More than 100 nonprofits want change to City Charter to help them get paid on time
This article originally appeared in The Daily News: and is authored by Jillian Jorgensen
A review by Controller Scott Stringer (center) found that 81% of new and renewal contracts in the city were sent to his office for registration after the contract’s start date had passed. (Shawn Inglima for New York Daily News)
Nonprofit organizations tired of being paid late by the city are looking for a little help — in the form of a change to the City Charter.
More than 100 nonprofits have signed on to a letter to the 2019 Charter Revision Commission, seeking reforms that would create a "strict time frame" for city agencies to register their contracts with nonprofits that do crucial work like helping the homeless.
The letter was spearheaded by the Human Services Council, an advocacy group representing the city's nonprofit human services sector.
"For nonprofit human services organizations, delays in contract registration create administrative headaches but also have real financial costs; providers are not paid until the contract is registered so often they have to take out lines of credit or delay payments to third parties while waiting for payment," the coalition wrote.
A review by city Controller Scott Stringer found that 81% of new and renewal contracts in the city were sent to his office for registration after the contract's start date had passed; that number was even higher, 90.8%, for human services contracts, and half of those were late by six months or more.
"We're really asking the Charter commission to resolve a decades-old problem, and one that is becoming more serious because of the fact that the city is now contracting billions of more dollars out," said David Greenfield, a former Brooklyn city councilman who is now CEO of the Metropolitan Council on Jewish Poverty.
The city has $5.7 billion worth of contracts with more than 1,000 nonprofits across the city, he said — and the average one is registered 210 days after the start date.
"Many of the smaller nonprofits are actually struggling to stay open, and literally have to beg or borrow to pay the bill," he said. "And for bigger nonprofits like us, we actually loan money to smaller nonprofits so they can stay in business."
Greenfield said the instability can also make it hard for nonprofits to attract staff.
"You don't want to come work for an organization if you're not sure whether or not you're going to get paid," he said.
The nonprofits are making their plea to the Charter Revision Commission created by the City Council — which will be the second body to review the City Charter in two years.
Last year, Mayor de Blasio created a commission to make recommendations for Charter revisions related to elections and civic engagement. Changes to the campaign finance system and term limits for community board members suggested by that panel were approved by voters in November.
This year's commission will have a broader scope, and its recommendations will also have to be approved by voters.
The nonprofits are hoping the commission will set a specific time frame in which city agencies have to review and approve contracts. The groups are also looking for the creation of a publicly accessible system for tracking the progress of those contracts.
Stringer is joining the nonprofits in calling for a change to the Charter to fix the longstanding problem.
"It's an outrage and it must stop," Stringer said. "The city has to start paying its bills within a reasonable time frame and create long-overdue transparency."
Jose Bayona, a spokesman for de Blasio, said the city was working to put the procurement process online, a project dubbed the Procurement and Sourcing Solutions Portal, or PASSPort.
"PASSPort is a technology solution that is designed to create visibility into the contracting process, enhance collaboration and facilitate timely contract registration," he said, adding that nonprofits and vendors were being consulted in its implementation.
But the portal will be rolled out over three releases, the final not coming until 2020 when all aspects of the procurement and contracting process will be online.
