MMR - FY20 - Department of Finance

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• Parent Document:: Mayor's Management Report - Fiscal Year 2020
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    • DEPARTMENT OF
    • FINANCE Jacques Jiha, Commissioner
    • DEPARTMENT OF FINANCE | Page 339
    • WHAT WE DO
    • The Department of Finance (DOF) is
    • responsible for the collection of more
    • than $40 billion annually in revenue
    • for the City and the valuation of
    • over one million properties worth a
    • total of more than $1 trillion. DOF
    • records property-related documents,
    • administers property tax exemption
    • and abatement programs, assists
    • New Yorkers with tax payment issues
    • through the Office of the Taxpayer
    • Advocate, adjudicates parking
    • tickets, administers the City’s bank
    • accounts, manages the City’s cash
    • flows and administers its business
    • and excise taxes.
    • Through the Office of the Sheriff,
    • DOF enforces court mandates,
    • orders, warrants of arrest, property
    • seizures, and a wide variety of state
    • and City public safety mandates.
    • The Sheriff’s Office investigates deed
    • fraud, the trafficking of illegal and
    • untaxed tobacco products and the
    • sale of synthetic narcotics.
    • Through the Mayor’s Office of
    • Pensions and Investments, DOF
    • advises the administration on the
    • management of the City’s five
    • pension systems.
    • DOF is committed to providing
    • exceptional customer service. The
    • agency utilizes a customer-centric
    • business model, incorporating
    • reforms and initiatives. DOF,
    • leveraging Lean Six Sigma, continues
    • to streamline processes and improve
    • cycle times. This furthers the mission,
    • Finance’s commitment to its revenue
    • goals, and enables a better customer
    • experience for the City’s taxpayers.
    • FOCUS ON EQUITY
    • DOF has several programs and initiatives to ensure all New Yorkers are treated fairly
    • and have access to City services and information. The Customer Contact Center
    • provides all residents and businesses with support regarding payments, property
    • exemptions and business taxes. As of June 30 around 36,500 calls have been
    • received from our constituents. DOF maintains exemption programs for senior
    • citizens and the disabled (SCRIE, DRIE, SCHE and DHE) which enable qualifying
    • renters and homeowners to remain in their homes. The Taxpayer Advocate and the
    • Parking Summons Advocate provide additional means for many under-resourced
    • residents to address issues with their taxes or parking tickets and moving violations,
    • respectively, that could not be resolved elsewhere.
    • During the pandemic, it is critical that DOF provides a safe means for our most
    • vulnerable constituents to conduct their business with DOF and to ensure the
    • safety of staff. Online appointment scheduling is now offered for some programs
    • enabling a quicker transaction with DOF. DOF offers the public a broad array of
    • options to conduct transactions online, by phone, and by mail.
    • OUR SERVICES AND GOALS
    • SERVICE 1 Bill and collect property and other taxes.
    • Goal 1a Increase the proportion of individuals and businesses that are in
    • compliance with tax and revenue laws.
    • Goal 1b Promptly review requests for refunds.
    • SERVICE 2 Bill, adjudicate and collect on parking tickets.
    • Goal 2a Increase the proportion of parking tickets that are resolved.
    • Goal 2b Assure that all respondents are offered convenient options for
    • paying and challenging tickets.
    • SERVICE 3 Administer rent and property owner exemption programs.
    • Goal 3a Promptly review applications for exemption programs.
    • SERVICE 4 Help NYC taxpayers resolve tax issues.
    • Goal 4a Through the Office of the Taxpayer Advocate, promptly address
    • inquiries and resolve cases.
    • SERVICE 5 Record property-related documents.
    • Goal 5a Increase the percentage of online property recording transactions.
    • SERVICE 6 Serve and execute legal processes and mandates.
    • Goal 6a Increase the proportion of judgments, orders and warrants that are
    • successfully served/executed.
    • Page 340 | MAYOR’S MANAGEMENT REPORT
    • HOW WE PERFORMED IN FISCAL 2020
    • SERVICE 1 Bill and collect property and other taxes.
    • Goal 1a Increase the proportion of individuals and businesses that are in compliance with tax and revenue laws.
    • Property taxes billed that are paid was 98.06 percent for the year, following the trend of recent years.
    • During the COVID-19 pandemic, in-person audit visits have been suspended and the pace of taxpayer interactions with the
    • audit staff has slowed. The year-over-year audit results remained relatively level compared to the previous fiscal year. The
    • retirement of non-field audit staff resulted in the hiring of replacement auditors with lesser experience. The reduction in the
    • percent increase in tax liability for non-field cases was impacted, but will be cured over time by the increasing experience of
    • this newly hired non-field audit staff. Additionally, the non-field unit audited larger, more complex taxpayers in Fiscal 2020
    • over Fiscal 2019 who paid more tax on original filings, resulting in a lower relative increase in liability over the prior year.
    • Due to the pandemic, the tax lien sale did not occur in May 2020 as originally scheduled. On September 4th, the Mayor
    • announced that the effective date of the tax lien sale had been moved to September 25. Soon after, the governor issued an
    • executive order prohibiting any sales of tax liens until October 4. During this time, DOF will continue to work with property
    • owners whose tax lien is at risk of being sold. The Fiscal 2020 data reported below reflect the number of properties placed
    • in the 2019 sale. This sale occurred in September 2019, as the deployment of the new Property Tax System delayed the
    • annual Fiscal 2019 lien sale process.
    • Performance Indicators
    • Actual Target Trend
    • FY16 FY17 FY18 FY19 FY20 FY20 FY21 5-Year
    • Desired
    • Direction
    • « Property taxes billed that are paid (%) 98.6% 98.7% 98.8% 98.3% 98.1% 97.0% 97.0% Neutral Up
    • – Paid on time (%) 96.1% 97.1% 96.5% 95.5% 95.9% * * Neutral Up
    • Average turnaround time for field audits (days) 504 435 324 382 408 * * Down Down
    • Average turnaround time for non-field audits (days) 220 165 175 175 175 * * Down Down
    • Increase in tax liability as a result of audits (%) 25.8% 25.9% 23.1% 19.0% 20.1% * * Down Up
    • Increase in tax liability as a result of field audits (%) NA NA 27.3% 18.5% 21.2% * * NA Up
    • Increase in tax liability as a result of non-field audits (%) NA NA 12.6% 25.4% 10.9% * * NA Up
    • Originally noticed properties sold in lien sale (%) 14% 17% 16% NA 16% * * NA Down
    • Properties in final lien sale 3,461 3,939 3,728 NA 3,724 * * NA Down
    • « Critical Indicator “NA” Not Available ñò Directional Target * None
    • Goal 1b Promptly review requests for refunds.
    • The average turnaround time for property refunds decreased from 27 to 21 days. This improvement in processing time was
    • due to a workflow process improvement that resulted in eliminating certain manual tasks. DOF also instituted additional
    • training modules for staff to ensure prompt knowledge transfer of any new system enhancements.
    • Performance Indicators
    • Actual Target Trend
    • FY16 FY17 FY18 FY19 FY20 FY20 FY21 5-Year
    • Desired
    • Direction
    • « Average time to issue a property tax refund (days) 24 24 35 27 21 28 28 Neutral Down
    • « Average time to issue a business tax refund (days) 9 26 35 15 15 25 25 Neutral Down
    • « Average Time to Issue a Requested Business Tax Refund
    • (days) NA NA NA 13 13 25 25 NA Down
    • « Average Time to Issue a Non-Requested Business Tax Refund
    • (days) NA NA NA 16 16 25 25 NA Down
    • « Critical Indicator “NA” Not Available ñò Directional Target * None
    • DEPARTMENT OF FINANCE | Page 341
    • SERVICE 2 Bill, adjudicate and collect on parking tickets.
    • Goal 2a Increase the proportion of parking tickets that are resolved.
    • Due to the 90-day lag in the reporting of the results, full Fiscal 2020 results are not available in time to be included in this
    • report. The Fiscal 2020 results will be published in the Preliminary Fiscal 2021 Mayor’s Management Report.
    • Performance Indicators
    • Actual Target Trend
    • FY16 FY17 FY18 FY19 FY20 FY20 FY21 5-Year
    • Desired
    • Direction
    • Parking tickets resolved within 90 days (000) 8,813 8,472 9,283 8,896 NA * * NA *
    • « Parking tickets issued that are paid within 90 days (%) 66.8% 66.1% 63.3% 66.3% NA 65.0% 65.0% NA Up
    • Parking tickets issued that are dismissed within 90 days (%) 12.9% 12.9% 15.8% 11.1% NA * * NA Down
    • « Critical Indicator “NA” Not Available ñò Directional Target * None
    • Goal 2b Assure that all respondents are offered convenient options for paying and challenging tickets.
    • During the COVID-19 pandemic, Alternate Side Parking rules were adjusted. Also, parking enforcement rules were
    • suspended. This led to the number of summonses adjudicated dropping by 19 percent; particularly during the April-June
    • timeframe, which saw an 82 percent reduction as compared to the same period in Fiscal 2019. As a result, total hearings
    • for the year dropped accordingly. Due to public health concerns during the COVID-19 outbreak, no in-person hearings
    • were conducted between April and June. Online hearings saw a two percent increase over 2019 and accounted for 61
    • percent of total hearings as compared to 56 percent in Fiscal 2019. Fiscal 2020 also saw a significant increase in the usage
    • of the “Pay or Dispute” app which includes payments in addition to hearing requests. Due to the pandemic, the number
    • of parking ticket appeals reviewed decreased significantly. It is anticipated this number will increase in ensuing months as
    • more public-facing services reopen. Time limits to submit hearing requests related to parking or camera violations were
    • suspended through August 5.
    • Performance Indicators
    • Actual Target Trend
    • FY16 FY17 FY18 FY19 FY20 FY20 FY21 5-Year
    • Desired
    • Direction
    • Summonses adjudicated (000) 2,037 1,988 2,421 2,346 1,902 * * Neutral *
    • « Parking ticket hearings - Total 978,447 978,574 1,126,557 1,074,662 998,215 * * Neutral *
    • – In-person hearings 220,221 216,695 216,106 185,021 127,418 * * Down *
    • – Hearings-by-mail 343,601 318,373 347,045 291,299 260,677 * * Down *
    • – Online hearings 414,625 443,506 563,406 598,342 610,120 * * Up *
    • Parking ticket “pay or dispute” app transactions NA NA 620,882 1,142,596 1,451,241 * * NA *
    • « Average turnaround time for in-person parking ticket
    • hearings (minutes) 14 12 11 10 12 25 25 Down Down
    • « Average turnaround time to issue decision for parking
    • ticket hearing-by-web (days) 4.4 3.7 4.6 4.2 4.7 8.5 8.5 Up Down
    • « Average turnaround time to issue decision for parking
    • ticket hearing-by-mail (days) 7.0 6.9 7.0 6.7 7.2 14.0 14.0 Neutral Down
    • Parking ticket appeals reviewed 58,939 30,375 39,466 33,982 25,031 * * Down *
    • Parking ticket appeals granted a reversal (%) 10.0% 21.0% 24.0% 20.0% 16.0% * * Up Down
    • « Critical Indicator “NA” Not Available ñò Directional Target * None
    • Page 342 | MAYOR’S MANAGEMENT REPORT
    • SERVICE 3 Administer rent and property owner exemption programs.
    • Goal 3a Promptly review applications for exemption programs.
    • The Department rolled out a new processing system for homeowner exemption applications in August 2019 for applications
    • received for tax year 2020/2021. The increase in average cycle times for the SCHE initial DHE initial, and DHE renewal
    • applications is primarily attributed to activities in transitioning to the new system. It is expected that cycle times will trend
    • downward during the upcoming fiscal year. SCHE recipients are required to renew every two years. The first renewal
    • cycle was initiated for tax year 2017/18 and as such there are larger volumes expected in every odd numbered year. DHE
    • recipients are required to renew annually, so the renewal volumes are relatively similar year over year. SCRIE initial application
    • volumes started to decrease in the second half of the fiscal year as a result of decreased outreach activity and limitations
    • due to the COVID-19 emergency.
    • Performance Indicators
    • Actual Target Trend
    • FY16 FY17 FY18 FY19 FY20 FY20 FY21 5-Year
    • Desired
    • Direction
    • Senior Citizen Rent Increase Exemption (SCRIE) - Initial applications received 8,951 8,289 8,432 6,600 4,582 * * Down *
    • « Average time to process initial SCRIE applications (days) 4.7 3.0 5.0 7.0 6.9 10.0 10.0 Up Down
    • SCRIE renewal applications received 27,760 25,091 28,932 24,564 25,632 * * Neutral *
    • « Average time to process renewal SCRIE applications (days) 6.9 5.2 7.7 6.6 5.3 10.0 10.0 Down Down
    • Disability Rent Increase Exemption (DRIE) - Initial applications
    • received 2,594 2,143 1,822 1,566 1,216 * * Down *
    • « Average time to process initial DRIE applications (days) 7.5 3.4 6.0 7.3 7.6 10.0 10.0 Up Down
    • DRIE renewal applications received 5,816 6,141 6,856 5,957 5,813 * * Neutral *
    • « Average time to process renewal DRIE applications (days) 7.6 4.2 5.7 6.4 5.2 10.0 10.0 Down Down
    • Senior Citizen Homeowners’ Exemption (SCHE) - Number of
    • initial applications received NA NA 18,340 8,446 9,117 * * NA *
    • « Average time to process initial SCHE applications (days) NA NA 30.2 16.3 37.1 ò ò NA Down
    • SCHE - Number of renewal applications received NA NA 1,696 36,111 6,959 * * NA *
    • « Average time to process renewal SCHE applications (days) NA NA 127.4 18.5 20.8 ò ò NA Down
    • Disability Homeowners’ Exemption (DHE) - Number of initial
    • applications received NA NA 1,038 868 669 * * NA *
    • « Average time to process initial DHE applications (days) NA NA 30.2 15.9 34.1 ò ò NA Down
    • DHE - Number of renewal applications received NA NA 195 2,777 2,659 * * NA *
    • « Average time to process renewal DHE applications (days) NA NA 159.7 14.0 23.4 ò ò NA Down
    • « Critical Indicator “NA” Not Available ñò Directional Target * None
    • SERVICE 4 Help NYC taxpayers resolve tax issues.
    • Goal 4a Through the Office of the Taxpayer Advocate, promptly address inquiries and resolve cases.
    • The Office of the Taxpayer Advocate (OTA) saw an increase in inquiry process time in March and April 2020. This is largely
    • due to difficulties that staff faced during the transition to the remote working environment, necessitated by COVID-19.
    • Access to OTA’s case management system was unavailable for a period of time. Most of the remote working-related issues
    • have been resolved and the average inquiry response time decreased in June to 4.7 days.
    • OTA has conducted outreach in all five boroughs and forged new partnerships across the broadening scope of taxpayers
    • and organizations familiar with OTA’s services. This community building effort generated an over 100 percent increase in
    • total cases closed volume from 471 in Fiscal 2019 to 1,026 in Fiscal 2020. This also yielded a greater number of complicated
    • cases which require cooperation across units in DOF and other City agencies. Coordination across various channels, a
    • rise in intricate cases and the doubling of cases overall, are the main factors in a change in average case closure times. In
    • response, OTA has developed weekly case management tools that monitor each case advocate’s workload to track case
    • length and communications.
    • DEPARTMENT OF FINANCE | Page 343
    • Performance Indicators
    • Actual Target Trend
    • FY16 FY17 FY18 FY19 FY20 FY20 FY21 5-Year
    • Desired
    • Direction
    • Inquiries received 381 770 1,424 1,738 1,454 * * Up *
    • « Average time to address inquiries (days) 9.0 7.8 10.0 4.1 9.9 10.0 10.0 Neutral Down
    • Cases opened 194 308 353 665 664 * * Up *
    • Cases closed 156 311 353 471 1,026 * * Up *
    • « Average time to close a case (days) 53.7 61.6 50.4 48.8 102.5 45.0 45.0 Up Down
    • « Critical Indicator “NA” Not Available ñò Directional Target * None
    • SERVICE 5 Record property-related documents.
    • Goal 5a Increase the percentage of online property recording transactions.
    • The City Register’s Office results continued the trend of recent years, seeing significant growth in electronic submittals. It
    • continued its strategy of prior years to encourage more people to record transactions online. One such initiative included
    • outreach to legal firms and title companies emphasizing the benefits of electronic document submittal. The pandemic also
    • led to more electronic submittals as opposed to physical drop off of documents. Electronic submittals during the last three
    • months of the fiscal year were 86 percent as compared to the annual 78.4 percent rate.
    • Performance Indicators
    • Actual Target Trend
    • FY16 FY17 FY18 FY19 FY20 FY20 FY21 5-Year
    • Desired
    • Direction
    • Online property recording transactions (%) 58.8% 63.1% 69.7% 73.0% 78.4% * * Up Up
    • Average time to record and index property documents (days)
    • Citywide 3.4 1.1 0.8 0.6 0.7 * * Down Down
    • « Critical Indicator “NA” Not Available ñò Directional Target * None
    • SERVICE 6 Serve and execute legal processes and mandates.
    • Goal 6a Increase the proportion of judgments, orders and warrants that are successfully served/executed.
    • The pandemic had significant impact on the operations of the Sheriff’s Office. While the percentage of successful child
    • support orders held steady year over year, no orders were processed for the last few months. Family Court has been closed
    • as a result of COVID-19, other than emergency cases since March. Property seizure orders successfully executed (%) dropped
    • due to a significant increase in the amount of debt assigned by the City, including more uncollectible debt than in the past.
    • Performance Indicators
    • Actual Target Trend
    • FY16 FY17 FY18 FY19 FY20 FY20 FY21 5-Year
    • Desired
    • Direction
    • Arrest warrants successfully executed (%) 81% 72% 73% 76% 78% * * Neutral Up
    • Orders of Protection successfully served (%) 58% 63% 61% 56% 55% * * Neutral Up
    • Property seizure orders successfully executed (%) 88% 83% 80% 78% 62% * * Down Up
    • Child support orders successfully served (%) 59% 62% 65% 63% 64% * * Neutral Up
    • « Critical Indicator “NA” Not Available ñò Directional Target * None
    • Page 344 | MAYOR’S MANAGEMENT REPORT
    • AGENCY-WIDE MANAGEMENT
    • Performance Indicators
    • Actual Target Trend
    • FY16 FY17 FY18 FY19 FY20 FY20 FY21 5-Year
    • Desired
    • Direction
    • Total revenue collected ($000,000) $36,044 $36,914 $38,939 $41,064 $42,310 * * Up *
    • – Property taxes collected ($000,000) $22,946 $24,447 $26,214 $27,745 $29,530 * * Up *
    • – Business taxes collected ($000,000) $7,550 $7,289 $7,420 $7,855 $7,637 * * Neutral *
    • – Property transfer taxes collected ($000,000) $3,008 $2,501 $2,439 $2,640 $2,111 * * Down *
    • – Parking summons revenue ($000,000) $642 $627 $668 $698 $718 * * Up *
    • – Audit and enforcement revenue collected ($000,000) $1,161 $1,252 $1,299 $1,058 $999 * * Down *
    • – Other revenue ($000,000) $738 $798 $899 $1,069 $1,315 * * Up *
    • « Critical Indicator “NA” Not Available ñò Directional Target * None
    • AGENCY CUSTOMER SERVICE
    • Performance Indicators Actual Target Trend
    • Customer Experience FY16 FY17 FY18 FY19 FY20 FY20 FY21 5-Year
    • Desired
    • Direction
    • E-mails responded to in 14 days (%) 71% 73% 64% 79% 83% 85% 85% Up Up
    • Letters responded to in 14 days (%) 87% 91% 89% 84% 84% 85% 85% Neutral Up
    • Completed customer requests for interpretation 5,453 7,699 7,584 4,550 4,627 * * Down *
    • Average customer in-person wait time (minutes) 4 5 5 7 6 12 12 Up Down
    • Calls answered by customer service representative (%) 46% 80% 88% 91% 94% * * Up Up
    • CORE customer experience rating (0-100) 81 96 98 NA 96 90 90 NA Up
    • « Critical Indicator “NA” Not Available ñò Directional Target * None
    • AGENCY RESOURCES
    • Resource Indicators Actual1 Plan2
    • FY16 FY17 FY18 FY19 FY20 FY20 FY21 5yr Trend
    • Expenditures ($000,000)3 $258.8 $266.6 $278.9 $300.2 $324.4 $333.6 $324.8 Up
    • Revenues ($000,000) $816.2 $818.2 $832.8 $883.0 $887.4 $963.1 $829.9 Up
    • Personnel 1,954 2,016 1,969 2,051 2,018 2,226 2,181 Neutral
    • Overtime paid ($000) $2,699 $3,519 $3,878 $5,306 $1,050 $1,050 $1,050 Down
    • 1
    • Actual financial amounts for the current fiscal year are not yet final. Final fiscal year actuals, from the Comptroller’s Comprehensive Annual Financial Report, will be reported in
    • the next PMMR. Refer to the “Indicator Definitions” at nyc.gov/mmr for details. 2
    • Authorized Budget Level 3Expenditures include all funds “NA” - Not Available
    • None
    • DEPARTMENT OF FINANCE | Page 345
    • SPENDING AND BUDGET INFORMATION
    • Where possible, the relationship between an agency’s goals and its expenditures and planned resources, by budgetary unit
    • of appropriation (UA), is shown in the ‘Applicable MMR Goals’ column. Each relationship is not necessarily exhaustive or
    • exclusive. Any one goal may be connected to multiple UAs, and any UA may be connected to multiple goals.
    • Unit of Appropriation
    • Expenditures
    • FY19¹
    • ($000,000)
    • Modified Budget
    • FY20²
    • ($000,000)
    • Applicable MMR
    • Goals³
    • Personal Services - Total $163.5 $176.6
      • 001 - Administration and Planning $46.9 $44.8 All
      • 002 - Operations $21.6 $24.5 1b, 3a
      • 003 - Property $28.4 $30.3 1a, 1b, 5a
      • 004 - Audit $29.7 $33.8 1a, 1b
      • 005 - Legal $6.8 $7.3 1a, 1b, 2a
      • 007 - Parking Violations Bureau $10.4 $13.3 2a, 2b
      • 009 - City Sheriff $19.7 $22.6 1a, 2a, 6a
    • Other Than Personal Services - Total $136.7 $147.8
      • 011 - Administration $82.9 $90.6 All
      • 022 - Operations $31.7 $36.3 1b, 3a
      • 033 - Property $3.8 $4.4 1a, 1b, 5a
      • 044 - Audit $0.2 $0.9 1a, 1b
      • 055 - Legal $0.1 $0.1 1a, 1b, 2a
      • 077 - Parking Violations Bureau $0.7 $1.4 2a, 2b
      • 099 - City Sheriff $17.3 $14.1 1a, 2a, 6a
    • Agency Total $300.2 $324.4
    • ¹Comprehensive Annual Financial Report (CAFR) for the Fiscal Year ended June 30, 2019. Includes all funds. ²City of New York Adopted Budget for Fiscal 2020, as of June
    • 2020. Includes all funds. ³Refer to agency goals listed at front of chapter. "NA" Not Available * None
    • NOTEWORTHY CHANGES, ADDITIONS OR DELETIONS !
    • • Due to the pandemic, the tax lien sale did not occur in May 2020 as originally scheduled. On September 4th, the Mayor
    • announced that the effective date of the tax lien sale had been moved to September 25. Soon after, the governor
    • issued an executive order prohibiting any sales of tax liens until October 4. During this time, DOF will continue to work
    • with property owners whose tax lien is at risk of being sold.
    • • Fiscal 2020 is the first year DOF is reporting on business tax refunds as “Requested” and “Non-Requested.” In our
    • ongoing efforts to best serve New York’s constituents, DOF re-engineered its processes and technologies that enable
    • the distribution of business tax refunds without a prior request from the taxpayer.
    • ADDITIONAL RESOURCES
    • For additional information on items referenced in the narrative, go to:
    • • NYC Rent Freeze Program:
    • www.nyc.gov/rentfreeze
    • For more information on the agency, please visit: www.nyc.gov/dof.
    • Page 346 | MAYOR’S MANAGEMENT REPORT