In June, I reported that after months of inactivity, City Hall had loaded up its migrant cash-debit cards with another nearly $1.1 million in taxpayer money.
Days later, the Adams administration confirmed it: Gotham taxpayers will spend $2.6 million through the end of the year to add 7,300 families to the existing program, which has served about 900 families since March.
The city considers that “pilot” successful — but still hasn’t released a whiff of data to prove it.
Even if you think it’s a good idea to try giving migrants cash cards instead of direct aid for meals and other basics, the way Adams has gone about it is not the way to do it.
In January, the city inked a no-bid, one-year deal with MoCaFi, a company co-founded by an Adams supporter , to distribute a potentially open-ended amount of money — “above $150 million” — to migrants staying at city hotels.
The city was in a hurry to sign the contract, but it took three months to start handing out those debit cards.
In late March, City Hall said it would launch the scheme with 115 families over six weeks, giving each family of four $350 a week; the pilot grew to 900 families.
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Through late June, the program racked up about $850,000 in costs — but only $648,000 went to the actual migrants.
Instead, according to the contract, nearly $211,000 is owed or has been paid in fees to MoCaFi: $62,500 for half a year’s setup fee and two quarterly fees of $62,500 each, and stray fees for cards ($3.50 each) and a share of the money given to the migrants (3%).
The city says the program has saved almost $600,000, compared to delivering three boxed meals a day to the migrants’ doors.
But that’s comparing apples to (rotten) oranges.
Yes, City Hall is paying $8 each for three meals a day to a different no-bid contractor, under a deal it concealed for months — twice as much as the $4 per meal that MoCaFi debit-card recipients get to spend.
Yet the city has only just begun a bid process to see how much such meals might cost if companies compete for the job.
For reference, it cost the city between $4 and $6 per meal to provide take-out school breakfasts and lunches during the 2021 pandemic closures.
Plus, a big part of this comparison relies on a different assumption: that migrants, with no access to cooking facilities, can successfully budget $4 per meal.
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A real-world example strains that assumption: The New York Times followed a family of three to a downtown bodega, where they bought one day’s lunch . . . for $44, or close to $15 apiece.
Sure, maybe they’ll save some of that food for dinner.
But Manhattan prepared-food outlets aren’t cheap.
There’s a way we can know the facts — under its MoCaFi contract, City Hall has access to all “card-level spending data,” including “specific transaction information” for each card, with “transaction amounts, timestamps, and locations.”
The city should release these reports: Where are people spending their MoCaFi money?
Is it mostly at bodegas and other prepared-food outlets, or at grocery stores?
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Such releases would protect against fraud, telling us whether people are spending their money on items coded as acceptable under the program — that is, food and baby supplies — and if they’re spending it within the five boroughs.
The city’s stance toward potential fraud is trust us , even though there’s massive scope for improper card disbursal (giving out cards to the wrong people, like city workers), card theft, illegal card transfers and spending on items that aren’t included in the program.
As for security, MoCaFi has applied to the city to pay a Bronx security subcontractor $350,000 for “staffing services” at the Roosevelt Hotel.
But the MoCaFi contract says that the city, not MoCaFi, is “responsible for the security of the [cards] until delivered . . . to cardholders,” and that the city is supposed to keep the cards in a locked safe or cabinet.
So why the need for a Roosevelt subcontractor, and why was this one chosen?
Finally, as New York enters the second half of this one-year contract, what’s the longer-term plan?
City officials say this program is working. Indeed, since the city doesn’t expect to spend the full $53 million it had budgeted this year, it’s already thinking of requesting an extension to next year.
This, when they could be starting now to launch a competitive-bid process, to see if other financial services or benefits companies can manage this program more cheaply than MoCaFi can.
As it stands, MoCaFi remains the main beneficiary of a potentially massive new city-paid benefits program that is likely to persist as long as the migrant crisis does.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.
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