New York City stands to gain more than $100 million in additional funds to help close its fiscal 2013 budget gap, city Comptroller John Liu said Wednesday.
Liu, who spoke before the City Council’s Finance Committee, cited the $997 million general obligation bond refinancing set to be finalized on Thursday and lower than expected interest rates.
He said the lower rates will yield $33.6 million in savings, which the city could roll over to fiscal 2013, while the refinancing, announced May 23, would produce savings of $67.8 million and $68.9 million in fiscal 2013 and 2014, respectively.
The city issued GO bonds in two series, with the sale upsized by $150 million from the retail order period.
“By successfully navigating the bond market, we have been able to save more than $100 million which can now be used to provide budgetary relief,” Liu said.
Liu, however, warned that the budget relies too heavily on stop-gap measures such as an estimated $1 billion that may not materialize from the sale of taxi medallions, the nearly $500 million settlement with CityTime payroll system contractor Science Applications International Corp., and $1 billion in funds from the Retiree Health Benefit Trust.
The comptroller also said the city was vulnerable to outside events such as the Eurozone crisis or a political stalemate in Washington.
Liu repeated his calls for an accelerated capital construction program, advancing projects already approved, and for the city to recover as much as $163 million from Hewlett-Packard Co. His office released an audit last week accusing the technology company of overbilling and underperforming on the contract to upgrade the city’s 911 emergency call system.
Liu referred the matter to Manhattan district attorney Cyrus Vance Jr.
Representatives of the Office of Management and Budget and the Independent Budget Office also spoke on Wednesday.
The council is considering the $68.7 billion budget Mayor Michael Bloomberg has presented. The mayor and the 51-member council must agree on a budget by July 1. Bloomberg’s office, while presenting a balanced budget, also projected gaps ranging from $3 billion to $3.7 billion over the following years.
Ronnie Lowenstein, director of the Independent Budget Office, called the city’s fiscal climate less gloomy.q
“While we project significant shortfalls in the following years, these budget gaps are smaller than those estimated by the Bloomberg administration,” she said.
Lowenstein, however, said the lack of stop-gap revenues will pose a serious challenge for fiscal 2014. “The use of one-shots to keep 2013 in balance simply postpones some of the tough decisions about the underlying shortfalls in the city budget,” she said.
Standard & Poor’s and Fitch Ratings assign double-A ratings to the city’s general obligation bonds, while Moody’s Investors Service rates them Aa2.