Better Reporting And Monitoring Of Capital Projects Needed: DiNapoli

The majority of New York City’s capital projects are over their initial budgets and behind schedule, according to an analysis released by State Comptroller Thomas P. DiNapoli. 

“New York City’s capital projects too often experience delays and cost overruns, though efforts are underway to improve the process,” DiNapoli said. “Given limited resources and an escalating cost environment, the city should monitor its capital spending in a more uniform and comprehensive manner so it can review funding expectations, prioritize where additional work is needed, and maximize the return on every capital dollar it spends.” 

Among the 5,128 projects that were analyzed, DiNapoli’s report found:

• 64% were delayed, defined as projects with tasks at least three months past their planned completion date.
• Almost half, 49.9%, were excessively delayed, with tasks three or more years behind their completion date.
• More than 50% were over their initial budget, with planned spending now at $54.5 billion more than initially anticipated. Nearly two-fifths of all analyzed projects were more than 20% over budget.

DiNapoli’s report also found about 27% of projects were on budget, and 21% were under budget.

Of the nearly three-quarters (73%) of delayed projects, more than half were delayed because of budgetary constraints. However, because the city does not explain what is causing budgetary constraints and how they are contributing to delays, updates to cost estimates are difficult to predict. It is notable that the analysis period included the onset of the pandemic, where capital projects were halted, which likely contributed to delays.

The report found certain types of projects are more likely to be behind schedule or over budget than others. Courts, waterway bridges, water supply, traffic, highways, public buildings, library, and economic development projects were all likely to start more than two years after the initial project sequencing start. Similar delays existed for NYC Health + Hospitals as well as the police and cultural affairs departments. The movement of start dates directly impacts the cost of projects, as prices of labor and materials generally rise over time.

Certain project types were also more likely to end up over budget. More than half of sanitation, water pollution, water mains, highway bridges, courts, and cultural affairs projects were excessively over budget, going 20% over original cost estimates. Projects that spanned multiple areas were also more likely to experience cost overruns, suggesting more focus on coordination and complexity may be desirable in scoping the work and prior to estimating necessary funding. Greater detail is needed on whether recent actions to improve management of complex projects by the Department of Design and Construction have been successful.

Three of the largest projects examined were for the Department of Transportation, including in-house asphalting and in-house non-asphalt, both citywide projects, as well as partial rehabilitation of the Brooklyn-Queens Expressway. For the two road maintenance projects, the original budget was $891.3 million, and actual spending has reached $1.7 billion. The total budget for these items is now $3.5 billion, nearly four times the original amount. Detailed reporting is essential for ensuring projects adhere to their budgets.

While there is no explanation provided for the cost overruns, budgetary constraints were noted in a number of cases. Still, it is unclear how constraints have held back the projects.

DiNapoli recommended the city shift all relevant project information to the new dashboard, provide regular updates on the status of its reforms to review the effectiveness of changes implemented for reducing costs or delays, and add flags that allow the public to identify projects which have been able to leverage those reforms. With closer, more uniform monitoring of capital projects, the city can better identify where additional improvement is needed.