your question is no, I do not think that is (05:11:22) adequate. Thank you. (05:11:26) Okay, great. CM Morano, followed by... (05:11:28) Brewer. Thank you, Jim. Thank you, Levine. Good to see you, Carson. (05:11:34) Thank you. My question goes back to the water rental payments. The City continues to pour hundreds of millions of dollars out of the water system for general fund use, even though the original debt rationale ended years ago. Will you audit the water rental payment and publicly (05:11:58) show how those funds have been used? I think it is a very important topic and I would love to work with you on it. Thank you. So how about we meet on this? (05:12:10) Absolutely. We will put a good plan together. Absolutely. Thank you, Council Member. Do I have time for another question? Now, you praised parts of the executive budget but also noted it still depends on one-shots and does not solve the structural gap. What single assumption in this budget worries you the most — child care, City FHEPS revenue or something else? Ah, look. You had a robust conversation on City FHEPS, right? (05:12:41) And I want to say this is an incredibly important program. I am very proud that New York City has essentially the only municipal Section 8 in the country. There are something like 70,000 families being supported on it. I do not want to cut that program, but it is growing at a very, very fast pace, Council Member, and it is not currently accounted for in the budget. That is not sustainable. So I think by simply bending the curve on the growth we can both protect families who need it but also get a handle on the budget impact. So I am going to identify that as a fast-growing budget area that we need to get a fix on. It needs to be properly budgeted and that is probably going to have to involve some restraints on the pace of growth, because right now it is (05:13:32) growing exponentially. Yes, it is. There is no end in sight. Thank you. Thank you. Thank you. (05:13:39) Great. CM Brewer, followed by Morano. (05:13:43) Thank you. So I just was wondering where you think we are with the retirees' health care, a very complicated topic. Secondly, I know when you were in the Council we all fought to get rid of the commercial rent tax in Manhattan. I did not know if you thought, given the good news about the revenue, that might be something to consider for those small businesses. And then also, I just wanted to get updated on where we are with the credit ratings. One thing about the schools — I just want to say, knowing the schools as well as you do, the students need more help than they have in the past. So even though the number has gone down, each student has a whole myriad of challenges. So I do not think it is apples to apples. You got X number of students and you only need X dollars — I think you need more dollars in a sense because every child needs more support. So I just want to throw that out. (05:14:32) So look, I am going to answer the retiree health question from the perspective of the retirees themselves, which I know is what you care about, CM. First of all, the Advantage plan is gone and not coming back. I get asked about it constantly still, so I want to be clear on that. We still have some work to do to achieve some of the savings that we had hoped for in previous agreements, but I want to be clear that that does not put the health care of individual retirees in jeopardy. This is a problem for us to work out to make sure our budget squares, but that is not a problem for retirees. On the commercial rent tax, it is true I have felt it is unfair that it is only applied to one part of the City — Manhattan, south of 96th Street — and it is hard enough to run a small business right now. I have generally focused on lifting the trigger point so that it is now at $500,000. I would probably be in favor of lifting it further. I am a little more cautious given our broader fiscal situation, CMs. So I would like a chance to think about the question of completely abolishing it, but I would certainly support finding ways to exempt more small businesses. (05:15:56) And then on credit ratings... sorry, credit ratings? Yes. (05:15:59) Look, we got a warning shot from three of the four agencies — from Moody's, from Fitch and from S&P — and they told us, by lowering their outlook, that there is a chance they would give us a downgrade. It is not a foregone conclusion. We could still avoid it, but I think that is still an ongoing threat that in the months ahead, and through the fall, particularly as we close out the annual budget, we need to be very wary of. I think the good news we have had in Wall Street earnings helps our standing with the credit agencies. Some of the additional money that we got from the State will help our standing. The fact that the current budget plan does not draw down the rainy day fund will also improve our standing. So we are in a better place for those reasons, but we should still be cautious. I think it is still hanging over us and we should still do everything we can in the months ahead to avoid the risk of a downgrade. (05:17:02) Okay. And just finally on housing — much discussion. You have said that you are going to use some of the pension money to assist in the effort. I did not know where you are with that, and just generally on the allocation for housing, how are you feeling? Are we going in the right direction or... (05:17:16) Look, I think we have done so much good work on rezoning, City of Yes and the related amendments. There is still work to do there. I know the Council is all over that. But to me, the big fight right now is the financing, with vacant properties all over the City where the land is ready to go, the zoning is set, the developer is set, it is all good — they are just waiting for financing. You see it probably in your district, lots that are waiting one year, two years, three years, four years, and it is often financing. There is a wait for a low-income housing tax credit, et cetera. So we are trying to solve that. We have announced the plan to invest $4 billion of City pension funds in financing housing in New York City — deeply affordable housing, workforce housing, preservation, conversion of offices to residential. This is going to impact tens of thousands of units and this is going to be good for the pension fund. We are not going to lower our investment criteria. We never do. We turn down deals all the time. We are going to find that win-win where we get good returns but provide the financing that would have been missing in these deals. I am very, very excited about this plan. Thank you. (05:18:24) Thank you very much. Thank you, CM. Next, CM Morano, followed by CM Maloney. Thank you, Chair. (05:18:31) Sir, for the record — Comptroller or Controller? (05:18:36) Mark is just fine, CM. But in general, if you are setting the tone for the City, I do not want to be put on the record on this because I do not want to upset one of my consistent constituencies. Fair enough, all right. (05:18:50) I will tell you when I am not under oath. OMB testified this morning that the pension re-amortization is a responsible way to smooth payments over time and improve predictability. Your testimony characterizes that same action as one of the major reasons for, as you said, kicking a very big can into next year. What specifically do you believe OMB is getting wrong? If this pension restructuring is such a concern, what would you have done instead? (05:19:23) I really appreciate the question and this is a once-in-a-lifetime opportunity here. I think there is an argument to smooth out the payment schedule from an accounting perspective. I would prefer that, given this is a once-in-a-lifetime windfall, we use it to build up reserves and not to simply plug this year's gap. That is an opinion I have expressed repeatedly. This is ultimately a decision of the trustees, where the labor unions themselves have a role. The first very small pension fund — the Education Retirement Services fund — did vote to approve last week, but this is probably only about 3% of our total assets. The big funds are still scheduled for the weeks ahead, so stay tuned for that. But again, my feeling is there is a justification for smoothing this from an accounting perspective, but I just want... (05:20:20) ...to make sure that we are also using this very unique opportunity to build our resilience for the long term. Your testimony says the City would be adding approximately $854 million to the rainy day fund if your proposed reserve policy were already in place. Given the competing demands for public safety, sanitation, education, housing, everything we have all talked to you about already and other essential services, where specifically would you find that $854 million? What spending would you reduce, defer or eliminate in order... (05:20:55) ...to make that deposit? Well, first of all, the point of having a rainy day fund is so that you do not have to cut services when the tough times hit. The impact of not having prepared is that every kind of service that you and your constituents need could be cut. I have already spoken about a few ways I think we could save money in this year's budget — by combining small schools, so you avoid having to have duplicate principals, two assistant principals and two school secretaries, et cetera. I think that ultimately benefits kids so that they have critical mass for field sports teams. I think we are going to have to look at the hold harmless structure. That alone I put at a quarter billion dollars this year. And I say with great sensitivity, I do think we can bend the curve on City shelters and save money there as well. And finally, if I may, Chair — OMB testified earlier that the administration closed what it described as a $12 billion budget challenge without raising property taxes, drawing down reserves or cutting services. Do you... (05:22:07) ...agree with that characterization, or do you believe taxpayers should understand this budget differently? (05:22:15) Well, the Mayor presented a balanced budget as the Charter requires. I think it is fair to ask what has happened in the last five months to make that possible. The most important contribution to that progress has been that Wall Street has had a very, very strong run, and so we have all revised our tax estimates up. We had a very good bonus season on Wall Street. Secondly, we got about $4 billion in additional support from Albany — credit to the Governor and State Legislature on that. Then there were some savings and efficiencies that the Mayor identified — credit to him on that. But as I mentioned, that was not enough, and that still left us with the need to use some short-term measures that are going to get us through another 12 months, but they are not going to be there for the year after. The proof of this dynamic is that the out-year gap — the FY28 gap, which we are going to start talking about in like six months — is a very big number. We are not used to seeing a number that big. To confront that, re-amortization is off the table. I do not think we are going to delay class size again. There are other things that I do not think we will count on for yet another year. I think that should give us a little bit of concern, and that is why I think we should do everything we can in this budget to solve some of the structural problems. Thank you. (05:23:41) Thank you, CM. Next we have CM Maloney, followed by CM Avilés. Thank you, Chair. (05:23:48) Thank you to the Comptroller for testifying. I completely agree with you on the risks and opportunities that are presented with the shift to AI and the need for workforce development to start early in all sectors. We all need to be getting more comfortable with these tools, including in nonprofit and government. So we have some work to do there. I also want to mention the other side of this coin, which is the role that New York City plays in the economy. New York City has not always been a day-one leader in what we can be doing to ensure that AI companies are founded in New York, grow in New York and that we reap those economic benefits. Could you speak to that? (05:24:35) Well, first of all, I am very grateful for your leadership on economic development. It is extremely helpful to have someone who knows technology in that role, and you are a very good partner for me on that. Amidst all the potential disruption on jobs that we fear might be coming from AI, there is one way that we could get a little more of the upside, which is to have some of the jobs building these tools located right here in New York City. We have had that benefit so far. We have actually gotten a fair amount of the upside so far, also because we are financing this boom. The firms that are financing the data center build-out, et cetera — acknowledging all the complications with that infrastructure — that is one reason why our budget is in a good position today. One reason why we have closed the $12 billion gap that we were worried about is because the financing of the boom has run through New York City. And I know you are well aware that we have had a very good run on the renting of office space. Commercial real estate is on a tear right now. Who saw that coming six years ago in the pandemic? One of the major drivers of that is AI firms, which are renting space at a very rapid clip — firms we know and startup firms, very large ones. So what can we do to support that? This should be the capital of applied AI — AI for health care, AI for research, for biotech, for financial services, for law. We should be the capital of that industry and we should do everything we can to grow that ecosystem. We want those jobs here. I would certainly rather the people building those tools be New Yorkers who live in a diverse city and ride the subway every morning than someone in Silicon Valley who is living in a bubble. That is my belief. I would rather that New York be the place where these new tools are built. (05:26:35) I agree with you on that and on having New Yorkers take part in the upside. I wanted to ask one quick question on the revenue side with tourism. I asked this to the Director prior, but I am concerned about the lower funding for tourism in fiscal year 2027 when we are seeing projections come in shorter than expected. Do you agree with the lower funding, and what assessment have you made at the Comptroller's Office about what the marginal impact would be of adding funding comparable to other cities in our country, in terms of increased tax revenue from tourists coming and using our businesses and our resources? (05:27:20) Thank you for fighting on this. We are way underfunding tourism. The amount we are spending is a pittance relative to peer cities. I think Las Vegas spends 10 times what the local government gives for tourism promotion, and we are behind our goals. This is a huge economic engine for New York City. We need to be out there telling the story and we are not able to do it adequately. So I absolutely support your fight to get more funding for tourism promotion, and I think you have asked for an analysis of the impact of every additional dollar. I do not know that that has been done, but it is something I would love to work with you on. (05:28:02) And the last thing I would add to that is an assessment of how all boroughs benefit from that increased investment. Look, it is unequal right now. Every tourist wants to go to Times Square — and if you are watching from home, it is so crowded you would probably be better off going to like Prospect Park or somewhere a little more open. We do want to see tourism shared more equally, also in uptown Manhattan and communities of color more broadly. Our tourism promotion can help that by uplifting the stories of the diverse communities of the City. One more reason we need more funding for tourism. Thank you. (05:28:39) Very much, and thank you. (05:28:43) Next, CM Avilés. Alexa... (05:28:47) I am not going to engage in that other conversation, but thank you so much for your testimony. I want to jump around on a couple of things. (05:28:53) I mean, interestingly enough, I was sitting next to a hedge fund individual who was really expounding the excitement around AI and I said, "So do you think kindergartners should be using AI?" and he said, "Absolutely not." It does beg a question here that I think our City should certainly lean into. But there is a growing movement of profound concern with how AI is broadly unregulated in our public school systems — one that does not acknowledge the bias of AI, the digital inequities across the City, and how some students have the tools and others do not, and how that will exacerbate inequity in our City. So I guess, just as a general matter, I think we really need to look very, very seriously at the use of AI in our public schools and develop some real guardrails, because ed tech companies are staying with our dollars and I am not sure they are helping our children more than they are harming them. So that is not my line of questioning, but I could not help but say that. In terms of City shelters, you mentioned a couple of times bending the curve, and we know that the growth has been exponential. The crisis has been exponential, and this has been as much your life's work as anyone's, right? Affordable housing — truly affordable housing. But so has the growth of shelter costs been trying to find a middle ground. Do you have a recommendation for how we can bend the curve but still continue to provide the much-needed housing to this community of folks that continues to grow every year? (05:30:54) I agree. This is an essential program and it has definitely kept families out of homelessness. I do not want any family to lose their voucher — I really do not. I do not think we need to even consider that. But with Section 8, there is an annual budget for that which the federal government sets and you cannot spend beyond that. Now, unfortunately, that can mean there is a waiting list, but the federal government can run a deficit. So I think it is very hard for the City to have a multibillion dollar program that has no budget limit. I would like to see this incorporated into the budget with a fixed price tag, and that is what I mean by putting in some guardrails on the growth. That is going to entail some tradeoffs, I get that. But to me, that would be the way to make this sustainable for the long term. I think we want a number that we can work with. It is not the big number we would love, but I think we need to get to a point where there are actual negotiations around a number. (05:32:04) In terms of the pension funds that you noted to finance projects — that sounds eerily familiar to a public bank, which we love. I was curious whether that commitment includes a commitment to very low income housing, or is it just using our financing money to do a lot of market rate and a little actual affordable housing? What kind of guardrails are you going to be using for those pension financing funds? (05:32:42) We absolutely need housing for people at the lowest rung of the economic ladder, including people who are at risk of homelessness, and we do have some good programs like that in the City which should get more funding so we can build more units. But also we have an affordability crisis at pretty much every rung. A bus driver in New York City is having a very hard time finding housing. A social worker, a construction worker, a nurse even are finding it very difficult to secure housing they can afford, and we are losing those families as well. So I think we view the best housing model as one that has options for people at every rung of the ladder, potentially in a single development even, where you have mixed income housing, which has all the benefits of families from different backgrounds being together. And look, I believe that we just need to expand the supply overall. We probably have a 500,000 unit shortfall in New York City. That is a very big number. We are only building about 25,000 units a year, so it would take decades to get there, and to do that we are also going to need to mobilize the private sector. So we are very, very focused on people who are at every level of the income ladder, including those who are earning minimum wage or in danger of homelessness. Thank you. (05:34:13) I will just say to close, I think using our pension dollars — pension dollars that do not benefit our most vulnerable community members but kind of trickle the money out — and is interested in making the most money it can with our money, I would be a little uncomfortable. (05:34:37) With using public dollars again to do private financing for private companies to max out their profit on our dollars in another way. I think there needs to be some real guardrails, and making sure that... it still takes too long, there is not enough money there to develop those units, and getting them 10% at a clip is not going to reach the need. So I would encourage guardrails on this. This is a huge discussion which we cannot do justice to here because we are over time. But look, my solemn obligation is to protect the pension fund and to make sure that three quarters of a million New Yorkers who have worked for the City or are still working for the City have a safe retirement. I wake up every morning thinking about how I can make sure I live up to that. That does not mean we cannot also, while maximizing risk adjusted returns, do some good in the world. We are looking for win-wins, especially wins in New York City. It is a narrow path where we can have a good impact, and I am confident that we are going to have some great announcements on housing projects in the five boroughs which you are going to love, which are going to meet those two standards. So stay tuned. Thank you. (05:35:57) Great. Thank you so much, Comptroller. OK, so I think that actually concludes this portion of our budget hearing. Thank you so much. Sorry we started late, but thank you. Thank you, Karen. Thank you to all the Council Members. Great conversation. Thank you. So I think we are going to move into the Committee Room, so we will...