Two weeks ago, it had become clear despite many months of pleading that several New York City contracts that had been awarded toThe West Side Commons , also known as Strycker’s Bay Neighborhood Council, would not be registered in time for the organization to make its Friday payroll. In a last-ditch effort to avoid laying off staff and discontinuing services, the organization’s executive director Kelley Williams reached out directly to City Council Member Helen Rosenthal to intervene on her behalf. At the same time, she approached SeaChange Capital Partners for an emergency loan.
Williams got lucky. In most cases, the failure of the city to honor its commitments would have led to disaster with her staff who are mostly people of color with modest incomes, losing their jobs, and the after school, eviction prevention and other services that would be abruptly canceled. However, Rosenthal knew the organization well and as a long-time council member, who also led the Committee on Contracts, was well positioned to get the wheels of the city bureaucracy turning. SeaChange also had a pre-existing relationship with Williams and her organization, allowing us to make an emergency bridge loan in less than 24 hours.
The West Side Commons story illustrates how late registration and payment remain an enormous and poorly understood problem with dire human consequences. NYN Media spoke with Williams about her experience and asked her to brainstorm what the Adams administration could do to address the problem.
You’ve led The West Side Commons for 35 years. How does the situation today, with respect to registration and payment, compare with what you have seen over your long career?
It is worse than it has ever been for our organization. I attribute this to more of our funding coming from City Council discretionary grants. We rely on this funding to meet the needs of our neighborhood-based programs.
The system is so complex that it seems like nobody knows what to do. When a contract is delayed, have you been able to find out what is going on and what needs to be done to get things moving?
No, not really. The most common answer I get is, “It’s in the Comptroller’s Office”, but it’s seldom clear what that means or when the contact really gets to the Comptroller. However, my most recent effort involved reaching out directly to a financial analyst from the finance division of New York City Council. I only discovered this contact by luck. Reaching out to her and our City Council Member Helen Rosenthal got our contract released immediately in the city’s online contracting portal. I reached out in desperation and not out of any established protocol. But it worked.
HHS (health and human services) Accelerator, PASSPort, and other systems appear to have improved over the last few years. Have these improvements changed things for your organization?
Yes. Accelerator is great for invoice processing. PASSPort is an effective way to provide contract documents for multiple grants and has resolved the labor-intensive process of having to provide as many as six original and some notarized contract forms required. It also provides a digital paper trail of when documents were submitted. But it is still very frustrating that I frequently have to resubmit contract documents because they go stale after three months even though the delays have nothing to do with me.
Do the people you deal with in the city understand your plight? Do they care?
I have had more people who care than not. However, the caring people are not always the ones responsible for moving documents through to the next stage. When documents fail to move from one stage to the next, I have to make calls and plead for someone – anyone – to expedite the processing so that we can make payroll.
Those who have been helpful and really care have no problem when I go around them to get the contract process moving. But there are others with no understanding of nonprofit management or the pressures executive directors of small neighborhood-based organizations face. During the pandemic, we were pressured to offer full in-person programming. I shared we had a cash flow problem and had not received any payments in the nine months since the contract started. The response I got was, “...when you agree to run programs you assume the financial responsibility even if you have not yet been paid by the city agency.” This showed a disregard for what we were going through in the field during the pandemic.
In private, many nonprofits report being loathed to speak up for fear of being “punished”. Can you tell us more about this concern?
I’ve never been punished by a city agency, but I believe that a lower-level manager/director may have been caught off guard when questioned about the cash flow problems that I was experiencing. This person may not have the power to defund our organization but they certainly have the ability to issue poor evaluations which could impact West Side Common’s Vendex rating.
When times get tough, have you tried to borrow from board members?
Yes! Board members have advanced us tens of thousands of dollars ─ this fiscal year alone forty thousand dollars was given to help meet payroll expenses. The board understands that our staff does not have access to financial resources. All of our staff are people of color, who live in public housing or other subsidized housing and are working hard to make ends meet while serving the community. A missed paycheck can mean a missed rent payment, phone bill, or doctor visit copay.
There is great reluctance to advance or lend against contracts which have been awarded but not registered. Have you ever had a contract awarded but not registered?
Never in the four decades I have been with the organization has an awarded contract not been registered. The reluctance of lenders could be an outdated procedure from the time when it was difficult to validate an organization’s ongoing business relationship with the city. This could possibly be revised utilizing PASSPort to track current, ongoing transactions that would validate insurance clearances and timely contract management practices. This could serve as a primary qualification for the organization to obtain a cash flow loan. We start up programs on time without a signed contract or advance. It’s a calculated risk but if we can begin work without a signed contract, shouldn’t the city permit a percentage of the contract award to be released? Why shouldn’t lenders assume that we will eventually get paid?
The New York City Mayor Bill De Blasio administration says it values smaller, community-based, BIPOC-lead organizations yet these are often the groups least able to survive the city’s poor registration and payment processes. If (mayor-elect) Eric Adams is serious about changing this, what four to five things should he consider?
Here are some things he could do: Appoint a procurement czar to work with the Mayor’s Office of Contract Services (MOCS), the Comptroller, the agencies, and even philanthropic entities to help figure things out. This office could also be a resource for organizations desperate to figure out the status of their contracts. Someone like City Council Member Helen Rosenthal would be great for this role.
Examine the policies that prevent city agencies from processing city council contracts upon passage of the city’s budget as these awards have been voted on and are already embedded into Schedule C of the approved budget.
Align city council awards with those of each city agency through which they are contracted.
Look for ways PASSPort can be used to substantiate an organization’s qualifications for immediate contract processing. If I have an existing contract and have been actively submitting invoices and receiving payments for an entire fiscal year – the ongoing qualification could be extended three to four months (except proof of insurance must be current)
Create a mechanism for organizations to get advances or loans against awarded contracts even before registration.
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