Statement Urging the Adams Administration to Address Chronic Payment Delays to Nonprofit Legal Services Providers

SUMMARY

The City Bar issued a statement calling on Mayor Adams’ administration to address chronic payment delays to legal service providers. The statement was endorsed by the Immigration and Nationality Committee, Children and the Law Committee, Civil Right to Counsel Task Force, Council on Children, Health Law Committee, Housing Court Committee, Housing and Urban Development Committee, New York City Affairs Committee and Nonprofit Organizations Committee. The significant delays in payments to legal services providers are jeopardizing their ability to provide critical services to vulnerable populations. These legal services providers, which assist with eviction defense, immigration issues, and related social services, are facing financial difficulties due to late payments, threatening their operations and the stability of their services. The delays have led to staff layoffs, reduced services, and even the potential closure of programs. While legislation has been introduced by the City Council to ensure prompt payments and penalties for late disbursements, nonprofits do not have the time to wait for the legislative process to play out. Prompt payment is crucial to ensuring that nonprofits can continue their work in providing essential legal protections. The City Bar urges the City to take immediate action to resolve these payment delays and honor its contractual commitments.

REPORT

STATEMENT URGING THE ADAMS ADMINISTRATION TO ADDRESS CHRONIC PAYMENT DELAYS TO NONPROFIT LEGAL SERVICES PROVIDERS

On November 13, 2024, fourteen organizations representing the largest coalition of nonprofit legal services providers in New York City called on Mayor Adams’ administration to address chronic payment delays that are making it difficult or impossible for their organizations to continue to provide essential services to New Yorkers in need.[1] The letter demanded that the City “act by immediately allocating additional advances on housing and immigration contracts and addressing other payment issues that threaten [their] ability to operate.”

The New York City Bar Association joins legal service providers and City leaders advocating for prompt disbursement of current and past-due payments.

New York City’s legal services organizations provide crucial access to justice for indigent New Yorkers who rely on their services to navigate the legal complexities of eviction defense, immigration and deportation proceedings, and related social services. However, as detailed in the November 13 letter and in the press,[2] the City’s ongoing payment delays have put many of these service providers in a financially perilous situation, threatening their capacity to continue serving the City’s most vulnerable populations.

The consequences of late payments are far-reaching. Service providers may be forced to reduce their caseloads, resulting in a backlog of cases that could lead to more evictions, higher risks of immigration detention and deportation, and further instability for already vulnerable communities. For organizations that depend on City contracts to operate, the delay in payments undermines their ability to plan and budget effectively, jeopardizing the sustainability of their operations. Many are forced to take on interest-bearing loans to meet payroll and other expenses, or face shuttering their operations completely.[3] And this is no small matter. The City has over $12 billion in contracts with nonprofit organizations to provide essential services, including foster care, supportive housing, crime prevention, immigrant services, senior care, health care, and community outreach.[4]

The New York City Council has introduced legislation (Int. 0514-2024) that would require the City to pay nonprofit vendors and mandate that interest be paid on late disbursements.[5] State Assembly Member Jennifer Rajkumar is also reportedly introducing the “Get Nonprofits Paid Act” to address this issue.[6] The City Bar supports these legislative fixes; however, nonprofits do not have the time to wait for the legislative process to play out. Without reliable and prompt payments, these organizations face the very real prospect of staff layoffs, reduced services, and even the potential for program closures. Such disruptions would not only harm the nonprofit organizations themselves but also leave countless New Yorkers without the legal support they need to secure their rights and stability.

On January 3, 2025, Mayor Adams’ appointed Michael Sedillo as the executive director of the New York City Mayor’s Office of Nonprofit Services to improve support for nonprofit organizations that are currently facing payment delays across the city.[7] While we remain cautiously optimistic about Mr. Sedillo’s appointment, we urge both him and the City to take immediate action to resolve these payment delays and honor its contractual commitments. Failure to act will further undermine legal services providers’ financial stability and risk depriving vulnerable New Yorkers of essential legal services. Prompt payment is crucial to ensuring that these organizations can continue their work in defending tenants’ rights and providing immigrants with essential legal protections.

Immigration & Nationality Committee
Dorian Rojas and Ludvine Van Der Heyden, Co-Chairs

Children & the Law Committee
Christina Rich and Amy Hozer-Weber, Co-Chairs

Civil Right to Counsel Task Force
Sara Wagner, Andrew Scherer, and Alison King, Co-Chairs

Council on Children
Cathy A. Cramer, Chair

Health Law Committee[8]
Debra Cohn, Chair

Housing Court Committee
Jennifer Hudson and Ronald Languedoc, Co-Chairs

Housing and Urban Development Committee
Farhana Choudhury and Julia Solo, Co-Chairs

New York City Affairs Committee[9]
Marc Landis, Co-Chair

Nonprofit Organizations Committee
Katherine Hughes and Tracy Boak, Co-Chairs

January 2025