Nov 2010 Financial Plan Instructions

The City of New York
Office of Management and Budget

75 Park Place • New York, New York 10007-2146
Telephone: (212) 788-5900 • Fax: (212) 788-6300
Mark Page
Director
MEMO TO: Agency Heads
FROM: Mark Page
SUBJECT: November 2010 Financial Plan
DATE: September 21, 2010
As you know, we have adopted a budget which is balanced in the current fiscal year,
FY2011. However, we face a budget gap in the next fiscal year, FY2012, of over $3 billion.
The Adopted Budget accommodated a reduction in State funding to the City of $1.2 billion.
The State’s fiscal outlook for next year does not seem to be better than it was this year.
While the local economy has done better than we had forecast when the recession first
began two years ago, we have still suffered from serious declines in tax revenues which
support the services which New Yorkers demand and deserve. The national economic
recovery that began in late 2009 appears to be struggling in the second half of 2010. As a
result, the outlook for the local economy is uncertain, particularly due to the ongoing volatility
in the global financial system.
We are seeking City budget proposals which will best preserve necessary City services and
quality of life while enabling us to live within our resources. The difficulty of our financial
position means that we need as much time as possible to accumulate the value of whatever
actions we take against the deficit we face in the period through June 30, 2012. Therefore
we are not waiting for the January Preliminary budget but are seeking actions we can
implement with our first quarterly Financial Plan modification in November. I am asking City
agencies to focus on their operations in Fiscal Year 2011 and FY2012 to determine how
best, to the extent necessary, we can achieve balanced City operations. The total target is $2
billion for the period through June 30, 2012. I am asking that each agency address the full
target, but also to be as clear as possible in their priorities.
As noted in the Mayor’s memorandum, the target savings Citywide for FY2011 is
approximately $800 million and breaks down as 2.7% for uniformed forces and the
Department of Education and 5.4% for all other agencies. The target savings Citywide for
FY2012 is approximately $1.2 billion and breaks down as 4% for uniformed forces and the
Department of Education, and 8% for all other agencies.
The detailed reductions required by this letter will give us the necessary agency information
for determining resource allocations with the Mayor for the remainder of FY2011 and for
FY2012.
As a general guideline, you must submit proposals that meet the total amount of your target.
The target can be met by reductions in personal service costs or other than personal service
costs and/or assured, recurring revenue actions. In cases where you are submitting
reductions to personal service costs, you should include the value of any fringe benefit
savings that will be achieved as a result of these reductions. The programs and areas to be
cut and the resulting level of services that will be provided should be indicated in the
descriptions of your proposals. Your proposals should be prioritized in order of preferred
implementation. (One should reflect the top ranked proposal.)
The proposed reductions you submit do not necessarily represent the final outcome of
resource allocation for your agency. Your own priorities should be clear in the reductions you
propose. If you believe lay-offs, or other extraordinary actions would be necessary to meet
your target, these should be reflected in your submission. As always, OMB intends to work
collaboratively with each of you to find recurring savings in your agencies.
Unfortunately, the targets as outlined in this letter will not fully address the forecast need for
the period through June 30, 2012. We hope to avoid further reductions but will, as usual, be
addressing our circumstances as necessary over the next months.
Until your program is approved by OMB, the Mayor has directed that all hiring be frozen. The
only hiring that will move forward during this period will be for positions immediately
impacting public health and safety or positions which help maintain budget balance through
this period. The prospect for lessening the austerity of the hiring freeze is uncertain, but will
not be considered until after the savings program is in place and the decision will be made on
an agency-by-agency basis by the Mayor. Any requirements your agency may have for
expense funding that are not currently within your agency’s budget will not be considered. If
additional expenses are critical, you should reprioritize your existing budget.
Please return your proposals to meet your agency’s target to OMB no later than Friday,
October 8, 2010. The City’s financial management system (FMS) provides the capability to
submit your proposals electronically rather than via paper forms.
Thank you very much.
cc: Mayor Michael R. Bloomberg

First Deputy Mayor Patricia E. Harris
Deputy Mayor Linda Gibbs
Deputy Mayor Stephen Goldsmith
Deputy Mayor Carol A. Robles-Roman
Deputy Mayor Robert Steel
Deputy Mayor Dennis M. Walcott
Deputy Mayor Howard Wolfson

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The City of New York

Office of Management and Budget

MEMO TO: Agency Heads

FROM: Mark Page

SUBJECT: November 2010 Financial Plan

DATE: September 21, 2010

Thank you very much.

cc: Mayor Michael R. Bloomberg

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