7 On Your Side investigation prompts changes to homeless services program
NEW YORK CITY (WABC) -- The New York City Department of Social Services is making changes to an emergency grant serving recently homeless or evicted families in response to a 7 on Your Side Investigation into wasteful spending.
7 On Your Side Investigates found one company, A&A Moving and Storage, charging the city up to 14 times the rates other companies were advertising for free moving and storage.
In one instance, A&A billed $485 a month for a 5x5 unit. We found other companies advertising the same sized unit for as low as $34 a month.
Department of Social Services Commissioner Steven Banks said long-standing city policy had always been to just pay the bills individuals presented in requests for emergency assistance, rather than move the items to less expensive units.
The program is run by a branch of the Department of Social Services called the Human Resources Administration.
"When people get evicted, we want to make sure they don't lose all of their possessions," Banks said.
In 2017, HRA spent $18.5 million on monthly storage fees. According to a city spokesperson, A&A received $4.6 million, about a quarter of the yearly spending.
According to the city, 75 other companies split the rest of the annual spending on emergency storage, averaging about $185,455 each.
"You really have to wonder, why wasn't an oversight mechanism in place?" said Brandon Muir, executive director of Reclaim New York, a non-profit organization which works to reduce unnecessary government spending. "City Hall has to be able to look the taxpayer in the eye and say we are spending your money wisely, and we aren't just going to be writing blank checks."
In general, Banks indicated A&A had been charging the city at least twice what other companies charged the city for comparable services and the city had been paying.
"There needed to be a change made in the process, but as a result of the light that you shed on this issue and our work with the state will now change this process, so that if somebody comes to us with a bill that is out of line with what we typically pay, we work with the family to move their belongings," Banks said. "We'll make sure that they don't lose their belongings, but we'll make sure that we're paying a fair price."
A&A owner Adrian Firescu declined multiple requests to speak with 7 On Your Side Investigates on camera, but he stood by his prices in a written statement provided to 7 On Your Side Investigates through his attorney.
"A&A offers its clients a full and comprehensive moving and storage service at rates that are competitive to other companies offering comparable services," Firescu wrote. "Included within A&A's monthly storage rates are full moving services performed entirely by its team of experienced movers from apartments of any size and from any location citywide. It is important to distinguish the above-mentioned comprehensive services from those offered by self-service facilities that do not provide movers, labor, materials and/or moving trucks for the full duration of the move at no additional cost. A&A's clients' items are carefully delivered and stored in its brand new, state of the art storage facility which features ample parking, 24-hour security and unlimited access to stored belongings during business hours."
7 On Your Side Investigates also brought to the city's attention an A&A flier provided to homeless individuals claiming, "A&A is the only moving company in New York City to have an exclusive contract with Department of Homeless Services (DHS) to move homeless families... HRA accepted."
The company had made similar claims on its website.
Some individuals who utilized the program explained that the flier had led them to believe A&A was their only option for storage if they required city assistance.
"That's absolutely untrue," Banks said. "And as soon as you brought that to our attention, we had our lawyers issue a cease and desist letter to stop that. Because we don't want companies preying upon people."
The city confirmed A&A does have a contract with DHS for moving services, which was awarded as a competitive sealed bid. However, that contract is not technically exclusive.
The HRA program, which offers storage as an emergency service, is also separate from that DHS service and contract.
Firescu removed the term exclusive from his advertising and the A&A website, and his attorney explained the decision was prompted by a desire to remove any confusion.
"A&A serves the Department of Homeless Services (DHS) and its clients by providing moving services at the lowest rates submitted to the agency," Firescu wrote in a statement. "To clarify, since 2013 A&A has held DHS contracts to move families citywide from shelters to permanent housing after coming in as the lowest responsive and responsible bidder on each of the agency's procurements for these services. As the successful bidder, A&A was awarded the moving services contracts."
According to Banks, anyone facing eviction should call 311. The city can connect individuals and families to a lawyer who can represent them in housing court and possibly help them stay in their homes, along with other eviction prevention assistance.
Banks estimated roughly 70,000 individuals have avoided eviction over the last several years with this service.
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