Council Members Push to Reform NYC’s Capital Projects Management

Council Members Push to Reform NYC’s Capital Projects Management

New issue brief shows 44% of projects severely late, 42% severely over budget. City Council legislation seeks fundamental reform.
May 25, 2017
Whit Hu, Communications Director, 718-499-1090
New York

In the wake of ongoing City Council attention to the weaknesses in NYC’s capital projects management system, Finance Chair Julissa Ferreras-Copeland and Deputy Leader for Policy Brad Lander, along with Council Members Mark Levine, Andy Cohen, Ritchie Torres, and James Vacca, released an issue brief further highlighting the problem, and announced a package of legislation to reform the City’s system for managing capital projects.

The issue brief, prepared by Council Member Lander’s office, is based on an analysis of the City’s Capital Projects Dashboard, which tracks City Capital projects over $25 million. The brief finds that 44% of projects are severely late, and 42% are severely over budget. Of the 44 projects that are both severely late and severely over-budget, 43 are managed by the NYC Department of Design and Construction (DDC). On average, they are $30 million over-budget, and 700 days late. The issue brief is attached for download below.

The Council’s report builds upon the recent “Slow Build” report from the Center for an Urban Future, which focused on DDC’s management of library and cultural projects. The projects reviewed by CUF take an average of over 4 years to complete and can sometimes drag on for more than a decade. Construction costs on these capital projects are through the roof, with the median cost of construction at a staggering $930 per square foot -- roughly double the cost of new office space in NYC. 

The Council Members announced a package of legislation that would establish a Capital Projects Management Reform Task Force to develop and implement fundamental reforms, overhaul the project evaluation system, update the City’s process for assessing the adequacy of NYC’s infrastructure, and dramatically improve transparency and reporting. The legislation is detailed below.

“While managing NYC’s capital projects is no easy feat, what we’ve seen is a lack of coordination among agencies, too little accountability in the delivery of projects, ineffective budgeting and planning, and outdated procurement processes. The results? Outrageous cost overruns and absurdly long delays,” said Council Member Brad Lander, the Council’s Deputy Leader of Policy. “New Yorkers deserve to see their tax dollars managed with cost-efficiency, timeliness, transparency, and accountability. The City has a responsibility to ensure that our neighborhoods see the street repairs, flood protection, and improvements to our sewer systems, schools, libraries and parks that they need, when they need them. We need to fundamentally reform this system.”

“We’ve expressed concern for years, but CUF’s report leaves no doubt: we must do better to reduce outrageous cost-overruns and long delays on New York City capital projects,” said Council Member Julissa Ferreras-Copeland, Chair of the Finance Committee. “Which is why we’re releasing this issue brief that further highlights these problems and proposes concrete solutions that will reform the City’s system for managing capital projects. We must improve our accountability to taxpayers.”

"When my colleagues and I fund a capital project, it would be nice to see it completed in a timely and efficient manner," said Council Member James Vacca. "All too often there are massive cost overruns where it feels like we are allocating funds into a bottomless pit. We need accountability when it comes to the public's money. My bill would increase transparency by requiring the Department of Parks to proactively notify Council Members when there are changes to projects we have funded. By being made aware of these change orders, we can effectively exercise our oversight role and make the entire capital process run more effectively.”

“Every member of the City Council has a park capital project in their district that has stretched out from five to six to even seven years or beyond. The inordinate amount of time it takes to complete even relatively simple parks projects threatens to undermine the public’s confidence in this important work and even erode the political will for providing funding for such projects. it is imperative that we bring more transparency, accountability and efficiency to the parks capital process so that our precious green spaces receive the investments they so badly need in a timely fashion. That’s why I’m working on a bill to provide more accurate, detailed, and relevant reporting of the true timeline of every park project in the city,” said Council Member Mark Levine.

"The delays and inflation in capital projects are absurd. We need action to ensure that projects are done in an efficient and timely manner. These bills are a step in that direction," said Council Member Ritchie Torres.

“The capital projects process is out of control with extensive delays and overrun costs, it is in need of reforms such as these. My bill, Intro 1543, requires notification when there are 60 day delays or 10% cost overruns to capital projects under the management of all city agencies. It’s about improving accountability – telling these agencies that when you make a commitment to our communities, you have to deliver on it, and if you don’t, there will be consequences,” said Council Member Andrew Cohen.

To address these issues, the Issue Brief sets forth a set of new recommendations to Reform NYC’s Capital Management Process:

  • Establish a Capital Projects Management Reform Task Force, as recommended in CUF’s “Slow Build” report and included in the CIty Council’s Preliminary Budget Response to review the capital construction process to identify and mitigate the inefficiencies that plague the system.
  • Expand the City’s Capital Projects Dashboard to include capital projects under $25 million to improve accountability and transparency in how the City manages capital projects.
  • Reform the City’s Capital Projects Evaluation Process to standardize quality performance metrics, customer satisfaction, ability to minimize change orders and maintenance costs among other factors.
  • Expand the Scope of the City’s Asset Information Management System (AIMS) provides information about the sufficiency and adequacy of all City infrastructure, to better understand the full scope of capital needs in NYC’s neighborhoods.
  • Expand the Department of Parks and Recreation (DPR) web based capital projects tracker to include more detailed information regarding its capital projects, including the reasons for delays, the dates projects were fully funded, the total number of projects in its portfolio, projected and actual cost overruns, individual sources of funding and the length of time it took to complete each project.

In addition to the above recommendations, the Issue Brief calls for the passage of three bills that seek to notify elected officials about delay on all capital projects and to bring further accountability and transparency to the Parks Department:  

  • Council Member Andrew Cohen’s Intro 1543-2017 would require all CIty agencies that manage capital projects to notify the affected council member, borough president and community board within 30 days of learning about delays of 60 days or more.
  • Council Member Ritchie Torres’ Intro 1340-2017 would require DPR to provide regular updates on the status of DPR capital projects to Council Members who funded such projects. It would also require DPR to notify contractors when it has denied payment for work done by such contractors on  a DPR capital project. Such notification would have to include the reasons for such denial and the process for the contractor to satisfactorily complete the project and receive payment.
  • Council Member James Vacca's Intro 407-2014 would require DPR to provide written notice of a change order to a contract for a DPR capital project to Council Member who allocated funding to such capital project, within 30 days of implementing such change order.

The goal of this effort is to work collaboratively with the Administration to give this critical issue the attention it deserves. The Council Members look forward to working with Mayor de Blasio, OMB, DDC, City agencies, leading experts and vendors on this package of legislation to identify best practices, root out inefficiencies, streamline the capital projects management system to keep costs down and improve the City’s accountability to the public on these critical infrastructure projects.

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Capital Projects Reform Brief.pdf559.38 KB

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