Caution was the operative word as New York City’s budget director and City Council members on Thursday discussed Mayor Bill de Blasio’s proposed $84.9 billion fiscal 2018 executive budget.

A possible huge hit from the federal government and New York State's $68 million cost shift in its enacted budget to the city for health and education-related expenses have forced a conservative spending plan, according to Mayor's Office of Management and Budget director Dean Fuleihan.

“In light of the challenges we face, and our current fiscal position, we take a careful approach to the executive budget,” he told the council’s finance committee at City Hall in lower Manhattan.

The 51-member council must act on the spending plan by July 1. It’s up fractionally from the preliminary budget he proposed in January. De Blasio and council members agreed to last year’s budget three weeks early.

According to Fuleihan, the administration funds $1.25 billion in reserves for each year of the four-year financial plan, including $1 billion a year in the general reserve, and $250 million a year in a capital stabilization reserve that de Blasio officials created.

The administration has also maintained a retiree health benefits trust fund at $4 billion.

“Since the November plan, we have saved a total of $2.8 billion, including $700 million in the executive budget, exceeding the goal set by the mayor,” said Fuleihan.

Further, he said, the city expects to achieve $1 billion in savings in fiscal 2017 and $1.3 billion in savings in fiscal 2018 through efficiencies in conjunction with the Municipal Labor Committee, an umbrella group that covers most of the city’s public-sector unions.

Council Speaker Melissa Mark-Viverito called on the administration to boost reserves.

Fuleihan called the reserve levels significant. “There is no comparison with any city or administration to what we have put in reserves.”

Mark-Viverito also criticized de Blasio officials for what she called inefficiencies in the capital planning process, even though de Blasio and budget officials reduced excess capital appropriations by $3.2 billion to “better reflect planned commitments.”

The proposed 10-year capital strategy is $95.9 billion.

“While we are glad that the mayor has reduced excess appropriations, my colleagues and I remain worried that this budget continues the practice of committing funds that significantly exceed the city’s ability to actually execute projects,” said Mark-Viverito, overseeing her last budget process as speaker.

Projected outyear gaps for fiscal 2019 through 2021 are $3.6 billion, $3 billion and $2.3 billion, respectively.

“In light of the challenges we face, and our current fiscal position, we take a careful approach," said New York City budget director Dean Fuleihan.

Council approval of de Blasio’s plan would mark an increase of nearly 17% to the budget from fiscal 2014, the final year of Michael Bloomberg’s administration.

The watchdog Citizens Budget Commission on Thursday projected the city’s workforce to increase by 10.5% from Bloomberg’s last year to fiscal 2018, reaching an all-time high of 328,484 positions.

Moody’s Investors Service rates the city’s general obligation bonds Aa2, while S&P Global Ratings and Fitch Ratings rate them AA. All three assign stable outlooks.

The city has $37.8 billion of general obligation debt as of Sept. 30, 2016.

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