COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING JOINT COMMITTEES OF THE WHOLE and HOUSING NEIGHBORHOOD DEVELOPMENT AND THE HOMELESS - - - Room 400, City Hall Philadelphia, Pennsylvania Monday, March 29, 2004 10:35 a.m. - - - RESOLUTION 040095 - A resolution amending the Fiscal Year 2004 program Statement and Budget for the expenditure of the Neighborhood Transformation Initiative (NTI) bond proceeds. - - - PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN JANNIE L. BLACKWELL COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DAVID COHEN COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JUAN F. RAMOS COUNCILMAN FRANK RIZZO COUNCILMAN FRANK J. DI CICCO COUNCILMAN DARRELL L. CLARKE COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN RICHARD T. MARIANO COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN MARIAN B. TASCO COUNCILMAN JACK KELLY - - - V A R A L L O INCORPORATED Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, PA 19103 (215) 561-2220 350 RESOLUTION NO. 040095 - 3/29/04
Good morning, everyone. Sorry for the delay. This is the continued Public Hearing of the Committee of the Whole, of Neighborhood Development, Housing, and the Homeless Committees regarding Resolution No. 040095. Mr. McPherson, would you please read the title. MR. McPHERSON: A resolution 11 amending the Fiscal Year 2004 Program Statement and Budget for the expenditure of the Neighborhood Transformation Initiative bond proceeds.
Thank you. Anyone wishing to testify, if you would see Ms. Murray back here, give her your name so that you would be called at the appropriate time. Good morning.
Please identify yourself for the record and proceed with your testimony.
Patricia 351 RESOLUTION NO. 040095 - 3/29/04 Smith, Director of Neighborhood Transformation. Good morning, Madam President, Madam Chairperson, and members of the Committee of the Whole and Housing, Neighborhood Development and Homeless. My name is Patricia Smith, Director of Neighborhood Transformation. If I may, I would like to just take a few minutes at the outset of the hearing --
Ms. Smith, just a moment, please. The noise level is much too high. Thank you, that's much better. Please proceed.
If I may, I would like to take a few minutes at the outset of the hearing to address some of the issues and concerns that were raised last week about the progress the Administration is making under the Neighborhood Transformation Initiative. And I am also submitting a substitute Exhibit D in terms of that I would like to replace the one that was in the 352 RESOLUTION NO. 040095 - 3/29/04 resolution itself. And I will talk a little bit more about that at the closure of my testimony and explain that. Under the umbrella of NTI, the Street Administration is taking on problems that are the result of decades of divestment and neglect. NTI represents an unprecedented commitment of resources for Philadelphia neighborhood. It endeavors to help preserve and rebuild Philadelphia neighborhoods by removing blighted conditions, creating opportunities for redevelopment through land assembly, stimulating private investment in neighborhoods, and coordinating and improving the delivery of services and resources to neighborhoods. NTI recognizes that strong and healthy neighborhoods requires safe streets, job creation and workforce development, good schools, retail, cultural and recreational outlets and a range of quality housing options for all incomes. NTI emphasizes neighborhood 353 RESOLUTION NO. 040095 - 3/29/04 planning, balancing affordable housing and market-rate housing development, the involvement of nonprofit and private sector, and collaboration among city departments and agencies. The implementation of NTI has not been easy. To my knowledge, nothing equal to the breath or the scale of NTI is being undertaken elsewhere in the country. When necessary, the Administration has made adjustments in its program goals and strategy to accommodate lessons learned and changed circumstances. Yet, despite the many challenges that are embedded in the implementation of an initiative of this scale, this Administration has accomplished a great deal since the passage of the NTI authorizing legislation in March 2002. And just to list some of our accomplishments, we have contracted for the demolition of more than 1900 dangerous buildings, contracted for the stabilization of more than 400 properties, redesigned the PHIL 354 RESOLUTION NO. 3 million in development costs, initiated the acquisition of more than 5500 projects for development projects or land banking using the RDA eminent domain powers, contracted with ten CDCs for the implementation of a new homeowner repair program for their neighborhoods, and contracted with eight CBOs to help maintain vacant lots. In addition, the Administration since January 2000 has made the neighborhoods safer and cleaner by closing down open -- air drug markets, taking 202,198 abandoned cars off the street, removing graffiti from 308,757 buildings and fixtures, pruning 15,975 trees and removing 7401 dangerous street trees, removing more than 30,000 tons of debris from vacant lots, planting some 4000 new trees on streets, in parks and on vacant lots, improving more than 1400 vacant lots by installing topsoil, seeding and fencing, and selected more than ten commercial corridors or 355 RESOLUTION NO. 040095 - 3/29/04 neighborhood gateways and garden projects for improvements, and funding upgrades for 26 neighborhood parks. We secured a seed grant from Freddie Mac to set up a public information hotline to reach victims of predatory lending and help home improvement or debt consolidation loans. To date, what we call the "Don't Borrow Trouble" hotline has served more than 2300 callers. Because of a generous grant from Citizens Bank, the Administration will promote the hotline this summer in a series of ads in newspapers, on buses and on the radio. Furthermore, the face of several Philadelphia neighborhoods is being transformed by large-scale development projects throughout the city. Six large-scale developments, consisting of more than 2500 new units are well underway.
Some of these 21 developments include 788 units at Mill Creek 22 Hope VI, 400 units at Brewerytown, 230 units 23 at Capehart, 546 units as Tasker/Gray's Ferry, 400 units by Universal Communities in South Philadelphia, and 151 units at the Cecil B. 356 RESOLUTION NO. 040095 - 3/29/04 Moore Homeownership Zone. About half of these new units will be rental properties, including low-income and senior housing, and the other half will be homeownership properties. It is impossible to talk about neighborhood transformation without recognizing the work of the Philadelphia Housing Authority. There is a demonstrated need for affordable housing in this city, and public housing is a significant resource for Philadelphia's low- and moderate-income families. PHA does play a critical role in neighborhoods. Its resources can serve as a catalyst to the revitalization of communities. Of course, the transformation of neighborhoods requires a balance of public and private investments. NTI is engaging the private sector in many important ways. Citizens Bank has committed $104 million in capital to neighborhoods where NTI is active. In the first year of its commitment, Citizens has exceeded all lending goals. In 2003 alone, they have more than doubled their residential mortgage goal of $10 357 RESOLUTION NO. 040095 - 3/29/04 million by making $20 million available to buyers in low- and moderate-income census tracts. Local lenders are active in NTI-funded loan programs. Fleet, Wachovia, Citizens, PNC have made more than $4 million since Fiscal Year '03. The PHIL program leverages $2 million in NTI bonds to make $13 million in loans available over the next few years. In addition, eight lenders -- Beneficial, Citizens, Commerce, Fleet, National Penn, PNC Bank, Sovereign and United -- all came together to serve as lenders for our new anti-predatory loan products. 6 million loans to homeowners with past credit problems. Because of NTI, there is a renewed interest, I believe, in the City of Philadelphia by for-profit residential home builders, interests seeking to build large-scale developments in distressed real 358 RESOLUTION NO. 040095 - 3/29/04 estate markets, like Cecil B. Moore and Brewerytown. The RDA has begun to receive expressions of interest from developers looking to purchase land from its inventory at fair market value. And just a few years ago, we couldn't give some of this land away. NTI bonds are laying the foundation for future development. By current estimates, roughly $19 million in approved acquisitions will bring $136 million in affordable market-rate, mixed-use development to the city. This is just the beginning. Development projects can take five years plus to come to fruition. For the next decade, the majority of all development in Philadelphia will likely have been facilitated by the use of NTI bond funds for acquisitions. We are proud of the direction we are going. I also want to reiterate the Administration's commitment to using NTI as a tool to foster economic opportunity. The Administration is meeting the subcontracting goals that are set out in the economic 359 RESOLUTION NO. 040095 - 3/29/04 opportunity plan for demolition activities. Of all the contracts that have been let for target demolition programs as of March, MBEs account for 49 percent and WBs account for percent of the subcontracts. 7 Plus, minority firms are performing 34 percent 8 of the curb-side demolition work. 9 The African-American Chamber of 10 Commerce is helping to build the capacity of 11 minority- and women-owned businesses who are 12 interested in bidding as prime contractors in 13 the NTI targeted demolition program. 14 In addition, we are issuing small 15 bid packages to facilitate the participation 16 of demolition contractors. 17 For the targeted demolition program, 18 the Administration is pleased to report that 19 minorities account for 78 percent of the more 20 than 87,000 hours worked.
Philadelphia 21 residents represent 77 percent of the work 22 force employed. 23 The vacant lot maintenance program, 24 administered by PHS, created jobs for 70 neighborhood residents. Thus far NTI work 360 RESOLUTION NO. 040095 - 3/29/04 force development program administered by DAP has resulted in acceptance of 36 individuals into the building trades. I now turn to the specific issue at hand today, the proposal to add to the FY '04 NTI program budget. The Administration wishes to replace Exhibit D to Resolution 040095 with the attached spreadsheet. The additional $25 million that we are seeking will be used to fund all or part of bid packages that are highlighted in blue and yellow on the spreadsheet. And, if I may, I just want to, for example, pick out a Council district and explain. Because I know it is a lot of numbers on this spreadsheet. What we sought to do, instead of estimating, as we had done in the approved budget that was introduced last year, we listed the actual bid packages that the amendment will support. So if you were to look at, for example, Council District No. 8, you have 361 RESOLUTION NO. 040095 - 3/29/04 already under contract bid packages 24, 25, 23, and the AAC training program. That's already under contract. In this amendment we will be adding Allegheny West and funding, for example, I believe, 46 properties as part of the bid package, as part of this amendment as additional FY '05. And we used the alternating colors just to make it easier to read. In addition, we are including funding for emergency curb-side asbestos monitoring for the targeted program and wrap-up insurance. And then, as I also explained, some bid packages, because of their size, some are being partially funded with the amendment. The remainder of the funding for the Kensington, Grays Ferry, Haddington, and Allegheny West bid packages will be in the NTI FY '05 program statement. As I explained in my testimony last week, the additional funds are needed because the pace and the cost of demolitions in '04 is 362 RESOLUTION NO. 040095 - 3/29/04 greater than the Administration projected in the original budget, which was transmitted about a year ago -- which was developed about a year ago. Because the targeted program was not fully operational when we transmitted the budget, we had very little actual experience in the field with how the contracting community would respond to large bid packages, packages that were usually greater than 75. During the first half of FY '04, only three contractors were actively bidding on target demolition packages. Another cost driver has been the significant number of party wall treatments in bid packages. As I had stated, for every 100 demolitions, on average we stucco 64 party walls. And the cost of a party wall treatment is $9,000. Although the Administration could have exercised its right to reject all bids because costs were coming in higher than projected, we elected to go forward. Generally re-biding adds at least 363 RESOLUTION NO. 040095 - 3/29/04 two to three months to the city's procurement process, without any guarantee that the demolition contracting community will submit lower bids. Furthermore, there was a great deal of public pressure to increase, not slow down, demolition activity. The Administration is working hard to reduce costs, and we are committed to that. To increase competition, we are aggressively recruiting contractors for the targeted demolition program. And results are beginning to pay off. The Ludlow bid package drew eight bidders, and Belmont has come in percent 17 lower than our estimate. 18 While our demolitions costs for both 19 the targeted and emergency curb-side programs 20 are higher than initially projected, we do believe the quality of the demolition work has improved dramatically. We have revised the specifications -- and we have talked about that -- to improve the post-demolition 364 RESOLUTION NO. 040095 - 3/29/04 treatments. Where appropriate, we are fencing.
In addition, to improve accountability, we changed the bidding process. Contract is now bid on the entire demolition procedure, including asbestos removal, party wall treatments, and post-demolition treatment. There has been a noticeable decrease, we believe -- these changes have been well received by neighborhoods. Furthermore, there has been a noticeable decrease in the number of complaints regarding demolition work. " The noun "initiative" comes from the verb "initiate," which Webster defines as to cause or facilitate the beginning. For example, to initiate a program of reform. "Initiative" means the first step. During the past 50 years, Philadelphia has witnessed unprecedented losses in both people and jobs that have 365 RESOLUTION NO. 040095 - 3/29/04 decimated property values, quality of life, and the sense of community in many once proud neighborhoods. NTI seeks to build a foundation for change in neighborhoods that have been neglected for decades. Although we have faced some tough challenges, NTI has accomplished a great deal in a relatively short period of time. While much remains to be done, as President John F. Kennedy so poignantly pointed out in his inaugural speech, all of this will not be finished in the first 100 days, nor will it will be finished in the first 1,000 days, nor in the life of this Administration, nor perhaps in our lifetime on this plant, but let us begin. NTI represents the beginning. Madam President, Madam Chairperson, and members of the Committee of the Whole and Housing, Neighborhood Development and Homeless, I respectfully request your favorable consideration of the proposed amendment to Resolution 040095. Thank you. 366 RESOLUTION NO. 040095 - 3/29/04
Thank you. Have all of the Council Members received a copy of this amendment? Thank you. Ms. Smith, what is the traditional cost of a party wall treatment? What did it cost us when L & I was doing the demolition?
Well, L & I continues to do emergency demolition. And their party wall treatment number is coming in around the same amount at this point in time. It may be slightly lower because some things, like prevailing wage, does not apply to emergency curb-sides because the amount may not exceed $25,000 in total. And under Council ordinance, if a construction cost is less than 25,000, that doesn't apply. But they are almost comparable at this point. The other challenge we have in doing the apples-to-apples comparison is that under the emergency curb-side program, we let one contractor to do all stucco work. And then contractors are deployed citywide; as opposed 367 RESOLUTION NO. 040095 - 3/29/04 to having, in the NTI targeted program, the prime contractor responsible for everything. And as you may recall, Council President, one of the reasons why we made that change is, a lot of times neighbors, after a house was taken down, when the curb side, and not immediately stuccoed, would complain because they didn't realize that another contractor would come.
At that time we waited an awfully long time. And we were told that we could only find one person in the entire city who did stucco work.
I mean, $9,000 seems like an exorbitant amount to me for stuccoing work, but I'm not an expert at that. But it does sound like a lot of money.
It is in line with what we are estimating in terms of the work. And, again, the other drivers are things like prevailing wage.
Ms. Smith, I received a call from Councilman Nutter this 368 RESOLUTION NO. 040095 - 3/29/04 morning. He is unable to be here; however, he indicated that last week he did ask for a breakdown of the original budget by councilmanic district.
And he also wanted to know how much has been spent to date. Have you been able to provide him, his office, or us with that information?
We have put together a response to all the questions that was presented to Council, and they are being delivered. There was, unfortunately, a typo that I caught. And they are being delivered to the Council offices today. And I think you have my one and only copy that I brought with me, the draft.
Fine. Thank you. Are there any questions from members of the committee? 369 RESOLUTION NO. 040095 - 3/29/04 The Chair recognizes Councilman Goode.
By your statement just now, that packages are being prepared for Council Members in response to questions asked last week, should I take that to suggest that the responses within your testimony do not respond to the questions asked last week?
No; I tried to respond to what I thought were some of the major themes of last week. And one of the other things I did attach to my testimony, because there was a question specifically around the direct leverage of NTI bonds, and I did attach that chart to this testimony.
I saw that chart, but I will get back to that part of it. The first question I asked last week --
The Chair 370 RESOLUTION NO. 040095 - 3/29/04 recognizes Councilman Cohen.
Did Ms. Smith say she prepared for the individual Council Members the answers to their questions?
Well, I understood that the procedure in City Council always, without exception, was to send the replies to the President, and the President would send them to the Council Members, those Council Members whom she believed it was appropriate who asked the question. Send one to the Chair, whoever the Chair was. So I am wondering whether that's been changed at the request of the Council President, or who is changing the procedure? Because many of the questions may be asked by a particular Councilman. Sometimes one or two Council Members are interested, sometimes there are more.
No. The letter responds 371 RESOLUTION NO. 040095 - 3/29/04 to all questions that we took notes on as addressed to President Verna and Chairwoman Blackwell. And then that response we cc'd all members of Council, because it is distributed to everybody.
Why is that? Is it because you don't trust whoever the Chair is to distribute them to the appropriate people?
That's not my understanding. But I would like to have clarification from the Chair. Have we changed the procedures?
No. Normally it is sent to the Chair, and the Chair then submits it to all Council Members.
We made copies. We will deliver all copies to your office, Council President.
Yes. As I said, I had 372 RESOLUTION NO. 040095 - 3/29/04 to make a change. And we will bring all copies, we will make the copies and deliver them to your office.
Just getting started, Madam President. The first question, Ms. Smith, last week was how the rate of housing production has changed under NTI in measurement on a yearly basis. Is housing production within NTI areas increasing, is it decreasing, has it stayed the same? I don't note that response within your testimony. I don't know whether it is contained within the answers that will be forwarded.
Again, the rate of housing production, what we will be sending over separately, if you recall, I mentioned Secretary Hannon was pulling that information 373 RESOLUTION NO. 040095 - 3/29/04 together. But in some areas it is increasing. And some of that is due to the fact of, for example, PHA has done several large-scale housing developments, like --
Ms. Smith, we went through this last week. In terms of a comprehensive overview of housing production in NTI areas, which is not a difficult question, it is not a complicated question. If you look at it on a year-by-year basis, starting before NTI, in the first year of NTI, then the next year of NTI, is housing production in NTI areas increasing, decreasing, or staying the same? Because I notice even within what you take credit for in terms of accomplishments, not one new house, and the rehab of only 50.
What we attached to the question was our break-out of what we anticipate in rental housing development using NTI bonds. 374 RESOLUTION NO. 040095 - 3/29/04
Ms. Smith, I am not asking you what's attached. I am still asking you the question. You are the director of NTI. It is a very simple question. Has housing production increased, decreased, or stayed the same? And that, also, is not a question that I am asking for anecdotal response. I actually want to know what the numbers were the year before in terms of housing production in NTI areas, what the numbers are on a year-by-year basis.
So a week later you still don't know the answer to that question?
That's correct, not in exact numbers. I don't know it in exact numbers. I did list in the response the number of properties -- and, unfortunately, my one copy that I brought with me, if I can get 375 RESOLUTION NO. 040095 - 3/29/04 it from Mr. McPherson. I did list what we have in acquisition. I believe that's around 800 units we are projecting off of what we are acquiring. I had one copy of my response.
If I may for a second. Mr. McPherson, if I could just have the letter back. Thank you. What we provided was a list of the tax credit projects for FY '02 through FY '04 that received tax credits and the chart --
That's not the question I asked. I asked whether actual housing production in terms of units. The housing production itself, new units actually being created, has increased under NTI? 376 RESOLUTION NO. 040095 - 3/29/04
So you did not answer the question of whether housing units have actually increased under NTI, though you are asking for $25 million more, which may or may not lead to any more housing units?
The million is 14 specifically to carry out the demolition of 15 dangerous buildings for public safety. But I 16 will provide you -- 17
I understand 18 that. 19 So they may or may not lead to any 20 more housing units. 21
Thank you. 23 Second question was in terms of 24 private leverage. And the first part of the 25 question was, under NTI, period, what is your 377 RESOLUTION NO. 040095 - 3/29/04 figure in terms of private dollars -- not commitments, but private dollars -- that have already been leveraged?
And what I provided, to the best of our abilities -- again, just last year is when this was the first year that we used NTI bond proceeds for acquisition.
Do you know the answer to the question of how much in private dollars have been leveraged? Not committed, but actually leveraged.
I know what we are projecting off the leverage, because it has not resulted -- not all the units have been built yet, so --
The question I am asking is very simple. Number of housing units, number of dollars. An actual dollar amount of private money that has actually been leveraged from NTI.
For the acquisition of rental development, 6.8 bond proceeds have been approved. We are estimating a leverage of 83.6 million for 697 rental units. 378 RESOLUTION NO. 040095 - 3/29/04
Again, at this point in time not all the declaration of takings have been filed, not all projects have been funded. I can speak to the Citizens Bank commitment.
Let me ask you a question about the Citizens Bank commitment. Are you familiar with a law passed in 2001, 2002, by this Council that says that our depository banks have to submit lending goals --
They have to tell us how many home mortgages, how many home improvement loans, how many small business 379 RESOLUTION NO. 040095 - 3/29/04 loans, how many community development investments they are going to make?
Well, the legislation was authorized in 2002, the NTI bond legislation. So, it was before.
So Citizens Bank had to give you commitments for how many -- have the Administration count the commitments for how many home mortgages, how many home improvement loans, how many small business loans, how many community development investments they were going to do in order to retain their depository status anyway?
Yes. But they have also been, I mean, actively working on different other programs and projects in support of NTI. They have been a great corporate partner in this initiative.
Well, they have been a great corporate partner to retain their 380 RESOLUTION NO. 040095 - 3/29/04 depository status, I am sure of that. Beyond that, I think they have also done some great things. But the issue is, specifically in terms of those commitments made by Citizens Bank to keep their depository status, how can you separate them from commitments made to NTI? This is a question I have asked both Citizens and NTI in the past, to differentiate the two. Because I think that, basically, they are double-dipping in terms of commitments. In fact, I know for a fact that they are double-dipping in terms of commitments. I know for a fact in your testimony, when you talked about their lending goals being reached, those are lending goals that actually relate to reinvestment statements offered as part of my legislation, not the NTI legislation; is that correct?
Well, again, I think these are different tools that go hand in hand in support of your legislation. 381 RESOLUTION NO. 040095 - 3/29/04
I asked you in your testimony, where you talk about lending goals being met in terms of home mortgages, is that actually commitment that NTI is tracking separately?
We receive -- I met with Citizens Bank, I guess it was, last month, and they gave us an updated report. And this was one of the things, information that they provided to us, where they were in terms of their residential goals. They also were getting for us things like small business lending. They also did a number of grants for projects that they are going to update.
So you know that is separate from their reinvestment goals they submitted to the city?
I would assume that they are similar and the same. I mean, again, I think these tools build off one another in many ways.
I am still not sure what tools the Administration is using, 382 RESOLUTION NO. 040095 - 3/29/04 that's my question. I know the commitment by Citizens. I also know the commitment made by Wachovia, formerly First Union, and by Mellon and by PNC and by Commerce Bank and by other banks. And my question would even go to the point that, if you believe that the Citizens commitment is or is not per what they have to do to retain the depository status, what are you doing with the other banks, and why are you still listing a commitment that was made years ago at a point in which they had to start making commitments anyway?
Well, while they were doing, I think, lending previously, when they came to us and we sat down and talked about a role that they can play in NTI, that conversation was about increasing and setting new goals. I mean, granted, they were required to and mandated to do so under your laws. But they were greater goals than what I think had initially been there.
So are you aware 383 RESOLUTION NO. 040095 - 3/29/04 that Wachovia, as the city's largest depository, is actually decreasing what they plan on doing in terms of home mortgages?
I wasn't aware of the specific issue around decreasing home mortgages. My meeting with Wachovia have been around their support --
If you are aware of Citizens increasing their goals, why are you not aware of Wachovia decreasing their goals, if you are actually doing what you should be doing in terms of trying to leverage private investment from city depositories?
Mostly because of the limited capacity in terms of my office to track everything with respect to the leverage of banks. What I have been doing is meeting with -- for example, met with the head of the Wachovia Regional Foundation about coordinating their grant-making program around planning grants, so that that can augment some of the community planning activity that's been 384 RESOLUTION NO. 040095 - 3/29/04 going on. So I have been approaching and talking with various individuals on specific topics. We approached and got additional four banks that had not historically been part of the PHIL program to participate in the anti-predatory loan program. That was something new that occurred. I know under CRA, both at the federal level and under the ordinances at the state level, that that requires banks to make commitments. And we are trying to work with them, encourage them to push the envelope to the best of my ability and the capacity of my office.
I decided to let you finish that statement, although I don't understand it. So you do not know, for the record, the number of housing units that have been produced in NTI, you do not know the dollar amount, how much -- 385 RESOLUTION NO. 040095 - 3/29/04
-- private dollars have been leveraged, and you are not sure whether even the Citizens commitment, which you take credit for, which you probably should not, whether that actually is any different from what's mandated under the legislation that was initiated by this Council?
I have not tracked it in that way. And I don't have those numbers and figures in my head, no. 15
Good morning. Ms. Smith, can you talk to me a little bit of how you are going to handle and decrease your cost of demolition? You made references in your statement that were kind of contradictory, at least from me reading on it. 386 RESOLUTION NO. 040095 - 3/29/04 On you said, although the Administration could have exercised its right to reject all bids because costs were increasing, we elected to go forward. And in the same breath a little later you say, the Administration is working hard to reduce costs.
That's correct. One of the things that we have been trying to do is get more contractors to actively bid. We are resizing bid packages in terms of the size of the bid packages so they are not as large. We are doing small bid packages, very tiny ones, to help facilitate the participation of additional contractors. And, going forward, we are going to seriously look at, you know, whether it makes sense to reject. Our concern is, if we reject all bids, we have to start the process over, and that does delay things.
Is that approach -- 387 RESOLUTION NO. 040095 - 3/29/04
We are committed to reducing the costs. And we do understand that it is of concern and issue to this Council. And we are committed to, within our control, do what we can do.
And what you just outlined, this has been thought out, and you believe that this will reduce the costs by making smaller --
Well, the experience has shown on some of the small bid packages that we have let this month, I believe the numbers have come in a little bit lower. And then on two of the larger bid packages that we have let, the numbers have come in lower than what the historic experience had been. So we are starting to see a change, yes.
I believe you will agree with me that the members of this Council -- and I am a new member of this Council -- that I found it quite a bit disconcerting that your cost of demolition had 388 RESOLUTION NO. 040095 - 3/29/04 almost doubled. And that's very troubling for me. Do you know of any instances where you awarded a prime or a subcontractor's work, demolition work, and they stopped for whatever reason, quit the job, we can no longer do this for whatever reason? Did you suffer any of that?
I don't believe in the targeted demolition program that has happened. I know there has been sometimes we had to replace contractors who may have been subcontractors who were unable to carry out the work.
They actually had to walk away, if you had to replace them.
A couple of times, I believe. 389 RESOLUTION NO. 040095 - 3/29/04
They did walk away, and you have replaced them. Have you taken a look and see if that has impacted your costs of demolition work?
I can check on that. I don't think that it is, to my knowledge, from what I remember in operation meetings, that hasn't been a problem. It has been more around the quality of work issues. Sometimes there is a need to -- for some of the smaller contractors that were initially listed as part of the commission, weren't able to actually perform, and there were substitutions. And if it was a minority contractor, we worked to replace that with a minority contractor. In terms of the numbers itself, I just want to re-emphasize that we were projecting -- I mean, we have never done targeted bid packages of this size like we had done prior to the NTI targeted program. 390 RESOLUTION NO. 040095 - 3/29/04 We would let bid packages, you know, much smaller scale, they were citywide, they were only for the demolition of the house. And then under separate contracts we would let the asbestos removal, we would let the stucco work, we would let -- under separate, what we call, requirements contracts. And that had kind of led to a difficulty in accountability. Because one person would take the house down, they would be finished their job, but then somebody else would have to come along at some point to do the other work. So one of the changes we made was to put all this under the responsibility of a prime contractor. It also enabled us to create more opportunities for subcontracting; which, when we initiated the program, was a concern about the amount of subcontracting opportunities there have been previously. So in terms of that, if we looked at the cost of just taking down the house, they 391 RESOLUTION NO. 040095 - 3/29/04 are very parallel with one another under the emergency previously, as well as under the target program.
I believe you have gone through a review. But this review is going to have to be thorough and done very expeditiously, because it is going to cost the taxpayers of this city a tremendous amount of money. And we are as a body, as you saw last week, very, you know, very disturbed by the increase of the cost of demolition. I spent a lot of years in demolition, so I know a little bit about the field. And one thing that happens a lot in the demolition business is that contractors at times, for whatever reasons, cannot continue a demolition job. And what happens at that point is that you have to bring in another contractor to finish that job. And my experience of many years, it usually meant we had to pay more for it. And if you had more than a few of 392 RESOLUTION NO. 040095 - 3/29/04 those instances, I would like for you to find out. Or for you to take a look at that and see how that has driven. I suspect that your cost has been driven because you probably have had instances where contractors, whether prime or subs, have walked away from the job for whatever reason; they haven't got in paid in time, they just didn't want to do the work anymore, they couldn't get the right people to do the work, those types of things on jobs. So I would like you to take a look at that, as well.
I will double-check. But that has not been, what I recall, the walk-away part and that we had to make some substitutions.
I am still open to this request of yours, and I have not decided where I am going to go with this. But I will say that this City Council needs to have something in place where you can come back to us and talk to us about your progress in reducing the costs of 393 RESOLUTION NO. 040095 - 3/29/04 demolition, and in a timely manner, so we won't come here next year when you are looking for the rest of your money. And I am not saying that you are or there are any projections of what happened, but we sure would be, and the public would sure be, very dissatisfied to hear that your cost continues to increase, versus the cost of demolition decreasing. That's it, Madam Chair. Thank you.
Good morning. I apologize for being late, and I am probably going to ask some of the same questions that have already been asked. Could we have Mr. Solvibile up here, please. Could he come up.
Good morning. My name is Robert Solvibile, Acting Commissioner of Licensing & Inspections.
Good morning. Prior to NTI, what was the process for the demolition program for the city? 394 RESOLUTION NO. 040095 - 3/29/04
As Ms. Smith has stated, everything was separated. We had separate bids for the demolition, the stucco work, and the asbestos monitoring, and the asbestos identification that there was or was not asbestos in the building. We sought different contractors and different bids and primes for each individual aspect of the process.
So every building didn't require every aspect of the demolition?
So you could base the cost on what was actually the work to be done?
At the time several years ago -- and it has changed, it changes. Right now it is, roughly, 64 percent of demolitions require a wall to be stuccoed. Almost 100 percent require identification -- they all require that we identify if there is asbestos. In the past, it was roughly 50 395 RESOLUTION NO. 040095 - 3/29/04 percent walls had to be stuccoed and maybe only 30 percent did we have to identify if there was asbestos in the property. The demolition is, with all the rules and regulations, mostly driven by the feds, the federal level, trickling down into the city level, state/city. It has completely changed, the environmental aspects of it. The fill that's in the holes is much more stringent than it was in the past. So all this has led to an increase in demolition. Basically, right now our average cost for curb-sides as of a week ago was $22,007, I believe. So ours is right in line with NTI. There is no great difference. As an example, the cost of stucco prior to, in the past, was a bid -- we bid it by square footage -- was roughly almost $3 a square foot. Right now it is, I believe, $5.45 a square foot. So there has been dramatic increases in the price of doing business. 396 RESOLUTION NO. 040095 - 3/29/04
Who were some of the contractors who were doing the demolition for the city prior to all this new regulation and process?
Gamma Wrecking, Gephart Brothers, Atlantic Wrecking, Liberty Demolition, and several others. I believe Robert Hawthorne was one, they are no longer in business. For the bigger demolitions, we would have Thorn Demolition.
Several. Robert Reiner -- I cannot remember his name -- gene Pullins, and one other that the name escapes me right now. But I can get that list for you, what we have now and what we had in the past.
Right now it is running about 45 to 50 percent range for demolitions, for primes. 397 RESOLUTION NO. 040095 - 3/29/04
Councilman Cohen, were you finished with your questioning?
Madam President, thank you. How much is L & I involved in any of the decision-making of demolition, if any at all?
Licensing & Inspections, as my prior boss used to like to say. Councilman, NTI and L & I have formed a partnership, and we make decisions jointly on what will be demolished. The improvement in the process, I 398 RESOLUTION NO. 040095 - 3/29/04 think the great improvement that NTI has brought to the table, has been they are planned demolitions versus necessitated on need of a building collapsing. And --
Buildings collapsing, like an emergency demolition, curb-side demolition. So we very, very rarely had the chance to have planned demolitions in the community. So with the NTI process, L & I, NTI, and the Councilperson for that district, we go out and we survey an area to see all the buildings that may or may not be dangerous and/or vacant. And then we have that information mapped out. And we go back again with the Councilperson, NTI, Hill International, and L & I inspector, and pick what's to be demolished, working with the Councilperson that has that area. 399 RESOLUTION NO. 040095 - 3/29/04 And I think that that's a great system, and one that was much needed. And I think that's the most successful part about NTI, is how they picked --
You would have never known a ward about it, as a Council body. Maybe individual District Council Members might or might have not known, but I certainly never knew that at all. In fact, we were kind of laughed at by the Administration, who suggested that L & I had an important role to play. In fact, we would have felt much more comfortable in Council had we known L & I was involved. Again, it was poo-pooed by the Administration, they don't need L & I, L & I has never had much experience in demolition, despite all the statistics showing the great volume of experience that L & I had. So when this did relationship develop?
L & I, I believe that when Ms. Smith first came with the city and first got the job, that her and I visited 400 RESOLUTION NO. 040095 - 3/29/04 more neighborhoods than I care to remember. So we have been involved from the beginning. Have been and will be. I have been involved with NTI since day one, have input. We have had input, I have had responsibility. And I think from NTI, along with Hill International --
Hill International, the consultant hired by NTI to help us with this massive undertaking. That they have taken up L & I's weakness. And our strengths, Licensing & Inspections' strengths, and NTI's strengths combined, make a really strong partnership.
All I know is the Administration flatly rejected. Council believed that there was no need for any new administration. Or if there was, there was very little need. But we were told that L & I was totally unprepared, they knew nothing about it. And that's the story that I last heard.
Councilman, I am not 401 RESOLUTION NO. 040095 - 3/29/04 privy to that.
This is the first time I have heard of involvement here.
Councilman, I can only say that actions contradict that. Because we had been involved, myself and Ed McLaughlin, my predecessor, had been involved from day one. I have testified here with Ms. Smith.
It is not unusual for us to be told one story and have the Administration do something totally different. So what you say is quite believable; it is just amazing that we never heard it before. Because then we would have had some complaints or questions, if we had them. I think all of us would have felt more comfortable dealing with an agency that had a vast amount of experience. I remember being told at various times in demolition questions that there was only one contractor who was willing to do that. And the city had problems for that reason, because he could pretty much set the 402 RESOLUTION NO. 040095 - 3/29/04 price because there is nobody else to do anything.
Actually, Councilman, that may have been true at the first bid, and it may have been true for the first three or four, I'm not really sure of the number. But right now we are receiving bids from several companies. One company -- minority companies, small businesspeople, small business companies. A real nice diversification of companies are bidding on these projects. So it was a lot of work that NTI did, a lot of outreach to contractors. But I think that part has been successful, also. The African-American Chamber contract is a tremendous asset to L & I. We were able to -- through that training program, we now have two contractors on our list that are capable and certified to do emergency demolitions with us, and that we would not have had. And that helps us in our program to 403 RESOLUTION NO. 040095 - 3/29/04 lower the cost of demolition in the curb-side bids, and it is a tremendous asset. It gets us more participation, more diversification. And I think it has been successful. It started out slow, but it is very successful right now.
Is the success based on the realization by contractors, or by people who are in that field generally and can become contractors, that there is lots of money available now, and the sky is the ceiling, we can even double the price? And unlike L & I, which can be hard-balled, and referred to a tight budget, we have a great setup here where the budget is unlimited. And if it doesn't meet it, we will just get an extra batch of money from City Council.
Right now, Councilman, our average cost is very, very similar to what the NTI programs are. And I would suggest that the cost has been driven up by increases in labor and the environmental actions that were necessary 404 RESOLUTION NO. 040095 - 3/29/04 that several years ago were not necessary. Environmentally it is a totally different world.
Well, take the stucco question. How long has it been when L & I first stuccoed a wall? Because for years you didn't, and you got many complaints from Council offices, including many from my office, and then we all welcomed them when stucco came. My impression has been, it has been some years now.
Actually, stucco was required with the new -- with the more modern code. 1952 it became a requirement.
With the performance contract we now have, about 20 years ago Councilman.
That long. So it should not have been too much of a surprise by the stucco prices. Because 405 RESOLUTION NO. 040095 - 3/29/04 certainly you must have realized, NTI must have realized, particularly if they were working with you, that stuccoing was going to be necessary, so that that should have been included in their estimates.
I don't know -- I know it wasn't a surprise. I think that what was a surprise to me -- I don't want to talk for NTI, but to me, L & I -- that there were more walls to be stuccoed now than there were prior. A lot of the straight demolitions have been done, and we are not dealing with a lot. There is more demolition adjacent to occupied properties than we were doing for the last several years. And that came as a surprise to me, personally. And I don't want to speak for NTI, because I don't know it did for them. But for L & I, it was a total surprise. It was around 50 percent, was the number of walls we would stucco a few years ago, and now it is, I believe, 64 percent. So that's a 14 percent increase, which is a tremendous increase. 406 RESOLUTION NO. 040095 - 3/29/04 And for L & I purposes, our average price went from roughly almost $3 to $5.50 a square foot. So there has been a big labor increase that is costing the bids.
I believe it is the labor cost. It is the cost of doing a quality job doesn't come cheap. And if you want to put, you know, a sloppy job up there, I guess we could get it for $2.50 a square. But these are much -- the spec has been changed and the quality is tremendous. The quality is just absolutely tremendous.
But there could be a number of reasons. I mean, I come from a paperhanging family. All my older brothers are paperhangers. And I sit here because I could never learn to keep the paper on the ceiling. It got wrapped around me while I was trying to get it on the ceiling. It had nothing to do with sending me to school. Maybe that's a 407 RESOLUTION NO. 040095 - 3/29/04 loss to Philadelphia, rather than its gain. But, in any event, that's how it happened. I know prices are driven by many factors. One is the estimator has a pretty good idea of how much money might be available. And if there was more money available, a good estimator figured out how to acquire it, how to convince people that the quality had to be better, and, therefore, it justified a higher price. Or in this case, in view of the facts that have appeared in the press so often, we all wonder about the campaign financing. For example, I am convinced that campaign financing raises the cost of doing business by the government. Because I have yet to find the first businessman that was the lease bit really interested in who the Mayor was except from the point of view, well, that Administration helped me get work. If it is good for my job, you know, then I will be interested in supporting it. 408 RESOLUTION NO. 040095 - 3/29/04 So I am convinced that campaign financing is paid for really by the public, not by the contributors in the form of, it is going to find its way into the bid estimates. And now I don't know how much that has to do. But at the rate that campaign financing has increased, I think it is a much higher rate than just the cost of demolitions. So I can see that it costs much more for the city to meet its contracts. But I am wondering, could we get information on the number of contracts for demolition that exist, how many properties they have covered, what the price range is, the names of the companies that were invited to bid, or that did bid, that kind of thing? And, then, can we utilize the city? I guess NTI does more demolition work than L & I now. But between the two of you, you can help us identify who the companies are. For example, I would love to be proved wrong. I would love to be proved that nobody who ever got involved in a demolition contract ever made a contribution to anybody's 409 RESOLUTION NO. 040095 - 3/29/04 campaign, not even Councilman DiCicco's campaign. COUNCILMAN DiCICCO: Point of order.
Or my campaign. It would be great. That would be great. So could we get that kind of information.
We will provide Ms. Smith our records, and she will provide it to Council President Verna. COUNCILMAN DiCICCO: Point of order, Madam President.
Councilman DiCicco. COUNCILMAN DiCICCO: In response to Councilman Cohen's suggestion about me getting some campaign contributions. Just for the record, Councilman, it is the first time in nine years I am actually in the red, so I haven't received any contributions. But I would gladly accept one from you, if you have any extra money in your account. 410 RESOLUTION NO. 040095 - 3/29/04
You might not yet be known by NTI. But I am interested, in general, why has there been such a huge cost increase? I think we ought to be able to figure that out and then take some substantive changes. If I am wrong on campaign contributions having any role in this, I would like to be able to admit it, because I think it would be great for Philadelphia. But the general theory is that costs of campaigns are paid for by taxpayers because businessmen think in terms of investment. And they are investing into the future. They are hoping somehow or other -- they may not know any of the details -- but they are hoping to be standing in good stead with whoever makes the decisions. Now, may I ask you, who makes the decision on a contract?
The contracts that we issue are issued through the -- one of the things I want to make absolutely clear, when we use the word "NTI," there are two ways, two 411 RESOLUTION NO. 040095 - 3/29/04 methodologies, that we are using for demolition work. One, as Mr. Solvibile said, is planned demolitions, where we work with the Council district in a target area in selecting the properties. But those properties are still bidded through the procurement department. Bid specs are advertised, posted on the internet, sealed bids are solicited, and we use the city's traditional procurement process. In addition, there is the emergency curb-side procedure. That operates citywide and addresses emergency situations. That, I believe, there is a prequalified list of contractors that we draw from.
And who is Hill International? I have heard that name before. Are they the ones that make the final decision on whether --
No, they do not. Again, I want to really state for the record two 412 RESOLUTION NO. 040095 - 3/29/04 things. From the very beginning we always said that this is the City of Philadelphia, under its public powers, contracting for the demolition of dangerous buildings. That has not changed. Because we never embarked upon the planned demolition program of the scale that we were talking about, we brought on Hill International Company, after an RFP process, to actually assist with the administration of the project, including recordkeeping, interfacing with contractors, tracking the bond proceeds, and things of that nature. It does not replace in any way the Department of Licenses & Inspections' role with respect to demolition. The department issues the Notice of Violations, it still deploys inspectors to inspect work for compliance with the Philadelphia building codes. Its traditional role is applicable whether it is an emergency, curb-side demolition, or what we call a targeted or planned demolition. 413 RESOLUTION NO. 040095 - 3/29/04
And who makes the decision as to -- I mean, what's the basis for choosing the contractor? Say you have three contractors who all bid about the same, one is a little lower than the second, and the second is a little lower than the third? Who makes that decision?
The decision is made by the procurement Commissioner, procurement department, and the buyer. In the City of Philadelphia, the lowest responsible bidder is the one chosen, with curb-sides and with NTI planned demolitions. There is no difference. The contracts are all bid and approved by procurement. L & I --
William Gamble is the Commissioner of Procurement. And that 414 RESOLUTION NO. 040095 - 3/29/04 department oversees all the city's contractual bid solicitations under the Charter.
He has more authority to determine who gets the contract than anybody in NTI?
He makes the decision that they are the lowest responsible bidder. And L & I and NTI weigh in if they are in agreement or disagreement with that, then they award the contract. But in all cases it is determined by the lowest responsible bidder. That's the city Charter. There is no, that I am aware of, any other way of bidding a process.
Hill International works with Licenses & Inspections, with the District Councilperson in looking at doing field surveys, identifying vacant properties, assisting with making judgments as to which properties ought to be included in the bid package. They develop cost estimates for the 415 RESOLUTION NO. 040095 - 3/29/04 Council, that's then submitted to the District Councilperson. They sign off on the bid approval signing. They write up the bid specific issues for the ones that are going to be selected. It is a variety of administrative actions that they do. They do not make the final decision or select the contractor. Again, it is the City of Philadelphia. They are a consultant to the city. It is the City of Philadelphia, through the procurement department, that actually puts the bid out and opens the bids and reviews them and selects them.
Yes. In fact, they 24 played the role as program manager and 25 construction manager on a number of projects, 416 RESOLUTION NO. 040095 - 3/29/04 both in the City of Philadelphia and throughout the world, from my understanding.
Absolutely. Councilman, in the beginning of the NTI process, there was an RFP, as Ms. Smith said, put out for soliciting people that wanted to be project managers. And Licenses & Inspections, represented by myself, sat on a committee that interviewed all of the companies that applied. And Hill was the top one or two picked by that committee to recommend to the Mayor.
The city had no 16 people who knew each other well enough to communicate? They needed somebody from the outside to bring the different parts of city government together?
Again, that was my recommendation, that we bring that resource to the table. Because, again, we had not had, in other own experiences as a city, managed a planned demolition in this fashion. I viewed it the same as, for 417 RESOLUTION NO. 040095 - 3/29/04 example, when Capital Program Office puts out for the construction of a library, they retain project managers and program managers to assist the city with that work. It does not mean -- they advise the city, they assist us with program administration, things of that nature.
Well, NTI originally had an estimate, didn't it, of what it was going to cost to demolish a building, the average building, or however you figure out estimates?
Again, I mean, an estimate is that. It was our -- at that time, given our very limited experience on a program, in fact almost no experience, we made an estimate. And we revised that to reflect what's actually happened, the actual experience. And we routinely review that and revise our estimates based on that.
The original estimates did not include the cost of stucco. 418 RESOLUTION NO. 040095 - 3/29/04
If I could say, the surprise was that there wasn't as many string demolitions, contiguous demolitions, in the city as there were when we developed that bid. And that we planned for stuccoing of walls, but there was less walls that we were required to stucco when the plan was created. And we didn't realize that we would have more walls to stucco under NTI.
Could you explain why that was? With all your experience and with the NTI and with this Hill International, a 25-year-old company, approximately, with worldwide experience --
-- why wouldn't somebody have said at some point, you know, these costs don't include the proper amount of stuccoing, the cost is going to shoot up one 419 RESOLUTION NO. 040095 - 3/29/04 of these days?
Councilman, Hill was not a part of that plan when we put that together. That was in the early part. And it was done by the Managing Director's Office, myself, and several people in the Managing Director's Office, and given to NTI.
Councilman Cohen, we do have other Council Members that would like to be recognized.
Of course you do. And I waited patiently for many hours many times.
Do you mind if we give them a chance, and we will have the second go-around?
Oh, no. But I wish the Chair would employ that method when others also speak.
No, I don't ever remember your doing that during the course of this hearing.
Councilman, you 420 RESOLUTION NO. 040095 - 3/29/04 have been questioning now for minutes. 3
I knew you would. 6 And we do have witnesses that have 7 been sitting here. I am sure that they may 8 have to be leaving to go to their place of 9 employment, also. 10 So, if you don't mind, we will do a 11 second go-around. 12
Well, I do mind, 13 in that I am right in the middle and I am 14 going to have to start all over again. 15
No, I changed 421 RESOLUTION NO. 040095 - 3/29/04 my mind.
Thank you, Madam President. Ms. Smith, I did get a copy of your formal responses to the questions asked last week. And own it says, please provide a list of tax credit development projects, parenthesis, Councilman Goode. I did not request a list of tax credit development projects. I think we partially went through that earlier. What do you believe that was in response to?
That, again, I had various staff people taking notes, and we got together and ran through the notes. I thought I recollected -- it was a lot of questions and a very long day, as you remember, last Monday. I apologize if we missed that one. I will sit down and get specifically the question you want answered, and we will be responsive to that. 422 RESOLUTION NO. 040095 - 3/29/04
Is the response, in terms of tax credit development projects, do you believe it was probably meant to be a response to the number of housing units produced?
I just recall the question coming up about tax credit projects. I understand it is not responsive to your question at all. I do understand that.
But even in the response this morning, which I consider to be nonresponsive, I am really just trying to find out why, even in discussion of housing production, you would mention tax credit units as it relates to NTI. The reason I asked the question is, you stated last week, you stated again this week, that NTI is having a major focus now on dealing with dangerous buildings; that it is primarily a public safety program. But, yet, when we asked for what's happening in terms of housing production, you either cite or give us a copy of tax credit problems, projects. 423 RESOLUTION NO. 040095 - 3/29/04 And I guess my question is, what would be the connection between tax credit projects being approved by the state, I believe, and your demolition locally of dangerous buildings?
Well, NTI, if we looked at -- and I am going to focus on the use of the bond proceeds that was authorized for us to issue. There are, essentially, I think, four core uses of those bond proceeds. One was for the demolition of dangerous buildings. The second, from the very beginning, we have always included bond proceeds for the acquisition of land for development projects.
So is there a direct connection between the tax credit projects and the acquisition dollars that have been spent?
Yes. Particularly in the tax credit projects that are in the pipeline, or the ones, some of them, in '04, may have received NTI bond support for acquisition. I am going to look at the list 424 RESOLUTION NO. 040095 - 3/29/04 and see.
I see tax credit problems approved all the way back to September '02 as part of this list. That's not meant to be related to NTI, is it?
I just, again, wanted to show the development. Because another conversation -- and maybe I misinterpreted the question a little bit, or my understanding of it, I also was getting the impression that people wanted to get a sense of development activity during the last two years. And, so, we listed all the tax credit projects. But, for example --
Let me just make a new request. In addition to the request that tracks whether housing production in NTI areas is up, down, or stayed the same, also one additional request in terms of tax credit development projects. And as you enumerate what tax credit 425 RESOLUTION NO. 040095 - 3/29/04 projects are going on in the city and/or proposed to the city, tell me which have some direct contribution in terms of NTI bond proceeds and which do not.
Okay. For example, there on Chart 5, it shows projects seeking tax credits in '04. I believe things like Belmont Affordable might be included in acquisition. There has been --
I am actually just making a formal request that you submit through the Chair a list of tax credit projects that are going on in this city, approved, that are proposed, and list which projects actually contain some contribution with regard to NTI proceeds and which do not.
You are welcome. Councilman Cohen, are you finished? You are. Thank you. Along with the information -- 426 RESOLUTION NO. 040095 - 3/29/04
Oh, I am sorry. I thought you said, yes. The Chair recognizes Councilman Cohen.
How did Hill International get the position? Do they specialize in just running big projects? Do they have special experience in demolition? Because I never heard of them in the demolition field.
We issued an RFP soliciting proposals for what we call program management of the targeted demolition program. And I believe that -- time is blurring a little bit. I don't remember exactly when that was. It may have been 2000, around 2002. I believe, from what I recall, we received around seven or eight responses from a variety of firms, maybe ten, from a variety of firms. There was a review committee that 427 RESOLUTION NO. 040095 - 3/29/04 looked at the qualifications. We were primarily focused on the project management experience and project administration experience, overseeing large projects and managing that. And making sure particularly projects which have a variety of actors and players. A lot of times, for example, as I talked about, L & I place a role, Working District Council plays a role. Looking at the bid packages, looking at our specs, developing these specs which are very detailed and complicated and paperwork heavy, we were looking for experience in that area. And they were one of the stronger candidates.
Do they have anything to say about whom the contractors are that are hired for specific jobs?
No. They assist us in outreach, finding contractors to interest them in bidding for us. And they sit, they Chair -- I want to say Chair is the wrong 428 RESOLUTION NO. 040095 - 3/29/04 word. They get together a group of people to approve contractors to make sure they are qualified.
Do they have anything to do with the choice by the contractor of subcontractors?
No. Only the ranges that are set by Minority Business Enterprise Council is what dictates to who, or the small businesspeople required in the ranges. But other than that is correct, the contractor is free to hire whom he wants.
They don't have anything to do with the contract between the prime contractor and the subcontractor?
Well, why would Hill International play a role where there might be a dispute between a contractor, the prime, and the subcontractor?
I mean, I would assume if there is a dispute, they may bring the parties together and try to work it through. 429 RESOLUTION NO. 040095 - 3/29/04
They are out in the field with us, along with my inspector. And they have the ability to have written up what needs to be done. But the NTI process will help settle any disputes between the subs and the primes.
I would say, in my mind -- it is probably something I made up a second ago -- but it would be myself, Jay McCullough, Hill International, the inspector that works for me, and the inspectors that are out in the field, any inspector out in the field, to see what the problem is, and then we make a solution to the problem. Contractors doing unsafe work, we stop it. You know, that's stopped right there instantly. We don't want unsafe work. We don't want damage to our adjacent properties. 430 RESOLUTION NO. 040095 - 3/29/04 So it is just an oversight on the contractor to make sure the sub and the prime are doing the work properly. That is our function, that is what we are asked to do, and we do it. So that's what I call the NTI process.
NTI process. L & I -- hopefully L & I and NTI. It is one of the things that the Mayor asked us to do, NTI and L & I, is to get our specifications and create them to be similar. And, in most cases, they are very similar, they are exactly the same.
The reason I raise these questions about the prime and the subcontractor is that, in an instance in which there seems to be a distribute involving the subcontractor, and a meeting with the general contractor was held, and Council has a staff official that also has a responsibility with respect to seeking to ensure minority 431 RESOLUTION NO. 040095 - 3/29/04 representation, was trying to be present at meetings to try to help get the situation clearly understood and then resolved. Jay McCullough ordered the Council representatives not to appear and said he is not welcome, said no one from Council is welcome. And that made it appear that Jay McCullough thought that he was the person. Nothing was said about you or anybody else. It is the same situation, Ms. Smith, that I raised the other day.
Part of the pressure, Councilman, for that was created by L & I being unhappy with the walls not being stuccoed in a timely manner, with that particular contractor. And we had to resolve that because that was one of the things that I believe that we did the most to improve in NTI over what L & I was doing, was having the walls stuccoed in a timely manner. And this particular contractor was not fulfilling that part of the deal. 432 RESOLUTION NO. 040095 - 3/29/04
Now, who can the Council representative talk to or get together with in an effort to resolve the matter?
I think what I would do is set up Mr. Solvibile and Mr. McCullough and myself can sit down with the Council representative. Again, I think the challenge here is that we do have contract requirements. And we try to make sure that the subs, you know, conform. But, ultimately, the sub reports to the prime. So lots of time we convene meetings to try to resolve issues.
Then we can call both of you, and you could arrange to meet, you could bring whoever you wanted, Jay 433 RESOLUTION NO. 040095 - 3/29/04 McCullough or somebody else? We were led to believe that Jay McCullough is the only one who makes the decision, and his word was final.
No. Whenever we have a problem, it is the team that looks at the issues. They try to resolve it, they try to resolve it in the field. If they can't in the field, there is followup meetings. And, as I said on Monday a week ago, you know, I understand the issue with one particular contractor. And I am more than happy to sit down and see if the situation can be resolved amicably, if it can be.
What is your position with respect to responsibility of the city to assist people who desire to become subcontractors or who have become subcontractors? Maybe they knew what they were getting into, maybe they didn't. But does the city have any policy? McCullough's point of view, is the city has no 24 responsibility whatever.
I answered to the best 434 RESOLUTION NO. 040095 - 3/29/04 of my ability that question last week, Councilman Cohen. As I stated, the primary way that we are providing technical assistance and capacity building support is through a contract with the African-American Chamber, their technical assistance center. Any contractor can go there, receive support with respect to paperwork, questions. They are also running specific programs to help cultivate people to become prime contractors.
But what if a subcontractor has a question; who does he go to?
You are talking about a contractor that has a problem, that is under contract?
He wants to work, people admit that he is a great guy, but he doesn't know, he doesn't know enough to know --
Does he have an existing contract to do work, or is he looking to get 435 RESOLUTION NO. 040095 - 3/29/04 work? I'm not sure I understand the question.
If he is interested in learning about the procurement process, again, our offices will have meetings, like through Mr. McCullough, Hill International, explaining the procurement process. We walk people through bid specs. We have routinely had meetings where we recruit people and explain the process with the bid packages. If the person already has a contract and has run into a problem, they should start first with the person on site in the field with respect to that problem, see if we can resolve it in the field.
Also, Councilman, this contractor sought out at a meeting, as Ms. Smith said, an evening meeting, to entice contractors to participate in the program. I had conversation for about a half hour to 45 minutes with this contractor explaining what needed to be done and telling 436 RESOLUTION NO. 040095 - 3/29/04 him we would work with him. And I believe that people, other people, in that evening did have conversations with the contractor. So there has been plenty of outreach and talking. I dealt with the contractor on the first NTI bid on 31st Street. I dealt with this company and told them what was needed to be done. It is not something that they found overnight that was problems. So there has been plenty of outreach and advice given to the contractor.
Well, I'm not sure whether we are talking about the same problem or not. But suppose we start, would it be appropriate to start, with you, Ms. Smith?
What I will do is follow up with a representative of your office, if you have in mind a specific contractor and a specific issue, I think it is best; as opposed to trying to, in a public forum, talk about somebody, a particular contractor's issues. I am more than happy to sit down, you know, with the contractor, with the 437 RESOLUTION NO. 040095 - 3/29/04 representative from your office, and really take on what that specific issue is.
Thank you, Councilman. Are there any other questions? The Chair recognizes Councilman Rizzo.
Thank you, Madam Chair. Mr. Solvibile, Ms. Smith, $9,000, is that what the ballpark is for taking care of one of these party walls, about 9,000?
Yes, sir. 9,000 roughly. About 5.50 to 5.85 a square foot.
Have we ever done an independent, do we have expertise within our own government, to estimate the cost? 9,000 bucks sounds like a tremendous 438 RESOLUTION NO. 040095 - 3/29/04 amount of money for that particular task. I don't know whether scaffolding is required or they have automated and started to use lift trucks to maybe bring the cost down, where they can get a vehicle in to do some of this work. My concern is -- and I bring this up all the time -- are we working as smart as we can? Because you can do a lot of renovation for $9,000, and I would like to be assured that we are doing this the smartest way possible; that we are not being manipulated by two or three contractors that are, "You do these three, we will keep the price high. The next round we will give you the next three." There are a lot of ways where the contractors -- and I am not suggesting they are doing anything dishonest -- have the ability to control the price, when it is limited to a few. So I would really like to see some estimates that have been done by a legitimate 439 RESOLUTION NO. 040095 - 3/29/04 appraiser or a legitimate estimator to make sure that we are getting the bang for our buck here. Because $9,000 can buy a lot of work.
Councilman, I also will provide to Ms. Smith, to provide to Council President Verna, the recent bid that was awarded for stucco work in the City of Philadelphia for emergency jobs, and who. And I think that might at least give you the price that L & I is paying for a square foot right now.
Have you ever had someone, a professional, an engineer, look at the way we do this to see if we can bring the cost down? Like I mentioned, if we have to erect scaffolding on every job that we do, that adds significantly to the cost of any construction work. Have we looked at the new lift devices that are out there, the one-man lifts, the bucket trucks that could be utilized to do this work? And maybe we could move a lot faster 440 RESOLUTION NO. 040095 - 3/29/04 and get a lot more done for maybe a lot less money.
The department, prior to NTI, looked at spray-on application of Portland cement. And Deputy Commissioner Perry, who was also an engineer, had several problems. And we felt that the pressure of it going on the wall may not work properly because there is no wire involved. And that was rejected because we were worried about that. As far as forklifts and such, that's up to the individual contractor to decide. We would not stop them from using that type of equipment.
But my point being is, if they have intensive labor in erecting scaffold, and they are going to charge us $9,000, I would appreciate somebody from L & I or NTI saying, "Wait. We don't want you to do it that way. We want you to do it the smart way, the way the people do it in this century, not the way we have done it a 441 RESOLUTION NO. 040095 - 3/29/04 hundred years ago." I would like to have someone from NTI and also L & I -- because you are spending a bunch of money over there, too -- to look at way to get more creative. That's one man's opinion. I have a lot of respect for Commissioner Perry, and the fact that he is an engineer. That's one person's opinion. I would like to find out if maybe there is a better way that we can do three for the price of one. Again, no disrespect. That's one of our problems in government. We get locked into a step, and that's what we do for the next years, when the rest of the world is 18 doing it differently. 19
We have explored a 20 number of alternatives. We have even reached out, I think, it was the Philadelphia University, and working with them to come up with a treatment process that would even be more energy efficient. 442 RESOLUTION NO. 040095 - 3/29/04 One of the things when you mentioned, you know, can you get trucks and lifts in, it really depends on the street and the size of the lot. Most of these are still in fairly small, you know -- it might work on a corner property. The other thing is, we also have to remember, in some instances we are looking at three-story buildings that are fairly large.
Pat, again, I don't mean to interrupt you. But if you ever watch a new home being built, they have devices called the scissor lift that will go into a space very, very narrow, will go very, very high. And, again, when you are installing -- and I am not suggesting this is the answer. But I am saying that I would hope that we have explored, since we are spending so much money, every alternative when it comes to the way we seal up these properties, the equipment we use, how we do it. Because if we are spending $9,000 a 443 RESOLUTION NO. 040095 - 3/29/04 pop, I don't think there are too many contractors that are going to step forward and say, "I have an easier way to do it so you spend less money with me." It is your responsibility, L & I's responsibility, to come up with a proposal, a specification, and say, "We want it done this way. And, guess what, we are going to pay $3,000 to do one."
Thank you. Thank you very much. Are there any other questions of these witnesses? And, Ms. Smith, you are going to remain until the conclusion of the hearing?
Yes. If I may, I know you are getting ready to go to public testimony, but if we can have a small break.
Last week we had 444 RESOLUTION NO. 040095 - 3/29/04 some questions of Ms. McColloch, from the Office of Housing and Community Development. And I did circulate -- I'm sure everybody did receive -- a copy of her responses. Ms. McColloch, do you mind coming to the witness table? There is just one question I wanted to ask you. I believe that I had raised the question about the waiting list for the basic system repairs. You responded that the waiting list varies depending upon the trade needed to perform the repairs, but it is averaging about one year. Heater repairs and replacements are given priority during the winter months. There is no waiting list for heater replacements. How about roof problems and water problems, the plumbing problems; is that a year's wait? MS. DEBORAH McCOLLOCH: Deborah McColloch, Director of Housing. It can vary from less than a year. 445 RESOLUTION NO. 040095 - 3/29/04 I mean, it can vary from eight or nine months, to more than a year. That's why I said the average. That was the number that I called PHDC to get the information to make sure I was providing accurate information. And they said it really depends, as I said.
If I have a bad roof, that can cause an awful lot of damage if you are waiting more than a year -- and I am sure the people have had that problem -- before applying for basic systems. Do you find that that's satisfactory? MS. McCOLLOCH: No. I wish we could do it very quickly. But I think between the.
Why the wait, then? MS. McCOLLOCH: Well, between the time it takes to take the application, and the people submit all the information that they need to submit, and then also getting the contractor and getting the contractor out to do the work, that's about how long it is 446 RESOLUTION NO. 040095 - 3/29/04 taking.
That's a long time. MS. McCOLLOCH: It is a long time, I agree.
That's a long time. And is that the same with plumbing problems? MS. McCOLLOCH: Well, that's why they said it really depends on the amount of work that's being provided for that contractor. So it may be, if there are more roofers under contract, roofers can go more quickly, plumbers are slower. I don't know which one is faster or slower. They were just saying it varies by trade, and that's why I provided that information to you.
I was just curious. As I said, I can understand, you know, people getting a new heater during the 447 RESOLUTION NO. 040095 - 3/29/04 winter months, you know, very expeditiously. But if it is a bad roof, and somebody has applied and they are waiting for more than a year, that can cause an awful, awful lot of damage. MS. McCOLLOCH: Yes.
Okay. Are there any questions of Ms. McColloch? Seeing none, we do have a list of witnesses to testify. And I would like to remind everyone that we have another Public Hearing scheduled at 1 o'clock. Our first witness, Susan Sierra.
Good morning, Madam Chair, members of Council. Thank you for giving me the opportunity to testify today. My name is Susan Sierra. I am the Policy Coordinator for the Philadelphia Association of Community Development Corporations, which represents more than 80 448 RESOLUTION NO. 040095 - 3/29/04 CDCs and other members that are doing the work of neighborhood revitalization all over our city. I first want to say that PACDC is glad to see that NTI's demolition program is moving forward. We are concerned about the increased cost of demolition. And we would all prefer to see abandoned buildings renovated where feasible, but it is a fact that in some cases demolition is the most appropriate option. The pace and increased cost of demolition this year have led to the Administration's request to move up future years' demolition funding into the FY '04 budget for demolition. PACDC does not oppose this proposal. However, the transfer resolution does shed light on the need to rethink the NTI budget over the final years of the initiative. And that's what I would like to speak to this morning. The first thing I would like to do is to call Council's attention to the need for 449 RESOLUTION NO. 040095 - 3/29/04 more funding for housing production. This was a key finding of the recent 21st Century Review Forum report on issues facing Philadelphia. And I would like to quote from the committee's assessment of NTI, if I may. Quote, The trend in housing production under NTI, both rental and home-ownership units, have not been good. There is no money budgeted under the NTI bond issue for residential or retail redevelopment. There needs to be a dedicated source of funding for development, especially for not-for-profit housing. And their recommendation is that the city should create a housing trust fund to support production of new units of housing. Legislation will soon be introduced in this Council to create a housing trust fund. The proposed housing trust fund would be funded at a level of $20 million annually, which would nearly double the city's current investment in housing, in housing production, and would allow hundreds of homes to be built 450 RESOLUTION NO. 040095 - 3/29/04 and renovated each year and thousands of units of housing to be preserved. The housing trust fund could leverage up to $50 million each year to Philadelphia, which is money that's available but which our city is currently not accessing. The key to the housing trust fund will be permanent, dedicated sources of funding, but we believe that NTI bond funds could provide initial seed money for the housing trust fund. And we recommend this Council and the Administration consider using NTI funds as one source for seeding the housing trust fund. I would also like to comment on the need for more funding for acquisition. NTI has allocated a total of $74 million to support property acquisition. About $50 million of this has already been obligated, and some Council districts have already exhausted or soon will exhaust their acquisition funding. The city needs to provide enough funds to support project-specific acquisition 451 RESOLUTION NO. 040095 - 3/29/04 in all Council districts. In addition, there is a need to plan more broadly to support project-specific acquisition in the long term and medium term after NTI funds are no longer available. Without acquisitions, project and redevelopment can't move forward. And we would support reprogramming NTI funds from other uses to support additional acquisition. In addition, we would like to advocate for the immediate implementation of the city recycling agreement to allow funds to be recycled to the city to provide further acquisition funding. We would also like to say that there is a need to improve the process by which the city is managing the acquisition and disposition of vacant property. Conveyance of properties that were approved for acquisition by this Council last year to their eventual redeveloper is moving slowly.
This can cause not only a delay in the project, but can put outside funding for these projects at risk. And we call on the 452 RESOLUTION NO. 040095 - 3/29/04 Administration and Council to make this issue a priority. In closing, I would like to reiterate that housing development is a win for Philadelphia in multiple ways. It provides needed housing options, it revitalizes neighborhoods, it improves the quality of our housing stock, and it leverages millions of dollars in outside funds to the city. Without acquisition and development funding, none of these benefits will be realized. So, in summary, we do believe that demolition can be a worthwhile use of NTI bond funds. However, we believe that other needs, including housing production and property acquisition, should have an even higher priority. We, therefore, urge Council to consider how future year NTI funds can be reprogrammed to support these activities. And thank you very much for your time and attention. 453 RESOLUTION NO. 040095 - 3/29/04
Thank you very much, Ms. Sierra. And certainly we appreciate what you have said about the housing trust fund. I'm not sure about the other funds, but certainly some of the local funds that you suggested in trying to raise some recording fees seem feasible to me. I'm not sure where we get the other funds. And obviously, certainly, we support your statements with regard to acquisition. There are many projects out there and, in fact, many redevelopment areas that can't be completed without the ability to finish up projects and get a few projects acquired so that major development can begin. Thank you very much. Councilman Cohen, you had a question?
Yes. I am convinced that the housing trust fund is also a good one, but that there is no chance of ever getting it here until we do something that prevents a house from having a market 454 RESOLUTION NO. 040095 - 3/29/04 value of one and a half the cost of building it as soon as its completed. Because I don't know who would contribute to the immediate devaluation by 50 percent of the house. So, therefore, I ask, has your group ever studied what could be done, in your judgment, to bring the price down so that the building price more closely approximates the cost of building it, without the need of a federal or state or local subsidy to make it available to the people who live in Philadelphia? For example, the one that comes to mind is, as I understand, that as a labor cost, that's only part of the additional cost. In Philadelphia there is no such thing as a residential rate by the building trades unions. But that in the suburbs, the unions do have, in addition to the regular rate, they consider that a commercial rate, and they have a much lower rate, maybe as much as 30 percent lower, for a residential rate. In other words, if they build a 455 RESOLUTION NO. 040095 - 3/29/04 house privately for an individual, the union rate is much lower than if they are building commercial things. Now, if that were done, that would begin to approximate more closely an equality between the cost of building and the market value. And I feel confident that until we get those two things lined up together, that if it costs $100,000 to build a house, that the market value of it, the sale price, will be a 100,000, instead of 50,000. Do you have any thought on that subject? Have you ever considered the issue of a residential rate being used in the construction industry being used in the city, as well as in the suburbs, or are you familiar with that?
It is not the only reason, but it is a substantial part of it.
Councilman, I am sorry. I am trying to respond to your question. 456 RESOLUTION NO. 040095 - 3/29/04 You are right that the difference between what it costs to build or to rehab housing and the price for which it can be sold is a problem. And there's two issues, I believe, that drive that. One is that construction costs are higher in this city than they need to be. I do think that a residential construction rate would be a good step towards resolving that. But the other issue is that real estate values in many of our neighborhoods are artificially depressed. In some neighborhoods, unfortunately, a new home that's built, regardless of the cost of building the home and the quality of the work that goes into it, the second that the builders walk off the site, that new home will only appraise at $40,000. And no matter what the -- it costs more than $40,000 to build a house, no matter what efforts we make to reduce costs. So I think that the key, a key need is not only to deal with construction costs, 457 RESOLUTION NO. 040095 - 3/29/04 but also to work on rebuilding the real estate markets and property values in our neighborhoods. And the way that I think works to do that is through community development corporations that have a long-term strategic approach to the neighborhood. There are a number of successful examples around the city of neighborhoods where CDCs have been able to rebuild property values. Unfortunately, that does take investment, until property values get to the point where the private market will function in those neighborhoods. And that's one of the reasons that we believe more funding for housing production is necessary.
Have you ever discussed -- you represent the community development corporations.
Have they ever discussed with the building trades unions the possibility of the development of a 458 RESOLUTION NO. 040095 - 3/29/04 residential rate? Because I agree with you, the community development corporations play a very important role in Philadelphia in the development of neighborhoods and the promotion of housing. And I think you are an extremely important force. But I think it would be helpful if you could use your assets, whatever they may be, to help bridge the gap between the building costs and the market rate. Because you do a lot of other good work in the neighborhoods that help to raise the worth in dollar terms of a neighborhood, as well as its intrinsic worth as a neighborhood in which to live.
Well, thank you for the kind words. I certainly appreciate them.
I think most of us would agree to that, clearly. We like what you do. We are looking for ways to expand what you do.
But apparently 459 RESOLUTION NO. 040095 - 3/29/04 money is not expansion of -- the availability of money is not one thing that at this time we are going to be of very much help to you.
Well, just to answer your question, we have discussed the issue. I mean, for example, I have personally brought up with Mr. Gillespie, the director of the Trades Council, that a residential rate would be a good thing. While, at the same time, we certainly believe that people should be paid a fair wage for their work.
But I think our feeling is that, really, the city and the Administration need to take the lead on working with the construction unions to find a way, if there is a fair way, to reduce labor costs. And so, you know, we believe that that's something that the Mayor and his staff should probably be taking leadership on. We have brought it up. We will bring it up. It is our position. But I think 460 RESOLUTION NO. 040095 - 3/29/04 you may be valuing our influence too highly, Councilman, if you think that we are going to be able to, through our advocacy with the --
Well, that's certainly our position, and we are happy to share that with anybody who asks.
Thank you. Are there any other questions of Ms. Sierra by members of the committee? Thank you very much. We appreciate your patience. Our next witness. This is a panel, Charles Trotter, Luis Cruz, Jihad Ali, Jim Copeland.
You could just pull two more chairs over, gentlemen. Good afternoon. Kindly identify yourself for the record and proceed with your testimony.
Good afternoon, Council President Verna. My name is Jihad 461 RESOLUTION NO. 040095 - 3/29/04 Ali, I am with the Contractors Roundtable Council. I am a founding member of the African-American Contractors Roundtable Council, a nonprofit organization of African-American and Hispanic contractors who have advocated for the inclusion of disadvantaged and African-American and Hispanic contractors in the City of Philadelphia. Madam Chair, I have copies of my testimony. Forgive me for not passing them out.
I want to thank this honorable Council for giving me the opportunity to comment on this important issue. And I commend you for providing ordinary citizens the opportunity to voice our concerns with the Neighborhood Transformation Initiatives Emerging Contractors Program being 462 RESOLUTION NO. 040095 - 3/29/04 administered by the African American Chamber of Commerce. I will not belabor these hearings with a lot of details because many others, including members of this City Council, have also asked questions about these matters during the previous hearing on the matter held on March 22, 2004 and are awaiting answers to questions raised by the Council President and other Council Members during the previous hearing. However, I do want to emphasize that, in my opinion, there has been and continues to be a systematic and partly successful attempt to mislead the City Council of Philadelphia on Emerging Contractors Program's success, which was questionably funded by the Neighborhood Transformation Initiative. There is no question that the overwhelming majority of the City Council of Philadelphia wants to provide opportunity to all of Philadelphia's citizens under the Neighborhood Transformation Initiative. 463 RESOLUTION NO. 040095 - 3/29/04 What is most disheartening is some organizations and businesses have attempted to mislead the City Council of Philadelphia, the Mayor, and others, including the administrators of the Neighborhood Transformation Initiative, by misinforming them on the, quote, successful, unquote, minority participation specifically of newly formed emerging demolition contractors in the awarding of prime contracts, subcontracts, and man-hours employed on the projects by the Neighborhood Transformation Initiative. The Neighborhood Transformation Initiative administrators have the responsibility to establish policies and procedures which govern inclusion of existing minority businesses in NTI projects. When this honorable Council enacted legislation to ensure participation in the Neighborhood Transformation Initiative, there was and is a requirement that monthly reports be submitted to this Council which reveal the utilization of African-American contractors in the contracts awarded by the NTI. 464 RESOLUTION NO. 040095 - 3/29/04 There was testimony by Ms. Smith that no reports have been filed with this Council to date, almost a year after this program has begun. In my opinion, there continues to be an attempt to mislead the Council of Philadelphia. There was testimony by Ms. Smith that the Emerging Contractors Program is placing new start-up demolition contractors on par with established majority demolition contractors. With no statistics submitted, how can this Council determine if this program is successful? The City Council of Philadelphia needs to know if this program has been a failure or not. We are not allowed to participate in the Emerging Contractors Program as administered by the African-American Chamber of Commerce. We have been removed from participation in this program, even though we are established contractors. The Contractors Roundtable has also 465 RESOLUTION NO. 040095 - 3/29/04 been removed from the Chamber of Commerce's website after we asked questions about the program, apparent conflicts of interest of its directors, nepotistic employment practices, and we were given no answers. We know that minority contractors through this program are not being put in a position to compete as prime contractors because we had the best chance because of our members' experience of being able to participate in the program and run this program. And I also would like to add, on the last bid that was awarded on Friday of last week, two of our contractors participated and submitted bids. That's only hours after we were 19 informed, after we had a meeting with the NTI, 20 Ms. Smith's office, director -- actually, a representative of Hill International, Mr.
Griffin, who told us of an opportunity to bid that was available on the web. We went to the web, and we successfully put in -- we weren't successful 466 RESOLUTION NO. 040095 - 3/29/04 in the bid, but we were successful in answering the opportunity for the bid. We put in a bid, and that's only 5 hours after we were notified of the bid. Luis 6 Cruz put in a bid, as well as Toratto 7 Construction, two of our members. 8 And I don't believe -- there was one 9 member that Ms. Smith was claiming that is a 10 member of the NTI Emerging Contractors, the LP 11 group, who put in a bid and was the successful 12 bidder. out of 20. 13 To this very day, there is no 14 reporting information regarding how this 15 program is progressing or how many contractors 16 have successfully completed this program and 17 can compete along with prime contractors. 18 We are requesting a copy of the 19 report, as required by legislation, and that 20 the City Council of Philadelphia reviews the 21 contract that was signed by the Chamber for 22 this program. 23 The Hispanic Chamber of Commerce 24 does not have a similar contract. Mr. Cruz is 25 here as President of his Chamber of Commerce, 467 1 RESOLUTION NO. 040095 - 3/29/04 and his business has been around a long time. We are asking this Council to carry out their responsibility as required by the legislation authorized because, in the end, everybody wins. Ms. " "Emerge" is beginning. And I also would like to give an acronym, an acronym of DIG, which is deception, ignorance, and greed. And that's really what leads to the misuse of public dollars. And I also would like to give a quote. None of us is as smart of all of us. And if you exclude half of us from a process, how can it be successful? I am asking that Council not favorably move forward Resolution 040095 until after you have gotten the answers that you have demanded. This Council went through a great deal of effort to enforce the legislation last 468 RESOLUTION NO. 040095 - 3/29/04 year on April the 23rd. And on the street, on the field level, we know that one Councilman lost his seat in the fight for inclusion. We didn't fight to have programs established that were going to benefit people specifically. We want programs in place that are fair across the board, and we want to give opportunities to all the citizens of Philadelphia. And specifically we know, as Ms. Smith quoted earlier, that a great deal of the African-American community has been excluded from contracts, through no fault of the city. But it has really been because of the industry, a practice that has been in place over 30 years. So we are asking that this Council be vigilant to make sure that everybody that says that they are about the same aims of this Council, that you carry out your responsibility and scrutinize the programs that are in place. I also would like to point out to 469 RESOLUTION NO. 040095 - 3/29/04 Madam President that, by the sheer fact that you are the President of City Council, you are a de facto member of the African-American Chamber of Congress. You are entitled to all the rights and privileges any other dues-paying member. And, as such, we would ask you to use your privilege to request all the information from the Chamber that we ask.
Thank you very much. In your testimony you say you are not allowed to participate in the Emerging Contractor Program as administered by the African-American Chamber of Commerce. Is that because it is a training program?
That is what we are led to believe, that it is a training program. Is that why you are not able to participate? 470 RESOLUTION NO. 040095 - 3/29/04
Well, that's a very good question, as I said. The history is, when this program initially was -- when inception of this program, really came about on the heels of all our activism out in the street. We had protested the Constitution Center, the Liberty Bell, we have shut down numerous jobs, Rite Aid, CVS, numerous jobs, the SEPTA El project. So at the inception of the program, there was no -- there was the Contractors Roundtable Committee, which was a group that had been formed outside of the Chamber, but only came into the Chamber because at the time our group, through one of our consultants, Tony Lewis, had written a grant for the Chamber, for the Commerce Department. And the grant was roughly maybe 300,000, 150,000 a year for supportive services to outreach for disadvantaged contractors. We put in a grant, and we were told that we couldn't receive the grant because we 471 RESOLUTION NO. 040095 - 3/29/04 weren't a filed 1C-3 at that time, and the grant would be administered by the Chamber of Commerce. As it worked out, we never received any funding, any reports of the funding; however, we noticed that then they came up with a concept of the Tag Center and Emerging Contractors Program, unbeknownst to any of us. And we were told that we were a part of it, that we were behind it. But when we really looked at the practices of them, we weren't a part. So throughout the year we just continued to try to keep our affiliation with the Chamber. And we continued to ask for reports, and we continued to ask for accountability. A period of two years passed, no 20 accountability. We asked some other questions about the employment practices of the Tag Center. We noticed that mostly everybody that was being a -- a majority of people that were being selected for employment with the 472 RESOLUTION NO. 040095 - 3/29/04 Tag Center, the first, the director of the Tag, was Bruce Carley's brother-in-law. Another member was Anthony Fuller's wife. Somebody else was connected with Jerry Valerie. Jerry Valerie was selected as -- even though he was a program developer, his company was selected -- the Emerging Contractors had to deal exclusively with his company for bonding and insurance. So just as businessmen, we all want to be involved in lawfully helping one another. We are not trying to encourage anybody to break the law. All we are asking people to do is give us a chance and obey the rules. So after we started asking questions about some accountability issues over some funding that we personally owned, with the director, the director of the Chamber's committee at the time jumped up, quit, and resigned. And two days later we were notified by letter, by the Chamber President, that we, our committee, was dissolved because of the 473 RESOLUTION NO. 040095 - 3/29/04 Chamber President quitting, even though we are all members of the Chamber and dues paying. But we were put in that position to be left. And we were told that we would no 6 longer receive administrative services that we needed for our organization. But because our organization were established contractors, we answered that challenge. We organized ourselves. Got our 501(c)(6) status, at least started that process, and we continued our organization mission that we had originally came into being with over 2003. So the answer to your question, Council President, is the reason why -- we really don't know the reason why we were excluded; we just know the reality that we were excluded.
Thank you. Ms. Smith, I think I asked you last week about the reporting and why we had not received any reports. I think, for the record, I am going to ask Mr. McPherson to please read the part 474 RESOLUTION NO. 040095 - 3/29/04 of the ordinance which very clearly spells out the responsibility of NTI reporting to us. You could sit at Councilman O'Neill's desk. MR. McPHERSON: I quote, Over the initial five-year period of the NTI, the City of Philadelphia, through its departments and agencies, will prepare monthly reports and updates of employment and contract activities for NTI which summarize the following: Utilization of MWDS, DBEs, and commitments made with such businesses; the hiring and employment of minorities and females; the training programs utilized and the placement rates. Additionally, the City of Philadelphia acknowledges the value of project monitoring and, therefore, will develop and work with an oversight committee to monitor all overall compliance and achievement of the project objectives as defined in this economic opportunity plan. The City of Philadelphia agrees to keep and require all prime contractors and consultants to keep such records and to file 25 such reports relating to the provisions of 475 RESOLUTION NO. 040095 - 3/29/04 this economic opportunity plan as may be reasonably necessary to document compliance with the plan. The City of Philadelphia, through the Mayor's Office of NTI, has contracted and is actively working with the Greater Philadelphia Urban Affairs Coalition to assist in the monitoring and reporting of its performance with respects of this plan. The GPUAC shall work with the city, its departments and agencies, contractors, consultants, and training providers to ensure maximum opportunities not necessarily identified in this plan. The City of Philadelphia, through its departments and agencies, agrees to work with all contractors to submit to the GPUAC manpower utilization projections for all work associated with this initiative. And, again, there are other reporting requirements stated throughout the ordinance.
We do have reports on file from both GPUC as to -- 476 RESOLUTION NO. 040095 - 3/29/04
Are you keeping that a secret or are you willing to share it?
We are willing to share it. Attached to the letter I gave you is a summary of the two reports for everything. But I will go back and get all of the -- and we have been getting them on a quarterly basis, that's the way from a capacity standpoint we have been able to manage. But then I will give you all the backup documentation. But I did attach to the letter the summary numbers.
-- would you please make certain that Council Members get a copy of that report.
Yes, I will. And I was just going to add that MBEC monitors the contracting side of the MBE/WBE. 477 RESOLUTION NO. 040095 - 3/29/04
Have you filed any of the reports with the Chief Clerk's Office?
And I will also make copies of the reports that we received from the African-American Chamber of Commerce on the Emerging Contractors Program.
And I would suggest, so that we don't have to do this every time we have a Public Hearing, I think it is more than just the reports that you are referring to. I would like you to sit with Charlie McPherson so that he could go over what reports you are supposed to be submitting.
One of the things that I did after the hearing last week is, I put in a request to the law department to review the legislation and to make a checklist for me of all the variety of reports that are required. I know we had been including some 478 RESOLUTION NO. 040095 - 3/29/04 information in our quarterly reports to Council, but then other bits of information have not been. So I am working on a system to rectify that.
The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam President. But if Mr. Cruz has a statement, I would hold my questions until he is finished.
Shall we listen to the panel, and then we could ask the questions. All right. Who is going to speak next?
Please identify yourself for the record and proceed with your testimony.
Good afternoon, Council President Verna and Council Members. My name is Luis Cruz. I am a Hispanic general contractor and the president of the Hispanic Chamber of Commercial of Philadelphia. 479 RESOLUTION NO. 040095 - 3/29/04 I have a problem with several things here today. And one of them is the $700,000 that is going to be given to the Minority Business Enterprise Council and also the million dollars that is also going to be given to the Emerging Contractors. Because, if anything, the Hispanic Chamber of Commerce is not included in representation at the Minority Business Enterprise Council. Up to presently we haven't had a representative of the Hispanic community as part of MBEC. And, as well as the Emerging Contractors, we haven't been included in that. We also have many contractors in the City of Philadelphia. Although I have been a founder and a member of the African-American Chamber and Contractors Roundtable, we were never included in the structure of this Emerging Contractors. As well as the MBEC, we have been a member for over ten years, yet our advocacy for getting representation of the Latino community as one of their directors or some 480 RESOLUTION NO. 040095 - 3/29/04 staff hasn't been included. This is a problem. Our community is growing at a very rapid pace, our business community is growing at a very rapid pace, but yet funds are being put out that doesn't include our community. I think that the African-American and the Hispanic community have a lot in common. But sometimes, because of individuals, we don't get likely included. I know there is a lot of Council Members that believe in what I have just said; that, you know, we have synergies. But sometimes people don't remember that. I would like to just make a brief description of what happens with our established contractors. About three years ago there was a strong push for participation for established minority contractors in the city to participate down at the stadiums. Me and several others were included to get opportunities down there, but a lot weren't given those opportunities. 481 RESOLUTION NO. 040095 - 3/29/04 We went down, we participated, we tried to bring in some of our other established minority contractors. At the Phillies, even less -- as time went on, even less got opportunities. The problem in our city right now is, we have a pool of established for real, for real contractors, you know, not brokers. I am talking about established minority contractors that meet opportunities, some of which are with me here today. And that's where the Contractors Roundtable came from. We were real contractors who wanted to get out so we could be able to get our voice heard, get our statement out to the street. But what happened was, you know, it evolved into a programmatic system. And we need to be able to help the established contractors so they could be able to build themselves up, as well as contractors coming in. But established contractors are disappearing because of lack of opportunities, 482 RESOLUTION NO. 040095 - 3/29/04 lack of support. You know, the people that I employ are losing their jobs. The people that they employ are losing their jobs. How could we bring in new contractors to become contractors, if the opportunities aren't interest for the established contractors? Everybody is looking for a way to not include minority contractors. Those of us who have all the requirements aren't getting the opportunities. How are the ones that are coming in going to get the opportunities?
Mr. Cruz, I guess I am losing you to some degree. Have you ever bid for any of this work?
For the NTI work, we bid one of the initial packages and we were unsuccessful. And the numbers just were unrealistic. We didn't bid anymore and we lost getting information on it, put it that way.
Why wouldn't you bid again? Just because you may not have been 483 RESOLUTION NO. 040095 - 3/29/04 the lowest bidder at one time --
What we did is, we followed up with keeping track on them, but the numbers were unrealistic. But I am not just talking about --
The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam President. Can Mr. Cruz explain, when you say the numbers were unrealistic or -- are you suggesting that the bid that you submitted and the bid that was eventually awarded, the numbers being for the contractor who got the award, you just couldn't figure out how they could do it for that kind of price? Is that --
Absolutely. COUNCILMAN DiCICCO: I think I know where you are going, but I think you need to explain that. Because at the end of the day, I don't know in this particular case, but at the end of the day it actually may even cost us 484 RESOLUTION NO. 040095 - 3/29/04 more money because sometimes contractors will come in with a low number. And then we get the overruns and the extras that are added in later on, which ultimately brings the number at the end of the contract to either equal to what was disqualified or sometimes, in many cases, even over what the contract was. So I think you need to try to explain that in layman's terms as best you can.
And thank you, Councilman, because that is the root of the problem. The initial contracts, the houses were going between 6 and 8 thousand dollars a house. Now, the demolition, yes. Now, we are a union contractor. Okay? Because that's the only way you get an opportunity in the City of Philadelphia, is by being a trades person. How can I pay union wages, if it costs me more -- in other words, real easy breakdown. You are taking down one of these houses, two- to three-story house, you would 485 RESOLUTION NO. 040095 - 3/29/04 use four to five dumpsters. If the dumpsters are costing you $600 apiece, that's $3,000. You bring a machine in, machine costs you about $1,000 a day. It takes you two days, that's $2,000. You got, let's say, three laborers. Laborers cost you, with packages, about 350, 400 dollars a day. I just went bankrupt, you know, and I didn't make no money. That's not including any of my overhead, that's not including insurances, that's not including the costs of my bonds. I don't know how these guys were doing it. I mean, you know, and I'm not about to, you know, go into somebody else's business. But that's why we pulled away from -- the numbers now, yes, the numbers look a lot better now. We were second in one of the packages, as my colleague said. We were the second bidder for the package that just came out. So the numbers have gotten better because they are more realistic now. Okay? But the initial packages were 486 RESOLUTION NO. 040095 - 3/29/04 unrealistic. They were coming into the city, outside contractors from outside the city were coming in, and then they were brokering it to smaller contractors and making them do it for unrealistic numbers. I hope I answered your question, Councilman. COUNCILMAN DiCICCO: I think I know where you are going, but maybe because I am a little familiar with construction. You go in and you made a bid on a particular job. Your numbers were higher than the competing bid. So, obviously, you don't get the job. The competing bid comes in. Do you know of any instances where that competitor, who out-bid you initially, ultimately had some overages, additional charges, which brought the numbers to either within the number that you originally bid or over that? I think if you know of any cases like that, that would be helpful to this committee.
Unfortunately, I do not. 487 RESOLUTION NO. 040095 - 3/29/04 I wish I did, but I do not.
Thank you. Councilman DiCicco, one of the things I really feel very proud about is, once we have awarded the contract, there have been very few change order or overruns. The only changes we make in contracts, as those of us who have worked on a program, sometimes we have taken properties off the list, then we deduct -- the cost of that property comes out of the contract and the contractor does not get paid for it. A deduct may happen because the owner may step forward, you know, says, you know -- and pull building permits to do the repair. For those of us that have been involved on the target program, that's what's happening. And I can also have Mr. Solvibile provide information on emergency curb-side. He has been called away. I mean, I think one of the things 488 RESOLUTION NO. 040095 - 3/29/04 this testimony does demonstrate is, you know, this cost, you know, some feel that is it enough to cover the cost of doing business. I mean, that, you know, and others feel that we were paying too much. But, no, we are not awarding contracts and then letting people change those numbers after contract award. COUNCILMAN DiCICCO: Thank you.
Ms. Smith, why don't you stay there, please. COUNCILMAN DiCICCO: Because I had a followup, but I will yield to Councilwoman Blackwell.
Thank you, Councilman DiCicco. I don't know what the figures say, but I would venture to say that Redball in my community, in Mantua, did in fact create the kind of situation that Councilman DiCicco called for. I am sure they must have had cost overruns. I mean, at every meeting I attend, I mean every single meeting as recently as 489 RESOLUTION NO. 040095 - 3/29/04 Friday, I talk about these contractors, Madam President, and that they need to be included. I know, for example, that we had a company on a contract in my district who said they didn't want to be in Philadelphia, didn't want to work in Mantua, and they are in my district and they were in North Philly in Strawberry Mansion in Councilman Clarke's issue. And they must have one crane, and they just move it from community to another and drag out a process. Since NTI, they have been in my community for about two years and still haven't finished. So, you know, it doesn't make sense that -- I mean, I am telling you, Madam President, every time we have a meeting as recently as Friday, I am asking about these contractors. And everybody keeps telling me they are on the list, we are in communication with them. I mentioned them to Pat Smith on Friday, you know, that they are saying they are not getting work and they are supposed to 490 RESOLUTION NO. 040095 - 3/29/04 be on the list and they are supposed to be getting contracts. But, if I understand correctly, Mr. Cruz is saying that if you give them one or two or three properties, it is not even worth it, he still can't make it. You know, and your question was, if I might, your question was valid in terms of the training program versus the emergency contractors because we are losing it. When I had a meeting with Mr. Crawley, whom I wish was here, on this very issue, he told me they are doing fine, that people like Jhiad Ali, Mr. Cruz, and the others at the table bid on regular contracts and they are getting all the work. And that they would -- you know, they are trained, and then they can get work, and everything is moving along fine. And that those who are actually in the training program are able to bid on smaller numbers of properties, a handful, depending on the project. And I know we have had problems with 491 RESOLUTION NO. 040095 - 3/29/04 MBEC, we know that. But obviously we owe these gentlemen a great deal of gratitude because Mr. McPherson read the rule. We don't get the reports. And it is apparent to me that they are not getting the work. I am embarrassed. One of the reasons why I have this amendment that I want to introduce is because of problems like this. We have contractors who live and work in our city, they are part of our city, they raise families in our city, and they still can't get the jobs. And I really would like us, I agree with Mr. Jhiad Ali who said we need to hold up until we get some answers and find out how we move forward in an orderly fashion so that people who live and work in their own city can be included in the jobs that are let here. (Applause.)
Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam President.
Thank you. 492 RESOLUTION NO. 040095 - 3/29/04 COUNCILMAN DiCICCO: Ms. Smith, in response to my question, you said that when a contract is awarded, these contractors are held to the actual bid, basically, to the actual bid --
What they bid. Plus we even make the contractor for what you call add-ons -- such as, for example, suppose we don't know, because we are unable to get access to every property, how much it will cost to do the asbestos removal. So we do, like, a linear foot. COUNCILMAN DiCICCO: I understand that circumstances arise that you can't predict when you do the original bid.
But they are locked into their linear costs. Right. COUNCILMAN DiCICCO: When these gentlemen were making these bids early on, what was the cost of demolition you were estimating there?
In the first year of the program, which was FY '03, and this was the contractor that -- and it was just last year 493 RESOLUTION NO. 040095 - 3/29/04 was awarded, one contractor came in, some people in the industry would call them a maverick bidder. They came in very low. But they were held to that cost. Their contract anticipated, I believe, a nine-month demolition process because there was more than a hundred properties in that. It was slow getting off the ground for a variety of reasons, including the necessary need to go into court, as Councilwoman Blackwell will remember. That contract is practically complete. I do believe some of the post-demolition treatments have been a little slow because of the capacity of one of the subs. And they are moving to wrap that contract up. That person has not bid in the City of Philadelphia, and said they would not bid in the City of Philadelphia, anymore. So they have really been off the table. COUNCILMAN DiCICCO: My question is, well, when the NTI program originally 494 RESOLUTION NO. 040095 - 3/29/04 started -- and I think we had some of this last week, but I would like it again for the record -- what were we paying on average to demolish a property?
Again, if we use the first three bids, for example, I can get that number for you. But it would be based on Strawberry Mansion and Mantua, which were lower than what they are today. COUNCILMAN DiCICCO: Give me a number. 6,000, 8,000 per unit, something like that?
I think they have some numbers here for me. The top three, which Redball bid on, it was one was at eight, that was in Strawberry Mansion. COUNCILMAN DiCICCO: 8,000?
Yes. Ten, which was Frankford. And then Mantua was ten. But they have not bid it since then for a variety of reasons. COUNCILMAN DiCICCO: Because, apparently, they couldn't do the job at those 495 RESOLUTION NO. 040095 - 3/29/04 rates.
Well, it was a lot of reasons going into that. I don't -- but the reasons that were stated to the Administration was not because they couldn't do the job at that rate, but because of the community issues that arose around the Mantua demolition project and the animosity that was, you know, generated by that. So they said, they told me specifically, that was why they were not going to continue to bid in the city. COUNCILMAN DiCICCO: When Mr. Cruz and Mr. Ali testified, Mr. Cruz, I think, testified that when they were bidding on jobs, the bids were expected to come in somewhere between 6 and 8 thousand dollars.
I don't recall that. I mean, what we do, cost estimates are internal. And then it is what is bidded when we publicly advertise it. I mean, what we have done in terms of outreach, we fax notice of opportunities. 496 RESOLUTION NO. 040095 - 3/29/04 We have even in the last six months had evening contractor outreach meetings, which I believe everyone has attended. I mean, we have done an active outreach to let people know when we are bidding the projects. COUNCILMAN DiCICCO: I am normally not one to interrupt someone answering. I appreciate all your comments, but I am trying to get a little bit more specific on the value of the bids when these gentlemen and their contractors were out there bidding, and compare it to what we're paying today for the same type of work, which apparently -- and through testimony last week and the week before -- has greatly increased. So I am concerned about if these contractors, the roundtable guys, were out there bidding, and they were coming in -- I don't know what their numbers were. I am going to say they were coming in at 10, just for the sake of by way of example, and another contractor was coming in at 6 and 8, obviously it is going to go to the lowest responsible 497 RESOLUTION NO. 040095 - 3/29/04 bidder. Since then their numbers, the people who are here today, seem to reflect more of what we are paying today than what was expected then. People were getting knocked out, were not being considered for contracts because they couldn't compete. And my question is, where are they in the world of competition today? Were not the numbers that they were coming in at a year or a year and a half ago coming in compared to the numbers we are paying today?
Councilman DiCicco, if they had bidded on subsequent things, they would have been as competitive as other bidders. To my knowledge, we did not receive any bids. I'm not sure which of these bid packages Mr. Cruz or the other contractors bid on. But subsequent to that -- and I know I have had a number of conversations with Mr. Cruz -- we were going to have some followup 498 RESOLUTION NO. 040095 - 3/29/04 meetings. Unfortunately, he was not able to attend. But the fact of the matter, all bids are -- when they are open, the numbers are read, that's a public process that you know what the numbers came in at. So people would have known that they were increasing because the industry numbers were moving up. We also continued to work, we made more than, I think, a number of offers to sit down, talk with people about the process and the bid process over, you know, the last -- I mean, the last few months, even, letting people know what bids were coming. We started the small package program so that people could participate in that. We sent out fax broadcasts, if we have your address. I know Mr. Cruz was one because I gave his information in to receive fax broadcasts of bidding opportunities. COUNCILMAN DiCICCO: I have a couple more questions, and my questions are now to Mr. Cruz and Mr. Ali. 499 RESOLUTION NO. 040095 - 3/29/04 How many members, contractors, are a part of the roundtable? Approximately, if you don't have an exact number.
What was that question? COUNCILMAN DiCICCO: How many contractors are members of the roundtable?
We have 35 members that are mostly unionized contractors. COUNCILMAN DiCICCO: Unionized contractors. How many of them are Philadelphia-based contractors?
I would say out of the 35, maybe 90 percent are Philly based. COUNCILMAN DiCICCO: So 27 or so, high 20's?
Yes. COUNCILMAN DiCICCO: And these are union member contractors?
Majority of them are all union, except for Mr. Jamal, he is not union. Maybe five are not union contractors. 500 RESOLUTION NO. 040095 - 3/29/04 COUNCILMAN DiCICCO: Is the opportunity there or do these contractors participate in the apprenticeship program for their employees?
Yes. We wholeheartedly support the apprentice program as it is being put forward by DAP, Diversified Apprentice Program, which is a subsidiary of the prep organization, which is being funded indirectly by Local 332. COUNCILMAN DiCICCO: Do you know how many of those employees that are in the apprenticeship program or have been in the apprenticeship program have made it to journeyman?
So far the numbers haven't come in yet, because it is a five-year cycle, mainly, we are talking about with the journeyman. But what I can tell you, Ms. Smith testified earlier, that there were 36 apprentices that were funded by the DAP Program. But what Ms. Smith didn't tell you 501 RESOLUTION NO. 040095 - 3/29/04 was that five of those apprentices were members -- were actually the ones taken out of the NTI program. It is disingenuous to say that 36 came in under the NTI program, when in reality it was only 5. And when we speak about in terms of employment hours, with contractors and apprentices, if we take those 36 and just assume -- COUNCILMAN DiCICCO: You are speaking of 36 individuals?
36 individuals. Because, really, when you look at the apprentice printout, that has an uphill fight with the building trades to increase that number. But we did have a commitment from all the building trades that they were going to put a hundred apprentices in this year. COUNCILMAN DiCICCO: I remember they had a press conference to that effect about a year ago.
Yes. COUNCILMAN DiCICCO: Have they 502 RESOLUTION NO. 040095 - 3/29/04 reached that goal yet?
No. They are far short of that goal. In fact, they are only at 56. And the time limit ends next month. COUNCILMAN DiCICCO: So we are at 56 from the hundred that they promised a year ago. And the 36 have been in from the beginning of NTI?
Actually, I am sorry, Councilman, not from the beginning of NTI; from this year. COUNCILMAN DiCICCO: Can you estimate the number of people who may be working out there in the NTI program, the number of employees citywide?
I can do just -- I can look at it. We have looked at it. If we look at it in terms of just looking at some of the recent comments that were made by Mr. Gillespie of the building trades, there are 73,000 building trades people across the city, 503 RESOLUTION NO. 040095 - 3/29/04 black, white, and Hispanic. Of that, there are -- COUNCILMAN DiCICCO: That's roughly 73,000 who work in the city.
Who work in the city. That's excluding the ones that come in that have jurisdictional agreements with some of the trades. And of that number, that means that's 151 million 840 man-hours that are being worked in this city. In terms of African-American and Hispanics, if we just assume that all the labor unions, the 332, 57, and all of those, are all African-Americans, which we know they aren't, but just -- COUNCILMAN DiCICCO: They are primarily minority employees.
Yes. Then we would say we are receiving only 8 million man-hours a year versus the market being 151 million man-hours. So we certainly have an uphill fight. But the issue is, it is, I think, Governor Schwartz just had a comment that 70 504 RESOLUTION NO. 040095 - 3/29/04 percent of all existing businesses make opportunities for new employees. So even looking at the apprentice thing and this NTI, it would make better sense to help support existing businesses, so we could increase, ultimately increase, that apprentice ratio. COUNCILMAN DiCICCO: I certainly agree. And that's where I was kind of going with my questioning. Is that when you look at the number, 75,000 or so employees who are in the building trades, who from time to time work throughout the city, and you wind up with 56 that was promised last year in the apprentice program, you are less than a hundred no matter what you look at. That's a very dismal number. It is a very insulting number, I think, in the scheme of things. But probably I think that I would be accurate if I was taking a guess that the majority of these apprentices are Philadelphia employees; citizens, residents of the City of Philadelphia. 505 RESOLUTION NO. 040095 - 3/29/04
Yes, that probably supports that. COUNCILMAN DiCICCO: Thank you, Madam President. I have no further questions.
I would just like to remind everyone that we do have a scheduled 1 o'clock Public Hearing. We still have a number of witnesses who would like to be heard. So I would ask everyone to please try to be as brief as possible with their questioning so that the people who were here for the 1 o'clock meeting will not have to stay too long. At this time the Chair recognizes Councilwoman Brown.
Thank you, Madam President. And I will certainly honor that request. Pat Smith indicated in her testimony that at some juncture, per your instruction, we will get the reports that speak to minority and female participation. My question to Pat Smith is, on RESOLUTION NO. 040095 - 3/29/04 of the five-year plan, it states -- and I will quote -- under the section Building Opportunities For Disadvantaged Businesses, that of the 25.5 million in demolition contracts since January '03, minority firms have provided 40 percent and female firms have provided percent of the work. My question is, the gentlemen before us, if they have not had the opportunity to be a part of these numbers as cited in the document?
Those numbers represent 14 subcontractors to the prime contractors. 15 One of the things when we first came 16 aboard and was putting together what we call 17 the planned demolition program, the targeted 18 program, one of the complaints we heard from the minority contracting community was that by letting just demolition contracts, letting just single stucco contracts, just letting asbestos contracts one by one, that a lot of times people didn't have opportunity to bid on those, what they call, requirement contracts, the way L & I had done it before. 507 RESOLUTION NO. 040095 - 3/29/04 So one of the changes we made was to come up with a GC model so that the GC would be required to subcontract some portion of the work in order to meet the goals that we were setting. And as a result of that, the GC's, or the prime, tend to subcontract out things like the stucco work, they tend to subcontract out the environmental work that Mr. Solvibile talked about. When I break out and make available to you the list of those who have been getting the subcontract awards, they tend to be environmental folk, they tend to be stucco plastering individuals, companies, and in the third area are individuals. There are some contractors that specialize in hand demolition, as opposed to the machine demolition. And in some instances some of the hauling might get subcontracted or the seeding of the lot, which was a new requirement, may get subcontracted. So we did that so that we can 508 RESOLUTION NO. 040095 - 3/29/04 increase the number of subcontracting opportunities. And that's why we were able to increase the participation of subcontracting. Having done that, then the concern was raised, at the same time we continued to try to reach out, we hold meetings in neighborhoods and provide information on bidding on NTI projects in general, but then the question came to us, well, it's not just enough to create opportunities for subcontractors; we need to work and create more opportunities for prime contractors. And that's when we received the proposal about the Emerging Contractors Program. I believe at that time the Contractor Table, Roundtable, was a part of that. In fact, that's the way I always understood it. I didn't realize that there had been this change. And then the other thing is, the other issue that has come up -- and, granted, we didn't do all these things from day one -- but the other thing that we did is the sizing of the package. We did have smaller packages. 509 RESOLUTION NO. 040095 - 3/29/04 For example, I think the Frankford package was around 26. We did have some 4 and 10 packages in some other parts of the 5 city. 6 But we are making a concerted effort 7 to put out smaller bid packages, which might 8 be more appropriate in size for the minority 9 contracting community. 10 And we continue to do outreach, you 11 know. If anyone expresses interest, walking them through the prequalification forms. There is a lot of paperwork, we all admit, that needs to be submitted as part of the process.
I would just like to respond to that. One thing, I really don't think, Ms. Smith -- and I really don't want to you take this personally -- I think that Ms. Smith really has an interest to do the right thing. I just think that she has been misled. When she just made mention that, at the time that we were a part of the roundtable, now we were told that -- we were 510 RESOLUTION NO. 040095 - 3/29/04 never informed that the NTI people, Ms. Smith and others, were considering creating an opportunity for a training program. That information was kept from us, me as a member and I am sure Mr. Cruz, who is the Chairman of the Hispanic Chamber. So, you know, it is disingenuous to say that we were a part of that process. We might have been physically in this world, but we weren't informed. And if you are not informed, how can you honestly say that we were a part of something? But that wouldn't be Ms. Smith's responsibility. The responsibility that Ms. Smith should have is to make sure that her process -- this isn't my first time seeing Ms. Smith or my first time being in Council. But her responsibility is to ensure that whatever program that she is advocating, to ensure that that is being inclusive across the board, and that she is not being misled by somebody who was trying to push for their own personal agenda. I think we owe that responsibility 511 RESOLUTION NO. 040095 - 3/29/04 to all the citizens of Philadelphia, and she certainly owes it to City Council. Because City Council, all you members sitting here, you are the ones that the voters elect. And when we go out on those picket lines, those citizens, your voters, come and they stand on those picket lines with us, and they look to you as the reason why we are out there. They don't know anything about the Chamber, anything about Anthony Fuller, anything about Ms. Smith. They know, hey, look, this job is going down, it is a city-funded job, we are not included, what's the reason.
So for clarity purposes, Ms. Smith, the documents that we will get the next round will show the distinction between subcontracting opportunities and what the numbers are and what the facts are around GC's; correct?
Yes. The spreadsheet shows the prime contractor, the amount of the contract that was awarded, and then it breaks 512 RESOLUTION NO. 040095 - 3/29/04 out by subcontract the name and the amount of the subcontract award, the amount that was -- that we have documentation for, as well as the commitment amount. That is the standard MBEC report that we have been getting.
In honor of President Verna's request, I will table and recess my questions for now. Thank you, Madam President.
Thank you, Madam Chair. Mr. Ali and Mr. Cruz, and I'm not sure how many other members of the panel are contractors, but I just have a quick observation, a question. Do you know if at any time any of the contractors have ever made suggestions on how to do these tasks differently? You heard the part about the stuccoing of the walls. Have you ever looked 513 RESOLUTION NO. 040095 - 3/29/04 at that and shook your head and say, why are we doing this like we are doing it?
Thank you, Councilman, Rizzo. My name is Charles Chaka Trotter, I am from Skills Bank Building Association, and we do brick block and stucco. What I found interesting is, somebody has been misled. I know that -- oh, I am sorry. I would like to thank the Council for having me have the opportunity to express myself. Somebody has been misinformed. I know the last package we bidded on, the stucco, we had to bid it for $2 a square foot to be competitive. Do you remember that? Now we are sitting here finding out that the competitive bid is, what, $5 or $6 a square foot? 5.45. $9,000? If I could get $9,000 for doing the building, I would have me a condo down there on the waterfront. Okay? Now, this is not happening. Somebody is being misled. All right? Now, our struggle again continues to be for economic development. Now, somehow or 514 RESOLUTION NO. 040095 - 3/29/04 another it must be a thin line between economic development and economic exploitation. I know that we shake the tree -- I will try to keep it quick. Our family is from Raleigh, North Carolina.
You can go on, but I need to know, I just want you to answer the question. We are hearing today that it costs 9,000 bucks to do one of these walls. I am asking, has anyone ever suggested a better way, a smarter way, to do this? And now what I am hearing is that you bid at $2 and some change a square foot, and you are hearing today that the deal got done for 5.45. What I want to hear is, have you ever looked at the process and said, you know, you are wasting taxpayer's money doing it this way, there is a better way?
Yes, we have looked at that. The process, the methodology that is 515 RESOLUTION NO. 040095 - 3/29/04 used to do stucco, we looked at stucco. The only thing that really can be changed about that method is the scaffolding. And because that's the time-consuming thing, to put the scaffold up. Mr. Solvibile, he testified to the technicality of the application of the mortar going onto the wall; that they use it with a method like some type of powered method, then it wouldn't adhere to the wall. And what he didn't say, it would create a void behind the wire mesh. And during the winter water would go in there, freeze up, expand, and push the wire out. So that's why they shot down the sprayed application method. But the methodology that would change the total cost to a subcontractor is just only, we could use -- that would be an individual decision. And the market, if the market was there, the ingenuity of the contractors would come up with another method as far as putting up scaffolding, whether using mobile methods 516 RESOLUTION NO. 040095 - 3/29/04 or not.
In what you do or what you bid on, do you see any areas where things could be differently? Like we mentioned the scaffolding. I don't have a lot of experience in construction, but I watch a lot of property being built. And when I see a lot of scaffolding up, and I don't see us using the state-of-the-art equipment that could save the contractor money and in turn save the City of Philadelphia money, have you seen other things like not using mechanized equipment and scaffolding on the work that you are familiar with that we could do better, we could do smarter, we could save some money?
There is always a better method. Like I always say, if we have all the more minds putting our interest together, we are going to find the method. You will see when you ride across the city. What you will see on some of the 517 RESOLUTION NO. 040095 - 3/29/04 bigger brick jobs, you will see they no longer stack scaffold on top of one another. They use a mechanized thing that raises up and lowers down. But the market dictates that. And for small contractors, they have to have a continued amount of work to support the purchase of that equipment. So there is always another method. But what we are talking about, in terms of price, what Ms. Smith is saying and Mr. Solvibile is saying in terms of the market being driven by the prices, the real reality is, you have a limited number of contractors participating in that process, and that's what's driving the price up. What we saw by us being included at the last bid opening this week was, we had two disadvantaged contractors who within 20 hours put in bids and were second and third on that list.
Could you go back over and explain to me how you could bid 2 dollars and some change per square foot and it 518 RESOLUTION NO. 040095 - 3/29/04 turns out to be 5.45? Something is not right here.
What Mr. Trotter was alluding to, Ms. Smith gave testimony earlier that -- I'm sorry, Mr. Solvibile, he testified that their prices per square foot was 5.45 cents a square foot. And we take an average house that's 30 foot high, 50 foot in length, that would be 1500 square foot. If we multiply that out, that would be $8175. Round that up, that's $9,000. But that's what the GC would put in his package for a price for stucco, that when Hill International opened the bid. There was a line item, it would say $9,000 for stucco. But then when it said the minority piece, you can bet assured that the minority piece would be bid at the $2 per price. So you would see a line item that said, "Trotter," at $3,000. That would be his price. But -- and the primary contractor would be walking away with $5125 in profit. Now, if you do that out by 65, 100 519 RESOLUTION NO. 040095 - 3/29/04 properties, you can see it is pretty lucrative.
So what you are telling me, if they shop smart, instead of spending 5.45 for a square foot, they could have gotten it for 2 and how much?
What we are saying in reality is, the market from the subcontractor point of view is keeping it consist at $2, maybe 2.25 a square foot. However, on the primary market, they are telling Council they are paying $5.45, and that's disingenuous because they are really not paying that price.
And you guys that are actually doing the work are getting 2 dollars and some change, and the rest is going into the bank of the primary contractor?
I had a feeling 520 RESOLUTION NO. 040095 - 3/29/04 all along that there was going to be a story like this some day told.
It is out there. And the other thing the Council needs to look at, you need to look at, like the Chair just asked, who is participating? Let's look at it in black and white. What's the name of those firms? And Council cannot ignore the fact that some of these firms have a relationship with some of their other firms. So it is easy to see that you could, that this Council could, be being manipulated. You could have four firms, which I think the testimony was earlier that Hill International bid it. And I was surprised that Mr. Solvibile didn't name Mellow Construction, Molly Construction, DeNobo Construction, companies that have been dominant in the award of those contracts. He didn't name those. But if you look at the relationships that these people have, they have a social relationship, a social network that you cannot 521 RESOLUTION NO. 040095 - 3/29/04 ignore that might be driving the price up.
I got you. And I guess what I am hearing is the fact that we are hearing from NTI that the cost of this work is going up. What I am hearing is, the profit on this work is going up.
Thank you, Madam Chair. Good afternoon. Just a couple of quick questions. In the Contractors Roundtable, you indicated you have approximately 35 members. Of those members, how many of those members deal predominantly with demolition?
So far we have Luis Cruz and Eric Bonner, two. Two. I'm sorry; it is three. Charlie Trotter.
Three demolition contractors. All right. 522 RESOLUTION NO. 040095 - 3/29/04 In the earlier hearing, with respect to this issue, I had asked a question of the Administration about existing contractors. One of the concerns that we had, one of the thoughts that we had when we talked about implementing this program, that this would afford an opportunity to existing contractors the ability to grow their company because of the substantial amount of demolition. And I had asked was there a program in place to address those individuals. Didn't really get a specific answer to that. Understanding my belief that the Emerging Contractors Program was dealing primarily with individuals who were start-ups or had some minimal technical skills, would upgrade their technical skills to be in a position to become bonded, and things of that nature. Is your concern primarily around the fact that the Existing Contractors do not have a process in place administered by NTI or the city that helps those companies grow or be in 523 RESOLUTION NO. 040095 - 3/29/04 a position to better participate as primes, or is your concern that the existing Emerging Contractors Program does not include the ability to do that for those existing contractors?
To answer that, Councilman Clarke, it is yes or both counts. When this thing started, we asked, from the inception of their concept, that it would have been better to include existing firms who have been out there, who know the safety, they know the regulations, they have insurance and bonding, to let's do joint ventures with Emerging Contractors. Because everybody needs a hand. But in this industry you cannot get your foot established if you don't have experience and if you don't have the money and bonding. So we asked that. We were told by, at the time I think it was Jerry Valerie, he was strongly opposing the fact that somebody would do something as a joint venture. Although Mr. Valerie has a 524 RESOLUTION NO. 040095 - 3/29/04 tremendous background in construction, he never actually was in the foot and in the trenches. So he really didn't know that you really, theoretically on paper, you might do one thing. But the reality of the world is those Emerging Contractors need to be locked hand in hand in with existing firms from the beginning. Our thing was shot down because the argument was, well, you know, I don't want somebody else's name on the contract. We want these guys to be primes.
I hear what you are saying. And I don't want to personalize the testimony talking about specific individuals, where we can talk about the programs, it would be better. Representing the district that I represent, you know, I obviously had a lot of interaction with contractors as it relates to demolition over a number of years. And one of the biggest issues from small contractors, that they didn't have an 525 RESOLUTION NO. 040095 - 3/29/04 opportunity to participate in various processes as relates to demo and other aspects of construction. So I think that we heard that personally. And I wanted to ensure that there was an opportunity. So I in no way want to limit a small contractor to get resources to become a sub, not talking about a prime but become a sub. Well, my concern is that I do not see in place a program that deals with existing contractors; not just in demolition, but in some other aspects of what we do as relating to construction. What I am trying to understand, if you are concerned, you are saying both, but what I would like to do is focus on the ability for existing subs to be able to bid on primes. If we/government had in place a policy or a program that would enhance the existing contractors who have some substantive level of skills both technically and ability to get some level of bonding in place to 526 RESOLUTION NO. 040095 - 3/29/04 enhance their ability, would that be something that you would be interested in participating in?
Let me shift my question to the Administration. Ms. Smith, through an amendment or a change -- and I won't say, "amendment" -- but a change in the policy as it relates to the NTI, could we put in place relatively quickly, at minimal, a policy initiative, and so we have a programmatic initiative, to assist the existing contractors, regardless of who they are -- because, again, I don't want to personalize any particular organization or names or individuals -- but from a programmatic standpoint put in place something in a short time because we want to access whatever we can as soon as possible. Because I do have a concern that I don't see the number of primes bidding on these contracts.
Yes. I know when we 527 RESOLUTION NO. 040095 - 3/29/04 met, when I talked with Mr. Ali last week, he wanted to talk about the concept of joint ventures. So what I wanted to do, and I know he has had some preliminary -- I believe he had some preliminary conversations, I am willing to follow up to look at a programmatic initiative that's more focused on established prime contractors, including everything from sizing of packages, to any other issues and ideas that you may have. And then, of course, seek appropriate funding, I guess, for that program.
What kind of time line would we put on the initial phase of that?
What I would like to do, if it is amenable to you, is to, maybe, when we come back with the FY '05 program budget and statement, to have something in place to talk about, an outline at least conceptually about that.
Usually we submit the 528 RESOLUTION NO. 040095 - 3/29/04 final May 1, the final program statement and budget May 1.
So by May 1 you can have a set of policies and procedures and targeted funding source or whatever to implement such a program May 1?
I can nod on policies and procedures. And funding sources, that's a little bit harder. But, no. 14 Again, I think one of the things I do want to emphasize, and I hope that we have been trying to do, is make those adjustments and changes. I think we have already done some changes. And I think if we look at the participation, even though it has been at the subcontracting level, it has been greater on demolition contracts than ever before. Like I said, the small bid program is going. And already you have heard the results, I think, of that initiative. And 529 RESOLUTION NO. 040095 - 3/29/04 there is always more to do. So we are committed that, as I said. And the focal point is established contractors, as opposed to emerging contractors.
Let me make sure I am hearing you right. By May 1, when you come back for the yearly sign-off on NTI, you will have in place a policy, procedures from a programmatic standpoint, and probably identify a funding source?
What I don't want to do is sit here and talk about a process, and knowing full well at the end of the day you are not going to be in a position to implement the program.
And I am just being honest. The resources, for example, for the Emerging Contractors is out of Commerce. We 530 RESOLUTION NO. 040095 - 3/29/04 look around government for --
That's fine. I understand our financial problem, I truly do. But at a minimum, you want to meet with the --
In fact, we already said we were -- I begged off to meet when we concluded this particular group of work. We have already touched base.
Can I ask the Chair, if at all possible, we have a member on staff, Mr. Rye, who is part of his responsibility in Council is to deal with minority contractors, if he can be a part of that process so Council -- I am assuming other Council Members individually are interested in participating; that's obviously something that that independently elected official can do -- participate in that process and receive notices of the status of that process? Because we don't want to have to come back here May and nothing has happened, you know, in terms of meetings and establishing a policy and procedure. 531 RESOLUTION NO. 040095 - 3/29/04
Certainly. We are happy, and I am sure the president would agree, and certainly I as majority leader am happy to ask Mr. Howard Rye to participate. Before I call on Councilwoman Tasco, I wanted to ask a question, since I had an amendment today and there is some big question about funding sources. We are talking about setting up this process whereby the emerging contractors or existing contractors have the ability to participate. Where is the question about money? Are you talking about setting aside project money for them, or where are we talking about cost, since everything becomes a question of cost and our budget process?
That's one of the reasons, in response to Councilman Clarke's question, I think we got to look at everything in the context of, you know, our program statement and budget, you know, other resources that we may be able to bring to 532 RESOLUTION NO. 040095 - 3/29/04 bear. Because I understood you wanted not just a commitment -- like, for example, doing small bid packages doesn't involve a funding source issue. We put them out in smaller packages. But if there were other issues or ideas that the Contractors Roundtable may have that's more like a program that may be funding, we are going to have to identify resources. So some things we probably could do.
It was always my belief, upon the establishment of the program, that this was a great opportunity to help existing contractors grow their company because of the level of work that was going to be provided by this NTI demolition program in setting aggressive goals on participation. It was always my belief from day one that this was going to help first, primarily, the existing contractors; and then as the process evolved, we realized we needed to get additional contractors in the pipeline. I am 533 RESOLUTION NO. 040095 - 3/29/04 comfortable with that. But if we didn't establish the first criteria or priority, then I don't think we have done what we should have done. Whatever shape or form that you come up with that relates to establishing some strategy to get these contractors, existing contractors, in the process as primes, because we want to walk out of here having created a number of primes that could be self-sustained. Then, if we don't do that, then I don't think we have been successful in our approach to all of this.
I agree, Councilman. And it seems to me, and I have spoken with them, they are always willing to take someone new and bring them into the fold, is what they do, is what contractors do and what people do. Especially minorities, because they know through helping one another does anybody get the opportunity. But my question is still, I don't know -- it seems to me we are talking about a 534 RESOLUTION NO. 040095 - 3/29/04 commitment to -- I don't see where there is a big money issue. If they are trying to take advantage of projects that private developers and others are doing out there, it seems to me to be, the main issue is the question of how we do business and inclusion. If the city sets up a program, we have people in place, unless we are hiring somebody new to set up a program under NTI, or if that's the money, but it seems to me it is not about cost as much as it is about a program of inclusion for contractors so that they can get work that takes place in the city, whether it be public work or private work. And I don't see that as a matter of money. Now, maybe I am missing something. And I am happy to be corrected. But I don't understand where there would be any hesitation on commitment for this program.
Majority Leader Blackwell, I think you hit the nail right on the head. That's exactly what we are talking 535 RESOLUTION NO. 040095 - 3/29/04 about.
I have a couple of quick questions. One of the issues, Mr. Cruz, you had indicated earlier that you were a union contractor and you were not able to in actuality participate based on the number that was provided for demolition contracts. And you said you have seen a substantial escalation in the available money per house; is that what you said? The numbers have gone from, I think, Ms. Smith said, the numbers were around $8,000 back when we had bid some of the first packages, and now the numbers are about 15, 16 thousand dollars. And that was based on the original bids, Redball being one of the originals. And he was a nonunion contractor provided to the city --
So the numbers now are reasonable for someone like ourselves to be able to feel comfortable to bid on the packages. 536 RESOLUTION NO. 040095 - 3/29/04
One other thing, last thing. Can I ask Ms. Smith, if you could get me -- and I don't know if this information is available -- but was there an analysis done or can there be an analysis done on participation prior to the implementation of NTI on contracts, prime, subs, and employment, and since its inception of NTI for those categories?
Councilman Clarke, just for a point. Understand that the curb-side bids and those bids, the majority of those contractors that do that work are nonunion and aren't mandated to follow the prevailing wage act. So that's why they are able to -- I mean, for numbers' sake, they could pay their guys 6 bucks an hour and get away with it. Where we, you know, pay --
I understand. I 537 RESOLUTION NO. 040095 - 3/29/04 participated in a number of curb-side bids by virtue of standing on the corner with some angry constituents. Just get that property down. We call in, we get on the phone, they get a knock-down, in two days the constituent is happy, I am happy. So I guess Mr. Solvibile is happy. But the union work force that didn't have an opportunity to participate is not happy. I mean, that's just the reality. Like you said earlier, the average person on the street doesn't care how it gets done or who does it, they just want it done. Thank you, Madam Chair.
Thank you very much. I am not sure, I have been distracted several times, what the answer was, but we are not finished this issue by a long shot. But let me defer to Councilwoman Tasco, who has been waiting to ask her question.
Thank you, 538 RESOLUTION NO. 040095 - 3/29/04 Madam Chair. I kind of agree with Councilwoman Blackwell on this issue. It is a matter of how you do business. Ms. Smith, who develops the specifications for the contract? Does that go through the procurement department or through Hill International?
The actual -- there's two parts of the contract. There's what I would call the standardized boilerplate. At the beginning of the program we may, in working with the law department and procurement, there were a number changes in what we will call the boilerplate. But each time you put out a bid, we develop a specific -- what we call design a specific package for the houses included in the bid. For the targeted program, that work, that written documentation is done by Hill. So, for example, one bid package may have ten three-story houses and five two-story houses and different, you know, requirements. 539 RESOLUTION NO. 040095 - 3/29/04 Another bid package can be the exact difference. So they have to be customized. On the emergency curb-side program, they are generic bid specs. But just as the Councilman explained, you are usually going out and you are usually making on-the-spot decisions. So I think that's much more flexible. Mr. Solvibile can talk to that. But Hill does the bid specification or what we call the design the bid package for each group of houses we do.
So my question to the gentlemen at the table is, what has been the impediment to you being successful in bidding on some of the contracts that have been led?
Jamal Johnson, I am involved with the Contractors Roundtable. And we initially formed our contractors group to solve that problem, the lack of inclusion on NTI and other contracting projects in the city, whether they are public works, private works, capital improvement, and et cetera. 540 RESOLUTION NO. 040095 - 3/29/04 And what we wanted to do was figure out a way to get included in these projects. So one of the reasons we got together was to get involved. So we initially thought that we was going to come up with NTI to establish a program to help the existing contractors. But what came out of it was a program that wasn't designed to help us. They did come up with a program which was the Emerging Contractors Technical Assistance Center, which we don't have a problem with. But we needed a program or a vehicle of opportunity for the existing contractors, and that's what we missed on setting up.
You didn't answer my question. If there is a bid package put out for demolition, how many of you participated, how many participated in the bid? And if you didn't get the bid, what was the impediment to you being successful, if you did bid on the contract?
Councilwoman, initially 541 RESOLUTION NO. 040095 - 3/29/04 we were one of those contractors that bid on the first packages, as I had mentioned earlier. What was the impediment was that, as a businessperson, we didn't feel that we could make the numbers work. At the end of the day, we didn't feel we would make the numbers work. We did bid on one of the packages. And after being unsuccessful with that one, we tracked. Because we had tracked some of the first ones, and then bid, and then continued to track it. While we were tracking them, the numbers were fluctuating back and forth, back and forth. Now the numbers are more realistic. So talking about the numbers, the numbers now are more realistic to be able to bid on these packages.
So as opposed to being, let's say, a minority contractor -- let's get that out of the way -- and small business, as a small businessperson bidding on the contracts, I want to know what is the 542 RESOLUTION NO. 040095 - 3/29/04 impediment for a small business to compete against the people who are winning the bid? When you look at the specifications for the project, what prevents you from being, the small business which tend to be minority, what are some of the impediments to you being successful?
My name is Eric Smith. I would like to answer that question. The program that was set up as far as the Emerging Contractors is concerned helps to assist contractors in more things than just learning how to do the work. It helps in financing, bonding, all types of issues like that. Those are situations that we as small contractors still have to face. So what stopped us or prevents us is, basically, the fact that we don't have our businesses developed enough to participate in a program like this. The NTI program has quite a bit of paperwork. There is a lot of administration required, a lot of requirements that you might not have to necessarily follow if you weren't 543 RESOLUTION NO. 040095 - 3/29/04 doing city work. So, you know, our businesses, basically, just need support to be developed to have the capacity to win those bids, to be able to bond the projects and to do the work.
So are you saying that in the Emerging Contractors Program, there is assistance to help those small businesses obtain bonding?
Sure. They help them to develop their companies. In other words, the emerging contractors are helped to develop a company, to acquire bonding, et cetera. How successful they have been, I don't know. But that is a part of the program.
So there is nothing in place to help the existing contractors obtain -- because bonding is a problem, and it has always been a problem.
So there is no 24 support there to help you with the bonding issue? 544 RESOLUTION NO. 040095 - 3/29/04
Bonding capacity. Bonding capacity, right, for established contractors. Because bonding capacity is more than just how much money you can borrow; it is a lot of things involved in that criteria.
So the ability not to obtain the bond will always keep you in the -- don't you have to have bonding as a subcontractor, too? Or does the majority, you would use the majority bond?
Let me ask you a question. These large contractors, they are sort of like the corporate head; right? But do they subcontract out most of their work? All of the work is subcontracted because they subcontract to -- subcontract out. How much do they have in-house?
I think that depends on what type of company it is. If it is a demolition company, then they may only subcontract a minority portion 545 RESOLUTION NO. 040095 - 3/29/04 of it.
And they do the rest it have in-house with their own employees?
Right. But if they are a general contractor or someone that's just gotten involved to try to take advantage of the NTI program, then they may, you know, sub out the majority of their work.
So when you go back to when they write in the bidding, and they are writing the numbers, they put in $5, so that they make the difference and they pay you $2 as a subcontractor? So that increases the costs. Wherein, if you were a small business and you were doing the $2, then it would be less because you wouldn't subcontract out, you would do the work yourself and pay your employees.
Yes. That also contributes to why we need assistance in developing. Because as long as the system is in place the way that it is, 546 RESOLUTION NO. 040095 - 3/29/04 then we are always subject to getting the work for a lower amount, which doesn't allow us to develop our company, to get to a point where we can act as majority contractors.
So small bid packages that could be developed so that you could do a portion of the work, and so two or three could do the work, you would bid on and get the same $5 for demolishing, and you wouldn't have to subcontract out. So you could meet the dollar amount and meet the figures; right?
Okay. Mr. Cruz, you said that the numbers are beginning to work now. Did you review the other bids that came in from the companies who were successful in obtaining the contracts? Have you reviewed those, their submission of their bids?
No; they just give the numbers. But the numbers were close enough -- like, in other words, our number was off by $2,000. So -- you know, to the other 547 RESOLUTION NO. 040095 - 3/29/04 contractor. So, that's pretty good.
But you do have an opportunity to review their submissions, don't you?
I guess you could. Under the Sunshine Act you could probably request it.
I think it would be helpful, then you could see what numbers they are putting in the bid package. It helps you as a businessperson understand how they are bidding on those projects.
Then it gives you some way to compare your numbers that you submitted and the numbers they submitted, and what they are doing in terms of the project and what you may or may not be doing.
Councilwoman, I just wanted to make a point on that. If they take out -- now, Ms. Smith took out the whole building and put packages -- or NTI, Hill, put small packages, if they did the same thing, say, for the 548 RESOLUTION NO. 040095 - 3/29/04 stucco, then Mr. Trotter could bid. If they put them out in two, that's $10,000, or $20,000. They could do that equally across the items that are actually being subcontracted to the disadvantaged firms.
So that the contractor bids on the whole package and subcontracts each thing. Where you are saying, if they put out stucco, they put out this, they put out that, then you would be able to bid on that entity, that portion of the contract?
Yes. And we have existing regulations that have certain exemptions for a certain dollar level. So we could capitalize on what this Council has already put in place, if we just got more cooperation and we were included in the process.
So let's just go back to bonding. So, then, just answer for me, what do you think would be a solution that this body or this city can do to help you with your 549 RESOLUTION NO. 040095 - 3/29/04 bonding issue?
Currently, Councilwoman, the city has a services bid bond program. You pay a percentage, and the city will bond your jobs, I think, up to a half million dollars. I don't know what the exact number is. And you might pay like $100 for a year of that bonding under services contracts. I think that we should look into doing something like that for these bonds. Because, at the end of the day, if you don't perform the job, you are not going to get paid. So that's the guarantee right there. The bid bond is only a second insurance, let's say; that if something down the road comes up, maybe go back on your bond. But, basically, if we have the inspectors, which there is several of them, you have the city inspector, you have an NTI inspector, you have your own staff that you are supposed to have there as your inspector, so the bases are basically covered. And if you have your insurance policy in place, I don't -- I think it is 550 RESOLUTION NO. 040095 - 3/29/04 undermining to have the bonds in these particular projects, at least for NTI's, because your bases are covered with your fee. We don't get paid until the job is done. There is your guarantee right there. If we are not getting the job done, we are not going to get paid.
But who picks up the cost of doing the job? So the money is still there to complete the job, if someone else needs to --
Yes. But that's why you are prequalified. So you do have a track record, you do have a record. Because one of the things that affects us from participating out in the market is being able to get bonds. So, basically, we are always begging from scraps from majority contractors or general contractors or owners to be able to do their projects. But in this aspect, if you qualify, your prequalification, then you are an established contractor. You don't want to 551 RESOLUTION NO. 040095 - 3/29/04 fizzle out and destroy it because the city is giving you an opportunity to be able to go out there and participate. Like my colleague, that's what impedes him from being able to go out there and get these jobs, is because he can't get the bonding himself.
Is there a fee for the bonds? It is like an insurance cost; right?
It is not the cost of the bonding; it is getting the surety companies to feel that you are capable or competent enough to be able to be given the bond. It is not like an insurance bond, where you just go pay your premium. Basically, you have to have enough assets. And they want to see liquid assets. They want to be able to go in and for you to have at least 20 to 50 thousand dollars, where they can just go to your bank and just grab it. 552 RESOLUTION NO. 040095 - 3/29/04
You never get to that point because you are never able to generate any profit to have that cushion for you to continue on doing the business.
But, also, a bonding company is not going to give you a million dollar bond, and all you have done for ten years is put doors on and fix kitchen sinks. Do you see what I am saying? So you are pretty much in a vicious cycle. You are limited to your development and expansion.
I guess the question -- and I asked you all those questions --
What is the answer? Because it has been a systemic issue for the last -- forever.
I think Ms. Smith 553 RESOLUTION NO. 040095 - 3/29/04 wants to acknowledge that.
In fact, this afternoon at 4 o'clock I actually have a meeting scheduled with the City Solicitor, the Procurement Commissioner and our Risk Manager. As I stated last week on the issue of the performance bond, for the small bid packages, the law department has been working with the Procurement Commissioner, who under the Charter has to establish, you know, performance bond requirements for the city, to look at a variety of ways of how we can address this issue. Is it feasible to use the program that's applicable to the purchase of goods and services, like tissue paper or something? Some people say there is a greater risk in demolition activity, so using the master surety program for the purchase of goods and services may not be as good. But I raised the very same questions when I asked for an opinion. I said, let's look at how we are operating the small bid package program; the 554 RESOLUTION NO. 040095 - 3/29/04 fact that, if for some reason the contractor is unable to complete the job, the way we structured the small bid -- the NTI targeted program is that the majority of the monies are held until the building is actually done. So that actually kind of limits your risk. And then the rest is paid when you finish the stucco work. And that way we get accountability. Because a lot of times if you pay on a monthly basis, they may walk before or not finish it or not -- what usually doesn't happen is that people don't do it, it is just that they take a long time to do it. They don't feel incentivized. So I just wanted to state this. I mean, these are conversations that I know contractors, small businesses, have been having. And, you know, we have been hearing it, you know, often. It is working between all of the legal opinions and risk management and procurement to get an issue. But I have put this very question forward. 555 RESOLUTION NO. 040095 - 3/29/04 Again, I think another thing that we have done is, I think the small bid package initiative -- which actually the concept was put forward, I am almost afraid to say it, but we have gotten beaten up by the Chamber for not putting out more small bid packages. So we have gotten that piece, I think, off the ground. Finally, I asked not to put out anymore -- we put out, I guess, maybe the last three weeks, I said, don't put anymore in case we come up with a different program.
Ms. Smith, may I make a suggestion, please? We have had people waiting here since 10 o'clock this morning to testify on this bill. We have people waiting to testify on another hearing that was scheduled at o'clock. You indicated that at o'clock today you are meeting with the City Solicitor's office.
Fine. May I offer 556 RESOLUTION NO. 040095 - 3/29/04 a suggestion? Before the end of the week, I think you should meet with the gentlemen seated at the table here. And whatever conclusion you have reached with the City Solicitor, that the gentlemen be informed so that they will know what right they have and when they can actually start this process going. As I said, I am going to have to suggest that we conclude this, because it is really getting late. It is a very important and very interesting issue, and something that we are all concerned about. But, as I said, there have been people waiting since 10 o'clock. And, Ms. Smith, I want you to put in writing the conclusion of your meeting with the gentlemen so that we are all informed. And, hopefully, next year this time we are not going to be sitting here asking the same questions.
Within the next few weeks we will be in '05. You are 557 RESOLUTION NO. 040095 - 3/29/04 absolutely right. Thank you, gentlemen. Our next witness -- I am sorry, gentlemen, just one more minute, please. Councilman Ramos.
I have been here a very short time in City Council. And for the exception, maybe, of the Public Safety Committee, this issue of minority participation comes up in every committee meeting. And every time it comes up, it goes on and on and on for all the obvious reasons, at least from my vantage point, at least, for lack of participation by minority business community contractors, in particular to the concern that the Chairman of the Hispanic Chamber of Commerce made about money allotted. I assume you are talking about an allotment of money that's in the Mayor's budget has been presented to us. It is my understanding there will be a proportionate percentage shared with the Hispanic Chamber of Commerce. And if that is not so, I will take that up during the budget 558 RESOLUTION NO. 040095 - 3/29/04 hearing process.
And I would think in two months we will be considering Year '05. So, gentlemen, that will be your time to come back again and let us know how you have made out.
It will be in a couple of weeks. Now, I know we have other witnesses. And to be fair with everybody, we will give each witness five minutes to testify. Again, I would ask my colleagues to please be brief with your questions. Our next witnesses are The Panel for the Philadelphia Coalition of Affordable Housing, David Koppisch, Marie Blocker, Phyllis Gibbs, Veronica Howard.
Would you all approach the table, please. Good afternoon. Thank you for your patience. Please identify yourself for the 559 RESOLUTION NO. 040095 - 3/29/04 record and proceed with your testimony.
Good afternoon. My name is David Koppisch. Thank you for giving us the opportunity to speak. We will try to be as brief as possible. My name is David Koppisch, I work for the Women's Community Revitalization Project. In that capacity I serve as the coordinator for the Philadelphia Affordable Housing Coalition. The Coalition is comprised of 13 member and allied organizations from around 14 the city. All of us here are members of those 15 different organizations that make up the 16 Coalition. 17 I am here to remind us that 18 Philadelphia is experiencing a housing crisis, 19 a crisis that affects nearly one in four 20 Philadelphia households. This is a crisis that demands decisive action and it is a crisis that we can deal with and conquer starting today by rethinking the proposal to add million more 25 dollars to this year's NTI budget for 560 RESOLUTION NO. 040095 - 3/29/04 demolition, and instead invest some of that money to increase desperately needed construction and repair of affordable housing. Let me just say a word or two about this crisis. Every day hundreds and hundreds of voting tax-paying Philadelphians come to each of our organizations in dire need of affordable housing and housing assistance. These are people who are living in unthinkable conditions, conditions that no one in this room would probably tolerate. Last year we released a study called A Call to Action, which I am going to submit for the record. It is based on research conducted by Dennis Culhane and Amy Hillier of the University of Pennsylvania School of Social Work. It documents the systematic reduction of public resources dedicated to permanent affordable house for low-income persons over the past several decades and the resulting crisis of affordability, quality, and accessibility that now affects nearly a quarter of all Philadelphia households. 561 RESOLUTION NO. 040095 - 3/29/04 This study found that 130,000 Philadelphia households are living on incomes below 20,000 a year and can't afford their housing costs. It found that 60,000 Philadelphia households have major repair problems with their housing that they cannot afford to fix. The study revealed that 65,000 disabled Philadelphians are in need of accessible housing, that 31,000 Philadelphia households are living in overcrowded conditions. The study also found that the waiting time for the adaptive modification program can be five years long. It also found that the waiting time for the basic systems repair program could be as much as two years long. The waiting list for the Section 8 voucher program has more than 10,000 families on it, and the average waiting list for most CDC-run rental housing developments is about 300 families long. It also revealed that Philadelphia 562 RESOLUTION NO. 040095 - 3/29/04 lost nearly 12,000 public housing units since 1993 mostly due to demolition. And the study calculates that 60,000 new rental units of affordable housing are needed immediately to get us out of this crisis. This crisis demands a long-term strategy to increase resources for the production and repair of housing for very low-income Philadelphians. Let me be clear we are not anti-demolition. We understand the need to remove imminently dangerous buildings from our neighborhoods and we understand that in order to construct new, large-scale affordable housing, some demolition has to take place. But we have an immediate crisis of housing affordability, quality, and accessibility. This is a crisis that affects nearly a quarter of our city's residents. Therefore, we need to balance demolition investments with more construction and repair investment. With that said, we recommend to Council that you not transfer the full $25 563 RESOLUTION NO. 040095 - 3/29/04 million in NTI bond proceeds for more demolition activities this year.
Instead, we urge you to use some of this money to make increased investments in desperately needed affordable housing development financing, basic systems repair, adaptive modification, and homelessness prevention. Specifically, we urge you to earmark at least $15 million of remaining NTI demolition money to help create an affordable housing trust fund starting in Fiscal Year 2005. Seeding a trust fund with remaining NTI demolition dollars would be a long-term systematic strategy to deal with our housing crisis, a crisis that afflicts nearly one-quarter of our city's residents, a crisis that is tearing the fabric of neighborhoods across the city, a crisis that prevents us from becoming a world-class city. Thank you.
Madam President and to the Council, my name is Marie Blocker. I am a social worker at New Jerusalem, which 564 RESOLUTION NO. 040095 - 3/29/04 is a spiritual, non denominational drug and alcohol recovery program. We are located at 2011 West Norris Street, and we are also a member of the Philadelphia Affordable Housing. And while I am testifying on behalf of my clients, it is because that when they come into recovery, one of their main goals is obtaining housing, something that can belong to them, whether it is apartment housing or whatever. Because when they were in their addictions, they were living in abandoned buildings, and they were doing their crack, heroin, whatever they were doing. So a lot of them come in in recovery, is gaining back their self-esteem, learning to become an asset to the community instead of a liability. So there is a lot of things that they have to correct. Some of the women, their children are in the system, or DHS. And one of -- they are mandated to be in our program and also obtain the housing. So we deal with usually between 59 565 RESOLUTION NO. 040095 - 3/29/04 and 70 people that have come into our recovery program. And some of them have a year, two years clean time. But the problem they have is getting housing, low-income housing, something that they can afford. So that's why we are for using that money to build up some more low-income housing for them so that they can afford it. Because even some of the jobs that they get, they don't make that much, they don't make or 30 13 thousand dollars. So, therefore, they really 14 do need something that they can afford and be 15 proud of, and also live with their 16 self-respect. Thank you. 17
Good afternoon, 19 my name is Jovan Watson, and I am an advocate 20 for residential -- I am an advocate -- I am part of an advocacy program for WCRP, but I am also an advocate for women and children in a community that's not aware of what's going on. What I am asking is that some of the money that they are using for the NTI program 566 RESOLUTION NO. 040095 - 3/29/04 be put aside to build safe, affordable housing, safe, decent affordable housing. Because although we may see housing going up, a lot of people are not qualified for it. So although they are not qualified for the program -- they are not qualified for these houses. Lower-class people -- they move the middle class people into North Philadelphia, building these houses. And although they are moving them into the community, we are not qualifying for the houses. So we need organizations like WCRP, who is willing to house us and give us a chance to have decent, safe, affordable housing. WCRP also provides subsidy, they provide social services. When they house people in the community, they are not also providing social services. So these social services, along with helping people get housed, will benefit altogether. The lower-class resident that does not meet all the qualifications of these profit and nonprofit companies do not fit the 567 RESOLUTION NO. 040095 - 3/29/04 criteria of what they are asking for these housing units. So what we are asking is that people that don't qualify, that don't meet the income guidelines, that has bad credit, and has bad background, they are not qualifying for the houses, either. But WCRP is willing to give people a chance to have a place to live. Thank you.
Good afternoon, Madam President. My name is Veronica A. Howard. And what I am is a homeowner. I am a member of WCRP, who is affiliated with the Philadelphia Affordable Housing Coalition. From what I have heard here this afternoon and what I understand, it is actually more expensive to tear it down, a house, than it is to rebuild it. Since I live in what you call North Central, which is District 5, Councilman Clarke's district, I live in such a home. It's been cited as the Mayor's blight projects, one of those. 568 RESOLUTION NO. 040095 - 3/29/04 And right now we actually stand alone because we are the last of 1839 North 8th Street. We are the last house standing. I live right across the street from the Philadelphia Gas Works. I have been there since I was 4 years old. I won't tell you my true age, but it has been over 50-something years now. My family and I still live in this house. We call it a family home. And right now the Mayor's project, the NTI, has targeted for demolition. So rather than actually destroy the last of our kind, why don't you help us rebuild it so we can preserve some of the history. And I thank you very much. (Applause.)
Thank you. Thank you very much. MR. McPHERSON: The next panel is the 46th and Sansom Street Panel, Beverly Murphy, Denise Ripley, Lillian Ford, Theresa Ransom. 569 RESOLUTION NO. 040095 - 3/29/04
Again, I want to thank you all for being so patient. But by the same token, I am again going to please request that you try to be as brief as possible with your testimony. Thank you. Good afternoon. Kindly identify yourself for the record and proceed with your testimony.
Good afternoon. My name is Theresa Ransom, and I live in the 4600 block of Sansom Street. I have been living on Sansom Street since 1968. At the time it was a lovely, lovely area, it really was. And I have been there all this time. Now -- and I have worked hard all my life, I really have. So I finally was able to buy this property in 1989, paid cash for it, for the reason that, where I was working, they gave us a lot of money because they were leaving the area, in department stores. So now last year I find out that they are going to make the block the most gorgeous place in the world, this is what they 570 RESOLUTION NO. 040095 - 3/29/04 are telling us. So they are going to tear -- in order to do that, they have to tear the block down. And now I understand they are not only going to do from 46th, but they are going to do from Chestnut all the way to Walnut. Now the problem is, I can understand with the progress and the area and getting into Center City and the University, and all that, I can understand that. But what I cannot understand is, after you buy your house, you have paid for it, I am 71, you are going to be there for the rest of your life, and then they are coming along with a project of making it a livelier area, and you are going to have to move. I don't have any money, I really don't. Over there in that area the houses are ideal. They are big, they are beautiful. Not a lot steps, all on one floor. Ideal for when you get older. Well, I am not going to have it much longer because it seems like they are taking it. 571 RESOLUTION NO. 040095 - 3/29/04 But now my point is this: And I understand it is a done deal, they are going to take it. But my problem is this, which I would like to know, is: Since they are going to take a duplex, they asked me how many bedrooms we have. We have five bedrooms, two on the first floor, three on the second, they are going to take that. Lovely area, really is nice. Has changed because people moving in, couldn't pay their bills, set fires. So, therefore, the area that I am in is really, really fairly bad. The block next, which is to 47th, is still nice. But now the block that I am in is terrible. All I want to know is -- and I know where I want to go once they want to take this place. And I don't want a senior citizen place, I really don't. Where I want to go is over on Lindbergh Boulevard, 70th, between 70th and 71st. Since they are taking a duplex, they are taking it, then I would like to have a duplex put back. I would like to have a 572 RESOLUTION NO. 040095 - 3/29/04 duplex over at 70th and Lindbergh.
I don't think you want to go to 70th and Lindbergh. Isn't that where they had the --
Here's my point. They asked me when I came around about a mortgage. I said, I don't have a mortgage. I am 71. Like I said, I am not working; I am living on Social Security. And I understand that Social Security is getting ready to go in the Year 2047. Medicare is going to go three years before that. So, therefore, you have no money to pay for something, to take a mortgage. So my point is, they are going to take this area, they will take the property, 573 RESOLUTION NO. 040095 - 3/29/04 houses. So how much money are we going to get to move or to buy something else? See, because you can't pay it back. Thank you.
Thank you. That's something that I can't answer. Somebody from the Redevelopment Authority would have to answer that, unless the Councilwoman has some knowledge. But that's not what we are considering today. I think that in a couple of weeks we will be getting -- actually, by this week we should be getting the NTI for FY '05. So, Councilwoman Blackwell.
I wish. I have been saying since the year started that we wanted to be ready for NTI, but obviously I haven't received any information. I did want to make a statement a little later that included Sansom Street, right before we recess, with regard to my amendment. But we have been talking about 44th, 45th, and 46th and Sansom Streets for quite 574 RESOLUTION NO. 040095 - 3/29/04 some time. And, in fact, as recently as Friday, because there is a plan for 4 properties, neither one half of the block, and 5 not the other. 6 And as you know, Madam President, 7 you can't plan for half an area, because the 8 other half is going to fall down. 9 So I commend all of these 10 individuals, Ms. Murphy and all the others, 11 for coming here today. It is a serious issue. We work on this issue every day. And they really deserve special consideration under this NTI agenda. We have had them on our list from the very, very beginning. And it looks like just when we think we have a developer and we think we have a process in place, somebody comes and it doesn't happen. But we are committed that before we will approve this CDBG NTI budget, that we are going to have a sound program for Sansom Street. Hold me to it, and I am going to hold the Administration to it. Thank you. 575 RESOLUTION NO. 040095 - 3/29/04
And I would just call to the attention of the Administration that the ordinance that we passed does say that at least 90 days before the beginning of each Fiscal Year the Mayor or his appointed designee shall send to each member of Council a preliminary annual program statement and budget in the same detail that will be contained in the final annual program statement and budget for which the Mayor will request approval from Council. So I believe that Wednesday will be 90 days, and hopefully we will be getting that this week. So I think, ladies, I know you have been very, very patient. So when that bill 18 comes up for a Public Hearing, I think that's the time that you should certainly be making your feelings known.
Council President, are you saying we should come back on Wednesday?
No. We should be getting the information from the Administration no later than Wednesday, 90 576 RESOLUTION NO. 040095 - 3/29/04 days before the end of the Fiscal Year. But there will be Public Hearings scheduled on that ordinance that will be introduced. And I would think that in the next month and a half we should be having hearings on that program. And I think that's when you should certainly be making your voices heard. Today we are considering the demolition issue. Please identify yourself for the record.
My name is Beverly Murphy. With the demolition, two things happen. One, you devalue the property, the existing properties, by creating vacant lots -- and I got this from a developer from South Philly that I worked with -- and the fear factor. Because when you live in a house, and two houses that are adjacent to your house are torn down, you get scared. You know, you think your house is going to fall. Maybe it will or won't, don't matter, you think it 577 RESOLUTION NO. 040095 - 3/29/04 does. So if you are fearful, then -- and we are fearful that either it is going to fall or the drug addicts will go in there and take up residence or start fires or anything. So is it possible to stall the continuing demolition until something else has happened, until we are given -- some sort of settlement is made with us to start to move us out of the area before they continue to demolish it?
Part of the issue is that -- they want to hold up demolition; is that what you are asking?
Well, it is absolutely possible. Because before we can continue, we have some relocation issues that we have been trying to get the city, you understand, Madam President, to pay for relocation. And that's an issue. 578 RESOLUTION NO. 040095 - 3/29/04 So we are stuck anyway. We are worried about these houses falling in, and the city hasn't made a commitment to us that they are going to pay relocation fees. So it is stalled anyway, Ms. Murphy. So nothing will happen. And we will make sure that we call you directly. Thank you all, all of you.
My name is Denise Ripley. I am from North Philadelphia, and I am a community leader in that section 15 since I was born 1957. So I have seen the deterioration in the community. I would like to read the Fifth Amendment. Nor be deprived of life, liberty, property without due process of law, nor shall property be taken for public use without just compensation. And I feel that the people in North Philadelphia are being taken without justice. We are not being able to have justice in our community. Because we have people who have 579 RESOLUTION NO. 040095 - 3/29/04 lived there over 30, 80 years, and still living, but now they are about to lose their home. We know we are about to. We have to vacate the community because it is becoming slow death every day, not knowing when they going to get on this side of our street. We just see houses torn down every day. You know, to live in a community where you have put your life in, you know, your everything. Myself being always involved in trying to make a difference in the community I live in, even though I see it falling apart. You know, having the opportunity to move from out of the city, but continue to just stay in the city, in the area where I live at, to try to make it better. And this organizing with the seniors that live there, to make sure that they get properly housed and relocated. And not knowing, you know, what to tell them. Because they always asking me questions because they know that I be involved with certain things, 580 RESOLUTION NO. 040095 - 3/29/04 you know. And some of them, they write letters, you know, and they don't get response back about their houses. And the basic repair program, like you said, it could take five years, you know, in that process. But I grew up in North Philadelphia, and I seen the deterioration of the community. I seen it when it was a good community and I seen the houses fall in. And they were being reported, they would be tore down. And it could take five or three, you know, a lot of years. Because I took pictures down to my Councilperson's office, which is the Fifth Council District. And then they told me to go to NTI. And I just ran around and ran around and nothing seemed to be done. It was just like the neighborhood, the study, is still crumbling. And I know other people are going through the same thing. I would like to read a letter. Because I called some seniors together. And 581 RESOLUTION NO. 040095 - 3/29/04 one of the seniors that came to my meeting, he explained to me, the appraiser came to his house, him and his wife they are in their 70s, and was told that he would get $3,000 for a house that him and his wife lived in for 30 years, and that that could help them get into like a senior citizen home. And at the meeting, we was telling everybody, don't sign anything, you know, just make sure -- you know, don't sign anything. Let's wait and see this process out. So I also have a letter from Mr. Sweeney, and I would like to read it. And this is what it says. The letter is addressed to Mr. Herbert E. Wetzel. "My name is Mr. Sweeney Brown, Junior. I have a house at 2702 West Susquehanna Avenue. This house was forced from me by what the Redevelopment Authority calls imminent domain. "In November 2003 I signed a paper that for the Redevelopment Authority to get the house for 3500. And any lien or taxes would be taken out of this 3500, leaving me with a mere $1500. 582 RESOLUTION NO. 040095 - 3/29/04 "The appraisal by your appraisal estimated that my house was a shell, which I never agreed with my house being a shell. I would like to have a second appraisal. I don't think you can buy any house at any condition for $1500 and anywhere. "I was not represented by anyone and I don't know real estate law. I feel that I was taken advantage of. If the Redevelopment Authority has sent me a letter of ineligibility for relocation, they should at least pay my fair market value for my home, and I am not happy with this. Mr.
Sweeney Brown, Junior," and he gives his address and stuff. But what I am saying is, this is what is happening all over the community. It is a sad thing to be in the community where you have had your whole life, your roots, you know, everything, your whole life, and it is just being taken away. You don't know when they are going to tear your house down. Or they might just take it here, like they are taking Mr. Sweeney 583 RESOLUTION NO. 040095 - 3/29/04 Brown's house. And we just want this NTI to really look at what they are doing, Council to see what they are doing to people in their homes. Because myself, you know, I have been committed to a lot of things in this city. But if they take my house, I am leaving the city. And I know a lot of other people have already left the city. And we shouldn't be forced out like that because we low income and we working hard. You know, families, we shouldn't be forced out of our home and our community and told that we could come back. You won't have no 40,000 or 50,000 dollars to come back into a community where you have to pay $250,000 for a home. So I think you should really look into what NTI is doing to families in North Philadelphia and around the surrounding city. Thank you.
Thank you very much. (Applause.) 584 RESOLUTION NO. 040095 - 3/29/04
A couple of quick questions. Good afternoon. Do you know Mr. Brown, Sweeney Brown?
No; I am just speaking on behalf of him. I told you, I am a community leader, so I read the letter.
Do you know if he lived in that house that he referenced?
The point is that the man is losing his house. I mean, I'm not -- because I read his letter, because it is a lot of other people case. I live in a house that is going to be tore down. 585 RESOLUTION NO. 040095 - 3/29/04
I think the Councilman is asking a question. Just answer the question, please.
Because I know Mr. Brown. I know the house. And I know Mr. Brown did not live in that house. So why -- the testimony with respect to his letter --
Well, he did own it at the time of the settlement. But I just want to note for the record that he did not live in the house. And we assisted him in getting his name on the deed so he would be compensated. But there are some questions around the house, for the record. I don't want people leaving here thinking that he was relocated, because he was not relocated, because he did not live in the house. He lives in Germantown. So, just for the record. You referenced him specifically. 586 RESOLUTION NO. 040095 - 3/29/04
In reference to the record, I came to your office about Mr. Green, which lives on the 2100 block of Jefferson Street. And he did get a letter for his house for $3,000. That's for the record. And I asked you could you form a committee together for us in reference to negotiate for us pro bono. And I never heard from you back in regards to that situation. You said you would.
I did at the time, and I don't know if there was a pro bono lawyer provided for you.
I recall the instance, and we had the hearing. And I asked Mr. Wetzel to provide assistance.
Thank you for telling me that. But I have kept abreast, 587 RESOLUTION NO. 040095 - 3/29/04 actually, from one of my good friends in the audience about some issues associated with that. And I agree with you that although the appraised value may come back as a particular number, that is truly not enough for that person to reasonably relocate in a comparable position. And I have instructed the Redevelopment Authority to not attempt to relocate anybody.
His house has already been boarded up. I don't know where they are at. And I looked around. Behind my house was a senior citizen had been there for 30 years. And I went to a birthday party for my friend's mother at a convalescent home. And there she was, my neighbor behind me, in the convalescent home for the last two years. There is nothing wrong with her. She says that her people from her church picks her up every Sunday to go to church. And she asks me what's going on in the community, would you please come and see 588 RESOLUTION NO. 040095 - 3/29/04 me. I don't want to see that happen to a lot of other seniors. If they are not ready to go into a senior citizen home, they shouldn't be forced to.
I agree with you. Okay. I just wanted to clear that up for the record about Mr. Brown. Because I know of him, and he came in the office and we talked about the issue. And he actually thanked me for helping him. And we are looking for a property so he could vacate the property based on what he initially wanted to do with the Susquehanna Avenue property. And I have been told by the city that we will get a property for him so he can continue the renovation in that particular community.
What are you doing on our behalf as far as helping us with legal negotiation and reference to our properties that we own? I actually have been in my house for 589 RESOLUTION NO. 040095 - 3/29/04 like 37 years, because it was a family-owned property. And I chose to stay in Philadelphia, which I had opportunity to leave and go to Florida, but I was committed to the community, you know, and helping the people that's there, you know, with information that they might not be readily available to them. I didn't stay just because I could make more money or, you know, it is a pretty city. I stayed because I was committed to the area and the people. You know what I am saying? But it seems like people are not being committed to what they say they are committed to as far as, you know, the people's agenda, we are going to try to do this. It is not happening. Do you know what I am saying? So I would like to see you, as our Councilperson for the Fifth District, try to help us get legal negotiation with a pro bono lawyer, whatever it may take, so we can get treated fairly with our homes, you know. And if we able to come back, so be it. If not, then people just not be 590 RESOLUTION NO. 040095 - 3/29/04 displaced, it is not fair.
That's more than a reasonable question, and I will follow through.
Thank you very much. We appreciate your attendance and patience. Our next witness is Anthony Fullard. Good afternoon, are you Anthony Fullard.
Please identify yourself for the record and proceed with your testimony.
I am Anthony Fullard from the African-American Chamber of Commerce. My title is Director of Economic Development.
Okay. Madam President and City Council members, it just saddens me to hear that I have to come before this Council to defend what we associate as a 591 RESOLUTION NO. 040095 - 3/29/04 successful program that has been opened up to every minority in this city. And each Council leader here should know that, because we came personally to your office. I have had a meeting with you, Madam President.
And I laid out everything that we were trying to do when we first got started back in, I believe that was, May of last year, of 2003. So we sat down with each Councilperson of what the program was about and what our intentions were to ensure that we had more minority contractors to be involved into the NTI program. And I believe that since that time, we went hard to work to ensure that we took off -- all of the excuses off of the table. Those excuses or those impediments were, as you heard, was bonding, was financing, and also understanding of the specifications and how the NTI program was administered. Also we -- I want to correct one 592 RESOLUTION NO. 040095 - 3/29/04 thing. The Emerging Contractors Program was specifically designed to bring more prime contractors to the table, not subcontractors. Even though, for whatever reason, if you could not move into that prime status, we did not leave anybody at bay. But we said, well, you can work as a subcontract status with one of the primes that did graduate, and but only at a short time, because we wanted to see all of our minority contractors at a prime status. And that's what the ultimate goal is for. But at the same time, because of the specifications and how NTI is designed, that you have to have some type of training of their policy, and how this work that is there for you to bid on, how all that worked. What is expected of you as a prime contractor, what about your submittals, what about your insurance. All of those things are there. So that we had a fast-track. Because we didn't want to have no 24 long, drawn-out training program. We didn't haven't to have no four-year training program, 593 RESOLUTION NO. 040095 - 3/29/04 as you will get with the unions. We wanted a fast-track training program so that those contractors that are in those communities could go through this training program, get the understanding, also receive bonding, also receive funding. Because I didn't hear anyone mention that we also have the eight largest banks to the table that was there to provide. We also brought PIDC to the table to provide start-up loans. Okay? Because you can go through the training. But, Madam President, if you don't have the right financing, if you don't have the right money to implement your work, it doesn't matter how many bids that you win, you still have to pay your men.
Mr. Fullard, if I recall correctly, wasn't that a four-month training period?
No; it is an eight-week training period, two month. Then we actually run our contractors through a field training, which you actually 594 RESOLUTION NO. 040095 - 3/29/04 bid on a house and you go through the whole process. And you will win a house, you have to go through a procurement process where you would bid. And you go through the whole practice that you would do as if you were in the procurement process with the city. Okay? We mimic that whole action to ensure that those companies know that whole practice, that procurement practice. And that procedure, process. So when we developed that, and we had an eight-week training course. And this is available, as I said, for all minority contractors. We contacted the Hispanic Chamber of Commerce, Asian Chamber of Commerce, the African-American Chamber of Commerce, of course, and all the CDC groups, all of the grass-roots groups. Now, Madam President, I am not just sitting here pulling this thing down. We submitted a full-blown report. Because this is funded by the city. 595 RESOLUTION NO. 040095 - 3/29/04 And there is a contract that we are -- that we have to abide by what those rules are in that contract. And we submitted a full report to Pat Smith, the Director of NTI, the Commerce Department, and also to Joyce Wilkerson our chief of staff. So we submitted a full report of every single thing we did.
I don't mean to interrupt you, but how many graduates have you had since --
It is in our report, Madam President, we had 31 graduates. We had bondable contractors that we could begin to 16 put out on any procurement process to bid on 17 bonding programs. 18 But the only issue that was there, 19 and as Mrs. Spencer said, it was how those bid 20 packages was packaged. And, so, we went to 21 the city and said, "Listen, we need you to make these bid packages smaller so that these new prime contractors could bid on smaller packages, such as three-house packages, four-house packages, seven house. 596 RESOLUTION NO. 040095 - 3/29/04
And that would be for every phase of the demolition, the removal of the asbestos --
Madam President, small packages include all of those disciplines. That is a prime package. Once you are awarded a prime package, you are responsible for the removal of the asbestos. As a prime contractor you are responsible for the stucco, you are responsible for the seeding. You know, you are responsible as a prime contractor for every aspect of that bid package. Okay? So for someone to come before this Council and say that they were not included, they did not have the opportunity, is a lie. Because we went out and we submitted information to everyone in the whole City of Philadelphia as far as our outreach. We also documented it and we said who we have contact with. We all -- and we also list everyone that comes through our door. And we write their names down, which companies they are from, so that we have a 597 RESOLUTION NO. 040095 - 3/29/04 documentation of who comes to the door. Now, as far as the roundtable, we have minutes. Because at that time I was the Chairman of the roundtable. And we do and provide and we take minutes of every meeting. NTI is a part of the agenda on all of our meetings. So we have minutes of everything that goes on in those meetings, what the dialogue was, and what we spoke about. And all those things are all written down, and we have minutes that we can provide to you letting you know that every person that was at this podium here got all of the information, they had all opportunity to bid or to participate in this program.
Thank you, Mr. Fullard. I believe Councilwoman Tasco has had her light on. Do you want to be recognized?
Oh, yes. Out of the 21 graduates, how many are doing work or got contracts in the NTI program? 598 RESOLUTION NO. 040095 - 3/29/04
Right now we have approximately contractors out there right 4 now finishing up their work now. And they are 5 in the process of -- and they will be bidding 6 on another 35-house package. 7
Were the small 8 packages put together for them to bid on? 9
So when the 15 program was designed, were the gentlemen sitting here at this table today, would they have qualified to be a part of the program?
They would have qualified if there is -- Councilwoman, they would have qualified if they would have came in and went through the process of filling out the right paperwork, they would all have qualified.
So was your program for small businesses who wanted to go 599 RESOLUTION NO. 040095 - 3/29/04 to prime? Had these people been in business before, were they experienced businesspeople?
Any business. We have contractors that were -- they had electrical business, carpentry business, stucco business, masonry business. And those that wanted to go through their program to diversify their companies and do something else, as well, because of the lack of work that, you know, that they was doing with the city, this was an opportune time for them to understand the city process and also to begin to do demolition work. We have an electrical company, NCNE Electric, that is one of our prime contractors. So to answer your question, right now we have about 15 contractors right now bidding as prime contractors. We have one of our contractors that bid in the normal process and did a joint venture. His company named is RPM. And he won an 80-house package. Which, to answer Councilman Rizzo's question is, because the issue was, there was 600 RESOLUTION NO. 040095 - 3/29/04 a time that NTI was trying to get more prime contractors to the table. But once we graduate these contractors for them, we was able to have, I think, about seven contractors bidded on this particular contract. And automatically it drove the unit cost down. And the city saved $500,000. This is documentation. This isn't something we are making up. Go look at the bidding process. This is all public information.
Because of more people bidded on that project. Before you just had only, like, two or three contractors bidding. So the whole sense of it is, if you get more contractors in the process, but they have to make the -- but they have to go through whatever is there for you to get process into the system. Even if they don't want to come 601 RESOLUTION NO. 040095 - 3/29/04 through us, they still have to go to the city, they still have to fill out a questionnaire form, qualification form. So even if you, you know, for whatever reason, and if you don't think that you have to go through that training, then either the city has small packages, you can bid as a prime any time that you want.
The Chair recognizes Councilman Rizzo for a point of information.
Sir, so I understand it correctly, could you please restate what you said, how competition -- I want to make sure I understand exactly what you said. So can you just say it one more time. I would appreciate it.
What I said, Councilman, is that we had an example that there was -- that the NTI had a problem of getting more primes to bid on their packages. Okay? 602 RESOLUTION NO. 040095 - 3/29/04 Once we was able to graduate our prime contractors, and then when they had the opportunity to get into the process of bidding, there was a package that was out to bid, it was an 80-house package, and I think it was about two months ago, maybe. And one of our graduates joint ventured with one of the majority firms. But not only that, there was approximately, I think, four other of our graduates also bidded on this package. So now you have, instead of two or three people bidding, you have seven people submitting bids on the same package, which makes it more competitive.
Let me just interrupt you for a second. So you were suggesting when there were just a few, there was control over the price.
Once it got expanded, how much money did the city save?
Plus, they saved, once NTI was able to get more people bidding on this. And they are working to do just that, to get more people to bid.
And would you agree with me that the process itself could be done differently? If you had more work, you would be able to buy the scissor lifts, or rent the scissor lifts, you would be able to do maybe some things to make it faster for you, where you could make a few extra bucks by expressing the process?
You can't do stucco on a scissor lift. Number one, you would be going outside the specifications that have been lined out. But you want to have your whole wall already laid so that you can do the whole wall. You don't want to do a section of the wall, come down, and then move. It is too many steps. So you want to try to knock out that wall in one step. So you put your scaffold up, so that 604 RESOLUTION NO. 040095 - 3/29/04 way you can do the whole wall. But I don't want to get into the mechanics of that because each contractor has his way of how he makes his money in a proficient way. But then you can't go outside a specification that has been laid out. We are working within the specs. Now, if you could come in and we could change the specifications --
I want to ask you the same question I asked someone else. Do you think --
I forgot I was on a point of information. I apologize. Get me on the next round.
In term of a bonding, are your contractors able to get the bonding that's required for these positions?
That is, that 605 RESOLUTION NO. 040095 - 3/29/04 we discussed earlier?
Yes. Yes, they are. But Councilwoman, there is a process. The bonding company has a criteria. And we have a bonding expert right here, this is all he does, this is why we brought him to the team, and also does all the training. Is that no matter how much that we want a company to be bonded, there are still steps that any bonding company has for you to go through and certain things that they want to see. And that's what the center does, is to work with each contractor to ensure that they have met those steps. So once they submit their bonding application, we want to make sure that they do not get turned down. Okay? So if you don't go and do what you have to do, whatever it is, whatever you have to find out, whether the issue is finance, whether the issue is tax returns, whether the issue is you have to show that you have a certain amount of money in the bank, whatever that criteria is, we have to follow that and 606 RESOLUTION NO. 040095 - 3/29/04 then find a way of how we get that done for that contractor. It is not that easy, where you come in and sit down, "I want a bond." They have a criteria. There are steps that you have to take. And this is what we do every single day to ensure that we work with those contractors to ensure that we take every step. And then, also, that they understand those steps and they understand how you obtain a bond. It isn't just that they come in there and we say, okay, give me some information, then we go into some kind of back room and we perform --
Mr. Fullard, I think your responses are going to have to be a little more concise. Because we have had people waiting for quite some time. Some people have been here since 10 o'clock. So I would ask you to please be a little more concise with your responses. Thank you. Councilwoman, are you finished with your questions? 607 RESOLUTION NO. 040095 - 3/29/04
Thank you, Madam Chair. Mr. Fullard, this is the first time I have heard of the need for more prime contractors. I thought the problem that we were working on was to increase the number of minority subcontractors. You have outlined a very carefully, step-by-step approach to helping a contractor. My problem with you is, why isn't that attention given to the creation of minority subcontracts? Because it would seem to me that that's usually the first step for a new business. Before they can become a prime contractor, they would have to be a subcontractor. Doesn't being a prime contractor involve the business being strong enough to have a substantial sum of money available?
That's right. And 608 RESOLUTION NO. 040095 - 3/29/04 that's why we --
And a new group of people, two or three people, getting together in the neighborhood and saying, we are tired of working for somebody else, we ought to, between the three of us, have enough ability to, you know, get together as a contractor? How would that work? Is there anybody doing your kind of work but on behalf of subcontractors? How would it work? Suppose three men in the community or three women came to you or two of one and one of the other came to you and said, "We have been talking about it. We have had a lot of experience. We have done some work. We don't have much money because we never got paid a decent pay. But we would like to accept the responsibility, it sounds like a good program. What do we do?" Now, is there anybody that could advise them step by step, as you indicated, the care and attention you give to the development of a prime contractor? 609 RESOLUTION NO. 040095 - 3/29/04 You are the first person I have heard testify in a way that gave me the slightest bit of confidence that the City of Philadelphia knew what it was doing. Because it seems to me whether it is prime or a sub, he doesn't know anything about the field or she doesn't know anything about the field. Somebody has got to help them understand all of the problems. And you seem to have an approach to deal with the problems and make sure that people understand it fully.
Now, why do you limit yourself to the development of primes, instead of subcontractors? Because wouldn't you do better if you started out with the modest goal of helping people in the community uplift themselves by getting them involved as entrepreneurs, as being a subcontractor, rather than being merely a worker?
Do you want me to respond to that? 610 RESOLUTION NO. 040095 - 3/29/04
As I said before, it is that a lot of our contractors come to us in a sub state. But the goal of the program is to move them into a prime status. Because you don't want to marginalize contractors to just a sub status. Okay? Now, we have been successful because, as I said, we have a training and we go through specifics, estimating, management, all the things that you would need to know of how to get to a prime status. Now it is up to the --
Excuse me for interrupting, but wouldn't a subcontractor have to know how to estimate?
Does he know how to estimate in the right manner? Prime example, we have an example, we have a carpentry company that was in 611 RESOLUTION NO. 040095 - 3/29/04 business for years. And he came to us and said that, you know, if I could get some help with estimating my projects, I think that I can do better. Okay? He went through this program. And this gentleman now is doing more work than he ever has done since he has been in business for years. He is one of our 10 best contractors out there. He is one of our 11 best carpentry companies out there bidding at 12 some -- and some work he still bids as a sub 13 because he has a specialty which is carpentry. 14 And sometimes that doesn't fall under a prime 15 status. 16 But, also, he can now bid as a prime 17 contractor as it relates to when he wants to 18 bid on demolition work as well, because he 19 knows how to bid and he knows how to estimate 20 that work now.
Well, is there any such program as the one you described that you are in charge of that relates to subcontractors?
It relates to all 612 RESOLUTION NO. 040095 - 3/29/04 contractors. It doesn't only relate to only subcontractors. Subcontracting is just that it is just another level of contracting where you don't have a direct bid to the owner. Okay? And then you don't -- and then you are not in charge of the whole project. Okay? So once you get the opportunity -- because minority contractors really never had the opportunity to bid as a prime contractor, but now they have the opportunity. They have the support that can lend them technical support for them to bid as a prime contractor. And we have some really excellent prime contractors now that is doing great work. And we have the information to back it up. Because at the end of the day, you want to know are you making money, have you been successful.
Yes, go ahead, Councilman. 613 RESOLUTION NO. 040095 - 3/29/04
Thank you, Madam President. Very briefly. To answer Councilman Cohen's question partially, Greater Philadelphia Urban Affairs Coalition also runs a minority contractors program. That's not the only minority contractors program in town.
It wasn't a question; it was a point of information, sir.
I was letting you know there is another minority contractors program in town that does train subcontractors, as well.
Because I have been looking for some program when I raised the question with Ms. Smith and Mr. -- I can never pronounce his name -- Solvibile. I got 614 RESOLUTION NO. 040095 - 3/29/04 the impression that minority contractors have to come to Delaware Valley African-American Chamber of Commerce. Is that your program?
And I got no 9 feeling that anybody in that program was concerned about the specific needs of a small-venture subcontractor.
We are interested in both, and every aspect of their growth, of their companies, but also to sustain them financially. We also gives out line of credit. We also do start-up moneys for these companies, too. You can also get insurance right there on the spot, you know. You can -- you know, if you have the paperwork, if you have provided enough information about your sub status, then we can 615 RESOLUTION NO. 040095 - 3/29/04 really look at your company and see where you can grow and how you can get to a prime status. Now, we also have some contractors that specialize in subcontract work, as far as it relates to stucco, as far as it relates to asbestos removal, as well. And they come into that program to do just that.
Suppose you have this situation, it seems to me this would be the most common one: A new group has started as a subcontractor. They would deal with the prime, a sub would be under a prime at some point, he would enter a new contractual relationship, and the city might have something to do with it, too. But say the sub has a problem, he has had no experience in having problems. He has got this prime contractor who might be a big outfit and the City of Philadelphia, which is pretty big, and they tell him you have got a problem here; who does he go to to get help from the problem?
He comes to see us, 616 RESOLUTION NO. 040095 - 3/29/04 and we can help him out.
All right. And that includes -- because sometimes both the Council and the Mayor's Office both claim to have representatives interested in the development, and they are both moderate goals, in the development of subcontractors. They would welcome the natural order of things, to have a progression up to prime contractors.
That's the business. That's the business owners' discretion, if he wants to do subcontract work or if he wants to move up to a prime level. But we want avenues to be open for him to make that decision.
In the beginning I think it starts simply on a subcontract. You mean somebody jumps in cold and becomes a prime contractor?
Let's take an easier case, where they are ready to become a subcontractor. 617 RESOLUTION NO. 040095 - 3/29/04 They can go to your group and get advice? They can go to your group and say, look, I didn't know what I was getting into, maybe, or maybe I did, but I now have this big contractor on my neck and the City of Philadelphia; what do I do?
We are not going to give them advice. We are going to do more than just give them advice. We want to do whatever his impediment, whatever his issue is, we want to take care of that specifically at his request. If he needs money, if he needs bonding, if he got a city contract, we can get him money. We can get him insurance. We can get him bonding. If he needs help with the estimate, if he doesn't understand the specification, if he has submitted a bid to this prime contractor and he feel as though he has made a mistake, we will look at that and we will go through his bid for him to understand and for us to understand what those issues are. We do more than just advice, because 618 RESOLUTION NO. 040095 - 3/29/04 we have been giving advice for over 30 years.
He would contact the Emerging Contractors Center at 1415 North Broad, at Broad and Mascher. He would come in there, he would fill out his information, and there is someone right there on the spot that will assist him that day.
All right. Very good. Very good. We are going to get a report card for you.
You already have one. You already got one, Councilman. You already got a whole full-blown report of the whole program from its conception. You already got a full-blown report. You already got it.
You are the only person that's ever, when I got down to the nitty-gritty, as I did, who said, yes, we will deal with this problem.
The Chair 619 RESOLUTION NO. 040095 - 3/29/04 recognizes Councilman Goode.
Thank you, Madam President. Mr. Fullard, you testified that the city has saved approximately half a million dollars due to the number of bids going up on demolition contracts. Did the bid packages also change?
No. That was a specific bid that went out. It was an 80-house package. And I am just -- it could have been, like, 78, 79 houses, or whatever the case may be. But just to round it off, it was an 80-house package.
So have the bid packages changed as a result of people graduating from the emerging contractors program?
The bid -- the city was admirable in working something out for smaller bid packages because of the capacity of the prime contractors that we were turning out and because in our program we lay out different levels of these companies. We would be working with prime 620 RESOLUTION NO. 040095 - 3/29/04 contractors that can do house packages from --
Mr. Fullard, my point is that the city chose to invest in Emerging Contractors Program roughly a year and a half ago, whenever it was. They have chosen within this budget year, even a tough budget year, to invest in the program again. How has that changed the bidding process or bidding packages? Have they adjusted what they are doing in terms of bidding as a result of people graduating from Emerging Contractors.
I mean, every other week, so that there is a consistent flow of small packages for the small contractors to bid on.
So there are more bidders because of people graduating from that program. And the city continues to invest in that program. But was it always anticipated that there was a need to do capacity building of minority contractors? What is your first 621 RESOLUTION NO. 040095 - 3/29/04 recollection that the city decided to increase the pool of contractors by training contractors?
That was the first problem that we had identified. Because there was only one prime contractor, minority contractor, that could get by me in the whole City of Philadelphia.
I guess my question is, if NTI was proposed in the general election of 1999, and if NTI was introduced in 2000, at what point was your program developed?
Our program was developed in 2003. That -- you know, when the contract was executed. We worked and we lobbied for about a year.
If NTI was proposed in the general election of 1999, if it was introduced as legislation in 2000, if the number of bidders of demolition contracts has increased due to graduates from your 622 RESOLUTION NO. 040095 - 3/29/04 program, and that has driven down the costs for the city, shouldn't the city have developed a program in Year 2000?
Yes, sure. They should have. But you were there in 1999, when we first came along.
The second question is, who are the eight banks? Who engaged the eight banks.
Who engaged the banks, the eight banks you referred to?
Who engaged the banks, in terms of becoming part of the Emerging Contractors Program?
Who brought them to the table? We brought them to the table.
The African -- American 623 RESOLUTION NO. 040095 - 3/29/04 Chamber of Commerce.
Oh, I am sorry. For the bank. I couldn't hear what you were saying. The African-American Chamber of Commerce worked with the banks for this specific program to work with small contractor demolition --
I am asking the question of who engaged who, who called who.
He called every president of the bank, and we had a sit-down and we sat down with them. We met with the Mayor on a number of occasions, as well, for this specific program, Councilman. I know that you have a program, 624 RESOLUTION NO. 040095 - 3/29/04 as well, that you --
Well, I am not here to talk about the banks. I am just here to talk about what the banks are doing.
Right. And I am just telling you what the banks are doing. I am not saying who engaged the bank. I am just saying that we had a specific program working with the banks and people are getting lines of credit. That's it. And, then, if you helped to facilitate that, great. But I think that it is a group effort.
Excuse me. I think the Councilman is speaking. If he asks 625 RESOLUTION NO. 040095 - 3/29/04 a question, simply answer the question.
It is a group effort, except for when we actually asked the Administration to engage the banks in 2000.
And they waited to engage the banks at some later point and for some later purpose. It is not a group effort when PNC Bank already said that it was willing to do bonding, in a letter from its then executive Vice-President, now President, in December of 2000. So, in other words, it was not a team effort we were trying to do this in 2000 and it didn't get done, and didn't get done until 2003. And, as a result of that, there were less bids because people have not graduated from a program that did not exist yet because some people drug their feet. And it was not a group effort of people dragging their feet.
I'm not in that. All I am telling you was -- 626 RESOLUTION NO. 040095 - 3/29/04
I don't think that was a question. I don't think you asked a question, did you, Councilman?
I am a supporter of the contractors program, I am a supporter of the contractors program at Temple. I am a supporter of the contractors program at the Greater Philadelphia Urban Affairs Coalition.
I think your posturing in coming in here was that you don't believe that you should have to defend the record of that program. What we are here to do is question the process. And the reason we are 627 RESOLUTION NO. 040095 - 3/29/04 questioning the process is partially due to how demolition contracting process takes place, the fact that costs have increased dramatically. And even your testimony suggested the cost has decreased based on the fact that the number of bidders have increased that were treated in 2003 that should have been treated along with the legislation in 2000. I am just questioning, in terms of the record, the process. Because obviously the process is not perfect. This is not a matter of just sitting here and coming in here and testifying are we going to give the $25 million, are we not going to give the $25 million because we are doing some good that wasn't done before. The program can always be better, your program, whether it is the city's process, or whatever it is. But even to the extent that your process, your contracting program is not the only contracting program in town. I think you should acknowledge that 628 RESOLUTION NO. 040095 - 3/29/04 there are larger issues with regard to this, some of them which actually deal with the finance industry and issues that were raised by this Council repeatedly over the last three or four years that just are beginning to be addressed recently. How do you respond to that now?
I can respond. Thank you, Madam President. You said a number of things that does not involve me. Okay? As part of the process, anything dealing with the banks and, you know, PNC. I have yet to see PNC write a bond for anybody in the City of Philadelphia as it relates to the NTI program, that I know of. But I know --
That's because they were not engaged in the Year 2000, when it was offered to them.
It is the question, Councilman. I am trying to respond to that, 629 RESOLUTION NO. 040095 - 3/29/04 that's all. But PNC has been due diligent in providing lines of credit, okay, for those contractors. I know that much. As well as Wachovia, Citizens, Fleet, and all of the other banks. And, also, PIDC has done a tremendous job of loans and also lines of credit that are in place now. Now, I can't respond to something that is going for or is still in the mix of to happen. I am talking about cause and effect. I am talking about things that are happening. That's what I am speaking to. That's all I am saying. Of the things that we have done, and that's all that I am responding to. I am saying that we was contracted out to produce 15 prime contracts. That's what our mission was.
Let me end with this. You started your own testimony by saying you shouldn't have to come up here and 630 RESOLUTION NO. 040095 - 3/29/04 defend your program. Of course you should have to come up here and defend your program, but I am not sure who criticized your program. The larger issue here is, you are trying to say the system is not broke. There is debate in terms of whether the system is broke or not as relates to minority contractors. But whether it is broke or not -- let's suggest that you are right, it is not broke -- it just recently got fixed.
It ain't fixed. I am telling you it ain't fixed. African-Americans still only get 4.5 percent of the receipts here in Philadelphia. We still have a long way to go. It ain't fixed --
Excuse me. We are not going to have cross-conferences like this. Would you please address the Chair, please. And, as I said, I am going to ask that you be brief because people have been waiting here since 10 o'clock this morning, 631 RESOLUTION NO. 040095 - 3/29/04 and we would like an opportunity to hear everyone. We also have people waiting for another hearing. So, again, I am going to ask you to please be concise with your responses.
Thank you. Our last witness is Mr. Steve Kauffman. Is he here? Thank you, gentlemen. Mr. Kauffman. Good afternoon, Mr. Kauffman. Thank you so much for your patience.
I am Steve Kauffman from Community Ventures. We are a nonprofit developer of affordable housing here in Philadelphia. I wanted to follow up on some testimony that feels like it occurred about five years ago from Sue Sierra and also from the Affordable Housing group. And I will try to keep this down to two minutes. Both of them suggested that NTI dollars be transferred at some point to 632 RESOLUTION NO. 040095 - 3/29/04 increase the acquisition budget by $15 million, and also there was a suggestion that the housing trust fund get an initial shot of money from NTI. And I spoke to Sue Sierra, I support her testimony, and I said, where do these NTI dollars come from, because it is finite. She did suggest that those dollars could come from demolition dollars that have not yet been allocated coming out of future years. And I just wanted to suggest that as a possibility. The other point which has not been stressed today in terms of finding additional funding is the matter of the recycling agreement. As I think everybody here knows, when the city, when the RDA, does take properties, the initial budget, NTI budget, does not take into account eventually unpaid city taxes, water and sewer liens, demolition liens, will come back. And given that only, apparently, $2 million of acquisition funding has actually been spent, in contrast to the 60 million 633 RESOLUTION NO. 040095 - 3/29/04 that's been allocated, what occurred to me was that at this point in the game perhaps NTI can estimate in a rough sense what that repayment of taxes and back liens is going to constitute, and basically borrow some of that $60 million that hasn't been allocated, take some of that money, spend it now on acquisition, and then repay that later, replenish the pot with those tax receipts. Because I think now enough properties have gone through the process that it should be possible to start figuring out in a conservative way what those tax receipts might be. The other point I wanted to stress was that with the Mayor's River City initiative, there are NTI neighborhoods that relate directly to the river, the two rivers, and perhaps that initiative could be a source of some of these acquisitions and even development dollars for affordable housing. As a developer, I am concerned because there are a couple of projects that we're involved in right now that are stopped, 634 RESOLUTION NO. 040095 - 3/29/04 basically, for lack of acquisition dollars. And, obviously, we can't respond to housing needs unless that first step, which is acquisition, takes place. And thank you for the opportunity to speak.
Thank you very much. The Chair recognizes Councilwoman Blackwell. One moment, Mr. Kauffman.
Madam President, I only wanted to make a statement, but I don't have a question for Mr. Kauffman. I would like to thank him for his investment and involvement in Southwest Philadelphia.
Thank you, sir. Do we have anyone else to testify on this resolution?
Can you tell me what the effect of the resolution is and why we have to vote on it? I am very befuddled at this moment. There have been some very important questions 635 RESOLUTION NO. 040095 - 3/29/04 raised about the operation of NTI. There may be good answers, there may not be. I think we are just beginning to touch the beginning of the program. Because it took about three years --
Why do we have to deal with the amendments now? It is very early in the budget process. I would like to have much more time to think about it. MR. McPHERSON: Councilman Cohen, these adjustments are for the current Fiscal Year. These are not adjustments to the '05. These are adjustments to the Fiscal '04 NTI program. And the Administration had indicated that they had pretty much exhausted their demolition dollars. And what they have requested to do is to increase the amount allocated for demolition by approximately $25 million for Fiscal '04, which will end on June 30 of '04. They will be coming to City Council with the '05 budget. And I think there is a 636 RESOLUTION NO. 040095 - 3/29/04 requirement of 90 days before the end of the Fiscal Year to have that submitted.
Councilman Rizzo, we are going to be ready to vote soon. Please don't leave.
It seems to me to be a long time to be making a transfer of funds. If they are that close to going broke, they should have raised this a long time ago. But you have had very important questions raised by the Committee on affordable housing. You have had other interesting proposals about formulating a special fund to make that affordable housing or other housing available. I think this is a time --
Madam President, if I may be heard for why I am raising this now. I feel totally unable to vote on this question because right now I don't know 637 RESOLUTION NO. 040095 - 3/29/04 whether we spent already far too much on demolition. There have been questions that no 4 one was able to answer. When Councilman Goode raised the question of the housing results, I didn't get any answers. I don't know whether he felt he got answers, but I doubt it. I am just not ready to vote and I don't understand why we should be put in a position of the Administration waiting until the last minute. I don't believe they need that money that desperately. And if they did, they created that situation. But I think we have got to meet the question what's the need of Philadelphia. And the need of Philadelphia, I think, is to meet the kind of questions of today people are getting inadequate housing service, and that's the people on the affordable coalition and a means of people who live in the small row houses who suddenly find their houses taken away, even though they lived there many years, without any opportunity to know what's going 638 RESOLUTION NO. 040095 - 3/29/04 on. I think they are the kind of housing problems we have got to address at the same time we deal with the NTI program. I don't understand why this can't wait at a regular order of business for housing in Philadelphia. We are beginning with the budget probably within a week or two.
Ms. Smith, am I led to believe and is it accurate to say that bids were put out on the package that we are discussing?
Yes. We are ready to move forward with a number of bid packages. We initially transmitted the resolution at the beginning of February, right after Council came back from recess. We recalibrated and looked at our numbers at the close of the quarters which is December, realized a projected a shortfall, transmitted the resolution. We had enough resources through February, and we are doing as much as we can to carry us through March. But we are at the point where the large bid packages that we 639 RESOLUTION NO. 040095 - 3/29/04 have awarded to date cannot go forward.
So this money is for packages, bid packages, that have already been awarded?
Yes, already been awarded or ready to be awarded. All bid approval forms have been approved.
What happens, Ms. Smith, what happens if we don't go forward with the bids that have been awarded?
If we don't go forward, then what will happen, if we selected a low bidder, that bid they have given us only stays in place for that -- whatever the time. So then we have to re-bid the whole process. And some of the most recent bids have been some of our better bids or numbers. So there is greater risk of the numbers coming back higher. Those are some of the consequences.
May I suggest that, as a result of these hearings, I think bids are going to come in much lower. Because I think that up until now nobody was watching 640 RESOLUTION NO. 040095 - 3/29/04 what was going on, and people were feeling when bids came in, they had no choice, and the bidders were having a great day. There was a big pocketbook that was wide open. The city had borrowed, what was it, 275 or 295 million dollars. The till was overflowing and the pressure was to spend the money. And they spent it so fast and they got much less in return than they ever promised to get for that expenditure of money. I am afraid this program -- to achieve the original goals of the first program, I think we are entitled also to know, and all the people of Philadelphia want to know, what's it going to cost. Because it is certainly going to cost far more than $300 million, if the cost of demolition is doubling. And I am sure we are way behind in the stated number of demolitions that this kind of expenditure of money would occur. Could you get for us, is there any way to calculate, or do we all have to work in 641 RESOLUTION NO. 040095 - 3/29/04 the dark, as to how many projects have been completed, what was the expenditure for those projects, and what was the anticipated cost of completing that number? And I think you are going to find a huge difference between the amount of money we have spent and the number of projects that that amount of money was supposed to deliver. I think there has got to be a review of the whole thing. Because, otherwise, I think this city is going, at a time when we all know there is supposed to be serious financial problems, we are facing maybe double the cost of the NTI. I don't know what it is, because nobody gives us any figures. And I am worried to death. And I think the people of Philadelphia have the right to find out what it is going to cost. And I think with all these other existing housing difficulties we have heard today, we ought to deal with the whole housing problem. Because this is not producing 642 RESOLUTION NO. 040095 - 3/29/04 housing, actually; it is producing clean lots. And as far as I know, even the homeless should not be compelled to sleep on a clean lot. I would like to find out what is actually happening in housing and what money has been spent and how many actual housing units.
I would be happy to provide that information, Councilman. And also, as Council President Verna and Mr. McPherson pointed out, when we submit the full program budget for FY '05, we will look at the issues around acquisition.
When do you think we will receive that? I think Wednesday --
The preliminary plan is due Wednesday, preliminary. And final will be transmitted on the first of May, along with the CDBG block grant final plan. So that we are actually looking at all the housing and community development resources. That's how we did it over the last two years. And I will be sitting down with 643 RESOLUTION NO. 040095 - 3/29/04 representatives from Council during the month of April to review that plan, answer questions, as well as gather up all the information that's been requested.
Thank you. Councilman, would you yield to Councilwoman Tasco?
Thank you. The first package of demolition, the first houses that were demolished, what was the cost for those houses? Because I have some houses -- I had an appropriation of $1.4 million. And I have some houses that are going to be demolished, I think, effective July 1. Now, what happened to all the appropriation I had before July 1, and what was the cost of the bid going out? I kind of agree with David in terms of the cost factor. Did we pay $11,000 for all those houses that were demolished in West Philly and Lower Philadelphia?
In Fiscal Year '03 we 644 RESOLUTION NO. 040095 - 3/29/04 didn't do that many bid packages. I believe that we probably did about, maybe, at most, three or four. Most of our work was emergency curb-side type of work.
At that time, as I discussed before, some of the earlier bids were coming in at around 10, that was because of one contractor's low bid, then it kind of jumped to about 13. That was the next big package that went out, that was a combination of both small and large. And at that time the contractor elected just to bid on a small package so that we could, you know, create opportunity. That was the Tioga bid package. Then the next series started to go up. Another small bid package was in one of these areas, that was around 9. West Tioga, Frankford, they started -- numbers started going up on average, started to get into the range of -- this is what was actually awarded around 16 and one was 14. They really do 645 RESOLUTION NO. 040095 - 3/29/04 vary. 16, 12, 1.
In the first Fiscal Year we only got to -- it looks like we awarded through what we call the Kingsessing bid package. That includes -- so that includes -- so the first year we only got seven, we were behind, seven bid packages out. Then we started picking up in the beginning of this Fiscal Year, that's why I said we really doubled. That's why when we came to Council back in May of last year, we lowered our projections based on what our experience have been. But we were able to increase production. So we got more bid packages out on the street. This amendment includes what we anticipate contracting for through the end of the Fiscal Year. That's in the highlighted colors. So, for example, Councilwoman, your 646 RESOLUTION NO. 040095 - 3/29/04 district, as you know, we have been working with you, I believe, for the last five or six months other representatives have been working with you on the Logan bid package. We got the cost estimates, we submitted them to you. And that number is coming in -- our estimate was 3.9. And that's what I believe you signed. Because everything has to be submitted to you before it is advertised.
Maybe I don't know the question to ask. But somehow or another I find myself agreeing with Councilman Cohen on the cost. I just can't see how the cost went up so high between the time you did the West Philly, North Philly stuff, to now you are getting -- and I think my letter says it starts July 1. Does that mean that this dollar figure is for 2004 or 2005? The letter I got that says that demolition will start in my district July 1. The bid package is already out. 647 RESOLUTION NO. 040095 - 3/29/04
My understanding is that you signed off on the bid approval form, but we haven't -- I don't believe we have yet advertised the Logan package.
Madam President, go to someone else, so I can figure out what I am asking.
Thank you, Madam President. I have been very concerned about the whole NTI program. And not only demolition, but stabilization and acquisition, because they were all phases of NTI. Last spring the city authorized 5260 properties to be acquired through the Urban Renewal Act, 94, Spot Combination Process. Currently that process is at a standstill due to the lack of funding and processing. Additional funding is needed to help ease this process. Through the introduction of NTI, we engaged the public trust in believing that we 648 RESOLUTION NO. 040095 - 3/29/04 would revitalize neighborhoods, and that's what it is all about. Also, private developers, Madam President, also have to feel confident that we will protect their investments by creating an acquisition pipeline to clear blight in their areas. Due to decreasing subsidies and affordable housing, most developers only end up getting more than to 50 properties at a 12 time because the project is spread out over 13 four years and they are not able to get 14 funding due to the lack of commitment to 15 acquisition dollars. 16 A massive demolition area's scarce, 17 scattered site, occupied structures still 18 remain, many of which are substandard housing 19 and where occupants want to move. 20 We have the case now where we have a senior who is living in one of the last remaining homes in a demolition area, this is Mantua. She eventually had to moved because she was robbed in her home at gun point three times. 649 RESOLUTION NO. 040095 - 3/29/04 On the same block another man wanted to move, and this wasn't until last week, because his home collapsed when demolition occurred next-door. And these are areas where the city pays double and triple due to these kinds of problems. Just last week when we had this hearing, the partnership CDC testified, as did other neighbors, about delighted structures around the 45 and 46 hundred blocks of Sansom Street. Only half of this project has been approved, and we are looking into that -- Pat Smith has committed to doing that as of Friday -- because we still have 11 occupants there, in a development area, living in unsafe housing. And that is where the Mayor signed the NTI legislation. Finally, Madam President, several mom-and-pop entrepreneurs have bought into NTI, too, as being a way that they can acquire vacant properties in neighborhoods. We even have businesses like the Bottom of the Sea in West Philadelphia, local 650 RESOLUTION NO. 040095 - 3/29/04 seafood restaurant that is becoming one of the major ones in Philadelphia, who want to acquire four lots next-door to expand their building, to allow for off-street parking. Another restaurant, the Venus Soul Food Restaurant, in East Parkside, would also like to acquire vacant lots. My point is that we have private developers also willing to pay for land. We have asked the city to find a way to sell property under condemnation to people who want to give. If the issue is money, let us find a way to have a clear deed so people, private investors, private developers, can buy property and we can continue on with the NTI agenda. We love NTI, I have said all the time the Mayor was campaigning, and still continue to say that I am the number one supporter. It is an innovative program that makes a big, big difference in our city, but we need acquisition dollars to make it a reality. 651 RESOLUTION NO. 040095 - 3/29/04 Having said that, we have a commitment, I have in writing, from the chief of staff of our city, that in the NTI program for Fiscal Year '05, statement and budget project to be submitted to us on Wednesday, that the $15 million will be included there that will allow, at least in a small way, for some of us to deal with emergency programs, emergency problems, and some backlog with acquisition projects. And having said that, since we have her commitment that the money will be included in the statement we will receive on Wednesday, I am happy to hold up -- it is only a few days.
I am happy to hold up with my amendment, and I will not submit it at this time. Thank you.
Thank you. Ms. Smith, how many demolitions or bid packages are in the current pipeline?
I believe it is Jefferson Square, so that's 72. I think Belmont, that's 71. I think a lot of people I have lost on the detail. West Philly, I believe some of the West Philly scattered sites, 38. Some of the APM East, which is in the Seventh District, and APM West, those are all that we went ahead and selected and we are just pending notice to proceed.
Yes, they have been awarded the contract. We haven't given the issue to proceed.
How much of this million will go towards those bid packages, 21 just estimate? 22
Well, with APM East and 23 West, what's holding that up from going 24 forward is the resources that we need to do 25 the asbestos monitoring, because we have 653 RESOLUTION NO. 040095 - 3/29/04 exhausted that pot of money, also. So for APM East and West, that's the holdup. Let's see.
Ludlow. Jefferson Square, that's about 1.8. I believe that's ready to go. Belmont is 1.3. We are awaiting Section 106 on some of the Cecil B. Moore, the larger ones. Ludlow is 81, that's 1.7. Then we have the ones that were set aside for the field training program for AAC, and they are scattered throughout. And I would say that's probably about another million dollars.
So I actually wasn't writing down the numbers. So approximately --
That's how much we need just for the ones that we warded the contracts.
Did anybody add that up? I was listening, I wasn't writing. 654 RESOLUTION NO. 040095 - 3/29/04 The Councilwoman is passing me a calculator. Say approximately million? 4
Uh-huh. About 7 or 8. 5 The rest we have approved bid forms. 6 For example, Grays Ferry is an approved bid 7 form. Some of them are small bid packages. We haven't awarded those -- I mean, we just awarded for this past month. So, some of that's included in here.
If what you are looking for is the number, what I would like to do is actually sit down and get the exact number.
I don't need the exact number. I want to get a sense of how much of that $25 million that you asked for authorization essentially will pay for properties that are in the current pipeline that have been signed off on.
It looks like about 12 million, I would say about half, particularly so we could continue the small bid package program. 655 RESOLUTION NO. 040095 - 3/29/04
Are we bound by law to adhere to that process, those particular bids?
So as we move ahead, the remaining million, every one of 9 those bid packages must be signed off by the 10 Councilperson? 11
They have been signed 12 off. They are ready to be advertised, or we 13 may be designing the bid package and we were working towards putting out bids for them before the Fiscal Year. But the Council -- the only bid package listed on this list that's in color, the only one for which we do not have real properties is the one for the Sixth Councilmanic District, which is a small bid package because we were --
The question was, of the remaining $13 million, have they already been signed off by Council Members?
Yes. With the exception 656 RESOLUTION NO. 040095 - 3/29/04 of Council District that has ten properties, that's $210,000.
So what process will you use in the bid solicitation for the remaining $13 million to ensure that these concerns that you have heard over the last two days will be rectified?
Well, everyone feels really good about the set of bid numbers that have come in within the last two months. And we can, for example, we can use that as a benchmark. And if the District Council agrees, you know, we are reject all bids. I mean, it is a consultive process.
Let me ask you this: Since you have indicated that Council Members have signed off on the remaining $13 million worth of bids, is there a process that we, essentially, can get a second bite at the 657 RESOLUTION NO. 040095 - 3/29/04 apple to ensure that some of the concerns that were raised, i.e., another process of sign off by Council Members? So we signed off just a little form we did, you know, understanding primarily -- I was primarily dealing with location and things of that nature, not paying a whole lot of attention to some of the cost-related issues that have come out over the last couple of days. As we move ahead in this process, since you haven't done any bid solicitations or you haven't awarded any contracts prior to any of that activity being signed off, can you come back to those Council Members who are in that loophole of sign-off and assure that the concerns raised over the last two days have been addressed?
Well, what we can do, once we have opened the bids, say we put it out and get numbers back, we open the bids, and that's a public record, what they are. The city always, in all of its solicitation, reserves the right to reject all 658 RESOLUTION NO. 040095 - 3/29/04 bids. And, you know, we can evaluate them and say the costs are looking too high.
I am not asking you about the city; I am asking you about Council Members. So the Council Members who are traditionally in this process of sign-off will have an opportunity to be involved in this process. And if they are not comfortable with some of the pricing issues, some of the participation issues, then those Council Members can, through written form or whatever, say, I am not comfortable with this, the participation goal, I am not comfortable with this, whatever, before we proceed on the award of contracts? We can be in a position to have input into that process?
Yes, within the confines of the Charter. Because the Charter does outline how you --
I understand. We were able to have a form early on 659 RESOLUTION NO. 040095 - 3/29/04 that I was told didn't conform with the charter, but we ended up doing it anyway. And I would like to see a similar approach as we move ahead on the -- if we move ahead on the remaining million. 7 Is that something that -- 8
We would be happy to 9 work with you and the Procurement 10 Commissioner, and with Council and the 11 Procurement Commissioner, to make sure we add 12 that as a step in the process. 13
Thank you, Madam President. Ms. Smith, did you testify to the fact just now that the $25 million that you are requesting in additional money, some of those contracts with been awarded?
We selected the contractor. Then the contractor has to submit 660 RESOLUTION NO. 040095 - 3/29/04 information to conform his contract. Then before we give the notice to proceed, we have to make sure the resource to pay that contract is in place.
So you are not currently under legal contract for any portion of that $25 million?
You mean is there executed contract? I'm not sure if there is an executed contract.
So you can't execute a contract without having the money.
Right. We need to have the money in place to award the contract.
Madam Chair, would it be out of hand if I would request, our Fire Commissioner, who has been sitting here since o'clock, and I think it is awful that he has to sit here because we don't know how long we are going to be from here on in. 661 RESOLUTION NO. 040095 - 3/29/04
And the Police Commissioner. It just doesn't seem right that we are holding them up for three hours.
I have one other question. The other question is, with regard to this process, you are not planning on floating any bonds for this money; this is money that is technically already in the bank, which you withdraw on the next day?
So the timing question is whether you can draw down this money as of this Friday, or you can draw down this money two weeks later; is that correct?
The question is, in terms of our process, whether you can draw 662 RESOLUTION NO. 040095 - 3/29/04 down this money as quickly as Friday or two weeks from Friday?
That's correct. We could, after we -- well, there is one other -- I forgot. There is one other thing that we need to do. There was a companion ordinance to this called the appropriation -- to also increase the appropriation authority by $25 million. And we still actually have to have a hearing on that piece, too. I almost forgot about it.
So technically you probably can't draw down this money until two weeks from Friday?
Thank you. Any other questions from members of the committee? Anyone else to testify on this resolution? Seeing none, this will conclude our Public Hearing. 663 RESOLUTION NO. 040095 - 3/29/04 (Public Hearing adjourned.) 664 COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC MEETING of the JOINT COMMITTEES OF THE WHOLE and HOUSING, NEIGHBORHOOD DEVELOPMENT AND THE HOMELESS - - - Monday, March 29, 2004 - - - Public Meeting conducted by the Joint Committees on Whole and Housing, Neighborhood Development and the Homeless, held in Room 400, City Hall, Philadelphia, Pennsylvania, on the above date, to consider action on the following: RESOLUTION: 040095 - - - PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN JANNIE L. BLACKWELL COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DAVID COHEN COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JUAN F. RAMOS COUNCILMAN FRANK RIZZO COUNCILMAN FRANK J. DI CICCO COUNCILMAN DARRELL L. CLARKE COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN MARIAN B. TASCO 665 PUBLIC MEETING - 3/29/04
We will now go into our public meeting. And the Chair recognizes Councilwoman Blackwell.
Thank you, Madam President. I move that resolution number --
Thank you. I move that we adopt the amendment to replace Exhibit D with regard to Resolution 17 No. 040095. (Duly seconded.)
It has been moved and seconded that the amendment be approved. All in favor will say aye. All those opposed?
The ayes have it. And the record will indicate that Councilman Cohen has abstained. 666 PUBLIC MEETING - 3/29/04 Again, the Chair recognizes Councilwoman Blackwell.
Thank you, Madam President. I move that Resolution No. 6 040095 as amended be reported out of committee with a favorable recommendation. (Duly seconded.)
It has been moved and seconded that Resolution No. 040095 as amended be reported out of committee with a favorable recommendation. All in favor will say aye. Those opposed?
Councilman Goode is voting nay. Am I correct, sir? And Councilman Cohen is abstaining. The record will so reflect. And Councilman Clarke, who was not in the room, wants to be recorded aye. To the Commissioners, we do apologize, but this too was a very important issue. We never thought it would take as long as it did. This concludes the public meeting. 667 PUBLIC MEETING - 3/29/04 Thank you all very much for your patience. (Whereupon the Public Meeting adjourned at 4:05 p.m.) - - - 668 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Monday March 29, 2004, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COMMITTEES OF THE WHOLE and HOUSING, NEIGHBORHOOD DEVELOPMENT AND THE HOMELESS _________________________ DEBRA A. WHITEHEAD