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What Intro 1392 does

Intro 1392 requires the City to move from an unpredictable reimbursement model to regular quarterly advance payments for certain contracts. Under the bill, covered DHS and MOCJ contracts will receive at least 25 percent of the annual contract value at the beginning of each quarter. It also establishes a pilot program to extend quarterly advances to other human services contracts over 1 million dollars, allowing the City to test and refine the model across agencies before making it permanent.

In plain terms, this shifts providers from chasing months-late reimbursements to having predictable, on-time cash flow. Instead of taking out lines of credit, paying interest, or delaying payments to staff and vendors while they wait for the City to process invoices, organizations will have funds available up front to run the programs the City has already contracted and budgeted for.

Why this matters for homeless services

The current system has left nonprofit providers routinely waiting months to be paid for services already delivered. Organizations have been forced to take on debt, draw down reserves, and make painful choices about staffing and programming just to bridge the gap between their expenses and delayed reimbursements.

HSU’s own sample of DHS-contracted members shows more than 189 million dollars in outstanding budget actions from fiscal year 2020 through fiscal year 2025. When approved budget changes sit “below the line” and cannot be invoiced until separate paperwork is processed, providers are effectively floating millions of dollars on behalf of the City. Many have pulled back from bidding on new contracts because the financial risk is too high.

Intro 1392 directly responds to these realities for DHS and MOCJ providers and builds a framework for broader reform across the human services system. By codifying predictable quarterly advances, the bill makes it easier for providers to:

• Pay staff on time and retain qualified workers
• Keep shelters, drop-in centers, and outreach programs fully operational
• Avoid high-interest borrowing to cover City-created cash flow gaps
• Plan ahead with a clear sense of when funds will arrive

How this fits into broader reform

Intro 1392 builds on earlier advances for other human service nonprofits, including reforms that created 50 percent advances for some city-contracted providers. DHS and MOCJ contractors were excluded from that law for technical reasons, which is why this new bill is so critical: it extends the logic of on-time payment to providers working directly in the homeless services and criminal legal system space.

At the same time, HSU and our partners continue to call for stronger enforcement tools to ensure agencies pay on time and move budget actions efficiently. Ideas such as interest on late payments, clearer deadlines, and more transparent reporting remain important pieces of the long-term solution. Intro 1392 is a major win, and it should also be a foundation for further change, not the end of the conversation.

What happens next

The bill now goes to Mayor Eric Adams for signature. We expect the Mayor to sign Intro 1392. Once the law and any implementation guidance are finalized, HSU will share:

• When quarterly advances will begin for DHS and MOCJ contracts
• Which contracts are covered and how the pilot for other agencies will work
• How recoupment, reporting, and reconciliation will be structured
• What providers need to do, if anything, to prepare on their end

We will also continue to monitor how this new structure interacts with existing challenges, including backlogged budget actions and long-standing delays in invoice approvals. Providers will still need agencies to clear past-due items so that they are not carrying historic debt while moving into a new payment model.

A coalition win

This win belongs to the providers who raised their voices and refused to accept late payment as “just how it is.” HSU members shared data, walked through their cash flow crises in detail, and testified publicly about the risks to staff, programs, and clients when the City fails to pay on time.

It also belongs to the frontline workers making sure New Yorkers have a safe place to sleep and someone to pick up the phone when they call for help. Their work has been underwritten by unstable contracts for too long. Intro 1392 is a recognition that if New York City relies on nonprofits to deliver critical public services, it must also pay them in a way that supports stability, not crisis.

HSU is grateful to Speaker Adrienne Adams, the bill’s sponsors, and the City Council’s Committee on Contracts for listening to providers, taking payment delays seriously, and moving this reform forward.

We will keep fighting for a contracting and payment system that matches the scale and urgency of the homelessness crisis. But today, we pause to recognize a meaningful step forward: a concrete, structural change that helps shift the burden of cash flow off nonprofits and back onto government, where it belongs.

Key facts

• Intro 1392 requires quarterly advance payments of at least 25 percent per quarter for covered DHS and MOCJ contracts.
• The bill creates a pilot to extend quarterly advances to other human services contracts over 1 million dollars.
• HSU members report more than 189 million dollars in outstanding budget actions across DHS contracts from FY20 to FY25.
• The Council approved Intro 1392 on December 4, 2025, and the bill now awaits action by Mayor Adams.

Next steps for providers

• Watch for HSU updates on the Mayor’s signature and implementation guidance
• Start internal conversations with finance and program staff about how quarterly advances could affect budgeting and cash flow
• Continue to share real-world payment and contracting issues with HSU so we can elevate them in ongoing advocacy