Stringer: Surplus, Transparency Mark N.Y. City CAFR

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New York City's comprehensive annual financial report shows a $5 million budgetary surplus and reflects a major change in pension reporting one year ahead of a required deadline, said city Comptroller Scott Stringer, making the city one of the first major municipal or state governments to do so.

"Meeting stringent new pension disclosure guidelines a year ahead of schedule was an enormous undertaking and demonstrates New York City's leadership in making municipal financial information more transparent and accessible," Stringer said in a statement Friday afternoon. Stringer, who took office in January, cited "substantial collaboration" among the city's five pension systems, the Mayor's Office of Management and Budget, the Office of the Actuary and the Comptroller's Accountancy Bureau.

For the 34th consecutive year, the city completed its fiscal year with a general fund surplus, as determined by generally accepted accounting principles. For that achievement, New York received the certificate of achievement for excellence in financial reporting from the Government Finance Officers Association.

The general fund had revenues and other financing sources in fiscal 2014 of $72.880 billion and expenditures and other financing uses of $72.875 billion, resulting in a surplus of $5 million.

New York has been budgeting under GAAP since it emerged from its dark financial crisis of the mid-1970s.

Statement No. 68, the new Government Accounting Standards Board standard, changes how the city reports pension liabilities in its government-wide financial statements. They do not affect the city's budget or the determination of its annual contribution toward its pension obligations.

At Stringer's direction, this year's CAFR has several additional transparency measures. Reporting of fiduciary funds in the supplemental section has increased. Footnotes on bonds and notes payable now more clearly distinguish between the city's general obligation debt and that of its blended component units. The long-term liabilities section of the statement of net position is now broken down in to more detailed categories.

"I want to particularly acknowledge the City's five pension systems, OMB and the Office of the Actuary for their partnership with my staff in assembling the most transparent and comprehensive CAFR in this City's history," Stringer said.

Among other highlights:

City pension funds as of June 30 had aggregate investment assets, excluding cash from the settlement of pending purchases and sales, of $160.6 billion, an all-time high; the city pension funds paid benefits totaling $12.7 billion during fiscal 2014.

Employer and employee contributions to the City pension funds were $9.7 billion and $1.7 billion, respectively. The remaining $1.5 billion of benefits were funded from investments.

Under GASB 68, pension assets represent 72.5% of estimated pension costs. This measure, said Stringer, is conceptually similar to what historically has been called a funded ratio.

The reported costs of other post-employment benefits, or OPEB, decreased by $3.04 billion, due primarily to slower than anticipated growth in health-care costs.

The city, New York City Transitional Finance Authority, and New York City Municipal Water Finance Authority issued $10.95 billion of long-term bonds to finance capital needs and to refinance outstanding bonds for interest savings. As of June 30, outstanding general obligation debt totaled $41.67 billion, consisting of $34.46 billion of fixed-rate bonds and $7.21 billion of variable-rate bonds.

Also, said Stringer, the City spent $732 million in settlements and judgments -- tort and non-tort -- up $208 million from the prior year.

The comptroller's Office's Bureau of Labor Law assessed $5.4 million in back pay and interest against private contractors that violated New York's labor law and assessed $411,000 in penalty money against those contractors. The Bureau of Audit issued 43 audits and special reports, identifying approximately $48.4 million in actual and potential revenue and savings. Reviews of claims filed against the city identified a further $19.7 million in cost avoidance.

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