$1.6 Billion in Debt Recovery Sought by Council Hearing

11/19/2015

Inter-agency task force announced

New York, NY – The Committees on Governmental Operations and Finance, chaired by Council Members Kallos and Ferreras-Copeland, held a joint oversight and legislative hearing today aiming to settle over one billion dollars in outstanding debt owed to the City as a result of unpaid fines. The debt issue was raised by Kallos and Ferreras-Copeland in a joint budget hearing of the committees in May 2014. A June 2014 report by the Department of Finance (DOF) detailed the extent of the debt. In addition to the oversight over the first required yearly report on ECB debt by DOF, the hearing will discuss five pieces of legislation:

  • Int. 806 (Ferreras-Copeland), a partial forgiveness program to incentivize those with outstanding debt to remit payment to the City;
  • Int. 807 (Ferreras-Copeland), Int. 811 (Kallos), and Int. 812 (Kallos), improve upon the current summons by requiring additional information on the property and the individual being served;
  • Int. 810 (Kallos) suspends or revokes the licenses and permits of individuals and business entities for outstanding debt or repeat offenses.

Acknowledging the chaotic situation of having 13 agencies issue ECB summons which are adjudicated by the Office of Administrative Trials and Hearings (OATH) and collected on by DOF, the Department of Buildings (DOB), DOF, and OATH agreed to participate in an inter-agency task force with the City Council in order to improve oversight, enforcement, and collection of violations.

“1.6 billion dollars could be financing programs for students and seniors, building affordable housing, and revitalizing our open space,” said Council Member Ben Kallos. “These fines are levied to uphold the safety of our buildings, the cleanliness of our streets, and protect quality of life. Since we spend resources issuing these fines, we must ensure we have the ability to collect on them and use that money for needed services.”

"Thanks to the collaboration between the Council and Department of Finance Commissioner Jacques Jiha, we now have ongoing reporting and increased enforcement of outstanding ECB judgments. Still, the Council's Finance Committee will continue to track DOF's collection efforts to help it improve and find new avenues for collecting what is owed to the City," said Council Member Julissa Ferreras-Copeland.

Twelve city agencies issue Environmental Control Board (ECB) fines, which are adjudicated by a tribunal under the Office of Administrative Trials and Hearings (OATH). According to DOF, 78% of the summonses that have resulted in outstanding debt were issued by the Department of Sanitation (DSNY), but 55% of the outstanding debt is the result of summonses issued by the Department of Buildings (DOB). DOF, the agency responsible for collecting the debt, explained the difficulties in collecting this debt in a report in June of 2014.

Among the reasons outlined in that report were defective or incomplete summonses which do not provide enough information to track down a respondent; a respondent who fails to appear for his or her assigned hearing date; and insufficient enforcement tools for city agencies to incentivize payment.

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