I think one of -- I mean, while we do have some properties in City ownership that's out in the vacant -- in -- in -- in these areas, a lot of them may have one publicly owned or City owned property, and then five privately owned properties. And then... So you can't do anything with just the one City owned. And with the condemnation, if there's a project that's involved, we'd be taking title to the privately owned, so we can amass bigger parcels of land. So that's why we're allocating money for the condemnation of vacant -- of privately owned vacant properties. I think one of the things -- I know a lot of people think the City owns a great deal more than we, in fact, do because we demolish it. Just because we demolish it doesn't mean we own it. 110 Resolution 040095 - 3/22/04
But don't liens get -- get applied to that demolition? And don't eventually, because of the value of the property, that we become the owner of that? I can't imagine us --
I can't imagine us going out and paying for a property that we've spent to demolish, that we haven't collected taxes on. We're not doing that, are we?
What happens is, the money comes back to the City. The way the law sets up, you have to pay the money into court. And then the first thing that's taken off is whatever delinquent real estate taxes or property liens on demolition or other municipal liens that are owed to the City. So that comes off the top. So... But you still have to pay the fair market value of the property in the court. That's the way the state law is 111 Resolution 040095 - 3/22/04 written. If we go through the Sheriff sale process for development, if you have ten lots you want, and we have liens on all of them and some tax delinquency, and somebody outbids you on one property, then you're not able to cause that full development. So we've been historically, the City, I guess for the last five to ten years, has been using eminent domain as their primary acquisition tool for development, so that we're assured of title.
What you just described about losing that one property, isn't there a legislative process that could help you prevent that from occurring? If one out of ten is going to interfere with development, you would think, other than eminent domain, that there would be a way not to have a developer or some other interested party outbid you for that particular parcel.
But then the City would 112 Resolution 040095 - 3/22/04 be just bidding -- I always call our equity is the lien. So if someone outbids the City's liens, then we, the way the law is written, it would go to that person. So there's a little bit more risk when you're using foreclosure as the method of acquisition. You may not get title to everything that you want. Also, the other thing is, when -- you get a clean and marketable title through eminent domain.
You're welcome. The Chair recognizes Councilman Cohen. Councilman Cohen.
Thank you, Madam Chair. Were you part of the group that decided on how much money was going to be needed for the original NTI loan? When we made the $295 million loan -- is that what we made -- were you in the decision making. 113 Resolution 040095 - 3/22/04
Yes, I was part -- By working with the financial advisors, we did the projections. And again, one of the challenges is that we use different types of bonds that carry different repayment terms and interest rates. And so, each year what we've been doing is, we've been recalibrating what we think we can raise, because we didn't issue all the debt at one time based on how we could --
Well, did you think at that time, based upon your projections at that time, what was it going to cost, in terms of ultimate bond issues, to do the work that the Mayor or the NTI team or both groups thought would be needed to end blight in Philadelphia? What was your final projection projection as to cost? I'm under the impression -- I could be wrong. My impression was that you presented a proposal of what basically you 114 Resolution 040095 - 3/22/04 thought or the group thought or the Mayor thought -- Whoever was working on NTI reached a conclusion as to what it would cost. And for that you were announcing to the people of Philadelphia it was going to cost that much money, and Philadelphia was going to undertake what many people thought was a very heavy bond burden of $295 million. And people did figure whether it was worth it or not. I happen to think it was worth it, $295 million. But what was contemplated that would be gotten with that 295, as far as demolition was concerned?
At the time when we introduced that budget, we were projecting between 10,000 up to 14,000 demolitions at that time.
That's a pretty broad grouping, isn't it, 4,000? 115 Resolution 040095 - 3/22/04
Well, again, it was a projection based on an average. We didn't have any experience in the field at that point.
Well, but you had made studies. And you knew what it cost with L & I. So you felt pretty confident about your projections that you --
Well, at that time what we said that L & I cost to demolish a house was around $10,000, $11,000. So we were using that as a benchmark, yes.
And you also probably included in your study what you thought might be some price rises at the same cost of living levels, that the cost of living seems to go up.
Well, what we started to use is our actual experience, what we were actually getting in bids from contractors. So, in the first-year budget, you know, it's our best estimate. And we looked at what had been the prior -- City's prior history under the emergency curbside 116 Resolution 040095 - 3/22/04 demolition program.
-- was not the first-year budget, was it? Was not supposed to be the total program? The $295 million, wasn't that to cover --
That was in '03. And this year we revised it downward to 275. But in '03 we were projecting $295 million over five years.
I missed that. You said you moved the goal down from 295 million to 275 million?
That's correct, because we made some changes on what type of bonds we would project to issue. For example, we increased the demolition -- the acquisition budget from 50 million to 74 million. That requires a certain type of bond that has a shorter term and different interest rates. So, we made -- 117 Resolution 040095 - 3/22/04
Well, please spare me, because I'm no expert on the different types of bonds. And therefore, it doesn't mean anything. You were telling people when NTI was first proposed, that the Administration thought that a total cost demolition included, as part of the cost but the total costs would require a $295 million bond issue.
Right. That was our -- COUNCILAN COHEN: And you had in mind --
-- 10 to 14,000, pretty body range, of the number of demolitions you would get.
Now, what would be the figure -- In place of 295 or 275, what would be the figure now, based upon the new demolition figure and your experience? How would you estimate the 118 Resolution 040095 - 3/22/04 costs of to 14,000 demolitions would cost?
I would say between five 5 to 7,000. It's almost exactly half because 6 the cost per -- the average cost is now 7 around 22,000, based on experience. So 8 we're looking at five to 7,000, instead of 9 10 to 14,000. 10
So you're looking at only achieving half of the demolition.
Has there been a statement to that effect made to the people of Philadelphia?
Again, what we do is, we've made -- When we made -- When we made the revised budget, I tried to keep those numbers in line. So I'm not sure what I said... We said we revised it downward, I believe, in the '04 budget.
I'm sorry. You're going to have to look in this direction when you address me because when you addressed Councilman Clarke, I get in 119 Resolution 040095 - 3/22/04 every other word. So, please...
When we presented the FY'04 budget to Council? That's this fiscal year. We said in FY'03 the City set an ambitious goal of about to 14,000. 7 We said based on '03 experience, and the 8 number of demolitions we've done to date, 9 we are now revising that, we said seven to 10 9,000 or about 1400 or 1600 per year. 11
Has there ever been a statement made by the Administration --
-- that the amount of money we borrowed we now learn at present rates is only going to cover half of what we wanted to cover?
Yes, as a part of our annual program statement and budget that's submitted to City Council.
Could you direct me to when that was told to the people?
Yes. Because this is a 120 Resolution 040095 - 3/22/04 publicly available document, I make it available to anyone on request. It's on record with the Clerk.
Was the publicity given to the fact that it's going to cost us twice as much to carry on the blight program as before had been predicted? Was that given the same publicity that the original announcement was given, as to the beginning of this blight program, the anti-blight program?
I mean, it's always a dodge of government agencies, and I guess business corporations, they say -- business groups say, well, we filed it in the report to the SEC, which nobody looks at. But when there's good news, they announce it publicly. Now, the City went to great lengths to announce the beginning of the NTI program. They generated a great deal of enthusiasm. They said it was going to be economic. 121 Resolution 040095 - 3/22/04 A member of Council earlier this morning talked about the fact that many of us in Council were disconcerted at the thought that you were bringing in other groups with no experience whatever originally in hiring demolition groups to run the demolition. We thought L & I ought to run it because they've been doing it, and they know what the situation is under different situations. And therefore, we thought that that would be the best ones. We were talked out of it. We were told, no, that L & I only did two or three thousand a year sometimes and -- or whatever the number was. They're not experienced enough; we've got to develop our own experienced team. And the experiment seems to have been going just the wrong way. It seems like Councilman Goode said before, instead of our controlling the market, which we all thought was going to happen, the market began controlling us. 122 Resolution 040095 - 3/22/04 And apparently the feeling was developed that the government, the City government, is really sucker number one. My God, we can charge them anything. Maybe we'll give campaign contributions; maybe we won't. I don't know what that story is. But I have no idea of how this small group of people who had had previously a very small amount of experience became the important group. And then we were assured that by hiring -- Is it L and company? Or some company was hired to oversee the whole thing, all the demolition. I'm not sure what the details were. But we've seen the worst has happened. And now we're only going to have enough money for half an NTI program, because... I saw nothing in the budget for any major increase, in terms of doubling the amount of NTI money. Isn't that right; there's nothing in the Mayor's new budget to expand the 275 or the 295 figure to 123 Resolution 040095 - 3/22/04 cover? That it's going to be double that cost instead of that simple cost? And the simple cost was extremely high. It wasn't low. Made a lot of people gulp a few times, because we have to -- Since we've borrowed the money, we're paying interest over -- Is it or 30 years for that? 9
It depends. Some of 10 them are as short as 10, and some go out as 11 far as 25, with respect to the term. It 12 depends on the type. 13
One of the things that I 16 just -- You know, when we unveiled NTI and 17 talked about trying to do geographically 18 targeted demolition, we had never really 19 done that on the scale that we've done 20 it -- we're doing it today. It was an --
I mean, that was something that we wanted to try. We thought, you know, it made sense to try to 124 Resolution 040095 - 3/22/04 go into a community, instead of going from a reactive to more of a proactive. It's still L & I managing the emergency curbside work. And a significant amount of demolitions are still being done by licenses and inspections. For example, they would this year probably be around 500, just in terms of the emergency curbside work. So --
So -- So -- So it was something that was new, it was different. And we're learning from that, and I will be willing to admit that.
But you didn't say that. I don't remember anything in the original statement saying, now we want everybody to know we're learning. (Laughter.)
And we may learn that the cost is going to be double. Because don't the people of Philadelphia have a right to make a decision as to whether something that may 125 Resolution 040095 - 3/22/04 be worth to them $295 million, but it's going to be worth almost $600 million or more likely a billion, in my judgment, because there's nothing even that guarantees that the figures, which have already doubled, won't double again in the next year or two, as you gain even more experience because of something fatally flawed in how you're proceeding, if the market has begun to control the City, instead of the City being able to control the market. And we don't know what it is. And I think we have a duty to try to find out; don't you agree on that?
And don't you think the people of Philadelphia ought to get the opportunity to express their opinion: Is the blight program -- the anti-blight program worth twice as much? Because now we know it's going to cost at least that, and maybe it will cost even more than that. Because we're paying for the NTI 126 Resolution 040095 - 3/22/04 people to gain the experience to know how much it's going to cost. Because what you're indicating is that when you came to the people and said, this is going to cost this, you maybe didn't mention that, you know, we're amateurs at this because we don't have any experienced people working on it, and others may take advantage of us. Or for other reasons maybe the costs will double. I think that something is due by the Administration coming out openly and telling us what as of this time and on what basis they think the costs will be. Because I think the people of Philadelphia have a right to reconsider that and decide whether that's worth that money and worth the risk of that amount even increasing, you know, dependent upon how the Administration raises it. Don't you think that's fair? Don't you think government ought to be fully open?
We try to be. Again, I've gone to a great deal of detail in our 127 Resolution 040095 - 3/22/04 program statement and budget. We have hearings when we go to community meetings, talking about, you know, the strategy we're using, the reasons why we're using, the objective of the programs. You know, I'm more than -- I try to be as transparent as we possibly can. And we have stated each year in pretty much detail -- I think a great deal of detail --
-- how we're going to run the program and what we're learning.
You make a statement, and the Mayor makes the statement, because when Pat Smith or Dave Cohen or I don't want to mention all the Council members individually -- When we speak, the people don't pay the same attention to it as they do their leader. A Mayor a very important person in government. Next to a President of the United States, I think a Mayor is 128 Resolution 040095 - 3/22/04 considered more sort of Presidential than anybody else. And when the Mayor speaks, people listen because they know he's talking to his -- the group that elected him. And the Mayor, in my judgment, is the second most important person to people generally. First is the President and second it's the Mayor. And people trust the Mayor. Whether they should or not doesn't make any difference. They trust that the person chosen by them to be the Mayor is going to level with them. I'm suggesting that on this money thing, I'm very disturbed. But I think if the people think it's all right, and if they think it's worthwhile, that's one thing. But if the people feel that they've been played for as fools, that they didn't understand that $300 meant maybe undertaking an obligation of $600 million, the people, unless they're fully informed 129 Resolution 040095 - 3/22/04 and have a chance to be told why the increase has occurred, and what other increases may occur, unless they know that and make a decision, they're going to feel as if they're not properly treated. So I'm suggesting to you, I think you ought to do what -- in whatever fashion you do, communicate with the Mayor. Let him know that if his statements don't comport with what the facts are now, that I think at least -- and I think many people agree with me -- that all the facts ought to come out and let the people know there's going to be a very substantial increase, maybe double, maybe even more than double the original cost. And let the people decide whether we should go on, particularly in view of this terrible emergency the Mayor presented to us last Thursday when he gave us the budget. I did not see anything in there that would account for how we're going to deal with the double costs of the anti-blight 130 Resolution 040095 - 3/22/04 program. Now, maybe it's hidden somewhere, and maybe somebody like you are going to be able to point out that in some line somewhere something was said about that. I don't know what whether it exists or not. I haven't seen it. But that's not enough. The Mayor's got to level with the people and I think that ought to be the number one priority right now. You ought to tell us what it's going cost. You ought to tell us about why the mistakes were made on the costs, and what he proposes to do to control the market, because nobody understands how the City lost control and why the City's paying these huge amounts for demolition. And I ought to end my questioning on the funds that way. Because now I want to raise the question of who is responsibility -- who has the responsibility for minority contracting and subcontracting in the NTI program.
It's overseen by Mr. 131 Resolution 040095 - 3/22/04 McCalla and myself. We have the NTI Economic Opportunity Plan which set forth subcontracting goals for minority participation under the NTI demolition program. And the goals were 35 percent, I believe, and 2. 9
As to minority 10 contractors, was it plainly stated of 11 becoming, some of them at least, prime 12 contractors, that that ought to occur in the natural course of events? But we haven't seen that. And secondly, I don't get any sense whatever of the slightest interest of the City of Philadelphia in furthering the employment of minority subcontractors. In fact, Mr. McCalla, who is actually sitting up here at the table with you, who is described as the Deputy Managing Director of the City, I raised some issues about a problem a minority subcontractor was having. He said the City owes no obligation 132 Resolution 040095 - 3/22/04 to minority subcontractors. They have to learn on their own to protect their own interests.
And I'm not criticizing him, but that's his view. But I think the City has a very clear obligation that we make it as crystal clear, because I did not succeed in influencing Mr. McCalla one iota by my statement. But I think others have to know that it's my belief that there is no program that exists in the City of Philadelphia today that is truly aimed at advancing minority employment. I find none because by definition most of the minority firms are brand new firms. People have had no experience. Their workers, when they've been able to get work, often haven't been able to get much work. 133 Resolution 040095 - 3/22/04 And they come in, and they meet other companies who deal with prime contractors who have had many years experience, who have great wealth. Seems to me the government owes an obligation to take these minority subcontractors, to protect them in every way in dealings, to make sure they know everything they know about becoming a minority subcontractor, help them every step of the way, to guarantee that the bidding is soundly based, instead of saying: Well, they bid; it's their responsibility. Now, I think a minority program that's going to be successful has to deal with reality. And the reality is that minorities, because of discrimination practiced against them all these years, are not as well equipped as the big old-line prime contractors, to deal with prime contractors. So that if we're serious about wanting to encourage minority 134 Resolution 040095 - 3/22/04 subcontracting and ultimately hope to advance of being prime contractors and employ African Americans, Latinos, and women in their jobs, and other minorities, to achieve that, the City has has to take an active hand -- not being a neutral -- between the prime contractor and the subcontractor, but actively holding the hands, guiding them, and insisting that the minority subcontractors know enough and get the protection of the City in their dealings. And I find, and I think Mr. McCalla will agree on the last part of what I said. But if he doesn't, I'd like to hear it. But to my knowledge, in trying to deal with a minority subcontractor who comes from my area who complained to me. It was his first experience. He's a plain working man, never had any experience. And suddenly he's told, well, you underbid a job, for example, by a large sum of money. It's your responsibility, and you owe large sums of money. 135 Resolution 040095 - 3/22/04 And the City takes the position, well, it's tough. He should have known better. And that's -- That's the way to discourage minority employment.
This is a substantive issue I wanted to raise with you.
At the request of the stenographer, we're going to take a five-minute break, please.
Right. That will 136 Resolution 040095 - 3/22/04 give them an opportunity to answer the questions. The questions will remain on the floor.
And Miss Smith will be prepared then to answer your questions.
All right, Councilman Cohen. Councilman Cohen, we're back in session. Miss Smith, I have to interrupt you, but would you respond. I'm sorry. The noise level is much too high. I'm sorry. Anyone who is not a Council member will have to get off the floor.
You asked me a series of questions about minority participation under NTI. As I stated, the plan calls for 35 percent participation of subcontracting opportunities, and I believe 80 percent residency --
Let me ask you to 137 Resolution 040095 - 3/22/04 stop right at that point. It may call for a 35 percent. But do you just look at the numbers and say, they're 35 percent but we don't care what happens to them?
We're not going to help them? They're on their own? And Jay McCalla told me plainly.
I think there may have been some misunderstanding, Councilman Cohen. No, they're not on their own. I mean, we --
Because I know the numbers game. It's very easy to play numbers and say that so many people are employed, but you don't deal with the substance of that employment. When we talk about minority employment, we mean business on that. We mean that they ought to have full rights. The City should not have the right to treat them as if they're dispensable because that's not what this Council means on minority employment. 138 Resolution 040095 - 3/22/04 We owe a duty to minorities to help them overcome their years of discrimination. They're not playing on a level field when they go into minority --
-- subcontracting for the first time. They're no match for the big companies that have been around for years.
Because I know the numbers game well. It means absolutely nothing. Give me the substance. What happens? I'm a minority contractor. I'm a minority worker, and I have ambitions, like most Americans do, to go into business for myself. How do I get 139 Resolution 040095 - 3/22/04 into minority subcontracting? And how does the City help me do that?
And will the City be by my side all the way through? I want to do an honest job, but I don't really know much about it. And I'll tend to believe everybody who talks to me. I think they're honest, until I find later that they have me on the chopping block.
We've had a number of contractors who were successful bidders on demolition projects who ran into problems on the job. When we do get problems on the job, we try to do as much as we, the City, can do. For example, you know, meeting with the person, identifying resources for working capital. You know, I myself made a couple of personal referrals to loan funds that I knew that was available. The African American Chamber of Commerce has worked with and the City is funding a technical 140 Resolution 040095 - 3/22/04 assistance center --
Who does the minority subcontractor go to for this kind of help? They leave the City as soon as they find a new name which means a new minority subcontractor. What does the City accept as its obligation to that group?
One of the -- One -- One place that we're funding is the African American Technical Assistance Center. We -- We -- We executed a second-year contract. They're one resource that contractors have gone to. And I know a number of people may access that for working capital. There are a number of banks that pooled money for working capital loans. We -- You know, as I said, we're working on issues trying to change the performance bonds which we understand can be a barrier to participation. Now, there have been some incidents where people who have contracts have not been able to do the work or ran into 141 Resolution 040095 - 3/22/04 problems while doing the work. And again, we -- you know, to the extent that we can, we work with them, trying to work through that issue. We can't guarantee -- We can't -- You know, if the work is unacceptable, we do have some responsibilities as a City to say --
-- that it's begun to -- The City's present policies make it very difficult for minority subcontractors to meet all our obligations, because nobody helps them.
And Councilman, we all recognize that. We all recognize that we have a very onerous procurement process, that it doesn't make sense for smaller businesses. And as -- You know, we've been tackling these issues. We've been making adjustments where we can come within the 142 Resolution 040095 - 3/22/04 context of a publicly bidded procurement process. As I said, we, you know, worked with the African-American Chamber of Commerce on the Technical --
The one Technical Assistance Support Center has been the African-American Chamber of Commerce. They can also identify, you know, resources for working capital.
But the City funds them. I mean, sometimes -- sometimes I find it better when we give the contract to somebody else to work with them than us, trying to work through those problems.
Then who in the City has the responsibility for promoting the welfare of these minority subcontracting teams, not only in protecting people that don't believe in 143 Resolution 040095 - 3/22/04 doing their job? I mean, protecting the people who are being prevented from doing their job by the City's aloofness, not wanting to help, pointing the finger at them saying they have no business getting into this without you're learning more about it.
Well, again, what I've been doing in NTI, I've been primarily the point person on the relationship with the African-American Chamber of Commerce. If there's somebody specifically that we can talk with --
Well, I think I'm part of the City. I think we are accepting responsibility.
But not by sending them out to someplace else. I want somebody in the City who says, I represent the City of Philadelphia, and I'm determined to see that this minority firm gets fair treatment, gets the help it 144 Resolution 040095 - 3/22/04 needs. If I have to call people, I'll call other people for their help; but I in the City take the responsibility for making sure the minority firm feels it's getting a fair, square deal.
I'll work with them within... But again, if it's an active contract and they're not... I mean, one of the tensions we do have is that we, the City, need to get the job done. And then you need somebody to work very closely with that person. If they come to me, I can see what resources in the City we can refer them to. If we don't have resources in the City, which sometimes we don't have the right resources, then I think it's best that they go to a group that the City funds, like the African American Chamber of Commerce, who's 145 Resolution 040095 - 3/22/04 set up a Technical Assistance Center, and with whom we're funding specifically the work not only with contractors in their programs, but they also provide a lot of support to contractors outside of their program.
See, I think the problem on funds that I raised originally is because the City has not accepted responsibility because you turned over the job to somebody outside the City to do the demolition work. And I think there's lots of reasons to be concerned about that arrangement. The reason we wanted L & I is because they're City people, and we can talk to them. But you can't talk to these outsiders. And it seems to me the City shunts its responsible by hiring somebody else to do the job for them. These people you hire are not government people. They don't know anything about the responsibility that a government ought to have for execution of 146 Resolution 040095 - 3/22/04 its policies. I'm asking who in the City, a permanent employee of the City, who has the job of seeing to it that minorities get fair play. In the City Council we have somebody. We have somebody on the payroll of City Council who has the responsibility for minority employment and for furthering it. And the city ought to also have somebody like that --
-- not somebody who looks at a distance and says, they're on their own. They choose to bid; they're on their own --
I mean, there is -- COUNCIMLAN COHEN: -- we have no 22 responsibility to them.
I mean, there is the -- at the MBEC, Minority Business Enterprise Council, that's also available. And that's 147 Resolution 040095 - 3/22/04 being overhauled, I believe, to expand some of the resources, that they can work more on providing technical assistance support.
But in the interim, with respect to any issue on the NTI project, you know, I can explore what, you know, what we can do. But sometimes -- There are some times when there are times when there's not much that we might be able to do. That may not be the case in this instance.
Well, it may. It may or may not be the case. I don't know. I don't want to judge it. But all I'm saying is, if the City has an interest and if the City says it has an interest, it passed a bill. The Mayor issued an executive order to guarantee fair treatment among minority subcontractors to reach the goal that Councilman Clarke stated he's for, I'm for, I think all of us are for. What we want to be a part of the 148 Resolution 040095 - 3/22/04 City government that has an interest in fair play for everybody and giving everybody an equal opportunity, not by looking down at a group of people and saying, you're on your own. But let's hold that issue now. And I can talk to you afterwards. And we come back if necessary to that. But the last issue is, in other areas we have dealt with the question of a possible moratorium on the taking of property where people are living in the property and -- (Applause.)
We understand that NTI is interested in eliminating blight, and we support it. But we understand that that's playing the interests of people living in a home that is satisfactory to them, that appears to be okay in every point of view, 149 Resolution 040095 - 3/22/04 just is disregarded by NTI. Tell me how we deal with that. There's a witness here from the group that's sitting in the audience, has been here, and other takings by the Redevelopment Authority. We've called upon them to change their method of operation, and not to deal with citizens of Philadelphia as if they're enemies, because that's what what happens when people live in an area a while, and suddenly they get a notice they're going to be thrown out, and they know nothing about it. And they don't understand how their government can turn so on then. NTI is supposed to be a program that's in everybody's interests. What are you doing to avoid that? Does a group that is concerned about the taking of certain houses have a place to go and say, do you, Miss Smith... This is a perfectly fine house. It should not be included in the taking. What would be the response that you would give then? 150 Resolution 040095 - 3/22/04
As you know, we cannot approve the acquisition through condemnation of any property without the approval of the City Council. And that's -- that's the ultimate, you know, arbiter of that issue. There have been numerous meetings with representatives regarding the relocation -- potential relocations. I know there's ongoing conversations. I have not been privy to the most recent group of conversations, but I can have Mr. Hanna get back to you with respect to details. But ultimately, you know, the Redevelopment Authority cannot acquire any property without the approval of the City Council of Philadelphia.
But that doesn't get the Redevelopment Authority off the hook, because they have first the power to recommend. And they ought not to recommend the taking of any houses, because if they recommend the taking of a house that people 151 Resolution 040095 - 3/22/04 are satisfied to live in, that maintains the proper L & I Code compliance features and the families live there, those people deserve the ability to go to sleep at night not worried that this government is going to act like some uncaring developer who might for profit reasons want to take the house for development. The City ought to be the friend of the people. (Applause.)
The City ought not to be taking property away from people... (Applause.).
...who want to stay there and who are playing by the rules. Now, I'm asking, if something comes to the attention of these people that there's a problem, who do they go to? Can I send them to you?
No. You send -- The acquisition work is being led by Mr. Kevin Hanna, with the Office of Housing and 152 Resolution 040095 - 3/22/04 Neighborhood Preservation, working with the Redevelopment Authority. So in that instance... And I know there's been meetings. I was into earlier meetings. But I know there have been ongoing meetings and letters back and forth.
It's not that -- Again, I mean, I'm one person, a small shop. You've been funding the acquisitions. But the leadership, in terms of actually managing that work, is in Mr. Hanna's shop. He's the person in the City that would deal with that issue.
In other words, NTI is not an agency that's really devoted to the welfare of all the people.
But with respect to what may be a difficult job or dirty work, some people call it, of really acquiring the property, NTI shuts its eyes 153 Resolution 040095 - 3/22/04 and has nothing to do with that and says, let the other agencies handle it.
I'm familiar with the issue, but when it comes to the detail -- You were asking me who in City government, just like before, that, you know, people would sit down with, the day-to-day operational work is handled by the Redevelopment Authority and the Secretary, Housing Neighborhood Preservation oversees the RDA, and the other --
-- housing and community development. I have been in meetings myself. I haven't been to all the meetings. But I'm part of the, you know, the Mayor's staff. And I work primarily on the budget, and the planning, and of the initiative. 154 Resolution 040095 - 3/22/04 But when it comes to the nitty-gritty of that redevelopment work, that's where that is. And I just have not been in recent months privy to conversations. I received a copy of the letter that was sent. You know, in response to letters, I sat in some earlier meetings with individuals from the coalition, and am happy to sit in some more meetings.
Would you object to an Amendment to your bill to add a small clause to it saying --
-- owner or tenant be required to move if such tenant or owner wishes to remain?
The Urban Redevelopment Law specifies -- and that's state law -- you know, the Council approval or disapproval as part of that redevelopment 155 Resolution 040095 - 3/22/04 proposal. I don't think this would be an appropriate vehicle for that type of an amendment. Again, every acquisition has to go through City Council and be approved by the City Council of Philadelphia.
Well, then, I've misunderstood. I thought NTI had as its main interest the elevation of the quality of life for Philadelphians. And I thought we were bringing in a new goal. And a new goal requires people to be reevaluating things and not using the same forces that have brought a lot of unhappiness to the people. Our experience with the Redevelopment Authority has been a very unhappy one because only recently have they begun to show the slightest bit of sensitivity. And that's only after enormous pressure from communities. And that ought not to be. If you're bringing in a new program, you ought to bring in a new group of people 156 Resolution 040095 - 3/22/04 that are going to consider the thing from the point of view of the new program, not do it the same way it's always been done in the past. And you're telling me basically that the NTI is the same old program, just a new way of giving Redevelopment Authority the power to take property. And if that's the case, it's not worth very much. It's certainly not worth $600 million or $500 million or probably not even worth the $275 million you say it's now going to take or was going to take originally. Well, I thank you. We'll follow that up later.
Thank you very much, Councilman. The next Councilperson to be recognized on the first go-around will be Marian Tasco.
Excuse me. 157 Resolution 040095 - 3/22/04 I would just like to remind the Council members that we do have a number of community people here to testify. So, I would ask that we try to be a little brief with our questioning. Thank you.
I'm sorry. I had to leave the Council to go to a meeting that was previously scheduled. And you may have answered some of the questions, so I apologize if you have been asked these questions before. In looking at the budget for Council District Nine, there are listed 996 vacant buildings, safe and dangerous -- unsafe and dangerous. And then there are a total of 207 buildings that are identified as dangerous. But the estimated number of demolition for 2004 is between 75 and a hundred. And then in the new budget it went from a hundred to 150. But even so, if we had 207 dangerous buildings, and you do the maximum 150, what happens to the 57?
Again, what we've been 158 Resolution 040095 - 3/22/04 doing on each year is looking at what we can -- what we're covering in that -- that year. And we've never indicated that we would be able to fund the complete demolition of every single dangerous building. This was based on our survey in 2001. When we go out on the targeted program, we update that. Sometimes we find more dangerous buildings than we initially had, and we reflect -- we try to revise the budget at that time, to reflect what is in actuality. So for here, this was for me a benchmark to show kind of the level of vacancy by Council District. That's how we used those numbers, in thinking about, then, how do we allocate resources among Council Districts?
So, when we... When we finish with the number of 7,000 buildings, dangerous buildings that you have targeted here, that's the total 159 Resolution 040095 - 3/22/04 number. How many do you think you plan to do? I think Councilman Goode asked that, in terms of demolition, with this amount of money. And then at the end of the day, when the $53 million is gone, what do we do for demolition money?
At that point, you know, we would probably have to begin either looking -- I mean, I guess there are a couple of options. One is just go back to emergency, you know, curbside -- the way we were doing it before, City wide, and funding out. You know, you look to the general funding. You look at, you know, additional other resources from, you flow, do we want to do another bond issue, if that's the intent there. But right now, you know, we've budgeted, and have in fact zeroed out for bond proceeds '07. And we've been budgeting -- assuming that we're just 160 Resolution 040095 - 3/22/04 doing -- We're not sure how much -- Depending on how many demolitions we line up for next year, maybe looking at $32 million or even more, if we can continue at the same pace. I mean, the other thing that happened was that we also reduced the amount of the overall demolition budget from initially we were allocating about 140 million. And this was back in '03 when we first unveiled the program. And it dropped it to 117, because we put some resources into the Basic System Repair Program. We put more resources into acquisitions, so that impacted the total amount that we had available for demolition. I'm going to be sending out the Budget Director to talk about the outlying years, in terms of demolition activity and resources.
So in the initial budget we passed, we had an 161 Resolution 040095 - 3/22/04 estimated 1200 to 1400 demolitions. And now --
And that also assumed 140 million at that time. Because remember we had --
But I mean for the whole five years we were looking at 140. Then that got scaled back to 117. Because some monies were put into acquisitions, and other monies were put into things like Basic System Repair Programs.
But I'm looking at your... I'm looking at your... On 13.
Right. Initially we were looking at 19 million in this year, but I was referring to the five-year budget. I'm sorry. I'm probably not understanding the question.
Well, no. I'm 162 Resolution 040095 - 3/22/04 just looking at the request -- the amendment that's before us now. We were going to do 1200 to 1400 for million 600. And the new budget you've 6 given me is 750,000 for 20,000 -- $20 7 million. 8
In your testimony 10 you have attached a table where you have 11 the bids going out for 750 houses. Your 12 testimony? 13
I'm talking 16 about totally, the total number of houses 17 in all the areas that you've targeted -- 18
For the -- That's just 19 the 25 million. That's what I was looking at. So the 25 million... This breaks out how we will spend the 25 million that we're asking for, the additional money. So I'm going to replace this which I -- My mistake was not putting this in amendment form -- to substitute for what we submitted to 163 Resolution 040095 - 3/22/04 Council, which was ranges, because we did not have all the numbers in detail at the time we transmitted the Resolution. It was just a projection. So we're looking at 125 properties to be funded out of the Logan package which I believe we have approval on now, at somewhere in the area of 3.9 million, based on what's been approved to date.
And I really apologize for that. I should have put this also into a revised amendment.
So the money -- some of the money we have here, you're -- it -- The money we originally voted on in 2004, I had $1.4 million designated for 75 to a hundred houses.
Now we got you at 125 at 3.9 million because now we have the actual Logan bid package live active. We have 164 Resolution 040095 - 3/22/04 hard numbers. We know how many properties are in that bid package. So that's the budget number.
I want to ask a question about the Emerging Contractors Program. Could you tell me what that means, how you define emerging contractors and what do you -- what is the proposal to provide them support?
Okay. One of the questions that came up, as Councilman Clarke, I think, had pointed out was, in addition to subcontracting opportunities. I mean, historically the City's looked at minority participation, in terms offer subcontracting opportunities. So when we wrote the NTI economic plan, it really talked about subcontracting opportunities. The African American Chamber also wanted and made a proposal to the City about how do we begin to groom people to bid as the prime contractor and not just as a subcontractor? 165 Resolution 040095 - 3/22/04 So, we basically, you know, accepted their proposal to create what we call the Emerging Contractors Program. The objective of that program is to groom contractors to be able to bid as prime demolition contractors. The first, I would say, cadre of businesses that went through last -- I think it was around July of last year -- They go through about a six- to eight-week training program that's classroom based. It covers everything from the actual, you know, technical information on demolishing a property; but as important, it focuses a lot of its technical assistance on and training on things like managing a business; you know, procuring bonds; you know, credit -- credit checks to make sure that, you know, you got the right -- you know, your credit history is into place. So they really were very hands-on. Once the group of -- That 20 businesses graduated out of the classroom 166 Resolution 040095 - 3/22/04 program. So then the next piece that we put into place -- because I don't think it's fair to expect someone to go from the classroom to demolishing a house -- is that we begin to give them properties for the people who graduated from the program to demolish in the field. And we've been putting out, you know, groups of properties to them, allocating that, as part of their training program. They demolish -- The chamber provides extra support in the field, safety managers, so forth, and so on. Now we're at a point where that, okay, in addition to demolishing houses as part of the training program, how do we make it so that they can bid as part of the City's procurement process? And one of the challenges is, we need smaller bid packages. So now we're starting to do smaller bid packages that are more suitable to their business size. And then the second thing we're 167 Resolution 040095 - 3/22/04 looking at are other impediments in our procurement process. And one of the big ones has been the surety bond issue, what they call the performance bond.
That will always be a problem. And until you solve it, you will always be in a training program.
The people who are in training, are they being funded out of the money you have identified in here?
Just the houses. They're almost acting -- For example, the money -- There's a, I think, a -- Commerce Department contracted funds, the technical assistance. When they bid, they submit a proposal to demolish the houses. And we pay them for the demolition of the houses out of here, but we don't pay for the technical assistance.
But do they get the same rate that the -- 168 Resolution 040095 - 3/22/04
It's been competitive -- A little bit lower in some instances.
But they're cost estimating, you know, based on the experience in the field.
What is the level of communications between the NTI administration and the City Council, specifically the President's Office, with regard to MBE and DBE contract participation?
We've included this information in, I believe, our quarterly reports on that. And I actually just got an updated report for March that I'll be able to send over.
Yes. I'm quite sure we 169 Resolution 040095 - 3/22/04 do quarterly reports. I believe we include that information in that.