New York City and its labor unions should hash out contracts soon to preserve the city's double-A bond ratings, according to city Comptroller Scott Stringer.
"What we need is the mayor and labor to sit down in a room and begin a robust discussion. No one remembers it. We haven't had it in a while," Stringer said in an interview Thursday following his speech to the Citizens Budget Commission watchdog organization. "But we have to go to the rating agencies with our budget and our four-year plan."
City workers, represented by about 152 labor organizations, have been operating on expired contracts, some as far back as seven years. Unions have demanded retroactive back pay.
Settlement of those contracts represents the first major challenge of Bill de Blasio, who succeeded Michael Bloomberg as mayor on Jan. 1. De Blasio is expected to present his budget to the 51-member council soon.
Moody's Investors Service rates the city's general obligation bonds Aa2; Fitch Ratings and Standard & Poor's rate them an equivalent AA.
Stringer, in his speech at the Yale Club in Midtown Manhattan, recalled the financial crisis of the 1970s, when the reached the brink of default and bankruptcy.
The keynote of his Thursday speech was the call to overhaul bureau of asset oversight of the city's five pension funds, whose combined value is estimated at roughly $150 billion.
Central to his initiative is a ban on private placement agents for investment managers. New York State bans such agents, while a city-imposed ban now applies merely to private-equity investments, according to Stringer.
Stringer said the move would help guard against pay-to-play scandals involving pension funds. In one such scandal, former state comptroller and mayoral candidate Alan Hevesi served 18 months on corruption charges.
Stringer said he favors eliminating duplication among the city's five pension funds while stopping short of an outright call for consolidation. "I have to work with 58 trustees across all five pension boards," he said.
The funds have a combined value of roughly $150 billion. They are the New York City Employees' Retirement System; the Teachers' Retirement System of the City of New York; the New York City Police Pension Fund Subchapter 2; New York City Fire Department Pension Fund Subchapter Two; and the New York City Board of Education Retirement System.
Each has its own board of trustees.
Stringer has had an active initial 30 days. His office has had two bond issues and a Transitional Finance Authority refunding saved the city $24 million, he said.
He has also launched audits of the New York City Housing Authority and the city's three library systems and spoke before a state legislative panel in Albany urging more education funding.
