Objectives

To determine whether the New York City Department of Transportation (DOT) has billed and collected the correct fees for revocable consents; whether DOT is ensuring that all structures meet the standards required by the Rules of the City of New York; and whether DOT is monitoring to ensure all structures requiring a revocable consent have one in place. Our audit covered the period from July 1, 2016 through July 29, 2019.

About the Program

A revocable consent grants an individual or organization the right to construct and maintain certain structures on, over, or under New York City streets and sidewalks. To obtain this right, the property owner must file a petition for the revocable consent with DOT’s Office of Cityscape and Franchises (Office). Revocable consents are granted for a term of ten years. At the end of that period, they may be renewed. DOT charges an annual rate for eligible revocable consents, based on either a formula or a flat rate. Fees charged are assessed using criteria delineated in Title 34, Chapter 7 of the Rules of the City of New York (Rules).

The Office’s review process is guided by the Rules, Chapter 14 of the New York City Charter (Charter), and the Office’s standard operating procedures. As part of the process, the Office forwards petitions for consents to other City agencies for review, and holds public hearings regarding the consent. The Office also obtains required security deposits and certificates of liability insurance from the petitioner. Consents must also be approved by the Mayor’s Office of Contract Services and registered with the City Comptroller.

According to the Office, as of June 20, 2018, there were 1,046 active revocable consents. The amounts billed were $15.6 million for City Fiscal Year (CFY) ended June 30, 2017, $16.0 million for CFY ended June 30, 2018, and $16.2 million for CFY ended June 30, 2019. The Office reported it collected from 99.4 to 100 percent of the amounts billed.

Key Findings

• We found that the Office did not bill and collect the correct annual rates for the majority of consents reviewed (21 of 25). The Office was inconsistent in its application of the Rules and did not always apply the Rules as written when calculating the annual rate to be billed. As a result, the grantees were undercharged an estimated $1,056,242.
• For the same 25 consents reviewed, we found the Office did not comply with all of the procedures such as: having copies of the architectural plans for the structure for which the consent was granted (one consent); documenting that notices of public hearings and summaries of the proposed consents were published for at least 15 days in the City Record (three consents); documenting that notices of the public hearings were published twice in weekly newspapers as required (all 25 consents); documenting which City agencies the Office is required to notify and obtain approval from (all 25 consents); ensuring the required amount of liability insurance was obtained ($51 million for 15 consents not obtained); and documenting that the required security deposits were obtained ($140,900 for 3 consents).
• We also visited various neighborhoods and noted 42 structures that require a revocable consent, and found that 41 were not in the Office’s revocable consent database, and therefore do not have a consent and are not being billed.

Key Recommendations

• Comply with the Revocable Consent Rules, the City Charter, and the Office’s procedures and maintain documentation to support all calculations and amounts charged to property owners.
• Prepare a checklist of requirements, such as needed documents, security deposit, insurance requirements, and agency approvals for each consent.
• Expand Office operations to include an examination of all structures to determine whether they require a consent, and notify the owner, where appropriate.