Your guide to NYC's public proceedings.
TESTIMONY
Testimony by Michelle Jackson, Executive Director of the Human Services Council, on the nonprofit payment crisis and proposed charter reforms
0:27:07
·
5 min
Michelle Jackson, Executive Director of the Human Services Council (HSC), testifies about the severe impact of chronic late payments on the nonprofit human services sector. She emphasizes the need for procurement reform as essential infrastructure, highlights the alarming rate of late contract registrations (91%), and details delays in invoicing and budget modifications. Jackson supports IBO's recommendations and advocates for mandatory time frames, interest penalties for late payments, and granting MOCS charter authority to address issues inconsistently handled by past administrations.
- Jackson argues timely procurement is critical infrastructure, especially for initiatives like City of Yes.
- HSC supports elevating MOCS, mandating the PPB set time frames for contract registration (aiming for registration before work starts), and imposing interest penalties on late payments.
- She stresses that charter changes are needed because management approaches across administrations have failed to solve the problem.
Michelle Jackson
0:27:07
First.
0:27:08
I'm gonna find my peers.
0:27:12
Good evening, chair Beery.
0:27:14
Thank you to the commission for having me.
0:27:15
I'm Michelle Beckman.
0:27:16
I'm the executive director of the Human Services Council, a membership association of a 80 human service nonprofits in New York City, and we do city and state policy on behalf of the sector with the members that I have, what they have in common is they all contract with the city of New York to provide essential and human services.
0:27:35
You have my written testimony.
0:27:37
It's the same as it's been for fifteen years with some updates by smarter people than me and some new ideas.
0:27:46
But, overwhelmingly, we strike the same note of despite administration, even with the focus on procurement reform, there has overwhelmingly been a lack of focus and effort on paying providers on time for the services that they provide.
0:28:01
And especially now, we see a real sector in crisis.
0:28:04
I will not read my full testimony to you all because there are people who have been at this issue and lived it in a different way much longer than I have.
0:28:11
So I just wanna highlight a couple of things.
Dr. Lisette Nieves
0:28:13
First, you know, to what Luis and
Michelle Jackson
0:28:15
Chaney said.
0:28:16
We absolutely for recommendation.
0:28:19
I think the second thing I wanna focus on is the city of yes.
0:28:23
When we think about affordable New York, at the end of the day, that's the infrastructure, and I appreciate that there's an insight into focusing on the infrastructure of affordable housing.
0:28:33
But the next layer of infrastructure is procurement.
0:28:35
And if we don't figure out a way to provide payment on time to human service providers who will do the supportive housing, who will compete with the RFPs, you are going to have good quality providers who are not going to be in business by the time we get those house that housing upright, and we're not going to have a system that supports all the services that need to be there for city of yes to have seniors and have the wraparound services, have supportive housing, and the wraparound.
0:29:00
So it's there's a huge connection between procurement reform and paying service providers on time.
0:29:06
You all have the data, but I think it's important to note that just recently, the controller's report noted that 91% of total contracts for human services were registered late last year.
0:29:18
That's remarkably late.
0:29:19
That means no human service provider should expect a contract online.
0:29:23
And lateness is on contract registration, but it's also changed until the contract is registered.
0:29:29
Nonprofits can't get paid.
0:29:30
But we've also seen and this is a newer invoicing has been remarkably delayed, and providers are owed not just invoicing for budget modifications when money is added back to FY '20.
0:29:41
They're still waiting on money to be put into the.
0:29:44
And so that's why I think what I'll start out of order is recommendation around having MOX have more authority.
0:29:49
MOX has been able to streamline the procurement process up till payment and invoicing.
0:29:54
So they have more authority to tell to tell city agencies to invoice and pay people in certain ways.
0:30:01
There's an opportunity to fix through the charter something that has plagued the sector and the city for a long time.
0:30:08
The second is I do differ from some of my peers that we do believe there should be time frames for.
0:30:14
The controller's office has thirty days.
0:30:16
We've gone a long way in waiting for different administrations to tell us people, what what if we go faster than our time frames?
0:30:22
We would love for them to have time frames and just work within the time frames.
0:30:25
We don't think it will be thirty days, but the PPP would have authority to establish those time frames.
0:30:31
There was a law that was passed through the city council to show how long it takes for procurement to go, and that would be a good, you know, barometer for it to start.
0:30:41
But, really, contracts need to be registered before the start date, and that's what timeliness means.
0:30:46
And that seems like not a revolutionary idea, yet here we are.
0:30:49
Second, we do believe in sticks, and there should be interest.
0:30:53
There should be an interest penalty.
0:30:54
The state has a contracting law that requires interest to be paid, and their targetness level is much lower than the cities by having some royalties behind it that says, you know, providers take out my members at one moment in time has $78,000,000 in lines of and that they were paying interest for.
0:31:11
That is nonreimbursable on most of their city contracts, which means that's money $78,000,000 is not going to New Yorkers in data services, and the city should be covering those costs.
0:31:23
And if you put it into the agency lines, then there's an opportunity for them to say, listen.
0:31:28
If we can register register everything on time, that's money for our budgets to use for other things.
0:31:34
So it could be a carrot and a stick.
0:31:36
And I mentioned, you know, we also support the charter authority around the mayor's office of contract services.
0:31:41
I think one of the questions that came up here was, you know, what should be what's bad management or mismanagement versus what should be in the charter?
0:31:48
And I would just say we've seen different administrations tackle this issue in different ways and have not followed this properly and, in fact, created their own unique ways of doing it.
0:31:56
And so these are just a couple of things that really provide relief to the nonprofit sector and ensure that there's some timeliness going forward.
0:32:06
Thank you.
0:32:07
Happy to answer questions.
0:32:08
You have my full testimony that has much more fact in it than what I just laid out for you today.