Politics

Experts say Stringer’s rejection of homeless shelter contracts is ‘illegal’

Giuliani vs. Hevesi. Bloomberg vs. Thompson. Bloomberg vs. Liu. Given the historic – and often litigious – disagreements between New York City’s mayors and comptrollers, the current standoff between Bill de Blasio and Scott Stringer over the registration of homeless shelter contracts is far from shocking.

However, as dozens of shelter contracts remain in limbo, some legal experts are suggesting that the comptroller has exceeded his authority in rejecting, or “kicking back,” contracts. And nonprofit leaders say the ongoing dispute is hurting their ability to provide services to homeless New Yorkers.

“Late payments and delays in contract registration don’t just cause headaches, they hinder organizations and impact service delivery,” said Michelle Jackson, associate director and general counsel for the Human Services Council, which advocates on behalf of many of the city’s homeless shelter providers.

“Nonprofit workers on these contracts are placed in limbo, working in temporary spaces and starting programs without necessary documents and funding,” Jackson continued. “And ultimately it’s the clients who suffer – the delays divert limited resources away from programs, impact staff morale, and make it difficult for nonprofits to plan and invest in programs at the outset.”

Registration of contracts for city-run homeless shelters has been an ongoing point of contention between the mayor and the comptroller, especially since a damning Department of Investigation report in March catalogued the unsafe and squalid conditions of many shelter sites.

The report was unforgiving in its assessment of the Department of Homeless Services’ oversight of 25 sites, saying, “DHS should, but does not, enforce building maintenance or ensure violations are resolved. It should, but does not, force repairs or regularly do its own repairs, nor does it seek assistance from other agencies in getting repairs made. As a result, many shelters operate with existing violations that make life unsafe for its children and family residents.” 

The report also highlighted that many city-funded homeless shelters have been operating without contracts on an emergency, per diem basis, making them both costlier and harder to hold accountable.

“With no contracts, providers and landlords are not subject to competition, and are not held to enforceable contract terms that could, in theory, require them to maintain their buildings or make needed repairs, or else be subject to penalties such as rent reductions or fines,” the report said.

In response, DHS has led an intensified effort to improve conditions at city-run sites and establish contracts for sites that have been operating outside of the contracting system. According to a spokesperson, DHS’ Shelter Repair Squad has completed more than 2,000 inspections over the past several months, clearing more than 7,000 violations and completing almost 3,000 repairs. The spokesperson also said 83 percent of the violations cited in the DOI report have been cleared.

However, according to the comptroller’s office, these efforts have been insufficient in ensuring the safety of many sites that the city has attempted to bring under contract. Over the past 20 months, Stringer’s office has rejected 33 homeless shelter contracts, saying 18 have open violations, and 21 contracts are missing a routine site review inspection, which DHS uses to evaluate safety at the sites.

City officials say the rejected contracts represent tens of millions of dollars in outstanding payments to nonprofits, which provide a total of nearly 2,000 beds for single adults and nearly 900 family units.

Some of the rejected contracts are with nonprofit organizations, such as Samaritan Village, that the city has partnered with for decades. Samaritan Village’s contract for operating a shelter at the former Pan American Hotel in Elmhurst – which initially opened as an emergency site – has been rejected three times over the past several months, with the comptroller citing numerous health and safety concerns.

Despite the cost to providers – some of which have accepted bridge loans to keep their operations going – the comptroller has insisted that his office should not – and cannot – register contracts without documentation showing that sites have either corrected violations or have a concrete plan to do so.

His office also says that in many instances, DHS has been unresponsive to requests for several months.

“The Department of Homeless Services should get its act together, make sure shelters are safe and provide the very basic materials required for us to register these contracts,” said John McKay, the comptroller’s communications director. “The fact that they have not done so, despite our offers to help them navigate this process, speaks to a lack of professionalism and an inability to handle the details necessary to run this city.”

But some legal experts say the comptroller’s refusal to register contracts is an overreach of authority.

Roderick Hills, a New York University School of Law professor who specializes in local government law, cited Section 328 of the city charter, which states that the comptroller must register a contract unless there is not enough funding for the contract to be paid, the Mayor’s Office of Contract Services has not certified the contract, or there is reason to suspect corruption.

Given that none of the homeless shelter contracts have been rejected on those grounds, Hills said the comptroller is operating outside of his office’s authority. 

“For the comptroller to slow down or stop the mayor’s contracting policy is frankly illegal,” Hills said. “The charter makes the comptroller a warning light, not a brake. The mayor is the driver, and all the comptroller can do is cry foul, not stop the car. It’s up to the mayor to decide whether to listen.”

The comptroller’s office, meanwhile, says it is justified in rejecting contracts and sending them back to DHS with requests for additional documentation, citing a Procurement Policy Board rule that lays out which documents should be included in all contracts and allows the comptroller and the head of the Mayor’s Office of Contract Services to agree upon additional requests.

But legal experts have suggested that the Procurement Policy Board rule is not sufficient grounds for delaying the registration of a contract, and that such delays deprive nonprofit providers of the funds they need to make the very improvements cited in the contract rejections.

“The PPB rule doesn't override the charter and it doesn't let the comptroller do the very things the courts have repeatedly said not to do,” said Marla Simpson, a nonprofit executive who was the head of the Mayor’s Office of Contract Services from 2003 to 2012. “Nonprofits are lifelines for New Yorkers who need services. When a well-known community-based group steps in and agrees to provide much-needed programs, if the goal is to improve conditions for clients, the last thing we ought to do is to prevent the city from paying for the work.”

McKay, however, says the comptroller is simply providing the oversight needed to ensure the safety of New Yorkers while acting as a check on the mayor’s authority, which is in the spirit of the charter.

“The charter has a separation of powers for a reason – it’s to protect the integrity of the contracting process,” McKay said. “These are huge contracts, worth millions of dollars. We’re not asking for perfection here, we’re asking them to get complete contract filings to us. That shouldn’t be so hard.”

But Simpson argues that the comptroller should hold city agencies and nonprofits accountable in ways that recognize the realities – and legal limitations – of the current system.

“City agencies are slow at getting contracts done. Many programs pay less than our services actually cost, and nonprofits are not always perfect,” Simpson said. “Of course the comptroller should hold city officials and nonprofits accountable. There’s huge room for improvement and there’s lots of ways to draw attention to that. But it’s not OK to stop paying for services because a city agency screws up the paperwork.

“And even if there are some more substantive issues,” Simpson continued, “it's unfair and illogical to think that taking funding away will make anything better. For the sake of the nonprofits trying to do this work, it’s important for the comptroller and the mayor to figure it out. Contracts should be registered on time, or deemed as registered, and providers should be paid on time.”

The dispute between the two offices may be exacerbated by the city’s payment system, which, according to a knowledgeable source who spoke on the condition of anonymity, does not accurately reflect the offices’ roles as defined in the charter.

“To pay anybody for anything, the city has to use a database system called the Financial Management System, or FMS,” the source explained. “When they built this system in about 1999, the city didn’t specifically build in an override option so the mayor could push the button when the comptroller chooses not to register a contract, although that override power exists in the charter. Only the comptroller can push the button so that payments can be made.” 

Despite the differences in legal interpretation and the complex logistics of the city’s contracting system, city officials have pledged to keep services for the homeless moving forward.

“Ensuring homeless families in need are housed and receive the services they need is our first and foremost priority, and we won’t let any paperwork issues impede that,” said First Deputy Mayor Anthony Shorris. “We’ve been aggressively repairing shelters to ensure they’re safe for homeless families and individuals. We’ve also consistently provided the comptroller’s office the information and paperwork they request, but these nonprofits provide critical services to New Yorkers in need and are owed funding – we have to remedy this situation.”

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.