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Impact - June 2015

Following CUF recommendation, Mayor de Blasio takes action to reduce infrastructure costs

The administration’s recent deal on public labor agreements implements a recommendation from our 2014 Caution Ahead report and will save the city over $347 million on construction projects.

Tags: economic growth economic opportunity infrastructure transportation

Our March 2014 Caution Ahead report highlighted the numerous challenges and vulnerabilities associated with New York City’s aging infrastructure. Though we argued that maintaining the city’s roads, bridges, tunnels and trains is critical to sustaining New York’s economic vitality, we estimated that at least $47.3 billion is needed to bring the city’s core infrastructure to a state of good repair.  With the decline in federal investment and limited capital planning at the state and local levels, our report raised the importance of bringing down infrastructure costs. One way to do this, we argued, is for the city to renew the project labor agreements (PLAs) for city construction projects. Not only do PLAs provide labor-cost certainty, but they also exempt the city from cumbersome state laws requiring separate contracts for plumbing, electric and HVAC on any construction project exceeding $3 million.

In June 2015, Mayor de Blasio announced a plan to do just that. Following our recommendation for renewing PLAs, the administration created several agreements with the Building and Construction Trades Council of Greater New York (BCTC) that will cover an estimated $8 billion of construction projects throughout the 4-year term of the agreements and will save the city over $347 million. Broken down, this figure includes savings of over $70 million related to citywide renovation work, over $84 million related to Department of Environmental Protection renovation work, and over $195 million related to School Construction Authority work.