New York City is facing a cash flow problem so serious – its balance could go negative in November, according to sources familiar with projections under review at City Hall.
Now, Mayor Mamdani’s budget team and the City Comptroller’s office are working together this weekend to develop solutions that will improve cash flow.
City Hall is also trying to stem strong pushback from nonprofit groups – some of whom expressed “sheer panic” after learning Thursday – in an NBC New York report – that the Mamdani administration was considering withholding or delaying billions of dollars in cash advances they are due to receive on July 1.
Administration sources have voiced concern about their ability to implement a new local law requiring the city pay social service nonprofits 50 percent of their annual contract award up front.
That’s double the 25 percent the City was previously required to pay.
The law was aimed at correcting decades of painfully late City payments to programs that serve the City’s most vulnerable residents, including but not limited to New Yorkers experiencing domestic violence, mental health needs and foster care.
“It feels like a betrayal and a gut punch,” said Jeremy Kohomban, Executive Director of the nonprofit group Children’s Village. Kohomban said his non profit is already owed almost $4 million dollars and was forced to pay almost $1 million in interest on loans needed to keep his foster care and violence prevention programs running in 2025.
Nonprofit groups quickly started organizing for a rally next week, circulating flyers that say
“Our work is essential. Our pay should be too. “
The Mamdani administration reached out to some nonprofit leaders before the weekend, promising to devise potential compromises quickly that would protect the human services sector from further harm, according to sources familiar with those discussions.
The local law does allow City budget officials to defer the required upfront payments for up to 180 days if facing financial constraints.
Sources tell NBC New York the City – hoping to avoid incurring more debt itself – is looking to reduce the payments due to the nonprofits in July. The Human Services Council of New York City estimated the advance amount owed at roughly $3.5 billion.
It’s not clear whether the nonprofit groups have any leverage to stop the delays, other than to protest a Mayor many of their employees largely supported.
Some nonprofit leaders sounded unsympathetic about the city’s cash flow problems in interviews with NBC New York.
“That’s their problem, not our problem. We need the cash,” said Kristin Miller, Executive Director of Homeless Services United, which advocates for more than 50 nonprofit agencies serving homeless adults and families.
Comptroller Mark Levine did not comment specifically on the negative-cash-in-November scenario, but in a post on Friday he said “We must take steps now to control our balance through the end of the year,” noting mounting downward pressure on the City’s cash flow.
Levine said the cause of the low balance problem largely pre-dates the Mamdani mayoralty, calling it
“In large part a direct result of the structural imbalance in our City’s budget, in which in recent years our recurring expenses have exceeded our recurring income.”
Some local officials noted the city’s cash flow issues are not a sign that the overall city budget is out of balance, but rather a reflection of timing – and the fact that tax revenues do not always align with necessary expenditures at certain points within a given fiscal year
In the past week, Michael Sedillo, Executive Director of the Mayor’s Office of Nonprofit services, a holdover from the Eric Adams administration announced he would be departing his role, noting on social media that he had been proud to double the standard advance payment rate for nonprofit providers to 50 percent. Sedillo declined to comment when reached by NBC New York.
In a statement last week, Mayor Mamdani’s senior spokesperson Dora Pekec said “Nonprofit organizations play a vital role in our city, providing invaluable services for New Yorkers, and all nonprofits will be paid fully for their rendered services.”
For now, the question remains when.
