New York, NY – October 15, 2009 – (RealEstateRama) — New York City Comptroller William C. Thompson, Jr. has gone to court to challenge the legality of the City’s recent placement of homeless families at 1564 St. Peter’s Avenue in the Bronx. Thompson is asking the court to compel the City to comply with its legal obligation to enter into a contract for the provision of housing and shelter assistance services at the Bronx site.
Incredibly, the Administration has taken the position that it can obtain such services without following the City’s procurement laws, thereby depriving Thompson of his statutory authority regarding the execution, registration and performance of contracts and monitoring of contract payments.
Last month, Thompson became aware that the Department of Homeless Services (DHS) had been moving families into 1564 St. Peter’s Avenue, which is not an approved location under any of DHS’s existing contracts.
Thompson promptly objected to DHS’s placement of homeless families at the St. Peters site in a letter to DHS Commissioner, Robert Hess, which can be viewed at www.comptroller.nyc.gov. In that letter, Thompson advised the DHS Commissioner that no contract existed authorizing DHS to place homeless families at that location and insisted that, absent a contract, DHS cease placing homeless families there and making any further payments for such unauthorized housing and shelter assistance services.
The City’s procurement laws make clear that City agencies must enter into contracts to obtain services, including housing and shelter assistance services and that such contracts cannot be implemented until they are registered by the Comptroller. Accordingly, Thompson has requested that the court declare that Commissioner Hess, DHS and the City of New York have violated the law by obtaining and paying for such services at 1564 St. Peter’s Avenue without a contract.
In his court filing, Thompson notes that this is by no means an isolated incident. In 2003, Thompson initially raised his concerns regarding the absence of contracts for housing services to the administration in his audit of payments to non-contracted facilities used by DHS. That audit found that DHS had paid $96 million in Fiscal Year 2002 to 30 operators of hotels and scatter site apartments without complying with the statutory requirement that it enter into contracts for the provision of such housing services. In response, Mayor Michael R. Bloomberg and then DHS Commissioner Linda Gibbs announced a joint initiative with the Comptroller to establish a more responsive procurement process for those agencies providing shelter services.
At the time, Mayor Bloomberg said: “Good government means transparent management and accountability, and bringing more facilities into a formal contracting process will be better from every perspective. I want to thank the Comptroller for his willingness to engage my administration in a discussion that is results-oriented and reform-minded.”
Then DHS Commissioner Linda Gibbs added: “Ending the scatter site program and decreasing the number of facilities without contracts are both critical to increasing accountability and bringing greater order to a system often defined by crisis. We will continue reducing the scatter site program until it is gone, while moving the system away from per diem payments toward contracts.”
Despite the Administration’s promises, the City continues to obtain scatter-site housing and make per diem payments for the provision of services without contracts, as is the case at 1564 St. Peter’s Avenue. After giving the Administration approximately six years to comply with the law, Thompson has now commenced legal action to compel the City to comply with its legal obligation and respect the Comptroller’s integral statutory role with respect to the execution, registration and performance of contracts and monitoring of contract payments.
