Right. So there's kind of two processes happening. There's the process when folks submit an application on paper and that requires some process changes and then also when folks apply online, we need to make some system changes. One quick thing I'd like to add about the Senior Freeze eligibility, now that folks can go back five years, the eligibility -- sorry, um --
You could think that through and send us the information.
Yeah, we'll send it to you because I don't want to misstep. Now that they go back five years, what we are looking at is what was the eligibility five years ago, right.
But if they go back five years if they weren't eligible but then all of a sudden are eligible, then they would only get the two years that they were eligible for?
What is the earliest that they were eligible for the program.
Right. Okay. That's good. The auto- enrolling and we talked about Homestead for people. How do we know how many people are not in Homestead, what percentage are not in Homestead if we don't know how many people own homes?
So the Census Bureau provides estimates every year. As we do our analysis, we look at data that the Census provides and then we compare it to the data that we have. So I would say it's probably very close to accurate. But it's not the same data source.
And do we work with -- like when people buy homes and stuff, to make sure when they're purchasing homes that they have the option of doing Homestead at that point?
Yes, I've had that conversation with a few folks that I think that is a process that could be improved, that if there was a way to include Homestead applications within closing documents or within the closing process, I think that would alert people to the program much sooner. I know that when I bought a home my realtor just did it, like he said, oh, you need to fill this out. But I want to make sure that all realtors do that.
Is that something we should make a requirement or do you think it's something we need to do or is just something that's done through regulations or through policy?
I think we'll have to look into what the legislative answer is there.
All right. Thank you. And one last thing because I know my time's up. Auto-enrolling and we mentioned that if people purchase a home or live in a home, obviously we don't know if they decide to move somewhere else or they leave it and rent it and whatever and we have to figure that out case-by-case. But even with TAP, right, and Water revenue, I recently was auto-enrolled in TAP. I'm not eligible. So the criteria that we use, how do we double check to make sure that since I was auto- enrolled -- now, I'm removed, thank you for removing me. But when I received my first bill and I saw a discount, I said, oh my God, what's going on. But that could be a challenge because the ratepayers pay the difference for the people who are in TAP and the people who aren't eligible get in. How do we put those checks and balances in?
I think you bring up a really, really important issue with auto- enrollment. There is not a single source of income data across the City. We have flags for any number of things, but there's not going to be a single source where we can know someone's exact income. So we have had to weigh the benefit of having folks get into the program against potentially sweeping up folks who may not be eligible. What we try to do is communicate this change and make sure that folks understand the program and whether or not they might not be eligible.
Because some people when they get that, they say, oh, great, a discount. They may not never know, right, so now they're paying a discount price for a long period of time.
Yes, it's something that we as we're looking at other auto-enrollment programs, that's one of the biggest challenges, is not being able to really pinpoint somebody's income and trying to kind of weigh the risk of that.
We don't receive -- because wage tax is paid for by the employer, we don't receive individual tax returns from residents.
-- unearned income so it's not going to be the whole thing.
Not income. Okay. All right. Thank you. Hopefully we could figure out a way to clear that up. And what happens if somebody's on that for several years and didn't realize it and then we catch that, you know, all these folks are on TAP that shouldn't be on there?
I don't think that the City can appropriately try to back-bill someone. But I think we would need -- the goal is to bill as accurately as possible.
Okay. Thank you. Thank you so much. Thank you, Council President.
You're welcome. We are now embarking upon our second round.
No, we're in the second round. Y'all spoke the first round. We're in the second --
Excuse me. The Chair recognizes Councilmember Nina Ahmad.
We're good. Nina first. Then we'll go to Quetcy Lozada and then we'll go to -- and then we'll officially be in the second round.
Okay. So I had the question sort of a follow-up on what has been asked, particularly what my colleague Isaiah Thomas was kind of trying to get to around what are our plans for revenue growth. I had a question about the econometric analysis of your long-term investment doing the safe, clean, green. Do you have a sense of when that's going to start paying off?
Yeah -- I mean, sorry. So I would say that it probably starts to pay off relatively quickly as we have success and people start to feel safer. So I think it's probably relatively quickly. That's not --
So you don't really actually have a model set out saying we're going to invest so much, we're investing so much money and what is the outcome for that because that can then be tied into what other revenue growth-producing measures do we need to take to match up to really have real growth?
Right. I don't think there's a really good model that would make that link. So I think for an econometric firm, that's not something that they would be doing.
So we don't have a sense of when all of this will be actually profitable?
The next question I had was about the increase in millage. Have we taken into account what we're going to -- we don't know when, but what the state will be changing and how much it will be giving to the School District and is that tied in?
Yeah. Sure. So the Governor's budget proposes a $240 million increase for the School District, and that was part of what we considered when we thought about our millage shift.
So that means our millage increase was still needed after that investment that the Governor is potentially going to make?
Yes. So what the School District says is that the Governor's proposal was an important first step in meeting the requirements of the Commonwealth Court ruling of getting towards adequate funding. And our millage shift is another step in that process. But there's clearly more the state needs to do to get to where the School District --
The reason I ask is if the state sees us increasing our millage, will they then say, oh, they're going to take care of it themselves, we need not to --
I think sometimes the opposite happens where they'll say the City's not doing anything why should we, so we want to just show that we had a commitment.
All right. And another question I had was about this pandemic that we just came out of, right, or still coming out of. This was somewhat of an unforeseen global economic shock. Going forward, is there somewhere in the budget, I haven't seen that, that we actually have a proactive stance because we live in a world that's really small and we're going to have more of these. So what have we built in and where have we built in this anticipation of having to have another issue like this?
Yeah. And that's what you have the Rainy Day Fund and a fund balance for. That's what those were supposed to help with. Obviously, we've never seen anything like the pandemic before. And hopefully, there's nothing like it again. You can't really plan in a five year plan for that kind of catastrophic fall-off in revenue that we show.
Do we have a sense of what it would take if that were to happen? Meaning, it may not reflect in the numbers of the budget. But have we as a City put together a proactive plan that would be put into motion?
Yeah. And I think the people who are best able to answer that are the people from our Office of Emergency Management, but they have definitely put together plans for how to react to various scenarios.
So your dip in the General Fund -- in the fund balance with respect to having a lot of the federal money gone also sort of anticipates that -- that and the Rainy Day Fund together anticipates potential issues that we would have the capacity to take care of if one were to see something like this?
So it would cushion that. But if we saw something like the pandemic and the dramatic fall -- it was a $1.5 billion loss in revenue. We don't have that built into our plan.
Right. and the last question I have is about program-based budgeting. We hear this, that it's done. Are you actually doing the analysis when you're asking for the increased or decreased next amount in the new budget? How is that tied into seeing how the delivery and success happened in order for that department to say we need more money or not? Is there an actual analysis done?
Yeah. So we do budget by program. And by program we have performance measures and we do look at those measures in determining what funding levels should be. And when departments ask for additional funding, one of the things we look at is what impact that will have on measures.
And the follow-up to that is that program work that happens connected to alleviating poverty and addressing our most vulnerable, does every department have metrics of that manner to see did we do that in how we spent our money?
Yeah. I mean, that is one of the factors that we look at and one of the things that we talked about because that's one of our overarching goals.
So there's like a saying, X program did this here and we actually were able to address our poverty rate in extrapolation, not an exact number?
Not an exact number. I mean, really what we're looking at is how measures tie into our overarching goals, right. And those overarching goals if they're successful will lead to reduction in poverty.
Where would we see that or are we just seeing it in your request for more or less money? Is that where -- we're assuming that you've done that, correct?
Yes. And you can see in the Five Year Plan in the budget detail the measures that we use by department.
Thank you. I'm going through our board. And so, we're still on the first round. Councilwoman Quetcy Lozada and then we'll wrap up the first round with Councilmember Rue Landau. We just had small technical difficulties. And so, if you press your button, right, just leave it and it'll stay on up here. But if you press it once or twice, it may go off the screen. But we're good. We're on the same page and let's keep rocking and rolling. And so, the Chair recognizes Councilwoman Quetcy Lozada.
Thank you, Mr. President. I want to make a statement and then I want to follow up with two questions. First, I just want to say thank you to the Revenue Department who partnered with me on doing a Homestead drive in the District where we were able to really zone in on the addresses of the individuals who had not taken advantage of Homestead yet and we were able to go door-to-door and enroll people where they are, right. But what we learned from that was that residents still don't understand the program. They don't understand it and they don't trust it, right. They believe that if they enroll in this program when they go to sell their property, the City will then penalize them for being enrolled in this particular program. And so, I think it takes that one-on-one relationship or engagement with them in order to ensure them that this is a program to help them get some of that tax relief that's so desperately needed. So I think we just need to figure out how we do better. I'd like to ask what are you all doing to ensure that communities that are non-English speakers understand the program better and have access to enrolling because we often times talk about a digital divide in many communities, but these programs require them to enroll online. (Witness approached Witness table.)
Good afternoon, Councilmember. That's an excellent question. I'm really happy to be able to report that the Department of Revenue recently engaged with a local marketing firm to work specifically with communities that do not speak English as a first language, and that's a continuation of a project that we first started in 2020. And I think that it's a very important aspect to our outreach that we understand. I think Revenue is very, very cognizant that our largest request for non-English materials is in Spanish. We translate many of our blogs, especially things that are for assistance programs into Spanish automatically. We provide dual language materials always. It's a given. And we've also completely translated the Philadelphia Tax Center into Spanish. We're happy to work with your office around how to improve the message. I think you bring up a great point and it's something that we'll definitely be talking about with our vendor.
I appreciate that. You guys know that we have a very limited budget as it relates to mailing and all that. And while we try to do that and include it in all of our mailing pieces, it's really important that departments like yours take the extra step to either promote on Spanish radio or Spanish media. I have a huge constituency of folks that speak Mandarin in the District who also don't understand and are not enrolled. And so, anything we can do in languages besides English to be able to encourage folks to get enrolled is extremely helpful. I also want to add to Councilmember Gauthier's request for information around the Housing Trust Fund. If we could add to her request the list of developers who consistently take advantage of that paying into the Housing Trust Fund to avoid the affordability requirement, I would appreciate that because what I do want to see is as we are meeting the goal or as we're trying to hit the goal of that 30,000 new units or housing units in the City, I want to know who the developers are, who are their partners. And if it is those who consistently want to pay to avoid the affordability, then I'm going to have a serious problem with that, right, because the land, the available land is in the 7th and in the 5th, right. And so, if they are doing projects in Districts like mine and consistently avoiding that affordability requirement, then I don't think that we should be using them to meet our housing goal.
You're welcome. The Chair recognizes Councilmember Rue Landau.
Thank you so much, Council President. Thank you, Budget and Revenue. Just to follow up on some of the more recent conversations about the Homestead exemption and LOOP and reaching people, it's kind of a larger conversation about how we are spending our time and money to collect taxes and revenue versus how we are spending our time finding the people who need our programs most. And I would like to see a shift in some of that. I would like to see us spend a lot of resources on some of our very successful measures to go out, to continue on what Councilmember Lozada was saying about the door-knocking, the reaching people individually, using the City's language access budget to reach as many people as possible versus the other side which is collections, lawsuits, losing their homes. There are costs on each side, and I would like to put the front-end costs of actually reaching people. I had a conversation with Revenue about the Water Department's practice of sending collection notices to people. They helped to explain a lot to me about how they send folks to collections but they don't necessarily file 16 complaints in court which harm people's records and can cause some significant damage. But even just sending them to collections, I would rather us to take the money that we are giving to these companies and figure out other ways that we can reach these folks beforehand, way beforehand, so we can figure out should they more actively get into TAP, are there other things that we can do with them. I was very impressed to hear that when the Water Department does reach people that they do try to connect them to other resources once they find them. I feel like there's a massive data gap here. We finally got to the point where the Water Department figured out how to automatically enroll those who they think would be eligible and Councilmember Squilla. But I think that we -- as the head of the Information and Technology Committee, I want to figure out more ways that we automatically enroll folks in these programs that we believe they'd be eligible for. Often times if you're eligible for TAP you're eligible for this, you're eligible for that. Let's start there. Let's put our money there instead of putting our money into collection companies, instead of taking people's homes in court, instead of having to even get in plans, to repayment plans that folks can't meet. Let's get them on the front end. And I am a huge partner with that. The second thing I wanted to say -- oh, and I wanted to also double down on, I know we used to use Philly Counts for this, we used to do a lot of door-knocking. We are talking now about a city that wants to put a lot of ambassadors on the street. We want clean and green with these ambassadors on the street. Let's also make these ambassadors or add to these ambassadors people who want to help folks get enrolled, get connected to our City programs and get connected to our low-income programs in particular because there are a lot of folks that we're going to have on the ground. I want to follow up -- I've got a bunch. I will hold some to the second half, but I believe that you said to -- I want to clear up something that I believe that you said to Councilmember Brooks. Councilmember Brooks was asking if we cut taxes what else will you have to cut in the budget in order to offset those tax cuts? And I thought I heard you say you don't look at it that way. And I wanted to get a little more clarity on that.
Yeah. So I mean, we looked at all of our revenue sources, right, and that's how we balance a budget and a plan. So we look at our projections and then balance the plan. It's not that we say, you know, this revenue's changing by this much and as a result, we're making reductions. Every time that we've had wage tax reduction we still had increases in the wage tax revenues. It's not that we have these incremental reductions and our wage tax revenue is decreasing the next year, right. They are still increasing.
Is that because more people become employees? How --
Yeah. Every year there are changes in two things: How many people are employed and what they're paid. And those two things combined drive what the increase in the wage tax is. You add that and then add the rate in, and the rate reductions have not exceeded the combination of those two.
Okay. That's helpful. I had a simple question about your budget to start, which is that in FY24 you reported that you had 139 staff members at -- in FY25 you projected having 147 staff members, but the increase in your budget was only about $37,000. And I didn't understand how you could increase by staff members to $37,000? 8
A couple 9 things. Five of those staff 10 members are funded by Grants Fund 11 so they won't show up in our General Fund budget. We're also looking at the timing of when we think the new employees will come on. We think that there will be some vacancies so there'll be time before they come on. And there are also kind of changes in some employees are leaving, others are coming in and there can be salary differentials between them. So that's why you see that small increase.
Makes sense. A couple more subjects, Council President. Okay. And one is that I've been hearing in all my conversations with folks throughout the City of delayed payments to contractors. And many of these folks have said that they're being paid extremely late, and even the Inquirer released an article on January 17th of this year that reports some Philadelphia homeless shelters have gone months or years without being paid on time. How will the City improve the payment of our essential contractors? And can you tell me how many contractor payments are outstanding?
I'm going to ask Cat who's been actually working on this issue to talk about it.
Yeah. So long- term for the improvement of payment to vendors is we hope to realize benefits with OPAL with replacing our financial and purchasing systems, right. So when data and systems are better linked, you can first have visibility on where they are in the process to be able to see where they slow down in the process. That gets me to the second part of your question, which is how many payments are outstanding. Right now that is difficult for us to report on because when a vendor sends an invoice to a department, it doesn't actually get entered into a system until it's ready to be paid. So that lag time at the department could be part of the delay, right. And that's not in a system for us to be able to report on. That's all basically manually tracked at the department. When we migrate to the new system, we hope to have majority of our payments come in at the point of when they submit to the departments is when they're actually entering information into the system. So we know the point where the vendor believes that they have submitted for payment and we'll be able to track that. Though to Council President's point, it's taking us a while to get there because we have to do this big system upgrade to get there. So in the interim, we have convened a working group to start looking at some other -- so Law, Procurement and Finance convened a working group to start looking at some interim changes we can do to try to help alleviate the problem. We do know the more vendors enroll in ACH, which is automatic payment, the quicker they're going to get their payment. So if you guys can help us push that goal, that would be very helpful. In addition to that, we are looking at upstream any issues around contracting that can lead to a delay in payment. So for most of our payments you have to have an active contract for us to be able to pay you against it. And so, there's some complexities there that we are trying to better understand.
Thank you for working on it. If there's anything that my office can do to help with that and all the other ways in which we could collect this data. I would rather us subcontract to entities that could help us connect the data and then give us a product in the end than to sometimes go through the process. As somebody who -- when I ran the Human Relations Commission, it took us nine years to get a database, nine years. Let's maybe front-end that and get a product and come back. The second one just for this round, another question, is about legal settlements. The City's projected in FY24 to have $1.1 million in settlements and in FY25 $1.4 million in settlements. Can you share with me how we're working to lower settlements? And can you also break down these settlements by department and categories, like employment, you know, accidents, slip-and-falls or anything like that?
Yeah. So I'll have Sharolyn Murphy to come up and talk about what our Risk Management does to try to reduce the number of claims that the City faces.
Good afternoon. I'm Sharolyn Murphy. I'm the Risk Management Counselor and the Employee Disability Manager. So with respect to settlements, it really depends on the category of settlement that you're referring to. And I'm not sure so I'm going to tell you about all of them until you tell me to stop. So with Workers' Compensation settlements, those settlements come through the Risk Management Department, the Employee Disability Unit. We settle cases based upon the severity of the claim, the injury, the number of years the employee has with the City, the diagnosis that is presented and also whether or not the case is in litigation. Cases that are not in litigation that settle, of course they settle at a lower amount. Cases that are in litigation settle at a higher amount because you have an attorney involved and you also have a fee that you have to pay. I'm going to give you an example with Aviation. Their cases are settled at a higher rate because they have this litigation piece involved in it. With Workers' Compensation, fortunately we can settle those cases without the involvement of the attorney, and we have a limit on how much we generally settle cases for. So, for example, if a person has received a service connected disability pension, we won't settle that case for an amount greater than about 1.5 years because we have the pension offset on that. Other cases that don't fit that model, we try to settle those at a reasonable amount. We try to be reasonable with the workers and we also want to be reasonable with taxpayer dollars. So we're trying to get the best settlement that we can for the City, but we still want to be fair. So there are a lot of factors that go into settling cases. They're all done on a case- by-case basis. We don't just have a dollar figure and we say all these cases settle for that amount. So a lot goes into how we settle the cases. There's some cases that are settled through the Law Department and they have their own discussions about the factors that I've just outlined for you and those cases are settled differently. I'd be happy to talk to you in greater detail about how we do it department-to-department, but those numbers are going to vary based upon the individual case.
Thank you for that. Can you and the Law Department get together and give us a list? I'm curious how many of those cases are associated with police officers, how many are slip- and-falls if we didn't fix a sidewalk timely and things like that. That's what I'm looking for.
How we can fix things in order to minimize the amount of money we're paying out.
Absolutely. Some of those cases are going to fall under the Tort Claims Act and we can certainly give you those numbers of cases that we settle, and some of those cases, you mentioned police officers, those will probably be Heart and Lung cases. Those are going to be under Employee Disability. We can certainly get you numbers for that as well.
Yeah, one more. Thank you for that, and I might follow up with you later on that. But thank you. I wanted to follow up on -- let's see. So this is a Councilman Jones' special I think. It's real estate tax. Last year Councilman Jones asked you what is the real estate taxes owed to us, what are the amount of taxes in Philadelphia that are owed by individuals outside of the City and what are those collection rates. And you responded, the City responded that principal delinquency is at $234 million. It was 80 percent. But 204 million of the 234 was owed by Philadelphians. $15 million was in other parts, was outside of Pennsylvania. What are the numbers today from that fiscal year from now, this fiscal year, and what are we doing to ensure we get funds from owners outside of Pennsylvania? I believe I heard the Revenue Commissioner say that we had 67,000 tax delinquent properties, so I'm curious how many of those are owners outside of Philadelphia and how much in total is owed? COMMISSIONER McCOLGAN: Thank you, Councilmember. At the end of Fiscal Year '23 out-of-state mailing addresses, we had 3,612 accounts associated with those and 11.8 million in debt owed.
Okay. COMMISSIONER McCOLGAN: For other Pennsylvania mailing addresses, we had 3500 accounts totaling 13 million in debt. And for Philadelphia residents, we had 46,400 accounts totaling 144.8 million owed.
And you said that was FY23 but -- COMMISSIONER McCOLGAN: Yes.
Okay. Do we know where we are now in FY24? COMMISSIONER McCOLGAN: I think we can get updated stats.
That would be helpful. Thank you very much. COMMISSIONER McCOLGAN: Sure.
I didn't -- sorry, I want to ask a collections question real quick. What are we doing to get the money to collect -- this is where I'm happy about collections, right. What are we doing to collect more vigorously from folks outside of Philadelphia or outside of Pennsylvania even? COMMISSIONER McCOLGAN: Okay. We do file judgments against folks that are outside Philadelphia. As chief counsel mentioned earlier, the challenge is when ownership varies from a property within Philadelphia to a property that they own outside. Is there anything to add to that -- filing the judgments is really the action that we are able to take to ensure that we can secure that debt.
And it should be pointed out that we could not adopt a program of systematically treating people who are non-Philadelphians differently as a matter of us constitutional law.
I am painfully aware. Thank you very much. Thank you, Council President.
You're welcome. So we will now take a break until 1:15. And at 1:15 we will start our second round. Thank you, everyone. (Lunch recess.)
This hearing is now called back to order. We are in our Round 2. And so, with that being said I just want to start off with one question for the Board of Pensions. (Witness approached Witness table.)
Good afternoon, Council President. Francis Bielli, Board of Pensions, Executive Director.
Good. My question is regarding diversity and inclusion for investment managers. And your testimony notes that the Board seeks to promote diversity and inclusion in its investment manager selection process. And so, I just want to know what strategies do you use to promote this and what is the current diversity rate of your investment managers?
So our current rate is diversity managers manage approximately 55 percent of the Board's assets, which is slightly over $4.2 billion. You could compare that to a handful of years ago when it was in the teens. The number of managers, diverse managers, is 28 percent. We do a utilization study every year, which measures the number of diverse managers in the whole investment universe database that meet the minimum criteria to invest money for the Board. That's 11.84 percent. So you can -- it's a very small percentage in the investment world that are diverse investment managers. And what the Board and the Trustees have accomplished over the last several years is extremely impressive.
Are you able to break those numbers down based upon the demographics?
Yes, we can send that to you. You will have that, and we publish that every month in our flash report which is on our website. And for example, at the Board meeting tomorrow that's in the materials at the Board meeting, but we can send that to you, yes.
Thank you very much. It also is noted in your testimony in the Five Year Plan since the 2016 pension reforms, the Pension Fund has increased its funding ratio from 44.8 percent to 61.9 percent and is expected to be fully funded by 2033. This has taken a collaboration across the City and state governments to make it happen which I think is a great thing. Once fully funded, what impact would that have on our budget? Now, I know Rob touched on this briefly in our budget briefings but we just want to go on the record. And then also, Rob, can you also compare the size of the payment the City makes now to the Pension Fund each year compared to what the payment will be in 2033?
So getting to 100 percent funded will mean that the amount that we contribute to the Pension Fund will go down dramatically because the biggest portion of our payment is paying off the unfunded liability from prior years. So that payment will go away when we're 100 percent funded and our total payment in '33 would go from 768 million to 147 million, and that is an all funds number. But as you can see, it's a giant impact on our budget. It frees up a lot of funds. Our decision-making at that point will be a lot different from what it is now.
Good job investment-wise. Appreciate it. Also, I want to ask for the City Treasurer to please come on up. (Witness approached Witness table.) CITY TREASURER DUNN: Good afternoon, Council President. Jackie Dunn, City Treasurer.
And good afternoon. I want to talk a little bit about NPI, the Neighborhood Preservation Initiative. It's now in its third year of a four-year program. As we plan for the future of this important program, does the Administration recommend another bond issuance versus using General Fund dollars or an infusion of both to continue to build upon the work related for NPI? CITY TREASURER DUNN: Thank you, Council President. This body several years ago approved an authorization for a total of $400 million borrowings over several years to support the programs underneath the Neighborhood Preservation Initiative. As mentioned earlier to one of your colleagues, we've done two of those $100 million borrowings and we're working with the NPI team on what their upcoming cash forecast needs look like to see where that pace of spend is, to see when we want to time that third borrowing.
Yeah. And, Rob, could you also just clarify also for the record -- now, I know we spent 200. There's 150 under discussion. I just want to make claim that 150 before the Administration begins planning and then -- technically there's 50 left, but could you just clarify it for me?
So the amount spent, I think the Treasurer said this morning it's 110 million. So of the 200 million that's been borrowed, there's 90 million left to be spent. Of the 200 million that's not borrowed yet, there's been an NPI budget approved by Council that was for 150 million.
150 million. I just wanted to clarify that because I know some District members -- not even just District members, members in general had questions about it. And also based upon that last 50, we had to determine as a group, Administration and Council, if we decide to do more borrowing or figure out a strategy on how we want to move forward; is that correct?
Okay. Part of NPI, and I think this is very good information. I know we're addressing affordable workforce housing, we're addressing the tree removal, the alleyways. We're also addressing the issue of driveway repairs as well, all our key critically important issues throughout the City of Philadelphia. One particular area that significantly has an impact on our NPI funds are the support for Basic Systems Repair as well as Restore Repair and Renew, right. And so, on the first NPI bond issuance of 100 million eliminates that backlog. And so, I just want to get an idea, if you can give me an idea and an update on this bond and what the payback outlook looks like? CITY TREASURER DUNN: I'm sorry, Council President. Could you repeat the last part of your question, what the?
Can you give us an update on the $100 million bond that we used and the payback and the outlook on that particular bond, what that looks like?
Yeah, debt service on it. Yes, the 100 million. CITY TREASURER DUNN: Sure. So on the first part of your question regarding the program allocations, the Basic Systems Repair program, through the first two bonds was allocated around 40 million. Adaptive Modification received approximately million, 7 and that's also a program 8 administered by Philadelphia Housing and Development Corporation. Those programs spend quite quickly. As you mentioned, they have a lot of need and they receive not only NPI dollars but also funding from other state sources, which is helpful. But those programs are the two quickest that we see requisitions for. And then in terms of the debt service, so the debt service on the first two borrowings to date is projected to be approximately 15.2 million in Fiscal Year '25. Because those were borrowed through our service agreement structure, those are paid through the Class 200 line item in the City budget, because that's more unique relative to Class 700 debt service payments. And then we anticipate that when all 400 million in bonds are issued for the NPI program, the annual debt service is projected to be approximately 33.7 million annually.
Okay. Thank you. And also, thank you for the work that you're doing around NPI and working with the team as we draw down the funds to move forward to address the variety of those different issues. So -- CITY TREASURER DUNN: Thank you. They do all the hard work so I appreciate that.
I just want to publicly thank you for that. At this time, the Chair recognizes Councilman Curtis Jones.
Thank you, Mr. President. Very quickly, my colleague asked how we could further market some of the programs available dealing with real estate and seniors and abatements. Can you tell me if we are connected and included in BenePhilly?
Okay. That's an important way to codify everything that people are eligible for in one application, so I think it would behoove us as a city to take advantage of it and get it marketed a bit better and boots on the ground. And one of the things Anton Moore does in South Philly is go door-to-door. And he knocks on the door and says, how can I help you, which I think is novel. And I am going to get some of that, Mr. President, because I think it's the best way to demonstrate to taxpayers that we're here to help with bringing relief door-to-door. I think it's laudable. The other thing is Vicki Riley, you need to convince her to come out of retirement because she is one of the few people that could go to a community meeting and have people clapping about taxes and wanting to pay their taxes. So whatever you have to do to incentivize her to come out, I would suggest. Do you have an answer? COMMISSIONER McCOLGAN: Thank you. I appreciate that question. The information on BenePhilly, I'm not familiar with partnering with them, Revenue partnering with them to date. So I would certainly welcome any opportunity to partner with any organization that can help get the word out.
Yeah. It's not just you that -- but particularly you, when somebody takes their time to fill out one of those long-form applications, it is efficient if they find out everything that they're eligible for. And it's been said, Councilman Domb used to always tell us we leave about $11,000 per household on the table in low-income neighborhoods that we could be taking advantage of. So if you could get to the President a confirmation about that. And if we're not on it, how we can incorporate that. I think that would be helpful. Then finally, I want to say thank you because when you do something wrong we tell you about it. But when you do something right, we should tell you about it. And in this case maybe six budget cycles ago, we had a complaint from a senior citizen that came into our office. And she was one of those seniors that still paid by check, still put the stamps on the envelope, took the envelope to the post office to make sure her money was paid. And she did it religiously, which is something to be appreciated. But what she came to the office and said is, When I put $30 on this, my balance doesn't come down. And when we looked at it, it was because it was applied to principal and interest and there was no breakdown on the actual receipt as to what your dollars were being applied to. Well, we checked before the hearing, and you guys have done that and then some. It's in most Revenue packets that breaks it down. This money, this dollar is going towards interest. This dollar is going towards penalty or this dollar is applied in part to the principal. I think for seniors and those who are not necessarily seniors, that is accountability at its best. And I just wanted to on the record thank you guys for at least hearing us. So I say this to my colleagues, you know, they actually do listen and they actually do take heed to what we are saying as elected officials. So thank you. Thank you, Rob. COMMISSIONER McCOLGAN: Thank you, Councilman. That was a great suggestion. We were happy to implement that. While we're talking about assistance programs, I also just wanted to mention we distributed some information, but I just wanted to make sure everyone is also aware of the Pennsylvania Housing Assistance Fund that's available right now. Applications just reopened on March 18th. And there's between $40 million and $50 million that's available to Pennsylvanians. That's for people who experience financial trouble during the pandemic and that applies to mortgage payments, property taxes and fees and also utilities. So I'd just like to get the word out about that also.
You're welcome. The Chair recognizes Councilmember Katherine Gilmore Richardson.
All right. Thank you so much, Mr. President. Thank you again, Rob. I just want to circle back to a couple of questions that I had, and then I'll have some questions for the Treasurer's Office.
And then I have an update to an answer that I wasn't able to give before. So whenever you want me to do that, I can do that.
Okay. Great. That's excellent. First, if you could just talk about the economic stimulus fund. In the budget and brief there's a projected $11.3 million increase in the economic stimulus fund from FY24 to FY25, and that makes the total for FY25, $29.3 million. And so, can you just explain the significant increase in the contribution to the fund. And if you could just talk about what you all are thinking about like a strategic plan to spend the funds on initiatives that grow and support minority business owners.
Because the money runs really through Commerce. And I think it's about million a 7 year for the rest of the plan. So 8 I think they'll be well-prepared to 9 talk through how they view using 10 that. 11
Right, but it's just 13 such a significant increase, 14 overtypical. And so, I'll circle 15 back to Commerce. I just made a 16 note to circle back to Commerce on that. The CCP subsidy, so if you could just for the record what was the actual contribution of CCP for FY23?
Give me a second. Instead of guessing I should actually look at --
I think you're talking about FY25 because that's 51 million.
And part of that was, which I think is going to be your next question, we gave them an additional 15 million in '23 for their capital budget, and that was intended to cover three years of capital costs for them. So it was a one-time thing that they need to occur because it was helping them with capital.
Understood. Okay. So FY23 was 67 because of the capital needs. FY25 proposed is 51, right?
And the FY24 year-end transfer ordinance, you're proposing a $10 million increase for CCP, and that would bring them up this year to 61 million?
Okay. And I guess the justification for that is the additional contribution to offset the tuition increase?
So partly the tuition increase and partly to establish the municipal college for City employment.
Okay. And so, then do you believe CCP would be able to stave off a tuition increase in FY25 so that they can run this new program with the $10 million decrease in the FY --
Okay. My colleague asked a question about indemnities and refunds, but if you could just go over it for me. For FY23 our indemnities cost 10.7 million?
Yeah. So here's the kind of quirk there is that at the end of the fiscal year, indemnities costs in our financial statements are then allocated out to departments.
So what we'll show is the actual in the finance indemnities isn't the full indemnities. So to answer the question of what we spent in indemnities for '23, we would have to go back and kind of go department by department and then get back to you.
Okay. Because to me from the budget and brief it looks like FY23 is 10.7 million, but FY24 projected 74.2 million and then FY25 then would be a decrease of $13 million in contributions to the fund.
Yeah. And again, the change from '23 to '24 is distorted by having allocated the indemnities cost out to departments.
Okay. All right. And then really quickly on insurance. In your budget detail, Rob, it shows that in FY24 we paid $859,084 for cyber security liability insurance and $3,350,491 for terrorism liability insurance. There are no allocations that I can see or find for FY25 for those costs. And so, could you just share the terms of the policies?
Yeah. If you look at the bottom of that page, you'll see there's a big 4.-something million to cover all the insurance. So we don't know how exactly it'll be allocated between the two, but that funding will come out of that pot.
Oh, okay. So it'll come out at the bottom of the page --
-- and then you'll allocate it out. I was just concerned because we're having so many events coming up and --
Correct. Yeah, it's not going away. It's just those two are bundled together on that page.
Understood. I heard the bell. I'll come back on the next round. Okay. Thank you, Mr. President.
Do you want me to give you the information -- so the two facilities that were included were the MEU, Medical Examiner's Unit, and 500 South Broad. Those are the two that we thought we were going to sell that will take a little while longer to sell. And then the other part was why the zoning permit number went up so much in '24. If you remember when the abatement law changed, there was kind -
The abatement law changed and there was a rush to get permits so that inflated the number, and that's why it goes back down.
Oh, that's why it goes down again because it was a rush to put in all of those applications?
-- Medical Examiner's is over where Air Management used to be in University City?
Okay. All right. I'll come back on the next round. Thank you.
Thank you, Council President. I wanted to follow up on my previous questions to try to get a little bit more detail. I know a number of folks have also lifted up similar questions regarding auto enrollment in tax exemption and refund programs. As far as I understand, I can also -- I'm sorry. You're coming -- sorry. As far as I understand, Philadelphians are eligible for the low-income wage tax refund if they're eligible for the Commonwealth special tax forgiveness credit. I know we talked a little bit about this earlier, but have you actually engaged the Commonwealth around sharing the data even with the legal pieces, sharing this data to make the low wage income tax refund enrollment process easier for Philadelphians? Has there actually been talk about that? COMMISSIONER McCOLGAN: Thank you for the question. We are always exploring how we can make it easier. I can revisit the topic with my team to see when it was that we last talked with them about that data sharing. I do believe the challenge is that by the time the data is available to us, it's no longer current. So much of the data that we receive in our data share agreements are 2 years old when we get it so that's a part of the challenge, but I'm happy to revisit that and see if there's any changes that could improve that process.
Stay focused. Do you have any estimate of the number of Philadelphians who are eligible for the low-income wage tax refund and not receiving it right now? COMMISSIONER McCOLGAN: Right now I have the number of folks who applied, but I do not have the number who are eligible. So I think we can analyze that and get back to you on it.
Okay. I understand that there are legal and data issues as have been explained to me today which is helpful to know, that ultimately make it difficult to automatically enroll Philadelphians in all of these programs, and I appreciate how much of a priority this is for you all as well. Thank you for getting back to your team as well. But when low-income Philadelphians aren't getting the crucial savings that they need, we are failing them and we really want to make sure the folks have access to what they need. So sort of in concert with all of my colleagues who have been interested in this issue, can I ask for a commitment from Revenue that you'll work with the Council to do everything that you can to automate these programs, Homestead, LOOP, Senior Tax Freeze, Low-income Wage Tax Refund, et cetera, so that we can get 100 percent enrollment for Philadelphians? COMMISSIONER McCOLGAN: I can commit that we will work very closely with you within the legal boundaries that we have and also provided that we have the tools and resources that are needed to do something like that. Because as I said earlier, we do share the same goal.
Yeah. COMMISSIONER McCOLGAN: So I'm happy to have new conversations about how we could potentially expand our assistance programs.
Okay. Thank you. I also wanted to follow up on Revenue's efforts to identify landlords with multiple property delinquencies. How will this Administration coordinate data and efforts between Revenue and other agencies like L&I to identify predatory landlords with multiple tax delinquencies and code violations and then hold them accountable to their tenants and taxpayers? COMMISSIONER McCOLGAN: I'm going to ask Frances Beckley, our chief counsel to come up and speak to that.
Yes, ma'am. Thank you. COMMISSIONER McCOLGAN: Thank you.
So we do work closely with Code Enforcement to identify cases where we will as I described sue landlords for everything that is what we call a municipal claim, which means it's been liened. So that will be the real estate tax, the water, and any work that L&I has done on the property, and that has been quite successful.
And the new PRISM system the Philadelphia Tax Center has done is enabling us to have much better information --
Thank you. Lastly, I wanted to follow up again on the City's budget engagement process. Rob, you mentioned that the engagement strategy -- and thank you for your responses. You mentioned that the engagement strategy is currently under development now, but the budget is being crafted now. I'm worried that if a strategy isn't finalized soon community members won't be able to participate this spring in time for Council to consider the input. Can the Budget Office be clear about when the engagement strategy will be finalized? I know you said you're in the early stages. But when will you have a plan?