Popular Annual Financial Report Fiscal Year 2018
A Message from the New York City Comptroller
I am pleased to present the fourth New York City Popular Annual Financial Report (PAFR) for the fiscal year ended June 30, 2018. This report gives New Yorkers a window into their local government and its budget functions. It is a user-friendly companion to the City’s 2018 Comprehensive Annual Financial Report (CAFR), which offers a detailed picture of our City’s financial condition. While the PAFR contains much of the same information, the presentation is more concise and straightforward.
The budget funds critical services such as education, human services and public safety to New Yorkers in all five boroughs. The budget also prioritizes and supports infrastructure investment such as building and maintaining schools, parks, and other important projects that define our City. The size and complexity of our budget matches the scale and diversity of our City, and the PAFR offers a succinct report on how our tax dollars are being spent.
Like our interactive Checkbook NYC website, the PAFR is an important transparency tool, giving open and expansive access to the inner workings of City government. The report offers citizens, businesses and community groups a breakdown of our revenues and expenses, as well as an annual snapshot of our local economy.
The PAFR focuses on New York’s “primary government,” which includes all City agencies as well as the legally separate organizations with which the City has significant financial ties. The report also provides an overview of our local economy, economic comparisons with other cities, and key statistics for each borough. It is intended to be a useful guide to understanding the City’s fiscal condition and economic priorities in the year ahead.
Scott M. Stringer
Popular Annual Financial Report
The Government Finance Officers Association of the United States and Canada (GFOA) awarded The City of New York the Award for Outstanding Achievement in Popular Annual Financial Reporting for its Popular Annual Financial Report (PAFR) for the fiscal year ended June 30, 2017. The City of New York has received this national award for the last three consecutive fiscal years. The award recognizes conformance with the highest standards for preparation of state and local government popular reports. In order to receive the award, a governmental unit must publish a PAFR whose contents conform to program standards of creativity, presentation, understandability, and reader appeal. The report must satisfy both generally accepted accounting principles and applicable legal requirements. We believe our PAFR continues to meet the Award for Outstanding Achievement Program’s requirements, and we are submitting it to the GFOA for consideration. The PAFR is a summary of the Comprehensive Annual Financial Report (CAFR) for the year ended June 30, 2018. The financial data in the PAFR derive from the more detailed CAFR.
Comprehensive Annual Financial Report
In addition to receiving the Award for Outstanding Achievement for its PAFR, The City of New York’s CAFR for the fiscal year ended June 30, 2017, was awarded the Certificate of Achievement for Excellence in Financial Reporting by the GFOA for the 38th consecutive year. The Certificate of Achievement is the highest form of recognition for excellence in state and local government financial reporting. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized CAFR whose contents conform to program standards. We believe our CAFR continues to conform to the Certificate of Achievement program requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate.
Both awards are valid for a period of one year only. The PAFR and the CAFR are consistent with generally accepted accounting principles (GAAP) and the guidelines established by the Government Accounting Standards Board (GASB), and available on the Comptroller’s website at comptroller.nyc.gov.
The pace of economic growth accelerated in both the City and the nation in fiscal year 2018 relative to fiscal year 2017. The City’s economic growth was supported by gains in payroll jobs, improvements in household employment, and increases in average hourly earnings. Both the City and the U.S. economies are expected to grow even more strongly in fiscal year 2019. Near-term growth will be fueled by high consumer spending, increasing wages, growing corporate profits and high consumer confidence. However, the primary risk to the forecast is the Federal Reserve could raise interest rates to levels where economic growth slows or even ceases. Ongoing trade tensions also pose some risks. Given the service-oriented nature of the New York economy these will mostly be in the form of higher prices for imported goods, fueling inflation.
The City’s private sector added 76,600 jobs, a gain of 2.0%, in fiscal year 2018, faster than the 1.8% gain in the nation.
The unemployment rate fell to 4.3% in fiscal year 2018, the lowest rate on record; the labor-force participation rate rose to a record high of 60.9%; and the employment-to-population ratio rose to 58.3%, the highest on record.
Unemployment rates improved in all five boroughs falling to 5.4% in the Bronx; 4.1% in Brooklyn; 3.6% in Manhattan; 3.5% in Queens; and 4.0% in Staten Island. These are record lows for each of New York City boroughs in more than a decade.
What Makes Up the City’s Primary Government?
The Primary Government is made up of various City agencies and other entities established to perform the City’s core functions and duties for its citizenry. Component units are legally separate organizations for which the City is financially accountable. Component units that are operationally codependent upon the primary government are in substance the same as the primary government and are included, or Blended, into the primary government. In addition to governmental activities, which account for services provided to the City’s citizenry, the primary government comprises a component unit distinction known as Business-Type Activities. The business-type activities distinction accounts for fee-based services that the City provides to third parties.
When comparing the revenues and expenditures presented in the governmental fund financial statements to the revenues and expenses recorded for the primary government within the statement of activities in the CAFR, the differences that exist are due to the different methods of accounting used to prepare these statements. Financial reporting for the primary government within the statement of net position of the CAFR, is designed to provide readers with a broad, long-term, overview of the City’s finances in a manner similar to a private-sector business. The primary government’s long-term focus calls for the recording of both assets and liabilities that exceed one year. In contrast, the governmental fund financial statements which is contained in the CAFR, is limited to reporting on near-term resources, similar to the City’s budget; its near-term focus emphasizes the recording of liabilities that are expected to be due and assets that are available to be used within the year.
The programs and functions listed are funded by two major sources: Program Revenues, including grants, and General Revenues . Program revenues are collected and available for their respective programs and functions. General revenues are available to be used for any program or function and is mostly composed of tax revenues. Throughout this report, underlined accounting terms are further defined in Accounting Terms
Revenues: Where does the money come from?
Program Revenues – Primary Government
In fiscal year 2018, program revenues were over $29 billion. Education had the most program revenues, overwhelmingly from grants, consisting of almost $13 billion, followed by social services, at over $5 billion. Program revenues increased in fiscal year 2018 by $108 million from fiscal year 2017. Increases in program revenues in education and housing had the greatest effect on the increase.
* Includes payments to the City for costs of the Water and Sewer system from water and sewer rate payments.
** Business-Type Activities refers to the following entities: Brooklyn Bridge Park, Trust for Governor’s Island, World Trade Center Captive Insurance Company, Inc., and Tax Lien Trusts. Please refer to the fiscal year 2018 CAFR for additional information regarding the goods and services provided by these entities.
General Revenues – Primary Government
In fiscal year 2018, general revenues were almost $60 billion, an increase of almost $3.3 billion from fiscal year 2017. Real estate taxes were the greatest single source for the increase, totaling over $26 billion, largely due to growth in billable Assessed Value during the fiscal year. In addition, increases in personal income taxes were due to changes to the New York State School Tax Relief Program, and prepayments precipitated by the Federal Tax Cuts and Jobs Act.
*Includes Business-Type Activities General Revenues
Expenses: Where does the money go?
Expenses – Primary Government
Fiscal year 2018 expenses (including all related personnel and applicable pension and benefit costs) were almost $92 billion. The City incurred the most expenses for education, at over $30 billion, due to the growth in mandated costs for special education pupils, growth in charter school enrollment and related increases in per pupil tuition levels and increased facilities costs. The increase of expenses of $5.8 billion in fiscal year 2018 from fiscal year 2017 is mostly attributable to $1.3 billion for Other Postemployment Benefits and nearly $1 billion for Capital Projects City-wide, which is allocated within the City agency categories below.
The Budget – General Fund
This Budget Roadmap is designed to help New Yorkers and others to understand the City’s budget process. The New York City budget is the place where many of the City’s policy decisions are made and where policy objectives are articulated and implemented in concrete terms. The scope of the budget includes all of the City government’s revenues and expenditures — estimated at about $89 billion in 2018.
Budget and Actual – General Fund Revenues
The General Fund is the main operating fund of the City. It is used to account for all financial resources not accounted for and reported in other funds, such as the Capital Projects Fund or the Debt Service Fund. General Fund revenues, as listed below, include tax revenues, federal and state aid (except aid for capital projects), and operating revenues. Revenue budgets help management set financial goals and assist management in planning for future needs and allocation of resources.
Budget and Actual – General Fund Expenditures
The General Fund is the main operating fund of the City. It accounts for all uses of financial resources not accounted for and reported in other funds, such as the Capital Projects Fund or the Debt Service Fund. The General Fund accounts for all expenditures in the Expense Budget that provide for the City’s day-to-day operations. The expense budget helps management set financial goals and review actual performance against these goals.
Discretely Presented Component Units
Component units are legally separate organizations for which the City is financially accountable. The financial data of the following component units, which are supported by fees charged for goods or services, are presented separately (discretely) from the financial data of the primary government.
*Business Relocation Assistance Corporation in All Other category dissolved June 30, 2016
New York City funds its capital projects utilizing the Capital Budget. The Capital Budget is separate from the City’s General Fund Budget, which pays for operating costs, including the salaries of public servants. The Capital Budget is exclusively used to fund capital projects, such as City construction, purchases of land, buildings, and equipment. The capital program is generally financed by borrowing money, usually through the sale of bonds. The table below lists the authorized expenditures versus actual expenditures for capital projects.
Capital Budget and Capital Commitment Plan
While the City Council adopts a Capital Budget each year, the planning and actual expenditure of funds for capital projects generally occurs over a period of years in accordance with City Charter provisions.
Capital Budget: The final Capital Budget is adopted by the City Council with the Expense Budget. Spending for individual capital projects may not exceed the amount appropriated in the Adopted Capital Budget.
Capital Commitment Plan: To track the progress of projects included in the Capital Budget, a Capital Commitment Plan is issued three times each year. The Commitment Plan is published within 90 days of the adoption of the Capital Budget (generally by late September) and updated Commitment Plans are issued in January and April with the Mayor’s budget proposals for future years.
Benchmarks: How do we compare?
Benchmarks are used to put financial information into context. Below, our City is compared to Philadelphia and Chicago. “Per Capita” means that the total dollar value is divided by the population for each city. For instance, “Debt per Capita” is the total bonded indebtedness divided by the population. This makes the debt figure relative to the population size of the city.
*Rating explanations are available on the websites of each rating agency.
Sources: New York City FY 2018 CAFR; Philadelphia FY 2017 CAFR; Chicago FY 2017 CAFR; U.S. Census Bureau; U.S. Bureau of Labor Statistics; NYC & Company; Visit Philadelphia; Choose Chicago; The Trust for Public Land; U.S. Bureau of Justice Statistics. All information provided represents currently available data.
Borough-Wide Statistical Information
The data below provides a snapshot of the characteristics of each of New York City’s five boroughs − the Bronx, Brooklyn, Manhattan, Queens and Staten Island.
Please Note: The fifth borough, Staten Island, has a population of 479,458.
Things to Know
Checkbook NYC is an online transparency tool launched by New York City Comptroller’s Office. Using an intuitive dashboard approach that combines a series of graphs and user-friendly tables, Checkbook NYC provides up-to-date information about the City’s financial condition. On Checkbook you could find the following:
- City Agencies with the most spending
- Prime/Sub-Vendors doing business with the City
- City Budget information
- Information on City Agency contracts
- And much, much more
Services for the Public and Businesses
Access the Office of the Comptroller’s Website to:
- File a Claim: Claims can be filed against the City of New York. The New York City Comptroller’s Office is responsible for overseeing the resolution and settlement of these claims.
- Pay My Claim: If you have settled a claim with the City, you could inquire about the status.
- Suggest an Audit: The Bureau of Audit welcomes ideas for audits to save the City money, increase revenues, or improve agency efficiency. Submit ideas here.
- Claim Wage Awards: If you worked for an employer covered by prevailing wage, living wage, and minimum average hourly wage requirements and were underpaid, the Comptroller’s Office may have already recouped the amount of your underpayment plus interest. Check here to see if your name appears on the list.
- Make FOIL Request: Citizens interested in accessing records from the Comptroller’s Office may do so through the Freedom of Information Law (FOIL).
- Prequalified CPA List (PQL): CPA firms interested in applying for placement on the PQL to be considered to provide audit services to City agencies, should access this page and complete the application.
- Obtain Certificate of Residence: If you are a student attending a New York State community college outside of New York City, rather than paying the higher tuition as a non-resident, qualified residents may receive a Certificate of Residence to pay the resident tuition fee while enrolled at the college. Click here to apply.
Our Elected Officials
Bill de Blasio
Scott M. Stringer
Council Majority Leader
Council Minority Leader
Ruben Diaz, Jr.
Bronx Borough President
Eric L. Adams
Brooklyn Borough President
Gale A. Brewer
Manhattan Borough President
Queens Borough President
James S. Oddo
Staten Island Borough President
Darcel D. Clark
Bronx District Attorney
Brooklyn District Attorney
Cyrus R. Vance, Jr.
Manhattan District Attorney
Richard A. Brown
Queens District Attorney
Michael E. McMahon
Staten Island District Attorney
The elected officials depicted above are as of the fiscal year ended June 30, 2018
The Government of the City of New York
Following are descriptions of some of the accounting terms used in this PAFR:
- Assessed Value: A property’s assessed value is a percentage of its market value. The assessed value cannot exceed 6% of the home’s market value.
- Blended Components Units (Blended): Entities, although legally separated from the City, for which the primary government is financially accountable. These Component Units provide services exclusively to the City.
- Business-Type Activities: Component Units that were established to provide services to third parties, and intended to operate with limited or no public subsidy.
- Capital Assets: These include all land,f buildings, equipment, and other elements of the City’s infrastructure having an initial minimum useful life of five years, having a cost of more than $35,000, and having been funded by the Capital Budget.
- Capital Budget: The budget that is exclusively used to fund Capital Projects, such as city construction, purchases of land, buildings, or equipment.
- Capital Project: A project that meets the criteria of a capital asset and involves the construction, reconstruction, or acquisition of Long-Term Assets.
- Discretely Presented Component Units: Component Units that are reported separately from the Primary Government. Although the City is financially accountable for them, they do not provide services exclusively to the government.
- Expense Budget: A budget that covers the day-to-day operating expenditures and is financed by city taxes and other revenues along with State and Federal aid.
- General Fund: The main operating fund of the City, which is used to finance the City’s operations.
- General Revenues: Revenues, not properly included among Program Revenues, which the City raises through taxation and other means. General Revenues are available to be used for any authorized program or function.
- Inception to Date Expenditures: Financial expenses from the start of a project through the specified fiscal year.
- Primary Government: The various City agencies and other entities established to perform the City’s core functions and duties for its citizenry.
- Program Revenues: Revenues that include charges for services such as rental revenue from operating leases on markets, ports, and terminals, and grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or program. Program revenues are collected and available for their respective programs and functions.
Scott M. Stringer, Comptroller
Bureau of Accountancy:
- Jacqueline Thompson, CFE, CIA, Deputy Comptroller for Accountancy
- Katrina Stauffer, Bureau Chief
- Man Hon Cheung, Assistant Bureau Chief/ Division Chief, Financial Reporting
- Leonel Ferreira, CPA, Division Chief of Capital & Technical and Professional Standards
Popular Annual Financial Report Developed and Prepared by:
Technical and Professional Standards Unit, Bureau of Accountancy
- Susanna Tregor, CPA, Assistant Division Chief
- Camille Arezzo, Administrative Accountant
- Joan Stapleton, Technical Writer/Project Coordinator
With Special Thanks to:
- Preston Niblack, Deputy Comptroller for Budget
- Eng Kai Tan, Bureau Chief
- Lawrence Mielnicki, Chief Economist
- Peter Flynn, Assistant Budget Chief
Bureau of Information Systems & Technology
- Mike Bott, Assistant Comptroller for Information Technology/CIO
- Troy Chen, Executive Director of App Development & Web Administration
- Antonnette Brumlik, Senior Web Administrator
- Angela Chen, Senior Web Developer & Graphic Designer
- Edith Mauro, Summer Intern
Bureau of Public Policy
- David Saltonstall, Assistant Comptroller for Policy
- Nichols Silbersack, Associate Director of Policy
Significant efforts were made by all staff of the Bureau of Accountancy and many others in the Office of the Comptroller and throughout the City to prepare the City’s fiscal year 2018 Comprehensive Annual Financial Report, from which much of the content of this report was adopted.
Comments or Suggestions
Thank you for taking the time to learn about The City of New York’s financial strengths. If you have comments or suggestions on how we can improve the PAFR, please contact the Technical and Professional Standards Unit by email at PAFR@comptroller.nyc.gov, or by telephone at (212) 669-3675.