Gotham Gazette Thu, 14 Dec 2017 22:41:51 +0000 Joomla! - Open Source Content Management en-gb (Webmaster) City Council Considers Subcontractors Bill of Rights 12331075774 34a53d8c6d z

Council Member Helen Rosenthal (photo: William Alatriste/New York City Council)

The City Council’s Committee on Economic Development and the Committee on Contracts held a joint hearing on Thursday to discuss proposed legislation that would create a bill of rights for subcontractors working with the city.

Intro.1615, sponsored by Council Members Laurie Cumbo, Robert Cornegy, Jr., and Helen Rosenthal, would require the Department of Small Business Services to create a bill of rights that clearly lays out expectations for prime contractors and subcontractors, and makes it easier for subcontractors to find out what services and resources are available to them should they have a problem or concern with their contract. The legislation would apply to any contracts worth more than $100,000.

“[Contracting] is the heart of so much of what we do here -- construction of public infrastructure and affordable housing, a whole range of human services from pre-K all the way up to senior services,” said Rosenthal, chair of the contracts committee, in her opening statement. “The contracting process is an essential part of how New York City government works.”

The city has registered 12,949 expense contracts worth $20.3 billion in the 2017 fiscal year, which runs through June 30, and subcontractors accounted for $558 million of that sum, according to data available on the comptroller’s Checkbook NYC website. These subcontractors often face a number of hurdles including a lack of access to adequate legal representation to navigate contracts, receiving late payments, and not being able to apply for loans. This is especially true for subcontractors working in human services.

“Contractors often pay subcontractors late because they cannot disburse government funds prior to completion of the service they are paying for, and they themselves are paid late,” explained Tracie Robinson, a senior policy analyst at the Human Services Council of New York, in her testimony. HSC represents thousands of nonprofits in New York and advocates for human services providers as a whole. “[Subcontractors] operate in the context of a broken contracting system. Only if we address the underlying causes of subcontractor instability -- problems at the government-contractor level -- will we be able to set prime contractors and subcontractors alike up for success.”

Many subcontractors are nonprofit organizations and small businesses that are overshadowed by larger entities and do not have the same access to credit and fundraising. Intro. 1615 would make sure that subcontractors get an overview of the payment process, know the points of contact between government agencies, and can get the appropriate documents necessary to get the information and assistance they need.

“Many smaller nonprofit organizations do not have in-house attorneys or staff with experience understanding and administering government contracts,” said Laura Abel, senior policy counsel for Lawyers Alliance for New York, a provider of business and legal services for nonprofits. “City contracts are long, dense, and full of legalese. As a result, nonprofit organizations may take on obligations that they do not understand and cannot fulfill.”

Abel also added, “I have asked clients dealing with an unexpected development what their contract says about that issue, only to hear, ‘Oh, it’s all boilerplate, it’s no help.’ A subcontractor bill of rights can help by encouraging subcontractors to consult counsel before entering into a contract, and whenever they have questions during the life of the contract.”

In addition, subcontractors are frequently minority- and women-owned businesses, commonly referred to as M/WBEs. The city has been trying to encourage the growth and development of M/WBEs to ensure a more equitable distribution of city money. M/WBEs also tend to be more familiar with local community needs compared to larger contractors. M/WBEs accounted for $245.8 million in subcontracts registered in fiscal 2017. Mayor Bill de Blasio’s OneNYC plan includes a commitment to award at least 30 percent of city contract dollars to M/WBEs by 2021 and to award $16 billion in city contracts to M/WBEs by 2025.

Michael Owh, director of the Mayor’s Office of Contract Services and the city’s chief procurement officer, said the de Blasio administration supports the bill and that it “is a step in the right direction toward providing information to businesses and connecting them with resources.”

When asked by Council Member Daniel Garodnick, the chair of the Committee on Economic Development, if the bill warranted any changes or edits, Owh emphasized that it would need input from all the stakeholders. “[We] want to make sure that we get enough feedback from not just our agencies but also the community, the contracting community, as well as the subcontracting community to make sure that we are able to take in all of the various factors,” Owh said.

City Council Considers Subcontractors Bill of Rights Thu, 22 Jun 2017 04:00:00 +0000
Pointing to Progress, Deputy Mayor Says City Hears Nonprofit Funding Concerns Deputy Mayor Richard Buery speaking Medgar Evers

Deputy Mayor Richard Buery (photo: Medgar Evers College)

As city-contracted nonprofit organizations continue to call for funding increases from the de Blasio administration, Deputy Mayor Richard Buery insists that the administration is “sympathetic” to those concerns and is doing everything in its power to ensure a “strong and robust” nonprofit sector.

Nonprofits in the city that provide a range of contracted services, from mental health care and early childhood education to homelessness prevention, say they are facing a crisis of financial instability brought on by decades of underinvestment by successive administrations. As their costs soar and contracts remain relatively flat, many are cutting staff or whittling down their services to remain afloat. Nearly one in five are insolvent.

“There really has been absolutely a history of disinvestment in the sector which makes their work harder,” said Buery, who heads strategic policy initiatives for the administration, in an interview at City Hall. “I think under our administration, there’s really been an acknowledgement of that and I really do believe a real effort to address it.”

Under Mayor Bill de Blasio, a first term Democrat, there have been incremental efforts to buoy the sector and those who work in it, particularly by providing salary increases for employees at city-contracted nonprofits. Two years ago, the city gave 2.5 percent cost of living raises to human services nonprofits. The city subsequently announced a $15 minimum wage for all city-contracted nonprofit personnel and, in the mayor's recently-released fiscal year 2018 budget plan, is proposing 2 percent raises annually for three years for the 90,000 employees of human services nonprofits.

The city also established a Nonprofit Resiliency Committee last year, to examine structural problems in the sector and “streamline some of the bureaucratic challenges which wind up having a dollar impact, a financial impact on nonprofits that try to get work done,” Buery said.

Still, nonprofit groups argue that salary increases, though laudable, are not sufficient in the face of rising costs for insurance, rent, infrastructure, and more. “I think it doesn’t get to the heart of the problem,” said Allison Sesso, executive director of the Human Services Council. “The institution itself is financially struggling,” she said, separating the questions of employee wages and organizational solvency.

Sesso is one of nearly 200 human services nonprofit leaders who wrote to Mayor de Blasio in December, calling for a 12 percent increase in contracts across the board at an estimated $500 million price tag. “You count on us each day to ensure the wellbeing, safety, and security of our fellow New Yorkers,” the letter reads. “We fully embrace your equity agenda, but are compromised in our ability to help achieve it given the years of City neglect of our work. You inherited this situation, but it has continued to worsen and we need bold leadership now to fix it.”

Deputy Mayor Buery stressed that the city is committed to those fixes and is engaged in constant dialogue with the nonprofit sector, but change doesn’t happen overnight. “I think everybody understands that...problems that have taken decades to create, are not gonna be solved in one budget cycle, or two budget cycles,” he said, pointing out that the challenges faced by the sector aren’t a problem specific to the de Blasio administration but one faced by city government at large.

Buery also said that the services provided by these nonprofits are particularly critical at a “vulnerable” time for the city, facing a period of economic slowdown and potential federal budget cuts.

That vulnerability and uncertainty about the future is precisely why Sesso from HSC said the city needs to invest in nonprofits now, to shore up a sector that serves the city’s neediest population. And while she agrees that the crisis can’t be solved immediately, “It’s important they make a substantial move forward this year,” she said.

Sesso commended the administration for creating the Nonprofit Resiliency Committee and ensuring ongoing conversations with nonprofits. But, she said, “As an advocate, until I see the money in the budget, I’m not satisfied. You can’t solve the problem through efficiencies alone.”

The city budget cycle recently began with de Blasio’s presentation of his preliminary budget. It will continue with a round of City Council hearings, behind-the-scenes negotiation and lobbying, de Blasio’s executive budget, more hearings and negotiations, and a budget deal between the mayor and the Council by the July 1 start of the new fiscal year.

The Federation of Protestant Welfare Agencies, one of New York’s largest nonprofit service providers, has been pushing for increased funding not only in the city but also at the state level. And while the state has yet to engage with their efforts, the city’s initiatives are encouraging. “We’re seeing some evidence of interest in addressing the issue,” said Emily Miles, director of policy, advocacy and research for FPWA. Miles cited the minimum wage increase and the cost of living adjustment. “But there’s some ways to go,” she said.

Miles and her colleague, policy analyst Carlyn Cowen, praised the administration for tackling structural issues and soliciting feedback from organizations through the Nonprofit Resiliency Committee, something prior administrations ignored. “Having everybody at the table is pretty unprecedented,” said Cowen. But they emphasized the pressing need to strengthen human services nonprofits, echoing Sesso’s warning of how federal policies may impact New Yorkers.

For the administration, the fact that nonprofits are voicing their concerns is a badge of honor, Buery said. “The light that’s being shined on the problem is a good thing,” the deputy mayor told Gotham Gazette, “but it is in part a reaction to an administration which has been willing to shine that light and open that conversation.”

Buery expects that dialogue will continue through the budget process as the city assesses revenue, and analyzes where best to allocate spending. “The mayor’s really shown his commitment to putting his money where his mouth is and so we intend to move forward with this sector to make sure we continue to do so,” he said.

With the city economy humming, and jobs and tourism at record highs, de Blasio has rapidly increased the city budget over his three years as mayor. He has continued to announce new funding initiatives already this year.

Asked at a news conference on Tuesday about the funding for nonprofits in his latest budget, Mayor de Blasio said, “I think the issue of how to make sure each preventive service organization does their job as best as possible is a broader qualitative question and to make sure we have enough of these services available when we need them for families in immediate need...we have to make sure the quantity and the quality is right. In the meantime we’re certainly looking for every opportunity to improve the dynamics for those workers and the compensation they get.”

by Samar Khurshid, City government reporter, Gotham Gazette

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Pointing to Progress, Deputy Mayor Says City Hears Nonprofit Funding Concerns Wed, 22 Feb 2017 05:00:00 +0000
The Time Is Now to Increase City Human Services Contracts Urban Pathways rally outside city hall

Urban Pathways members rally outside City Hall (photo via Urban Pathways)

In May 2015, my fellow Urban Pathways Board Member Gary Belsky rightfully recognized Mayor Bill de Blasio’s fiscal year 2016 budget investment in the human services nonprofit workforce. The investment -- a 2.5 percent cost of living adjustment and an $11.50-per-hour wage floor, coupled with a subsequent City-funded $15 minimum wage -- rewarded a long neglected workforce instrumental to moving vulnerable New Yorkers and the City forward.

However, as we approach the fiscal year 2018 budget, the mayor has more to do. It is now time for him to follow these laudable staff investments with a 12 percent increase in the city’s human services contracts themselves. Contract increases will act in concert with the enacted workforce investments. They will ensure we have human services organizations to employ the workers now deservedly earning a higher wage. (In 2013, nearly one in five city human services providers operated in the red, an indicator of potential closure.)

Human services nonprofits serve the most vulnerable in our city, about 2.5 million New Yorkers each year. They provide early childhood education and after-school programs, run food pantries, provide mental health services, house persons experiencing homelessness, and care for the elderly, among many other community services. Urban Pathways, for example, assists homeless adults in the New York City metropolitan area through a continuum of services and supportive housing.

Increases will enable us to provide ample training and affordable benefits to our staff. Years of flat funding from the city amid the rising costs of health care have complicated our ability to remain fiscally sound. This year, Urban Pathways endured another double-digit increase in our health care costs for our over 300 employees. Flat funding forces us to split these double-digit increases with our employees, resulting in increased co-pays and obligating us to modify our health insurance carrier.

City contract increases will also reverse the tide of consistently underfunded contracts. In the past decade, the city has granted only one increase to its human services contracts. This has yielded barebones human services programs that should do more than merely subsist. Those whom we serve deserve that.
A consistent challenge Urban Pathways faces in operating our facilities for alternatives to shelter for homeless adults -- the Olivieri Drop-In Center, Hegeman Safe Haven and Travelers Safe Haven -- is inadequate city investment in the form of an underfunded Other Than Personal Services (OTPS) line. OTPS constitutes a significant line in the budgets of our Drop-In Center and Safe Havens. We draw on it to feed the 500 clients we annually serve at these programs so they have access to healthy food amid their paltry incomes. We use it to ensure our staff receives benefits and development to counter high turnover in our sector. We also rely on it to upgrade technology and make capital repairs so infrastructure remains sound. Our Safe Havens, like any other buildings, break and require maintenance.

As a board member, I with countless others, invest time, money and personal equity in human services organizations across the city. We proudly do so because we recognize the value of these organizations. They are vital to the individuals receiving the services, our communities and the city overall. We also take our fiduciary duty seriously, and recognize that the challenges are growing and threaten the sustainability of these organizations.

The time is now for the mayor to complete his work and enact a budget that includes a 12 percent increase in the city’s human services contracts. Let’s ensure human services organizations and their workforce can develop and run programs to their fullest capabilities.

Kelley Gott has been an Executive Board Member of Urban Pathways since 2015.

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The Time Is Now to Increase City Human Services Contracts Fri, 10 Feb 2017 01:29:52 +0000
Enacting a State Budget that Restores Opportunity human services council presser

Seeking state budget changes (photo: Human Services Council)

Today -- Thursday, February 2 -- at 1 p.m., Urban Pathways, human services leaders, workers, and clients from downstate New York will gather at our Ivan Shapiro House, a supportive housing residence in Manhattan, to call on Governor Cuomo, the Assembly and Senate to strengthen the human services sector through cost-effective investment. We will also respond to an Executive Budget released by Gov. Cuomo that is devoid of this investment.

In the Executive Budget, Gov. Cuomo laid out laudable proposals, including expansion of pre-kindergarten and afterschool programming, and addressing homelessness and the opioid epidemic. All have a worthy goal of increasing opportunity for individuals and families. However, the $152 billion budget plan invests little in the sector responsible for executing this vision: nonprofit human services.

For example, to address homelessness, the budget appropriates $950 million for the construction of 6,000 supportive housing units throughout the state. Yet, an assessment of how the governor’s budget invests in compensating those who provide the support in supportive housing - human services case managers, security, maintenance, and administrative assistants - shows glaring shortcomings.

The fiscal year 2018 Executive Budget briefing book put out by the Cuomo administration acknowledges our “nonprofit labor force includes a large number of low- wage workers.” However, the budget is devoid of a cost of living adjustment (COLA) for our workers, freezing their income as their housing costs only rise. The governor has recognized the increasing costs of housing, but his budget does not reflect how hard it is for some of the state’s most important workers to afford their own places to live.

The governor’s budget also eliminates the planned 0.8 percent human services COLA. It also discontinues the COLA enacted in 2015 to certain direct care workers and direct service providers.

The State did enact a phase-in plan for a $15 minimum wage last year, which we appreciate. Our workers should not live in poverty. However, the governor has yet to fund the minimum wage increase for human services workers under contract with the state, leaving our sector to absorb the cost. He acknowledged the economic hardship that the increase imposes, suggesting his budget division could grant organizations a state reimbursement based on hardship. The governor should provide the necessary budget dollars instead of requiring us to demonstrate hardship. This is about organizations doing the most important work being able to pay their workforce without having to lay off employees.

The budget fails to consider the long-term success of its proposals, shortchanging all New Yorkers. For example, the staff of the new supportive housing units works years without a cost of living adjustment, ultimately leaving to work for a sector with COLAs. This means another new case manager for our clients. This interrupts the continuity in the clients’ care and jeopardizes their path to self-sufficiency. It also costs the supportive housing provider to hire and train new staff, which impedes the delivery of services for the client.

Currently, over 340 human services organizations across New York State are coming together for the Restore Opportunity Campaign. The campaign asks for increased investment in our sector to ensure we can continue to effectively serve our communities. The campaign recommends Gov. Cuomo do the following:

1. reverse the trend of defunding human services programs;

2. fund the cost of the minimum wage increase for human services workers; and

3. continue to invest in the Nonprofit Infrastructure Capital Improvement Program.

Across the state, the Restore Opportunity Campaign is holding press conferences to stress that the state can do better for its communities. This past week, the Human Services Leadership Council of Central NY and the Southern Tier Independence Center held press conferences in Syracuse and Binghamton, two of several cities in the state with child poverty rates above 50 percent. The campaign has also held a press conference in Albany where one-third of households are rent-burdened, paying 30 percent of their income on rent.

This is the year to enact a state budget that restores opportunity for all New Yorkers. We urge Gov. Cuomo and the State Legislature to stand with us and communities by investing in the organizations that strengthen our state and people every day.

Nicole Bramstedt is Policy Director at Urban Pathways. On Twitter: @UrbanPathwaysNY.

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Enacting a State Budget that Restores Opportunity Wed, 01 Feb 2017 05:00:00 +0000
Push Continues for Budget Boost to City Contracted Nonprofits hsc rally city hall

The Human Services Council and City Council Members rally at City Hall

On a hot and sunny day, dozens of nonprofit workers took to the steps of City Hall to call on Mayor Bill de Blasio to fund a 2.5 percent increase for the administrative costs of nonprofits that contract with the city. Forty-seven of 51 City Council members have signed on to a letter to de Blasio asking him to baseline the increase, an additional $25 million annually, into the budget as the city moves toward adopting a new spending plan. A budget deal between de Blasio and the Council is due by the start of the new fiscal year on July 1.

As nonprofits and their employees have strained under increasing costs for space, staff, and programming, sector leaders, workers, and legislators are pointing to what they say are flaws in how the city budgets funding for vital services.

The human services nonprofits requesting more funding from the city provide a wide range of services to the city’s most vulnerable, including foster care, homelessness services, mental health care, immigrant services, early childhood literacy and after-school programs, home-care for the elderly, and more.

The city is required to provide many of these support services, but contracts them out to nonprofits to save money and increase efficiency. However, many of these nonprofits are on the brink of insolvency and are borrowing from banks to meet payroll and provide services due in part to decades of underfunding from federal, state, and city government.

“I’ve had to make some really hard decisions in this past year,” said Marla Simpson, executive director of Brooklyn Community Services. “I can think of two programs that are very well run and much needed in our communities where we have had to choose to not fill vacant positions because we cannot afford to put the staff in that position and also pay the rent or the insurance bill.”

The increase in “other than personnel funding” that nearly the entire City Council and a coalition of human services nonprofits - including the Human Services Council, the Federation of Protestant Welfare Agencies, the New York Immigration Coalition, Urban Pathways, and the Center Against Domestic Violence - are asking for would help city contracted nonprofits to afford staff development, rent, repairs, equipment, and technology. (City Council Members who did not sign the letter to de Blasio were Finance Chair Julissa Ferreras-Copeland, Council Speaker Melissa Mark-Viverito, Dan Garodnick and David Greenfield)

These nonprofits are “consistently paid 80 cents for every dollar of work,” said chair of the Contracts Committee Helen Rosenthal, who spearheaded the letter to the mayor, referring to the fact that although government contracts account for the majority of nonprofits’ budgets, they pay roughly 80 cents or less of each dollar of true program delivery costs. “Human services providers need funding…in order to effectively serve the at least 2.5 million New Yorkers in their care,” Rosenthal added.

The de Blasio administration has taken steps to improve conditions for workers in the human services nonprofit sector, which employs over 200,000 New Yorkers, a majority of whom are women (four out of every five workers). In May of last year, de Blasio included a 2.5 percent cost of living adjustment increase for some of the city’s human services providers, and this January, announced a $15 minimum wage for all workers contracted by the city.

Yet more needs to be done, Council members and advocates say, to meet the demands of a sector whose workers are increasingly in need of the types of safety net programs (like Medicaid and food stamps) that they help to provide for others. The extra $25 million in funding is a relatively small ask in terms of the city’s overall $82.2 billion executive budget, said some present at Thursday’s rally.

“The city relies on nonprofit human services providers to deliver essential services on their behalf, but government contracts continually fail to cover the full cost of programs and payment is often late and unpredictable,” said Allison Sesso, executive director of the Human Services Council. “This chronic underfunding prevents nonprofits from being able to make important investments in things like technology, building maintenance, and employee training, which compromises the quality of important programs and services on which countless individuals and families depend.”

Thursday’s rally and the letter to the mayor come after two oversight hearings on contracts in the past year, one of which was prompted by the release of a report from the Human Services Council that painted the picture of a sector in crisis: underfunded contracts with the city create budget gaps and diminish the quality of services nonprofits can provide, and contract payment is chronically late, forcing providers to turn to costly borrowing to meet their organization’s needs, often accruing interest that is not covered by government contracts.

“If the city wants to build a bridge, if the city wants to build infrastructure, the city puts money in the budget into that. And if costs go over, we put more money in the budget to do that. That’s what we do for infrastructure in this city, and that’s what we have to start doing for our human services contracts,” Rosenthal said at the rally.

“If costs go over, we have to put more money in the budget,” Rosenthal concluded, returning to a comparison she made during the last contracts oversight hearing about the fact that many human services nonprofits are told to seek grants and other funding methods to account for the expenses that their government-funded contracts do not cover. At the time, Rosenthal pointed out that the city would never hire a construction company to build a $40 million bridge, then say to the construction company, “‘We’re going to pay you $35 million. Try to get philanthropy, foundations, or other jobs that you do to pay for the remaining $5 million.’”

by Meg O'Connor, Gotham Gazette

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Push Continues for Budget Boost to City Contracted Nonprofits Fri, 27 May 2016 04:00:00 +0000