Bill requires the Administration to alert the Council when contract project costs begin to climb.
Council will also vote to extend the Rent Stabilization Law.
New York, NY- Today, the Council will vote on a bill requiring disclosure of certain cost increases in construction and service contracts with a value of $10 million or more that are connected with projects in the capital budget. Under the Cost Overrun Disclosure Bill, the Mayor must notify the Council about project cost increases as they occur.
The Council will also vote to extend the Rent Stabilization Law from April 1, 2012 to April 1, 2015. The extension will help keep housing affordable for New Yorkers in all five boroughs by continuing the program.
COST OVERRUN DISCLOSURE BILL
The Cost Overrun Disclosure Bill will require notification of cost increases for large contracts in connection with capital projects.
Recently, the City has gone over budget on many of its large projects. And in some cases, as with CityTime and NYCAPS, the overruns have soared, costing taxpayers millions of dollars.
Today’s legislation provides a mechanism to curb exploding costs. Under the legislation, the Council will be notified whenever a contract worth at least $10 million on a capital project is extended or modified in a way that raises the contract cost by 20 percent or more. Next, the City will be required to alert the Council on any additional extensions or modifications that would result in a 10 percent cost growth above the revised contract value. The City will be obligated to explain why the contract extension or modification is necessary and how much more money it would entail.
“We simply cannot allow cost overruns on the City’s capital projects to go unchecked,” said Council Speaker Christine C. Quinn. “Today’s legislation will act as a safety net to catch contracts before they fall through the cracks. With timely notice to the Council when contract costs start to climb, we can better monitor projects and taxpayer dollars. We can determine whether it makes sense to continue to fund a project or whether the City needs to make changes to check wasteful spending.”
“Contract costs have increased at nearly twice the rate of overall budget spending, reaching over ten billion spent in public money,” said Council Member Letitia James. “As we have seen, some of these contracts are not managed well and lack necessary oversight. This bill will strengthen the Council’s ability to oversee contact budgets with the ultimate goal of cutting costs and identifying savings.”
“At the Contracts Committee’s hearing on this legislation last October, the Administration suggested that the City Council should exercise more aggressive oversight of contracts dealing with complex technology projects. With today’s vote, we’re granting that request,” said Contracts Committee Chair Darlene Mealy. “Intro. 707-A will ensure that the Administration provides the Council with the data needed to determine whether a contract’s ballooning costs justifies the continuing commitment of scarce public funds. Shining light on the city’s contracting practices has been my focus as Contracts Committee chair. I’m proud that we’re taking this additional step and look forward to doing more.”
RENT STABILIZATION EXTENSION BILL
The Council will also vote on legislation that protects the city’s tenants and neighborhoods by extending the Rent Stabilization Law. Specifically, the Council will vote on a resolution declaring that a housing emergency continues to exist and a bill that will therefore extend the law from April 1, 2012 to April 1, 2015.
A recent Housing and Vacancy Survey by the Department of Housing Preservation and Development (HPD) indicates a citywide rental vacancy rate of 3.12 percent. With a vacancy rate well below the 5 percent threshold, this study proves that a housing emergency continues to exist in New York City. Without the protections afforded to one million tenants through the Rent Stabilization Law, renters would otherwise face an uneven playing field and many would be forced out of homes, neighborhoods, and the city altogether.
The Rent Stabilization Law authorizes the City Council to review information on housing supply and conditions in the rental market and make a determination on whether a housing emergency exists.
“The City’s Housing and Vacancy Survey as prepared by HPD proves that extending rent protections remains an important priority for the Council and I am pleased to be joined by the Speaker and so many of my colleagues in addressing that need. Under state law, a vacancy rate of 5 percent or less permits the City to declare a housing emergency and the current HPD report indicates a citywide rental vacancy rate of 3.12 percent,” said Council Member Sara M. González. “We must continue to defend our neighbors by ensuring that they will not be forced out of their homes by unrelenting increases in rent and this legislation will protect hundreds of thousands of tenants in stabilized units.”
“Every day, I hear from constituents working two jobs but struggling to pay their rent. With rising rents and stagnant incomes, New Yorkers need help. The average New Yorker living in rent-regulated housing makes just $38,000 a year and many have to pay more than half their income in rent already,” said Council Member Melissa Mark-Viverito. “Rent stabilization makes New York at all affordable for them. Unfortunately, rent regulated housing is disappearing. This resolution affirms that we cannot afford weaker rent regulations and we must instead work to strengthen our rent regulations to preserve the city so that all New Yorkers can live here.”
“By extending rent stabilization and rent control, this body, led by our Speaker, has once again shown its commitment to maintaining a vibrant affordable housing stock in the City,” said Housing and Buildings Committee Chair Erik Martin Dilan. “The renewal of these rent regulations will allow thousands of apartments to remain affordable for hard-working New Yorkers, many of whom worry about being displaced from their communities simply because they cannot afford to keep up with the City’s escalating rents. With a citywide rental vacancy rate of 3.12 percent, passing these laws is the right thing to do.”