New York City's Agreement With Union Reduces Uncertainty As City Unveils Preliminary Budget For 2018

NEW YORK (S&P Global Ratings) Feb. 1, 2017--On Jan. 24, 2017, New York City Mayor Bill de Blasio unveiled the city's preliminary, $84.67 billion 2018 budget, which is slightly lower than that of the current fiscal year. In addition, on Jan. 31, the city reached a tentative five-year agreement with the Patrolmen's Benevolent Association (PBA), bringing more than 99% of its union workforce current. S&P Global Ratings believes this will reduce uncertainty associated with labor costs. For the budget, S&P Global Ratings believes the following factors are key from a credit standpoint: The tentative agreement with the PBA is retroactive to 2012, and the agreement's cost over the contract period is consistent with that established with other uniformed unions. The

...NEW YORK (S&P Global Ratings) Feb. 1, 2017--On Jan. 24, 2017, New York City Mayor Bill de Blasio unveiled the city's preliminary, $84.67 billion 2018 budget, which is slightly lower than that of the current fiscal year. In addition, on Jan. 31, the city reached a tentative five-year agreement with the Patrolmen's Benevolent Association (PBA), bringing more than 99% of its union workforce current. S&P Global Ratings believes this will reduce uncertainty associated with labor costs. For the budget, S&P Global Ratings believes the following factors are key from a credit standpoint: + The tentative agreement with the PBA is retroactive to 2012, and the agreement's cost over the contract period is consistent with that established with other uniformed unions. The city's labor reserve covers most of these costs, and any incremental costs are in savings that the labor agreement will reflect, with the estimated net cost at about $336.7 million. The full impact will be clear in the in April 2017...

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