Committee Hearing, June 4, 2002

COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE COMMITTEE ON FINANCE - - - Room 696, City Hall Philadelphia, Pennsylvania Tuesday, 6/4/02 11:00 a.m. - - - BILL 020075 BILL 020338 BILL 020355 BILL 020340 BILL 020348 BILL O20361 BILL 020275 RESOLUTION 020285 (Titles of the bills contained within transcript.) PRESENT: COUNCILWOMAN JANNIE BLACKWELL, Chair COUNCILWOMAN MARIAN B. TASCO, Vice Chair COUNCILMAN DARRELL CLARKE COUNCILMAN DAVID COHEN COUNCILMAN FRANK DICICCO COUNCILMAN JAMES F. KENNEY COUNCILMAN MICHAEL A. NUTTER COUNCILMAN BRIAN A. O'NEILL - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 I N D E X BILLS 020340, 020361 PAGE DONALD A. CRAMP, Hospital and Higher Education Authority .............. THOMAS TODOROW, CHOP .................... AUSTIN McGREAL, ESQ., CHOP .............. BILLS 020338, 020355 ROBERT FINA, PIDC, PAID ................. BILLS 020075, 020348 CRAIG WHITE, PGW ........................ JOSEPH BOGDONAVAGE, PGW ................. SAMUEL SPEAK, ESQ., Local 686 ........... 28 JOHN NIXON, ESQ., PGW ................... 31 ABBY PZEFSKI, ESQ., PGW ................. 33 PAUL MONDIMORE .......................... 42 BILL 020275, RES. 020285 STEVE CULBERTSON, Frankford CDC ......... 51 SHIRLEY RANDELMAN, Cedar Park West CDC .. 55 PATRICIA SMITH, NTI ..................... 56 VICTORIA MASON AILEY, Philadelphia City Planning Commission .............. 76 MJENZI TRAYLOR, Commerce ................. 79 DEBORAH MCCOLLOCH, Director of Housing .. 116 DAINETTE MINTZ, OHCD ...................... 129 ANTHONY LEWIS, Housing Association of Delaware Valley .................. 144 JUDITH ROBINSON ......................... 147 3 6/4/02 - FINANCE - BILLS 020340, 020361

Good morning. Thank you, everyone, for your patience. Since we have a long agenda and many bills in varied areas, certainly, we want to call into session of Finance Committee hearing. The clerk will read title of Bill No. -- maybe we'll read the first two bills together. Bill Nos 020340, a CHOP bond ordinance, and 020361 Temple bond ordinance. Would the clerk please read title of those bills.

Bill No. 020340, an ordinance declaring that it is desirable for the health, safety, and welfare of the people in the area served by the Children's Hospital of Philadelphia, of the Children's Hospital Foundation, and children's Seashore House of the Children's Hospital of Philadelphia, for Hospitals and Education Facilities Authority of Philadelphia to participate with such institutions in certain renovation, improvement, and expansion projects to such institutions, buildings, and facilities primarily at their campus located at 34th Street and Civic Center Boulevard. 4 6/4/02 - FINANCE - BILLS 020340, 020361 And Bill No. 020361, an ordinance 3 declaring that it is desirable for the health, safety, and welfare of the people in the area served by Temple University in the vicinity of 3401 North Broad Street, for the Hospitals and Higher Education Facilities Authority of Philadelphia to undertake a project whereby the Authority will finance the cost of the development and construction of a multi-level ambulatory health care buildings and other hospital improvements and related costs.

Thank you very much. Mr. Donald Cramp and whomever's testifying on these two bills, please come forward. (Witnesses come forward.)

Donald Cramp for the Hospitals and Higher Education Authority, always a pleasure, sir.

Thank you.

Please identify yourself for the record and proceed.

Thank you for your 5 6/4/02 - FINANCE - BILLS 020340, 020361 gracious introduction, Madam Chairperson.

Thank you.

If I may, I would like to have a short testimony on behalf of both bills, and we are prepared to respond to either bills with the one short testimony with respect to your time this morning.

Thank you.

Madam Chairperson, Committee Members, my name is Donald Cramp. I do serve as the Chief Executive Officer of the Hospitals and Higher Education Authority. I wish to make a brief introductory statement in support of both proposed bills before you today for Children's Hospital of Philadelphia and Temple University Hospital. The Children's hospital of Philadelphia and Temple University Hospital submitted their applications to the Hospitals and Higher Education Facilities Authority of Philadelphia seeking the Authority's assistance in financing the applications. Both applications have been accepted. The hearings are in order. THE use of the proceeds will benefit our citizens serving the citizens from both of these 6 6/4/02 - FINANCE - BILLS 020340, 020361 remarkable centers. The obligation to repay the debt rests with both institutions and not the responsibility of the City nor the Authority. Today we have the privilege together of assisting Children's Hospital of Philadelphia and Temple University Hospital and the many people associated with these exceptional organizations. To close, Madam Chairperson, I would like to express appreciation to you and to each member of the committee and of the Council on behalf of the Board of the Authority for the scheduling of these meetings before the recess. Thank you very much.

Thank you. It's our pleasure.

My name is Thomas Todorow, I'm the CFO at Children's Hospital of Philadelphia. And on behalf of the Children's Hospital of Philadelphia, I would like to thank the Administration and City Council for the privilege of issuing municipal securities through The Hospital Authority. As you know, CHOP and the Authority 7 6/4/02 - FINANCE - BILLS 020340, 020361 have an history of successfully partnering on these financings. The hospital's long been a part of the fabric of the West Philadelphia community. This expansion program will permit the hospital to maintain its position as one of the leaders in pediatric medical science, and more broadly, for the City to continue its outstanding reputation as a mecca of scientific and medical discovery and exceptional patient care services. The money will be used for both current refunding as well as to support our expansion program in which we are in Phase I, which includes expansion of our research capabilities and our Abramson tower along with the addition of our south tower and 50 beds. Again, thank you for your support in the furtherance of the research patient car and teaching mission of the Children's Hospital of Philadelphia. I will entertain questions at any time.

Thank you.

That concludes, Madam Chairperson, our testimony on that one bill. 8 6/4/02 - FINANCE - BILLS 020340, 020361

Thank you very much. When do you most likely think these deals will close?

It is a cause for our appreciation to be here before the recess because the proceeds we hope to be in the hands of both institutions during the summer months and well before reconvening in the fall. That's why we appreciate being here.

Great. And what is the anticipated debt for both projects?

The ordinance for the CHOP shows a figure of $240 million. And for Temple University, I believe the ordinance is $46 million. You may note that there will be a higher figure, if it should reach your ears, for the CHOP. It will be more than in the ordinance 20 in all likelihood but that's because of some refunding that can be done with a renewal. But the maximum that this ordinance is calling for is the $240 million.

Thank you very much. 9 6/4/02 - FINANCE - BILLS 020340, 020361 Are there any questions from members of the committee? (No further questions.)

Thank you very much. We will now proceed to the development bills, Bill Nos. 020338 and 020355. And the Chair calls on Bob Fina, Vice President of PIDC and whomever. Sir, did I miss something? MR. McGREAL: My name is Austin McGreal, I'm general counsel of the Authority. I just ask that if your Honorable Committee approves, I'd ask for a suspension of the rules on both of them.

Yes. MR. McGREAL: Thank you very much.

Yes, thank you. (Witnesses come forward.)

Good morning. Good to see you. Thank you for your patience. Please identify yourself for the record. 10 6/4/02 - FINANCE - BILLS 020338, 020355

Good morning, Chairwoman Blackwell and Members of the Finance Committee. My name is Robert Fina, and I'm accompanied by two colleagues this morning. On my left is Jennifer Rodriguez.

Excuse me, Mr. Fina. I'm sorry. I forgot to get the clerk to read the title of the bill.

Bill No. 020338, an ordinance authorizing Philadelphia Authority for Industrial Development to file an application with the Office of Budget under the Capital Redevelopment Assistance Program in an aggregate amount not to exceed $40,500,000 to assist in the development of the Northeast Community Center, Please Touch Museum, Universal Commercial Center, University of Pennsylvania Cancer Treatment Center, University of Pennsylvania Veterinary School, and the 60th Street Commercial Corridor. And Bill No. 020355, an ordinance 22 dissolving the St. James Court Tax Increment Financing District, being the area generally bounded by Eighth Street on the west, Walnut Street on the north, St. James Court on the 11 6/4/02 - FINANCE - BILLS 020338, 020355 south, and Washington Square West on the east, in accordance with the Tax Increment Financing Act being the Act of July 11, 1990, as amended.

Thank you very much. Now we're ready, Mr. Fina.

Thank you, Chairwoman. Again, my name is Robert Fina. I'm a senior vice president with and PIDC and I am here representing PIDC and the Philadelphia Authority for Industrial Development. On my left is Jennifer Rodriguez, a colleague of mine at PIDC. And on my right is Erin Murphy, a colleague of mine at PIDC. I will begin my testimony on Bill No. 17 020338. This bill will authorize the Philadelphia Authority for Industrial Development (PAID) to apply for Redevelopment Assistance Grants the Commonwealth of Pennsylvania in the aggregate of $40,500,000 for seven redevelopment assistance projects. The funds will be used to assist development of the Northeast Community Center, Please Touch Museum, Universal Commercial Center, the University of Pennsylvania Cancer 12 6/4/02 - FINANCE - BILLS 020338, 020355 Treatment Center, the University of Pennsylvania Veterinary and 60th Street commercial corridor. Bill No. 020338 would authorize PAID to enter into certain agreements with the City to apply for the state funding to enter into the grants. The agreements would be with the Commonwealth's Office of the Budget to carry out the purposes of City Council's ordinance, designate the City and or the project recipients to assume the requirement of the full match for each project, designate the City and/or the project recipients to reimburse the Commonwealth for its share of any expenditures found to be ineligible by the Office of the Budget and obligate the City and the designated project recipient to complete the projects within a mutually agreed upon time frame between the Office of the Budget and PAID, including allowances for reasonable extensions. Exhibit A of the ordinance provided with the project description for each of the seven projects seeking funding from the Commonwealth provides detailed explanation of each one, and I will not include that in my 13 6/4/02 - FINANCE - BILLS 020338, 020355 testimony. However, I will briefly identify each project, its location, the amount of state funding sought and process by which the Commonwealth accepts applications for funding. I will do this quickly, Chairwoman. The Northeast Community Center, located at Bustleton and Solly Avenues in Rawnhurst, seeks $1 million of State assistance funding. Please touch Museum, currently located at 21st Street near the Parkway, plans to locate to Penn's Landing seeks 12,500,000 of State Redevelopment Assistance. Universal Commercial Center, located on the avenue of the arts between Fitzwater and Catherine Street, seeks of 4,500,000 of State Redevelopment Assistance. The University of Pennsylvania Cancer Treatment Center located at the former Philadelphia Civic Center on Civic Center Boulevard, seeks $4 million of State Redevelopment Assistance funding. The University of Pennsylvania Veterinary School, located at 38 Street and 14 6/4/02 - FINANCE - BILLS 020338, 020355 Woodland Avenue, seeks $18 million of Redevelopment assistance funding. And finally, 60th Street Commercial Corridor between Arch and Catharine Street seeks $500,000 of State Redevelopment Assistance funding. To apply for State Redevelopment Assistance funding, three principal actions must occur: First, the Commonwealth's House of Representatives and Senate must have included the project by name and amount in the State Capital Funding Budget that they approve. Second, the Commonwealth's Office of the Budget or the Governor's Office must in writing authorize PAID to submit an application to the Budget Office. And finally, of course, City Council must approve the ordinance. There must be matching funds for each grant that's awarded and several other conditions must be met that PAID follows.

It should be noted that under previous administrations in Harrisburg, Governor 15 6/4/02 - FINANCE - BILLS 020338, 020355 Casey, Governor Ridge, and now Governor Schweiker, similar requirements were imposed by the Office of the Budget for 43 previous projects in the total grant amount of $207 million of Redevelopment Assistance Funding. Those 43 projects have combined for a total project cost of approximately $1 billion within the City of Philadelphia. And I am pleased to advise that all 43 projects are completed or presently under construction or about to go under construction. I again request the Finance Committee's favorable consideration of Bill No. 14 020338 and the Rules of Council be suspended to permit the First Reading at the next regularly scheduled session of City Council. I thank you for your consideration. I will be pleased to answer any questions on this particular ordinance.

Thank you. Will you be needing a suspension of the rules on the second bill?

Yes.

On both bills? 16 6/4/02 - FINANCE - BILLS 020338, 020355

Yes.

Thank you. Are there any questions from Members of the Committee? (No further questions.)

Thank you very much.

I'll proceed with the seconds bill. Bill No. 020355 will dissolve the St. James Court Tax Increment Financing TIF District. The St. James Court TIF District is an area approximately one acre in Center City generally bounded by Eighth Street, Walnut Street, St. James Court, and Washington Square West. City Council created the St. James TIF by ordinance approved December 30, 1998, by Bill No. 980719. That bill would assist in financing the residential development consisting of a 33-story tower and rehabilitation of seven existing one- and two-story structures. The development would have resulted in 328 apartments and 17,000 square feet of retail space as well as a 332-space parking garage. Although approved by 17 6/4/02 - FINANCE - BILLS 020338, 020355 an ordinance for a 20-year term that would commence July 1, 1999, PIDC was limiting the term to years for two reasons: First, the analysis 5 of the project did not require 20 years when only 6 12 years; and second, this was a housing TIF at 7 the time. At that time in 1998, there was a 8 newly enacted ordinance that permitted 10-year 9 tax abatement on the conversion of office 10 buildings to residential, so we did not want to 11 provide a disadvantage for the conversion 12 developers by providing a 20-year term on a new construction. So we've limited it to twelve years. However, for numerous reasons, the project could not proceed. And at this point, however, the project is able to move forward because it's reduced its scope to 307 apartments and 307 parking spaces as well as a smaller retail component. Now, this project presently does not need a TIF, and that's why we're dissolving this TIF. The reason it does not need the TIF is that there is currently a ten-year abatement that's very comparable to what we were proposing and, of course, the size of the smaller TIF. 18 6/4/02 - FINANCE - BILLS 020338, 020355 The same law, the same law under the Commonwealth that authorizes TIFs allows the governing body that creates the TIF to dissolve the TIF if there are no bonds or TIF notes that are authorized or outstanding for that project. There were no tax increment bonds or other notes for that project. Therefore, I respectfully request your favorable consideration of Bill No. 020355 with a suspension of the rules to permit First Reading at the next regularly scheduled session of City Council. Dissolving the TIF does not require City Council to wait three weeks as imposed when you create a TIF, so you can dissolve it and not wait the three weeks as mandatorily required in the statute. Thank you for your consideration. I'll be happy to respond to any questions.

Thank you very much. The Chair notes that we do have quorum present. To my right, Councilwoman Tasco who's vice chair; to her right, Councilman Frank 19 6/4/02 - FINANCE - BILLS 020338, 020355 DiCicco; to his right, certainly Councilman Jim Kenney; we also have Councilman Angel Ortiz and Councilman Darrell Clarke who are here. Councilman Nutter also present. Thank you.

Question.

We have a question from Councilman DiCicco.

Thank you, Madam Chair. Good morning, Mr. Fina. In the St. James Court TIF, what taxes were we TIFFing, do you recall?

Yes, I do, Councilman. The TIF was only taxing -- the incremental tax would have been on real estate. There was little or no use in occupancy -- well, there is no use in occupancy on residential property and there was little or no incremental taxes from the retail that would have been created. So we're only TIFFing at the time the real-estate taxes.

Okay. At the time the project was proposed three, four years ago, I lose track of time, was the restaurant part of that plan, do you recall? 20 6/4/02 - FINANCE - BILLS 020338, 020355

I don't recall if there was a restaurant. There was 17,000 square feet. I believe a restaurant as well as a convenience store at the time.

So for all intents and purposes, if the restaurant is developed or restaurants are developed, none of the taxes that would normally be TIFed are going to happen because we're dissolving it and we'll actually benefit because they chose to take the ten-year abatement.

That's correct, Councilman. They would have advantage of a ten-year real estate abatement on only the real estate portion of the restaurant. Use and occupancy, sales tax that goes to the City will be generated and stay with the City.

Okay, thank you. No further questions.

Are there any other questions from Members of the Committee? (No further questions.)

Thank you 21 6/4/02 - FINANCE - BILLS 020075, 020348 very much.

Thank you.

The next will be PGW Bill No. 020075, the Capital Budget. Mr. Craig White and whomever is testifying for PGW, please come forward. And we will ask the clerk to read the title of the bill. (Witnesses come forward.)

Bill No. 020075, an ordinance approving the Fiscal Year 2002 Capital Budget, providing for expenditures for the capital purposes of the Philadelphia Gas Works, including the supplying of funds to be obtained in connection therewith and rejecting the forecast for Fiscal Years 2003 through 2007.

Also, would you read the title of Bill No. 020348, also a PGW pension adjustment.

Bill No. 020348, an ordinance amending AND restating the ordinance 23 approved July 12, 1968, as last amended effective January 1, 1999, relating to pension benefits for employees working on behalf of Philadelphia Gas 22 6/4/02 - FINANCE - BILLS 020075, 020348 Works by revising the Philadelphia Gas Works Pension Plan to incorporate amendments thereto, clarify the operation thereof, and add certain provisions as required by the Internal Revenue Code of 1986, as amended.

Thank you very much. Good morning. Please identify yourself for the record and begin your testimony. Thank you.

Good morning. My name is Craig White, I am the Acting Chief Operating Officer at Philadelphia Gas Works. And to my right is...

Good morning, Madam Chairwoman and Members of City Council. I'm Joseph Bogdonavage, Senior Vice President of Finance for the Gas Works, and I will be presenting some testimony on the pension ordinance.

Thank you.

Good morning. PGW has submitted written testimony. I have submitted written testimony. I am not at this time going to read that into the record; however, with the 23 6/4/02 - FINANCE - BILLS 020075, 020348 approval of the Chair, I would like to make a few brief comments. PGW staff is here and available to accept any questions or to field any questions you may have.

Please proceed.

Thank you. With respect to the testimony that was filed, it was for the Philadelphia Gas Works 2002 Capital Budget. The total dollars being requested for authorization is for $54.8 million. One point that is of significant value and interest is the fact that 91 percent of this budget is for the core business of Philadelphia Gas Works. That means that essentially, those dollars would be spent in the areas of distribution, field services, and our gas processing plants. A very small amount of about 8 percent is available for new business initiatives and as well as for some changes to our Website and our billing system to accommodate deregulation and the unbundling of services. In addition, I wanted to make the Council aware of the fact that we have filed for 24 6/4/02 - FINANCE - BILLS 020075, 020348 an amendment to this budget. On April 29th, we submitted a filing to the Philadelphia Gas Commission and it is currently under the review the Philadelphia Gas Commission. That amendment is for approximately $5.6 million and it addresses modifications to our LNG plant, the new plant that we are building, automatic meter reading, our distribution system, and finally a million dollars for security-related issues. It is our expectation that if approved by the Philadelphia Gas Commission and recommended to Council, that Council would be asked to address this in the fall. Finally, I would ask that the Chair suspend the Rules and allow the bill to move expeditiously. That concludes my remarks and we are available to take whatever questions you have.

Thank you. Are there any questions from Members of the Committee regarding this bill? (No further questions.)

Thank you very much. You want to testify on the pension bill? 25 6/4/02 - FINANCE - BILLS 020075, 020348

Good morning.

Good morning.

As I stated previously, my name is Joseph Bogdonavage. I'M presenting testimony on PGW's new pension ordinance. Today I'm here to give you a brief summary of changes that we are proposing to the plan. There are members of PGW's staff and law department personnel available, and we'll be happy to answer any questions you might have about Bill No. 020348. I'd just like to give you an little executive summary. PGW's pension plan was established in its current form pursuant to an ordinance 480 dated July 12, 1968. Over the years, there have been many numerous amendments to the plan that reflected operational changes and incorporated various collective bargaining mandated changes to the pension plan. This bill 21 reflects those amendments. It adds certain additional changes and restates the plan to achieve the following goals: First, to consolidate the various ordinances which have been amended from the plan 6/4/02 - FINANCE - BILLS 020075, 020348 since 1968 into a single instrument with clearer language. Secondly, to incorporate any language changes required to bring the plan into compliance with tax qualification rules under the federal tax code. Third, to incorporate all language required to bring plan into compliance with various Federal and City laws, regulations, and programs, including City's Fair Practices Act. Fourthly, to address certain issues regarding the operation of the plan and the administration of the funds from which the benefits are being paid. And finally, to incorporate new language negotiated under the Collective Bargaining Agreement that was signed last May. It is important to note that the key features of PGW's plan, the restated plan, remained unmodified. The plan benefit calculations remain the same. Normal retirement age is 65. There is an earlier retirement program in effect for the 30 years of service and out an early retirement plan for age 55 plus 15 27 6/4/02 - FINANCE - BILLS 020075, 020348 years of service, and a special early retirement plan 55 years and years of service. 4 Survivor and disability benefits 5 remain unchanged. And the non-contributory 6 status of the plan still remains unchanged. The 7 changes to the plan are set forth in detail in 8 the remainder of pre-filed testimony. 9 If pleases the Committee, I would ask 10 that the remainder of my testimony be 11 incorporated into the record. 12 In addition, I would also ask the 13 Chair for a suspension of the rules to allow the 14 bill to move forward expeditiously. 15 And we're happy to answer any 16 questions related this. And that concludes my 17 brief remarks. 18

Are there 19 any questions from Members of the Committee? 20 (No questions.) 21

Thank you 22 very much. 23

Thank you. 24

We now have 25 Mr. Samuel Spear, attorney, representing SEIU. 28 6/4/02 - FINANCE - BILLS 020075, 020348 (Witnesses come forward.)

Good morning.

Good morning Councilwoman and Members of City Council. My name is Samuel Spear. I represent Gas Works employees Local 686 SEIU. With me J.J. Johnson, one of the deputy trustees at Local 686. Also in the audience are three union representatives, Fred Aikens, David Burns, and Joe McGrath. And reason we want to do speak today, Councilwoman, is because until Friday, the union was unaware that this matter was pending before Council. It was about three weeks ago that we received a copy of the ordinance. There have been some discussions between the union and management. We know management has told the union that there will be no substantive changes made to the pension, and we are in the process of making sure that's the case. But what we wanted to do ask Council to do at this point, because we still have not finished those discussions or the review, is to give us a little time and it should only be a few weeks, I think, for the union to actually sit down 29 6/4/02 - FINANCE - BILLS 020075, 020348 formally with management to talk through all of this because, as Council knows, these matters are appropriate for discussion between the union and management. The union members and many of the reps are concerned and they need to be reassured that none of their benefits will be affected adversely by this. There are certain changes that we are aware of presently in this bill, including decreasing the vesting from ten years to five years, which may or may not be a good thing. Given PGW's present financial situation, we need to talk with management to make sure that is the right thing to do at this time. We also need to talk to them about whether some of the other changes that management had said is not going to change things but we need to make sure that it is really is not going to change any of the benefits, any of the employees are presently entitled to. So, again, we would propose at this point, if Council can do this, to put this off for hopefully one month and then we would be sure that this bill does what management says it's 30 6/4/02 - FINANCE - BILLS 020075, 020348 supposed to do.

Thank you very much. We have conferred with Members of the Committee and the Administration who feel that it is the will of the committee to report it out today, but certainly to meet with you within the next week and to see if we can come to some agreement. Is that satisfactory?

That would be.

Thank you very much.

Thank you very much.

Thank you. Are there questions from Members of the Committee? Councilman Kenney.

Thank you, Madam Chair. Maybe someone from PGW can tell me how long this situation has existed and created the need for correction right now. I mean, how long have we been out of compliance of federal law? How long has this situation been in effect that we need to solve or cure the problem immediately? 31 6/4/02 - FINANCE - BILLS 020075, 020348 Can somebody from -- I mean, is this like a lengthy situation that we've been in or something new?

Abby Pzefski, I'm the general counsel for --

Abby, sit down and pull the microphone to you

Yes, we can't hear you.

I'm sorry. Abby Pzefski, I'm the general counsel for the Gas Works. I have with me John Nixon who is our pension counsel also the City's pension counsel, and I would like to defer that question to him.

Thank you. Identify yourself for the record again, please.

My name is John Nixon, I'm a partner at Blank, Rome, Comisky & McCauley, LLP. I'M outside tax counsel to PGW for purposes of the restatement of the pension plan. We are currently of the belief that the pension plan is in compliance with all federal tax laws. However, over the course of time, the IRS has established rules by which both public and 32 6/4/02 - FINANCE - BILLS 020075, 020348 private-sector plans may be submitted to the service for a determination of their tax qualified status. With respect to public sector pension plans, those plans are required, if they request a normal determination from the IRS on their tax qualified status, to be submitted during course of the 2002 calendar year. It's a function of the fiscal year. Because PGW runs on a September 1st fiscal year, the plan technically should be submitted to the IRS before the end of August, August 2002. By comparison, the City of Philadelphia's pension retirement ordinance was submitted in February of this year.

What happens if it's not submitted by that deadline?

If it is not submitted by the date, the IRS will not give a formal determination as to its tax qualified status. It is not necessary to have a formal determination by the IRS; however, you do increase the risk of the further examination from the service as to whether or not the plan actually complies with all of the applicable rules and regulations.

Who, in fact, 33 6/4/02 - FINANCE - BILLS 020075, 020348 initiated the development of this particular legislation? What was the catalyst that started it?

The catalyst that started it is that we understood that we needed to update the plan to bring it into compliance with the applicable laws and we began the pension review process sometime late last fall to make sure that we would be able to get it before Council in this session.

And does federal tax law require the reduction in the amount of time prior to tenure -- prior to vesting? I'm sorry.

It did not.

So why are we moving from ten to five if the Feds don't require it?

I think it's one of the very few changes that was not dictated by either Federal or City law. Essentially, it's going to cost us about $10,000 a year, as see in the actuarial reports that were supplied to Council. PGW believes and the Administration believed that 34 6/4/02 - FINANCE - BILLS 020075, 020348 it was a good device to encourage and allow people to become employees of PGW. As you know, sometimes it's a little hard to get people to come to work at PGW and stay at work at PGW, and this was simply a device to make it a more attractive --

I don't necessarily disagree with it because I'm not aware of the dynamic is when a person makes a decision, but if you're trying to encourage to come at work for PGW for a longer period of time, if you invested at five, that's more than likely to be a catalyst for them leaving earlier than later, would it not be?

Well, the City made a similar change a couple years ago, and I think that the prevailing wisdom on this was that it was a device that would enable City or PGW to attract and keep good employees.

And the only question I would have -- and you can respond also. But the other question I would have is that the gentleman there representing SEIU indicated from their opinion this is something 35 6/4/02 - FINANCE - BILLS 020075, 020348 that normally would negotiated as a result of labor-management negotiation as opposed to our action. Is that inaccurate?

Our office was involved also with District Council 33 in 1999 when Council passed a recodification similar to this one of the City pension. And at that time, the union was in favor of it, but there was a period of negotiation. The union isn't prepared to say today that we're not in favor of this general idea either. We know that there are many things that do need to be recodified for the same reasons it was appropriate for the City pension. But you're right, Councilman, and that's the thing that bothers us, we were only first notified about this about three weeks ago and we just have not had time yet to fully negotiate.

And I'm sure -- I'm sorry, go ahead.

One other thing. I'm sorry. As you also know, we had contentious long-term contract negotiations only last year in 2001 in which the collective bargaining agreement was renegotiated and there was much give and take 36 6/4/02 - FINANCE - BILLS 020075, 020348 during that process, and during that time, nothing about the pension was proposed by either side.

I mean, I'm not actuarial, but -- and I'm sure that the people you've hired to do this analysis are competent and capable, but it would seem to me from a layperson's standpoint that if allowing a person to vest and potentially take resources out of a pension fund earlier, five years earlier than they normally would be, that that would have some impact on that particular fund. Now, maybe your analysis or the actuarial analysis and the experience and the history is such that would indicate that that's not going to happen, but simply on the face of it, one would think that if I'm allowed to vest at five years as opposed to ten, the potential exists for more people drawing from that pension fund than would normally. Is that an unfair off-the-cuff analysis from layman's terms?

Frankly, that is one of the biggest fears that the members have expressed to us over the last week that we knew that this 37 6/4/02 - FINANCE - BILLS 020075, 020348 was coming up before Council, that sort of effect.

Okay.

And it may be an effect, it may not be. We don't know, but that's why we need to talk about it at least a little bit.

Okay, thank you.

You're welcome. Are there any other questions from Members of the Committee for PGW? Councilman Nutter?

Thank you, Madam Chair.

You're welcome.

I saw earlier, Mr. White. Is he still here? (Mr. White returns to witness table.)

Madam Chairwoman, with regard to the pension discussion that took place, it is not PGW's belief that that is part of the bargain agreement, the five-year vest provision.

Councilman 38 6/4/02 - FINANCE - BILLS 020075, 020348 Kenney, there's a response to your question. Would you repeat that, Mr. White?

Councilman, I believe counsel for the union indicated that the five-year vesting is part of the union bargaining agreement. We do not believe that's the case. So I just wanted to put that on the record. But we'll be happy to discuss it further.

You said it's not part of it or it wasn't negotiated? Was it negotiate in the last go-around?

It was not negotiated in the last go-around --

Because the feeling was that it was not germane to the discussion?

That's correct. But we certainly will sit down with the union and speak to them about it.

After we let this out of Committee. Okay.

Okay.

Madam Chair, I think that as we've had the staff of the Gas 39 6/4/02 - FINANCE - BILLS 020075, 020348 Commission review this whole process, and certainly they would have raised red flags with me had we had serious problems with this legislation. However, in the next week, if we do feel that there are serious problems with it, we could hold it. But we do not believe, based on our analysis, that there are any serious problems with this legislation.

Certainly, I'm sure that the vice chair of this committee will let us know. And as you are free to contact us and the union's free to contact us if there are serious issues that can't be worked out during the next week. Is that fine?

(Nods head.)

All right, thank you. Councilman Nutter, did you have a question for PGW?

Yes, I did, Madam Chair. Thank you. Mr. White, let me start by first commending you for your significant level of responsiveness in a number of situations where 40 6/4/02 - FINANCE - BILLS 020075, 020348 PGW has had activity, capital improvement activity, and I'm focused on of your testimony in the distribution area. I do want to thank you for being very responsive on a number of customer-related issues and also some projects that are of a somewhat unique and special nature. In that context, when I read the testimony last evening, as PGW has done in the past, you obviously are trying to keep your mains and services and systems as up-to-date as possible, you have a regular -- I guess you call it your cast-iron activity or -- what do you call it?

Cast-iron main replacement program.

Right. I need to ask you about one element. You know that we have a project going on or we're, I guess, finishing up a project in the West Philadelphia community at the moment. It's funny how projects start out for one purpose end up for another purpose. This started out as a SEPTA-related project and ended up as PGW project at the tail end. I've had a concern for some time, and 41 6/4/02 - FINANCE - BILLS 020075, 020348 we thought we had solved this situation over on 58th Street, but now I'm finding that it has expanded over into the 5700 block of Haverford Avenue. Related to the SEPTA work, apparently you decided to go into the 5700 block Haverford Avenue to do replacement main work. Are you familiar with that part of the job?

Yes, I am familiar but not as familiar as Mr. Mondimore, and Mr. Mondimore is here with us today. I'm going to ask him to join us.

If you want to bring am him up, that's fine. (Witness comes forward.)

Let me just ask a question. Generally, are the PGW mains or distribution lines in the roadway or in the footway?

They're generally in the footway?

Generally in the footway?

The new mains are generally in the footway. 42 6/4/02 - FINANCE - BILLS 020075, 020348

I understand. I'm talking about the old ones.

My name is Paul Mondimore, I'm director of distribution in FSD. The old cast-iron mains are generally in the roadway. When we relocate, we locate to the footway.

Now, why do you do that?

To save on paving.

Save on what?

The paving. Restoration of footway paving is cheaper than restoration of roadway paving.

So it's cheaper to break up the sidewalk, go into the footway area than it is to go into the street where, I guess, you have to go through a couple inches of asphalt and then concrete base and then go further down, is that the deal?

That is correct.

Just on average, what do you think the difference in the cost-saving is? 43 6/4/02 - FINANCE - BILLS 020075, 020348

I'm not sure of that cost. I could guess that it's half because of, as you said, in the roadway you have to go through the four inches of asphalt and the eight inches. Footways are usually four inches of concrete.

And then it's just dirt?

And then it's just dirt.

Okay. The reason I'm raising this issue is I have some pictures which I'd be glad to share with you. Apparently, what you do is you break up the concrete, make a trench, put the new main in, cover initially so people can get, I guess with some asphalt-type substance, and then you come back and pour concrete just in the trenched area; is that basically what you're doing?

That's correct. Typical restoration is to replace the one block that we disturbed in the footway.

Okay. I'll show you by way of the pictures but it's also been my 44 6/4/02 - FINANCE - BILLS 020075, 020348 experience, that match-up often doesn't work too well especially given the nature of what some of these footways look like. When you try to just fix the one in the middle, it's usually an area somewhere between the bottom of the steps and the curb; is that correct?

That's correct matching new concrete to old is very hard.

Right. So what I'm going to ask you know is since obviously you're making some cost saving by not being in the roadway, why don't you just do the entire footway as opposed to trying to patch it?

Councilman, we do have a resource issue that is associated with this. Much of this paving is done by third-party contractors. When we put contractors to do the entire footway, it actually takes them significantly more time than just in the areas that we've disturbed. In so doing, it delays other projects. So what it does is it limits our ability to keep up with the work as we move along.

Well, I 45 6/4/02 - FINANCE - BILLS 020075, 020348 understand that and I can appreciate that, but in the meantime, you have further negatively impacted the area where the people live. I mean, you get to do what you need to do, and I'm sure they're appreciative to have a new gas line out in front of their home. But if at the same time in the course of doing your work, I mean, you're going into the middle of the footway area, it is very difficult to match up either based on elevations, movement of the other slabs in that sidewalk area, and at the end of the day, I mean, somewhat in articulately I'll say it looks a little crappy.

As Mr. Mondimore pointed out --

And it can also lead to various water problems, runoff problems because you ultimately end up changing some of the elevations.

My experience has been typically the water runoff and elevation problems are the resurfacing of the streets multiple times without milling. But having said that, if we were to do all -- 46 6/4/02 - FINANCE - BILLS 020075, 020348

Well, but even in the areas where there is not that problem. I don't think you're going to see that problem necessarily in the 5700 block of Haverford Avenue. What your folks are going to experience is taking up the temporary asphalt, trying to match up new concrete to concrete slabs that have already started to either settle or break. It's very difficult. And the end result of which is, sure, it's a new concrete in there, it never looks right, and it doesn't match up or settle well.

You asked the question a little bit earlier why we don't do all of the sidewalk with the points you're making. In essence, we believe just in our side-bar right here that the cost would be triple compared to what we're spending today, so that's one of our concerns as well as the --

You're saying to do the whole sidewalk is now more expensive than going back out in the street? Is that your testimony?

No. I'm actually saying 47 6/4/02 - FINANCE - BILLS 020075, 020348 that doing the one area that we disturbed versus doing all of the sidewalk is much more expensive. We're not comparing it to the fact that we're moving out of the street --

Mr. White, I think that's rather obvious. I figured that part out. I'm saying, do you think that it is satisfactory, even with the newly poured concrete, to leave that part of the street where people live in that condition when the job is done? Your main role is to get a new main in the sidewalk because you don't want to be in the street. I understand that. That makes sense because the trench work never worked that well either, trying to match up the two. But if you're going to continue on this kind of path and that kind of program and if we're going into the footway area with all of the new activity, then I'm asking that you rethink the strategy because you end up leaving the condition worse than it was before you started.

Councilman, certainly we do not want to leave a situation like that. With regard to the coloring, the discoloration of new 48 6/4/02 - FINANCE - BILLS 020075, 020348 versus old, that's a feature of replacing the block. However you accurately pointed out that if there is blocks --

I'm less a about the esthetics than about the practicality of it. What I'm saying is if you have areas that are not perfectly level and the only way you get perfectly level is pouring new concrete all the way across, it is difficult for your folks to match it up. I'm not talking about colors. I don't really care about colors. You know, I'm not an architect.

We'll certainly look into this, Councilman, and report back to you what our finding are on this front.

I'd appreciate it. You can report back to the Chair.

Thank you.

Thank you, Madam Chair.

Thank you very much. Are there any other questions? (No further questions.) 49 6/4/02 - FINANCE - BILLS 020075, 020348

We will not go to our resumed hearing for CDBG and NTI --

Oh, Madam Chairwoman --

One moment please.

We have one amendment on the Capital Budget. We'd like to offer an amendment. Do we offer it now or in the meeting?

I think we offer that in the meeting

Okay, when we get to the public meeting, we will offer on amendment on the Capital Budget for PGW.

If there is anyone here who would like discussion now, because CDBG will take a little while, we're happy to entertain any discussion. Otherwise, we will go to the next public hearing. Is there anyone here? (No response.)

All right. Then we will assume everybody's fine and we will 50 6/4/02 - FINANCE - BILL 020275, RES. 020285 then go to NTI and CDBG and we will ask the clerk to, again, read the titles of the bills. And we will make an exception, and please, we don't want to allow more than five minutes for this because we ended the public testimony part, however, we will ask Cedar Park West CDC to come forward, Frankford Group Ministries Industries to come forward and Judith Robinson to come forward at one time. We will entertain that for five minutes after the clerk read title of the bill 12 and then we will ask the Administration to come forward so that we can begin our questions and hopefully move on. The clerk read the titles of both bills.

Bill No. 020275, an ordinance authorizing the Mayor on behalf of the City to file an application with the United States Department of Housing and Urban Development for Community Development Block Grant as required by Section 104 of Title of the Housing and Community Development Act of 1974, as amended, including all understandings and assurances contained therein and designating the 51 6/4/02 - FINANCE - BILL 020275, RES. 020285 Mayor and the Director of the Office of Housing and Community Development as the authorized representatives of the City to act in connection with application to provide such additional information as may be required and to accept the grant, all under certain terms and conditions. And Resolution No. 020285, a resolution approving the annual program statement and budget for the expenditure of the Neighbor Transformation Initiative bond proceeds for Fiscal Year 2003. (Witness comes forward.)

Thank you very much. We will now hear from Steve Culbertson, Frankford Group Ministries. Welcome and thank you.

Thank you, Madam Chair. Good afternoon. My name is Steve Culbertson, I'm the Executive Director of the Frankford Community Development Corporation. I want to thank Members of the Committee for allowing me to testify. I'll be very brief. I've been attending these hearings for a long time, about ten years. And when I started 52 6/4/02 - FINANCE - BILL 020275, RES. 020285 coming, I was scared, didn't know what I was talking about and it took a long time. I'm here today to request a change in the hearings because now these hearings are taking a lot longer than they ever have, and I'm pleased by that in that we are all more interested in community development and the revitalization of neighborhoods, which is my life's work. However, it's very hard for those of us who are trying to do development out in the neighborhoods to sit here for several days. And I would like to propose several things: One, that to the extent possible, project-related requests interaction between Council and us and Council and the Administration be worked out ahead of time to the extent possible. Two, that you have one hearing to interact with the Administration or the Administration would present to you their plan and that you would interact with them and then there would be another hearing, a separate hearing, for public involvement and testimony in response to what the Administration has presented to you. And in that public testimony, you would limit us in terms of the amount of time we can 53 6/4/02 - FINANCE - BILL 020275, RES. 020285 take to testify to two minutes and then cut us off. And if we go over that and go on another minute, then you cut off the mic. And I'm sure you can do that back in the back. I hope somebody's timing me so I don't go on beyond my two-minute limit. But it gets frustrating in that we come -- as of last Tuesday I came at 9 o'clock. I was here for three and half hours, 10 didn't get a chance to testify and had to leave 11 and wanted a chance to testify. And luckily enough, I'm friends with the Councilwoman and we said give Steve a chance to say these things, but not everybody gets that chance. So I'd just like to encourage you to do this in a different format. Now on to the real testimony, I just wanted to say that I support the Neighborhood Transformation Initiative as proposed and support the comprehensive plan as proposed. Frankford stands to benefit greatly from both programs. We are doing economic development with the Commerce Department, revitalizing commercial strip on Frankford Avenue, we're doing a lot of residential development with OHCD and the 54 6/4/02 - FINANCE - BILL 020275, RES. 020285 Redevelopment Authority and we've been closely with NTI on demolition and encapsulation of buildings in Frankford. And we hope that we'll be able to actually turn Frankford around to bring it back from being a very distressed community, and certainly some sections of it are more distressed than others, to being a place where the quality of life is high, property values stay at a relatively good rate, and people are able to live and raise their families in peace. That's really all I had to say. Thank you for the chance to express my support.

Thank you very much, Mr. Culbertson. And we certainly agree it's been a long process. And that I don't think it's a bad idea to -- I guess it's, what, a few weeks before that they have the public meeting before we have our hearings. And then by law, we have to have evening hearings which we also do one night at 6:00, I think, we have public hearings, don't we, as well? But obviously, it's still going on and it's made it very difficult. And I know 55 6/4/02 - FINANCE - BILL 020275, RES. 020285 you've been here over and over and over. And I think that this committee especially needs to consider maybe being able to have the Administration -- I don't know what the law requires, but we'll look into it, having the Finance Committee interact are the Administration and then having the public after that. But we'll certainly look into that for next year. And we thank you.

Thank you.

Cedar Park West CDC, Miss Shirley Randelman, welcome. (Witness comes forward.)

Please identify yourself for the record and begin your testimony.

My name is Shirley Randelman and I represent the Cedar Park West CDC located in West Philadelphia and I'm also a chairperson of the CDC and I just wanted to go on record as being in support the Neighborhood Transformation and the CDC on both bills.

Thank you so much. Thank you also for your leadership in West 56 6/4/02 - FINANCE - BILL 020275, RES. 020285 Philadelphia. Judith Robinson? (No response.)

All right, Judith Robinson stepped out. All right. We will now ask the Administration to come forward. (Witnesses come forward.)

Would you like to make is a statement? What is your pleasure? Please identify yourself for the record and we will proceed.

My name is Patricia Smith, I'm Director of Neighborhood Transformation. At the conclusion of the hearing last week, the Administration was asked to submit responses to a variety of questions to Councilwoman Blackwell's office. We've submitted those questions and supporting materials to your office yesterday. In addition, we were asked to explore feasibility of looking at the issue of retaining walls and how we might be able to support that with respect to a program activity. 57 6/4/02 - FINANCE - BILL 020275, RES. 020285

Councilman Nutter, we are hereby to -- Miss Smith is making a statement with reference to retaining walls. I know this area interests you.

Thank you. I appreciate it, Madam Chair.

Miss Wilkerson, Chief of Staff, who spoke with Councilman Nutter this morning, my understanding as a result of that conversation, we will be sitting down with your office to look at how we can design a pilot program that meets specific objectives with respect to the repair of common retaining walls that present health and safety hazards to neighborhoods, that we will look at strategies that -- we'll try to address new technologies and reduce costs, look at issues of some sliding scale in terms of contributions. So we're looking forward to scheduling that meeting to follow up with this concept of a pilot program to test a retaining wall repair program.

Okay. And I'm sorry I wasn't in my seat at the beginning. What does that mean in the context of NTI hearings or 58 6/4/02 - FINANCE - BILL 020275, RES. 020285 budget or funding?

The Administration is very much willing to work. We were thinking to suggest that for this pilot initiative that we fund it at about $500,000, that we try to identify three or four examples of retaining walls that meet criteria about dangerous conditions presenting a health and safety to the neighborhood or destabilizing properties.

If I can just ask, where did that figure come from? What's that based on?

Well, my understanding is that -- we're just putting that forth as a suggestion. It's based in part, I think, some preliminary numbers that your office may have had with respect to one particular property and the possible cost of that.

Well, $500,000 would probably cover at least one.

Okay.

Which is about -- I think the number two years ago may have been 238. I mean, I'm not the only person that has a 59 6/4/02 - FINANCE - BILL 020275, RES. 020285 retaining wall problem. I think if you look at the research, Streets Department I think has identified at least 190 that need some level of attention. And I believe the number is 90 that are of a serious concern. At the hearing a couple years ago, the recommendation was to start even with a pilot program and a possible revolving loan fund. I think that hearing may have been either in -- I think that hearing was either 2000 or 2001 where a bill was passed to deal with this particular issue. The suggestion or the recommendation at that time was that a revolving fund be put together which would have people actually paying some costs for this but that it would be initially funded somewhere in the 2 to $3 million range. Now, I understand that we still have some work to do and I'm more than willing, if not excited, maybe even be jubilant, to further this discussion. Today is as far as it's ever gotten.

Mm-hmm.

I would have a much greater comfort level, though, if we were talking about identifying a serious amount of 60 6/4/02 - FINANCE - BILL 020275, RES. 020285 money, knowing that we have some work to do and that it's a part of the budget that we're actually talking about. Otherwise, you're really just having a discussion. If you don't have any money and you don't have it identified and you don't know what you're dealing with, then it really is a discussion, then you've got to come back and all that. And I don't really want to keep doing that. I've kind of done that for a while.

Mm-hmm. Again, we're willing to sit down and work with your office with respect to this. My understanding was that we were going to make an effort to identify three or four retaining walls, really get a sense of the cost that so that we can then project out what it would take to adequately fund --

Let me make sure we're talking about the same conversation. My conversation with the Chief of Staff this morning, I think I told her specifically that there are probably four to six walls that I could think of off the top of my head which, you know, has got a fair amount of space up there, in West 61 6/4/02 - FINANCE - BILL 020275, RES. 020285 Philadelphia, one or two in the North Philadelphia portion of my district, and one or two in Overbrook.

Mm-hmm.

But as I said, I'm not the only person in this Council that has a retaining wall problem, so I'm not going to sit here and act like I'm negotiating on behalf of all the rest of my colleagues nor do I think it's fair for me to make a, you know, kind of agreement. I don't want to say a deal, but even some agreement that says, Well, we're just going to do one little thing over here and ends up excluding, by the shear dollar amount, other people to participate. I mean, dangerous retaining walls are dangerous retaining walls. As much of any advocate and as passionately as I feel about, I think there are other members who are affected by this in other parts of the City, and if we're going to start something even on a pilot fashion, I think we should have some decent pot of money identified. I'm not talking about we're going to spend it like drunken sailors. And establish some standards that say, This is a 62 6/4/02 - FINANCE - BILL 020275, RES. 020285 dangerous situation. It is overwhelming to the people who are affected by it. And just like we deal with dangerous buildings and we take them down and literally to some extent worry about some of the details later on, the retaining wall problem, from my perspective, is about the same. So the one thing I'd like to help ensure is -- I appreciate the offer with regard to the $500,000. I think that that is a little low, acknowledging that we're not going to spend it all at one time.

Mm-hmm.

Second, there needs to be a broader identification, I think, in a couple of different areas. You talk about a pilot, we want to have couple different experiences.

That was the intent.

There's the six-foot wall, the Chief of Staff told me about a 30 foot wall literally right across from my district. I'm assuming that they're going to get different treatments. So we don't have to decide this right here as we're speaking. And I appreciate you raising that issue first here this 63 6/4/02 - FINANCE - BILL 020275, RES. 020285 morning.

And we're committed, as I said, to fund to a demonstration project where we look at a variety of different types of walls in different places. I didn't mean to convey the message that it was only going to be one wall or two walls. We had not yet settled on a dollar amount because I think we really wanted to do get a sense of what it would cost. I mean, we would be pulling the number out of the air, which we basically did, and we were hoping that based on further investigation and detail, we can begin to quantify that number as with some other new initiatives in which we had proposed in the NTI Program budget. The intent was to say, Okay, let's get a since -- you know, let's start it, get a sense of what it is. Otherwise, you're kind of guessing at it.

I think Councilwoman Tasco wants to say something. The only other thing I would say is, I mean, this is one of those situations where we may not have to search too far in terms of information.

Yes. 64 6/4/02 - FINANCE - BILL 020275, RES. 020285

We have a fair amount literally in my office, but there have been public hearings on this issue. There's a pretty good record that's been established. And I think that there are some expert people in the Streets Department who are much more knowledgeable about this both from a cost standpoint, new technologies, new materials. No 10 one's talking about now literally stone or bricks and mortar. I mean, there's new material that exists that you see right out on the Schuylkill Expressway. As if you were leaving Center City but then decided to go to 30th Street, you know, you have to kind of go around and come back. That same material is the material that contractors are now using which significantly reduces the cost. I mean, obviously if being used on the Schuylkill Expressway, it has the ability to hold some weight.

Mm-hmm.

But that's the kind of stuff that we're talking about.

Yes, I understand that was the parameters of your conversation. 65 6/4/02 - FINANCE - BILL 020275, RES. 020285

Thank you. Well, maybe -- let the Chair suggest that we have a meeting in the very near future where we invite all Councilmembers and those who are interested can come to a meeting to discuss specific problems that they may have in their areas and we can begin a formal process to deal with the retaining walls as an issue. Councilwoman Tasco and then Councilman Ortiz.

I'd just like ed to say that I'm glad Councilman Nutter stated the fact that there are other districts with the issue of retaining walls. He's been most vocal lately on retaining walls. There's another problem that we need to look at also as it relates to blight in those neighborhoods that we're trying to stabilize, and that is the issue of driveways.

Mm-hmm.

And When I go to a community meeting, it used to be trees. Now we've taken care of the trees somewhat; it's now driveways. 66 6/4/02 - FINANCE - BILL 020275, RES. 020285

Mm-hmm.

And while we explain to them that it's the homeowner's responsibility, what homeowner's are saying to me is that they don't mind paying, but they need a process, they need an overseer to make sure that everybody impacted on both sides of the driveway pay for the work.

Mm-hmm.

When the Mayor was President of City Council, he had called together various departments in the City of Philadelphia, the Law Department, the Planning and Streets Department and somebody else, I don't remember, to talk about coming up with a way that the City could be involved, not necessarily in terms of providing the dollars, but providing the oversight of communities who want to repave their driveways.

Mm-hmm.

And I think that is an important discussion that need to take place because a number of people willing to pay. They want everybody to pay. And some of these 67 6/4/02 - FINANCE - BILL 020275, RES. 020285 driveways -- and I think the City has some liability because the trash trucks use the driveways.

Mm-hmm.

So Since the trash trucks are contributing to the destruction of the concrete and, of course, time and the use of the driveways by everybody, I think there has to be a serious discussion with us to talk about how we can set up a mechanism to help residents repave the driveways but the City serve as the overseer to make sure that it's done and that the money is collected.

Okay, yes.

Thank you. Councilman Ortiz.

Thank you, Madam Chair. Clarify for me -- it's my understanding that that area between Erie going towards Hunting Park, Fifth Street, that Feltonville area is not included in the plan. I think it's probably bordered with Seventh Street going down and I don't know how far it goes down, 68 6/4/02 - FINANCE - BILL 020275, RES. 020285 but the business corridor Fifth between the Roosevelt Boulevard and Erie. And the neighborhood that encompasses that area on both sides of Fifth Street are not included in the plan? Is that --

I believe there's some misunderstanding with respect to the areas where the City Planning Commission in Fiscal Year 2003 will be working with community organizations and residents around a community planning process. What we've emphasized is that those targeted areas for community planning processes does not preclude other neighborhoods or communities --

Well that area is not one of the targeted areas. It is an area that has, I believe, a very vigorous and normative commercial corridor that is trying to be stabilized, that is attempting and searching stabilization. It also has in both sides of Fifth Street generally family-owned homes on both sides.

Mm-hmm.

And you put that sort of situation together with strengthening the 69 6/4/02 - FINANCE - BILL 020275, RES. 020285 commercial corridor of that area and then you begin stabilizing that neighborhood.

Mm-hmm.

And you also have the problem, as we talked before, of the Feltonville residents that have some of the subsidence problems that they have encountered, and we don't want another empty lot leveling of homes in that area which will destabilize both the commercial corridor and the neighborhood.

Mm-hmm.

I just want to know why that area, which really is vibrant and ready to be stabilized and not yet deteriorated to a level that needs massive and huge amounts of money was not included in the plan.

Again, with respect to the Fifth Street corridor --

All of those organizations in there.

With respect to the Fifth Street corridor, we did acknowledge that that would be a focused or targeted comprehensive planning area, building off of the work that's 70 6/4/02 - FINANCE - BILL 020275, RES. 020285 already been --

I can't hear you, Pat. I'm sorry Ms. Smith.

Building off the work that is reflected in the boundaries of the plan, so that's one of the target areas.

But as it goes below Erie, it does not comprehend that area.

Mm-hmm.

The plan does not go that far north.

Right.

That's where most of the family home residences and family home buildings and I think a more vigorous retail and business corridor is developing.

Mm-hmm. Again, I just wanted to really emphasize that we envision planning happening over the five years of NTI, and what we put in this document here reflects the focal point in the first year. And at this point, there's some communities. We can look 24 at -- we also have acknowledged and said we need 25 to do some specific type of activities which may 71 6/4/02 - FINANCE - BILL 020275, RES. 020285 not be the same as a major planning study being undertaken and that it's still possible for us to work with community-based organizations and CDCs with respect to some specific things.

I understand that. What I'm saying is that from Erie down to Hunting Park up to the Boulevard and on both sides of Fifth Street, you have a neighborhood that's really a working-class neighborhood. It has not become a totally governmental subsidized neighborhood that is seeking help in rehabilitation and stabilization, which I thought was the goal of NTI.

Mm-hmm.

It's a neighborhood that's teetering. And you have businesses and retail businesses that are owned by people within the neighborhood and you have development going on within the neighborhood from CDCs and other individuals. And you have very basic institutions, plus you have the park. You have Hunting Park fronting parts of that.

Mm-hmm. I think --

And I just don't 72 6/4/02 - FINANCE - BILL 020275, RES. 020285 understand why that -- because it meets all of the criterias, I would suggest, that would go. This is a neighborhood that is teetering but has not fallen done to what we find, let's say, in the area of Sixth and Indiana and those areas. It's a neighborhood that is viable working class individuals African-Americans, Latinos, a lot of homeowned properties and businesses and that was excluded until a few years hence.

Again, let me emphasize that NTI resources are available for that type of neighborhood. For example, one of the things that we've done is we've looked at what we call, you know, vacant properties, you know, stabilization work to take place in a neighborhood like that. Resources is a part of the preservation strategy, making sure that the HRP program we're adding additional resources to the Homeownership Rehab Program which is a moderate rehab program. We've open that and said that in some neighborhoods where there aren't CDCs that if this was a neighborhood like that there would be opportunities to work with small contractors, small developers, small rehabber 73 6/4/02 - FINANCE - BILL 020275, RES. 020285 types to access those resources. But that's -- so NTI resources can be and will be targeted to neighborhoods such as that. There is proposals that we've received to look at combination grant and loan programs tied to a variety of CDCs to do preservation activities for existing occupied properties. And those resources, again, are available for a neighborhood such as the one you described. I was just distinguishing when we said there was going to be some planning work done, something that we haven't done a long time in this city on a comprehensive level that, you know, this was going to be the starting places. In addition, I want to just emphasize that the Planning Commission has also looked at a number of existing plans, including CDC plans from the past and other plans, and then we can also use that as a framework to extract out specific projects and resources. So I don't feel honestly that this neighborhood is excluded or just won't be a recipient of dollars. From your description, it sounds like one around which we are trying to allocate resources. You know, the PHIL Loan Program is another program that for 74 6/4/02 - FINANCE - BILL 020275, RES. 020285 owner occupants we feel excited about because we're going to be lowering significantly the interest rates on PHIL Loan and making it available up to percent loans up to 115 percent of income. And for individuals over that, they can borrow at percent. We're going to start doing much more targeted marketing of resources like the PHIL Loan Program, whereas before it was kind of information given out citywide but using vehicles like neighborhood newspapers to make people aware of this resource in their community.

But why don't you integrate the businesses that are there and the business owners, the community folks there and the community institutions that are there into a meeting. Because right now I can tell you, people feel -- because I read the newspapers and they look at maps and they look at charts, and I'm the one that gets the phone calls. And they say, What's going on here? We're getting left out of this process. And I believe if you're going to do that, I think an explanation of that community because from Erie to the Boulevard, you have probably one of the most energetic 75 6/4/02 - FINANCE - BILL 020275, RES. 020285 homeownership communities of Latinos and African-Americans that's still stable within the north central Philadelphia area. And I think it behooves to bring together these groupings of people.

And we will. That's the other thing that we emphasize in the program statement and budget, that the staff of the Planning Commission is available to meet and convene --

That area is not within the boundaries, okay?

I understand. And staff, I mean, again, we want to emphasize that this does not mean that Planning Commission staff is not available to attend meetings to facilitate sessions.

It's not whether they're available or not. I believe that they have to go out and meet.

They will.

And they have to go out and sit down and organize and begin explaining a whole lot of things because right 76 6/4/02 - FINANCE - BILL 020275, RES. 020285 now, there's -- you come here, and we might begin to understand. And we get very little understanding after we sit here. But if we don't understand this thing fully, can you imagine what it is out there?

Okay. Victoria Mason Ailey is here from the City Planning Commission and she can talk a little bit about how we envision doing the planning outside of the 11 areas. 12 And I also want to mention for the 13 record, the Planning Commission is also going to 14 be doing an asset inventory of commercial 15 corridors city-wide to service the jumping off 16 point for some other planning activity around 17 commercial corridors. 18

Good morning, Councilman, 19 how are you? 20

How you doing? 21

Fine, thank you. My name 22 is Victoria Mason Ailey, and I'm here this 23 morning representing the Philadelphia City 24 Planning Commission. 25 As Pat has referred to, there are two 77 6/4/02 - FINANCE - BILL 020275, RES. 020285 things I want to share with you. One, the Planning Commission is looking to engage in a vigorous neighborhood planning process that will involved reaching out to each neighborhood, again, engaging those communities particularly those communities that have no formal plan or planning document in a dialogue to begin to establish --

They have a plan, by the way.

Is that material that's been forwarded to our office? STAFF PERSON: No. We'd like to see it.

We've invited those neighborhoods and those entities that have formal documents and formal plans to forward that information to us. Richard Reading is here, our Director of Community Planning. He would welcome having that information forwarded to his attention.

Well, they're part of the original SABA group that we organized around ten years ago, and those plans have been 78 6/4/02 - FINANCE - BILL 020275, RES. 020285 done all the way up to Hunting Park and beyond.

Well, we are engaging communities with plans as in this instance and those without formal documents in a vigorous -- we're looking to engage in a vigorous neighborhood planning process that will enable residents, business community members, as well as key stakeholders within each community to have some input and to give us added information to help guide the planning process. We're not looking to embark on the planning process in isolation without input and participation from all levels of the communities. With regard to commercial activity, the Commission has embarked organ a study known as Phila Shops which will entail an inventory of all commercial establishments and components citywide, and that has just kicked off within the last few weeks and they will be looking into areas such as Fifth Street as part of that process.

Thank you. A. Thank you, Madam Chair.

Thank you. 79 6/4/02 - FINANCE - BILL 020275, RES. 020285 The Chair also notes the presence of Councilman David Cohen.

Mjenzi, you have something?

Councilman, I just want to add very quickly that it's not all a matter your concerns get addressed not simply through the planning process, but also the integration of the some of the activity that's already going on in that area. For instance of the several areas of Fifth Street, I think the ones that you're expressing a concern about now roughly falls somewhere in 42 to 4600, and that is one of the targeted corridors. And there is a coordinator from PCDC who works that corridor. So that some of the concerns of those business there would have already recorded under that process and then have to be integrated into whatever new levels of NTI planning and programming go on.

Thank you very much. Councilman Cohen, you had a question?

Yes. During the hearing at the outset, I 80 6/4/02 - FINANCE - BILL 020275, RES. 020285 raised the question of does the City have a plan, which to me really restores areas that don't have to be totally restored that are currently stabilized but are missing specific parts. Those parts include, for example, arrangements to repair driveways and retaining walls without breaking the backs of the house owners with the costs like the City used to do. It deals with what do we do with these small vacant apartment buildings to get them occupied instead of having them places where criminals, rapists, can hang out and threaten people in the neighborhood. What do we do about the lack of supermarkets? What do we do about lack of other retail establishments? If you're talking about revitalization of neighborhoods, seems to me that in areas that are largely stabilized not yet blighted, that that makes a whole lot more sense than to wait ten more years until areas get blighted and will cost much more money to restore when we will have severe losses of people from the neighborhoods. Now, I wonder in this course of time, has the NTI come up with a program to deal with those things? 81 6/4/02 - FINANCE - BILL 020275, RES. 020285 Let me add a fifth thing. There are whole areas where there are blocks houses, but for some reason or other, a house located in the center of a rowhouse gets to be deteriorated. I don't want to blame L&I for not paying attention or anybody else, but apparently the house or houses may have become so dangerous that an L&I judgment that had to be removed. There are some beautiful blocks, I think of one right in my area about 30 seconds from where I live in the 5900 block of Kimball Avenue, beautiful area. But right in the middle, two houses have been removed and nobody does anything to replace them. There are other blocks on the block in which I live, the 5600 block of North 16th Street, the fourth house from the southern corner 5607 North 15th Street is all board up. Every other house is in excellent condition on the block. Are we going to wait till that boarded up house gets blighted and has to be torn down or are we going save that block? There are the kind of questions that if you want interest to really be strong in the City in support of blight, you've got to think of 82 6/4/02 - FINANCE - BILL 020275, RES. 020285 how you prevent areas that are already not quite yet in the blighted stage from becoming blighted. So I ask my question, because I've raised this issue now over number -- not only at the beginning of this hearing, I've raised it before. Is there such a program to be dealt with? What are the outlines of such a program? And how does it fit into the NIT Program? Or does the NIT Program say, As long as the neighborhood can totter, we're going to let it totter until it falls down, then we can move it into the blight block and pay attention. Until then, it's got to suffer on its own. That's the question I direct to --

One of the things, Councilman, as you know from the beginning, we talked about the Neighborhood Transformation Initiative needs to look at how we invest our resources from two perspectives --

Why need to look at it? Why can't we do something about it? I don't understand this talk of looking at problems. I think we're in the business of solving problems not looking at problems. We can 83 6/4/02 - FINANCE - BILL 020275, RES. 020285 look and find many, many problems.

Yes. Secondly, within the NTI Program statement and budget, I have included a number of pages that really address the types of issues that you talked about. One is the issue of when we have one or two vacants on the block or very few vacants in neighborhoods, how do we address those problems? In the past, sometimes they did remain vacant to the point where they needed to be demolished. What we're proposing is a strategy that talks about stabilizing those properties, acquiring the properties if we are unable to facilitate the acquisition through private means and then packaging them and issuing RFPs for their rehab programs like the Homeownership Rehabilitation Program. Those programs are described in detail, including the operating principles on Pages 20 and 24 of the program statement as well as in the 21 back of the book on the HRP Program about in 22 order to be able to make sure we can cause the 23 rehabilitation of vacant properties in neighborhoods where there are currently no 25 Community Development Corporations, opening that 84 6/4/02 - FINANCE - BILL 020275, RES. 020285 program up and adding resources to it so that small contractors and rehab can access that resource. We also acknowledge that we beefed up and wanted to do expand the programs that related to owner-occupied programs. As I testified at the beginning of the hearing, we're expanding PHIL Loan, we're reducing the interest rate significantly to two levels from 9, 6, percent to two interest rates of and 3 percent. The 3 percent interest rates are available to homeowners up to 115 percent of income, median income within the City, the 5 percent is without limit. That will give us a great more flexibility to reach -- we're going to start targeting marketing those programs. We also acknowledge that not every individual may have the credit to access PHIL Loan, so we will design and work with what we call a loan product that will be accessible to those that are less than A credit, and we've put some funds in place to get that started this year. We also are looking at a targeted grant program, particularly we can leverage resources with grants and loans. And, 85 6/4/02 - FINANCE - BILL 020275, RES. 020285 again, the emphasis here is on blocks where there are few vacants so that we can preserve. It's a clear objective from NTI to also look at how do we preserve blocks that are fairly stable in neighborhoods that are, as you described, before they become blighted, how do we begin to make resources available so that we can prevent the encroachment of blight? With respect to things of supermarkets and the like, as I testified last week, I think there are a couple of things that are at play here. One is the availability -- the way the economics of supermarkets work today, and this is something that the City does not have power, they're high-gross businesses that work on what they feel like very small profit margins and so they tend to want to build the big super boxes in neighborhoods. So one way in some communities that we can assure that there's that opportunity is through the aggregation and assembly of land for supermarkets. There's been at the national level several initiatives, one lead by LIS, called the Retail Initiative where working and talking with supermarkets about their building 86 6/4/02 - FINANCE - BILL 020275, RES. 020285 inner city and getting them to rethink some of their requirements because some of their requirements, to be honest, business requirements, aren't suited for inner-city markets. And as Mr. Traylor testified, we believe one supermarket, Pathway, has began to rethink some of its basic requirements in terms of square footage. Again, there's some things which we don't have complete control over but are working with -- and one of the things about working at the national level is that many supermarkets national and the issues are not unique to Philadelphia.

And it provides a good excuse to do nothing locally because you can always be spending energies looking at the national level. And with the local level, even where the case that Councilwoman Tasco talked about that she and I have been working very hard for a number of years, we have an operator trusted by the neighborhood in the business in the neighborhood for 50 years, everybody has confidence. The City's done practically zero. I 87 6/4/02 - FINANCE - BILL 020275, RES. 020285 don't want to say zero because there's been an occasional meeting. But it would be a very simple, easy thing to put together if anybody really was interested in putting it together. It hasn't been put together. There's an apartment house at 16th and Grange that's been vacant for ten years. Nobody pays any attention to it. And therefore, I'm concerned. What I would like to know is how do you answer the question of a community leader who says, "When is that terrible emptiness in the middle of the 5700 block of Kimball Avenue going to be filled? Why are there still steps leading to nowhere, where they tore down a house but left steps here and nobody in the City even checked to see whether the contract included the removal of steps, and it probably but then nobody examined it to see if the contractor did it. What I'm saying is if you want to have confidence stilled in the community people in the community, then those things that the City can do, the City ought to do. It ought to stop looking at ways of doing it, but begin to do it. 88 6/4/02 - FINANCE - BILL 020275, RES. 020285 And I would like to know the answers to specific things in my area. I'm sure the other Councilmembers would like to have answer to give to folks in the community in their area. It doesn't take a lot of looking at. It takes some planning, sitting down with people d getting a job done. So I just hear in the blight program about all of these various kinds of programs, but you don't tell us that the program has already been utilized. Take, for example, years ago we passed a bill in this City Council because there was a great concerned expressed by a number of Councilmembers about the destabilization of rear driveways and retaining walls in areas that were good areas. We passed a bill to authorize it. As far as I can see, absolutely nothing has been done, though the bill is three or four years old, and I don't understand it. As far as I know, there's no money completely been made available for any driveway anywhere under any kind of a plan to be provided to help the neighborhoods restore these retaining walls and driveways. So I see at no point where the City has had an 89 6/4/02 - FINANCE - BILL 020275, RES. 020285 opportunity where everything is in place. The City has done nothing. That's our problem in selling confidence to people that something's going to happen in the blight program. We want it to succeed, and we think the City's got to come forward and begin doing something in the areas not only where areas are totally blighted already, but in the areas stabilized to do prevent them from becoming blighted. So when can we go from the time of looking at things to doing something? And I raise that question.

Councilman, on the issue of the supermarket situation, last week -- first, let me say that I think it would be very difficult for us to find any supermarket in the City of Philadelphia that has opened or reopened that the City has not been involved in some level in assisting with that activity. In the specific one that that you ask about at Broad and Godfrey --

Broad and Stenton.

Broad and Stenton. Since the individuals that -- the private people 90 6/4/02 - FINANCE - BILL 020275, RES. 020285 who are involved in trying to pull that project together did not seem to be moving the way we in the Commerce Department felt that they should be moving to put that project together, even with suggestions that we were making. We did recommends to the Fern Rock Olney CDC, under the direction of Mrs. Shirley Stevenson, a way to be involved -- I mean, because you were talking about community leadership and how important that is in being involved in these projects. And what we recommended to her was a way that the CDC could get involved and could get some planning support from the commerce to help move that project. That suggestion was made over a year ago. We have not heard back from the CDC in that period of time. Now, key to what was to be done by the CDC, I think, involved working with Rite Aid regarding what they would be willing to sell or lease in order to make that supermarket a reality. To my knowledge, we have not gotten any reports at all on any progress that was made with that. Now, I don't offer any of that 91 6/4/02 - FINANCE - BILL 020275, RES. 020285 information as an excuse for not doing more; I simply would like for Council to be aware of the fact that we do respond to these projects and we try to work with them and we try, where possible, to put public dollars to work in the planning as well as in the development process. So I just wanted to report back on that.

Yeah, but you can't leave to a small Community Development Corporation the responsibility.

Point of order, please.

The City ought to be in every stage of that.

Point of order. Let me just give a further explanation, and I don't always come to the defense of the Commerce Department. We constantly tug of war all the time. But in this issue, David, it is not their fault. They have provided and worked with this office, my office on that Broad and Godfrey site. And it is Rite Aid that's moving too slow. Now, you do something to put some fire under Rite Aid to negotiate, because I've had private developers 92 6/4/02 - FINANCE - BILL 020275, RES. 020285 in there. We've had a number of people look at that process. And every time we talk to them, they're in the process much doing something, and they're doing absolutely nothing. So we have to find a way to make Rite Aid move. The issue there is not --

But the City has to be in there, Councilwoman, not leaving it to the small community development corporation.

No, it's not the small community development group. And I don't mean to banter with you on this. Please just know that office is involved with this --

Oh, I think Mjenzi does a great job. I'm a strong supporter of his.

On this issue, my office is intimately involved with this process, and it is not the fault or the Commerce Department or PCDC in dealing with this issue. I want to make that very clear.

I'm just trying to move the whole City into an active mode.

Well, I agree. They're active with this us on this. And I don't 93 6/4/02 - FINANCE - BILL 020275, RES. 020285 have any complaints about it at all. We just have to move the other party

Okay. But then we're going to be involving Councilwoman Tasco, Mr. Mjenzi Traylor and everybody else. But that's the kind of activism that we need. But I would like to see the City in at every level of the negotiation with Rite Aid. I think the City ought to make clear to Rite Aid that it expects them to move. The City's got to show what resources it's going to make available. It's got to enter the activity affirmatively. And I know that that can done because I know Mr. Traylor over a long period of time and I know he's capable of doing it because he does it so well. But I'm saying we've got to move on these things. Four years is a long time to wait for a supermarket. At the Philip Murray House on the east side of Broad Street, we have an apartment house with more than 300 senior citizens who have no place to shop. You can watch them along Stenton Avenue, you know, with their cane walking. They used to be able to walk to a supermarket. There's no place for them to go 94 6/4/02 - FINANCE - BILL 020275, RES. 020285 now. And they have to pay or $20 a day. So I urge movement there, but in general movement in all of these areas, on the apartment houses, retaining walls and driveways as well. Thank you, Madam Chair.

Thank you 8 very much. 9

I know when 10 Councilwoman Tasco says it's time to shut up, it's a good idea to do that. So I will follow that advice.

Thank you very much. Are there other questions? Councilman DiCicco.

Thank you, Madam Chair, and good afternoon.

You're welcome.

I have one question. In the statement and budget program that was submitted by Joyce Wilkerson, it gives a budget detail on residential demolition and it prices out the average 95 6/4/02 - FINANCE - BILL 020275, RES. 020285 demolition cost per residential unit at $11,500. That is significantly higher than I believe we originally either testified to, you testified to or you anticipated. I think today if not mistaken, we're paying approximately 6 to $8,000 per unit. Why is it 11,500?

We're using a number that also includes things such as party wall treatments, post-demolition treatments, removing a certain amount of soil and putting in enough top soil that you can do some basic treatments to the vacant property. It includes costs like asbestos removal. My understanding is --

Excuse me for interrupting, but aren't we doing that now when we demolish a building?

The $6,000 number is used on the actual contract for the demolition work. And then it's my understanding that the City has a series of what they call requirement contracts where we they just may deploy people to do the party wall stucco, so it's separate. So we historically have not kept all costs on a 96 6/4/02 - FINANCE - BILL 020275, RES. 020285 per-property basis. We have a combination of property costs and then combination of costs that are incurred pursuant to requirements. What we wanted to do was we actually built a budget based on a per-property cost. This, again, as I explained last week, is an estimated cost.

Estimated.

That we're budgeting until we start getting, you know, live bids. That's what we'll know. It can vary with between the amount of machine demolitions and hand demolitions and party wall treatments. We've also significantly revised the specs to address historic community complaints about how properties have been left afterwards.

Don't you think, though, by publicizing what we estimate the costs to be we kind of set the bar or the market as to what the RFPs will be coming back knowing that -- the contractor already understands that and he or she can get as high as 11,500? I understand we have to budget, we have to come up with a number, but I just think it's counterproductive, in my opinion, to put the number out there already 97 6/4/02 - FINANCE - BILL 020275, RES. 020285 because I think that most people will start coming in looking for the 11-5 and we're going to have negotiate down as opposed to --

Again, because of the way that Council requested the information to be submitted as part of the legislation, you know, we had to break out the per-unit, the estimated budgetary numbers so that we could be responsive to the legislation that talked about the manner in which information would be presented. You know, there's -- the point was well made last week that we run that risk on the opposite side, you know, if we put a number two low and then they came in higher, that too can be a problem. So I understand the point, the point was well taken. You know, we do have this tension between being realistic and, again, I chose -- my position, to be conservative on the numbers as opposed to underestimating and saying the costs were come in as such. I appreciate the comments of the Council about that that may, you know, impact the bidding process.

Thank you. No 25 further questions. 98 6/4/02 - FINANCE - BILL 020275, RES. 020285

Thank you very much. Are there any other questions? Councilman Nutter, you had a question?

Miss Smith, a couple things. One, from our earlier discussion with regard to the retaining wall conversation, I have -- I mean, wherever we conclude today, I have a copy of what I think is the substantive material that will help the discussion which I can give you at the conclusion of today's hearing. It represents some of the materials from the past, but also some up-to-date information. As I said, I don't know that we have that much research to do. Secondly, I had written to you and you acknowledged in the first hearing back on May 17th about a site actually up in Manyunk which will not be in any of the materials that we discussed because it was just brought to our attention. Have you had any opportunity to look at that and do you have any reaction to that?

Again, as I testified, that's what we were going to -- want that to be 99 6/4/02 - FINANCE - BILL 020275, RES. 020285 an example of one of the test cases, even though we may not have all of the detail on that, that could be an example of a test case.

Right, okay.

The Administration is willing to work --

I appreciate that. That's a relatively new request.

Okay, I have it and I acknowledge it.

There is a lineup. I received recently two of these small vacant lot abatement program forms. I may have missed the memo on that. What are we supposed to do with these?

Small vacant abatement agreements?

Yes.

That information should be directed to the Office of Housing and Community Development. They would initiate the processing and issuance of the abatement agreement. One of the things that will happen is 100 6/4/02 - FINANCE - BILL 020275, RES. 020285 they will research to make sure tax liens, whether or not the requesting owner, I think, fulfills -- and as important as within one of the wards that were designated in the legislation by Council. But please forward that to I think it's attention to Belinda Mayo at the Office of Housing and Community Development.

Okay. The constituents sent them directly to me. I had no 11 idea where they were supposed to go.

Okay.

In term of actual activity, what's actually going to take place over the course of the summer into the fall? And how much money do you expect to spend between now and October 1st?

Again, we will be proceeding with regular demolition activity which is funded out of the bond proceeds. Any type of emergency demolition activities, that would proceed as usual. Second, we hope to have completed a number of the inspections of the priority areas. We hope to have gotten the prototype Strawberry 101 6/4/02 - FINANCE - BILL 020275, RES. 020285 Mansion underway. I can't speak specifically as to the dollar amount that would be expended by October. We would have funded the PHIL Loan Program as well as the Home Ownership Rehab Program, begin to identify and market. We are also in the process of reviewing all of the requests with respect to acquisitions to be funded out of bond proceeds as well as beginning the planning processes in connection with the areas that are designated in the plan.

All right. But you're saying that given all of that activity, you're not exactly sure how much of the bond proceeds you're actually going to spend during that period of time?

I haven't broken out to say, you know, looking between now and October what that would translate into a dollar amount. I can give estimates. For example, we refunded PHIL Loan, and that's a $2 million contribution out of bond pros in order to lower the interest rates and make them more available to a larger group of people and more flexible. Again, we've, I believe, allocated $2 million additional for 102 6/4/02 - FINANCE - BILL 020275, RES. 020285 the HRP program. That's a customer-driven program so we want to get that money in place or developer-driven. So that's $4 million. The harder one would be to say the exact amount in demolition dollars. One of the things that's important to note is that we continue to do demolitions that are in response to regular, you know, activity.

Right.

I can only guesstimate about what that would be between now and October. I would have consult with the folks at L&I. And then we're in the process of revising the schedule that was in the book because there has been some slippage on time, but we do hope to at least gotten notices receipt, if I remember correctly, in two or three areas so that we can be underway there and have those under contract.

When do you expect the first demolitions to take place?

With the targeted area, we're looking at sometime in -- I believe we wanted the notice to proceed out by the end of this fiscal year. Then I believe it's about 103 6/4/02 - FINANCE - BILL 020275, RES. 020285 another four to six weeks by the time you finish the asbestos removal. So I would say the beginning of August, mid-August.

Mid-August, okay. Now, we received the responses from last week's hearing. I think we received them yesterday. Is that the third 3rd?

Yes.

And there's a list of the questions.

Mm-hmm.

The memo indicates that you're still obtaining some responses and you'll forward them to us shortly. For the ones that have not been responded to, do you know when you'll have the information?

I would say no later than -- what's today, Tuesday? I'm losing track of time. No later than Wednesday. I have to go back -- I think some information may have went to my office as opposed to the Chief of Staff's office, so it's just making sure we got everything. But we pretty much was close to everything, if I recall correctly. 104 6/4/02 - FINANCE - BILL 020275, RES. 020285

You're talking about Wednesday like tomorrow?

Yeah, mm-hmm.

Let me to ask a question on the first issue. The question was, Is wrap-up insurance reflected in the City's Five-Year Plan? The answer was, "The wrap-up insurance will cost $6 million. The first million of that 6 million was included in a FY '02 midyear transfer ordinance passed by Council this spring and that the remaining five will come out of the difference between the amount of the debt service included for the NTI bonds in the FY '03 budget and the amount of debt service that is likely to actually be spent." Do we have a debt service schedule now based on the bonds? You quoted $143 million in bonds?

Yeah, we floated around 150 million, 145. I can get that from the Trustee or Redevelopment Authority. I don't have it with me

Do you know what that difference is? What's the first year of 105 6/4/02 - FINANCE - BILL 020275, RES. 020285 Debt Service in FY '03 and what's the actual?

I would have to look that up. I don't know. I may have it in some paper with me.

Now, the rest of that answer is, "During the budget hearings, the Administration told City Council that if actual debt service costs were lower than the amount included in the FY '03 budget, the savings used to pay for NTI-related activities." Do you know who told us that and when did they tell us? And what was the context of raising that issue?

I believe that was part of the conversation that we had with respect to either the mid-year transfer -- we had a lot of hearings.

I know. I've been at all of them.

The mid-year transfer ordinance or one of the hearings back in December. I couldn't say who said it or when it was said.

But you're saying 106 6/4/02 - FINANCE - BILL 020275, RES. 020285 that the million dollars was in mid-year transfer ordinance?

Pardon me?

You're saying that the million dollars was in the mid-year transfer ordinance and it was identified as a million dollars for insurance.

Oh, yes; oh, yes. In fact, at that time we also submitted an explanation as to what was wrap-up insurance and the like. We testified to that.

Okay.

That was with the budget department.

If you could find that out, I'd be intrigued about that. And you said you can get us a debt service schedule based on the financing that was done?

Mm-hmm.

Now, what all qualifies as NTI-related activities, because there's been a lot of discussion about what NTI is. It is very comprehensive. I understand it's 107 6/4/02 - FINANCE - BILL 020275, RES. 020285 a framework, it has many components. What qualifies?

Before you respond, Miss Smith, let me remind my colleagues that there's an L&I Committee hearing at 1:00 as well. Thank you.

Okay.

Again, for example, cost treatment of vacant land via NTI-type of activities. So we're doing things like the cleaning and sealing -- I mean, the cleaning of vacant lots. Any type of extra treatments that might be done to vacant land. One of the other things is the sealing of buildings, which historically has not been done very aggressively within the City.

I understand that. I guess I'm just trying to understand --

So it would be activities that wouldn't be appropriate to fund out of the bond proceeds that further the objectives of blight elimination and neighborhood preservation.

Are Any personnel 108 6/4/02 - FINANCE - BILL 020275, RES. 020285 eligible --

No. 4

NTI-related activities?

No. 7

With regard to -- I had asked you about some information related to the 4th District because I think I need to try to know as much about what's going to happen and we only have the current example of the pilot program. The question was providing steps for the 4th district in finalizing property lists and yes, it is absolutely true that by e-mail, I received two PDF files with dangerous and vacant buildings in the district. And subsequently, there was a meeting over again at Fleming on 4/29. Had I not asked you the question about the follow-up materials, would I have actually received the list on the same day that I asked a question?

I know you won't believe it, but it was actually transmitted separately while we were in the hearing. It went over as a part of the regular process. I know it sounds 109 6/4/02 - FINANCE - BILL 020275, RES. 020285 like quite a coincidence. When I asked him to do it, he said, "I just did it."

Just by sheer --

I know you won't believe it, but it was the regular process. It wasn't just done in response to the question.

I wish I had asked earlier. And so now you're waiting for us to have a follow-up discussion about those lists and the maps that were miraculously provided at the same time as the hearing; is that what we're going to do?

That's correct, yes.

You get a free ride on that one.

(Laughs.)

Miss McColloch, you said you had --

Councilman, do you have many more questions? Do you have many more questions?

Yes.

We have an 110 6/4/02 - FINANCE - BILL 020275, RES. 020285 L&I hearing due at 1:00.

I understand Madam Chair. I'm on the committee and I have a bill in there.

Okay. You're saying you do have a lot more questions?

No, I didn't say I have a lot more. I said I do have a few more.

All right. Does anyone else have any questions here? I know Councilwoman Tasco has to leave. We would like to conclude. I have only one question. Councilman Kenney, do you have any more questions?

No. 18

All right. Councilman Nutter, thank you. And the Chair notes that Councilman O'Neill is here. All right, Councilman Nutter.

Thank you, Madam Chair. Miss McColloch, I'll come back to you 111 6/4/02 - FINANCE - BILL 020275, RES. 020285 in a second. One of the questions had to do with the planning area in West Philadelphia and the response is that the current listing of 28 neighborhood planning areas, neighborhoods and 6 3 corridors a significant amount of work, which I 7 certainly acknowledge, but the conclusion is that 8 because of all of that you cannot include any 9 other areas of West Philadelphia. And I guess I 10 was trying to understand who decided about the 25 11 neighborhoods and the three corridors and when 12 was that decision made? 13

I just wanted to start 14 off to say that when we sat down with each 15 individual district Councilpersons back in April, 16 approximately, initially, we had started off 17 with, you know, 13 areas which we thought we 18 would be able to handle in terms of the capacity 19 because, you know, the planning process is a very 20 -- how can I put it -- labor-intensive activity. 21 And even though we have augmented the staff of 22 the City Planning Committee, we wanted to make 23 sure that we were able to do that. In response 24 to conversations we had with each of the District 25 Councilpeople, we expanded and tried to be 112 6/4/02 - FINANCE - BILL 020275, RES. 020285 responsive to those issues and looking at that really we were going to try to rely on looking at existing plans so we don't have to do a lot of groundwork. So it's a question of managing, you know, our capacity to deliver. What we don't want to do is, you know, make promises and raise people's expectations and then aren't able to follow through on that.

I understand that. The question was, who decided which neighborhoods were going to be included in the first?

Do you want to talk about the process?

Good afternoon, Councilman. The process was a collaborative effort between Planning Commission staff, the Administration, and Councilmembers. As I had indicated last week during the hearing, the initial planning, neighborhood planning areas were identified and recommended by our community planners within the Planning Commission. Each of those areas was then discussed with each individual Councilmember to identify and to 113 6/4/02 - FINANCE - BILL 020275, RES. 020285 confirm whether those areas were adequate, whether those areas needed to be expanded or the boundaries modified, or whether the area altogether needed to be replaced by another area which was the case for some Councilmembers.

Was there any recollection of my mentioning that there was this little place out on the western side of the City called West Philadelphia and that there was already and had been produced before we even knew these new language terms that there was a West Philadelphia plan and should be a part of this process? Does anybody have any recollection of that?

We recall having a discussion with you about a number of --

There was a document produced by the Planning Commission.

Yes. That is a document produced by the Planning Commission. Again, we in consultation with our community planners had identified several other areas within your district that were felt to be more appropriate for Year 1, and they were then presented to you 114 6/4/02 - FINANCE - BILL 020275, RES. 020285 as such.

I appreciate your feeling. Let me try to understand this. There's one area in West Philadelphia where there's going to be a significant amount, at least by West Philadelphia standards, a significant amount of demolition. We pretty much know that even though we just got the areas last week.

Mm-hmm.

Isn't that one of the areas that we would want to have as our priority in terms of planning, since we have no 14 idea at the moment what's going to be replaced, what's going to be demolished? Isn't that where you want to do planning?

Again, as I indicated in response to you, traditional planning activities would continue, the fact that all of the areas that you have identified or have expressed concerns about may not be reflected as a Year neighborhood planning area doesn't mean that other planning activities will not continue. Staff will continue to provide consultation services on neighborhood plans. Staff will 115 6/4/02 - FINANCE - BILL 020275, RES. 020285 continue to attend community meetings and will offer assistance with data collection and analysis. Staff will offer assistance with more site-specific -- specific concerns as opposed to broad, comprehensive --

I understand that. But their priority -- I mean, they don't have limitless time. I assume that they have to make a priority out of the 28 areas or the initial repairs or whatever the number is 12 going to be. And then everybody else is going to 13 get what's left over, which is not going to be very much. So I've got one area, I'm very happy, Wynnefield, Parkside, wonderful.

And also, we have included the Lancaster Avenue corridor --

But I've got another area that's going to see significant demolition activity and there is no strategic plan for what comes after it and it's not on the first year's list so it's going to get the leftover time, whatever somebody can scramble around and do. I don't want to be in that situation. 116 6/4/02 - FINANCE - BILL 020275, RES. 020285

As I indicated in our response, that because of the overwhelming response from Councilmembers that that expanded our list to 28, the Planning Commission did also indicate the need for technical assistance. And so we will be looking and identifying areas for consultant support, and we would be glad to sit down and talk with you about this particular area for possibly that kind of treatment.

All right. This is my last question in this area. Miss McColloch, you did respond and you and I had a discussion about the letter that I spent to you back in March with regard to 5946-48 Vine Street. I received your response, I think, in yesterday's mail.

Yes.

It's certainly a detailed response. Let me try to cut to the chase. Are we going to be able to provide funding for the Edgar C. Campbell Foundation Building over there or not?

I'm Deborah McColloch, Director of Housing. I don't know the 117 6/4/02 - FINANCE - BILL 020275, RES. 020285 answer to that without having more information about what the activity is that's being proposed for the building. And getting some of this other information, which I don't just know from the letter that you had sent me who owns building and what they want to do with the building.

I believe the foundation owns the building. Is someone going to --

I'm sorry?

It's called the Edgar C. Campbell Foundation. I believe, they own the building.

Okay.

Is someone going to contact the contact person that was in the letter that I sent back in March?

Yes. I sent -- attached to your letter was the letter that I sent to Mr. Smally with a list of questions that I had for him so when I get that information, then we'll be able to figure it out.

I appreciate that. Thank you. 118 6/4/02 - FINANCE - BILL 020275, RES. 020285 Madam Chair, Miss Smith testified that she has some other information that needs to be gathered, she thinks that that information can be put together somewhere in the next day or so. The Planning Commission is still saying that they would love to meet and have a discussion, but it sounds like there's no adjustment on the list. And Miss Smith also indicates that we're going to have some discussion about the pilot retaining wall program, but I think we don't necessarily have at the moment an agreement about how much and scope and those kinds of issues. I'd like to have some opportunity within a day or so to get those final answers to any of that information before there's a request to take any action on this particular bill. I'm sorry. And I have one other -- there is one other issue. I don't know if it was raised. I was out of the room a couple times. If it was, I'll keep going. Miss McColloch, you indicated the other day that there was a need because of a cutback in funding to significantly cut back in housing counseling; is that correct? 119 6/4/02 - FINANCE - BILL 020275, RES. 020285

Yes.

Have you talked about housing counseling today?

No, not today.

The cuts that were made in housing counseling, where were they made and how many organizations were affected by it?

A total of $647,000 was cut in housing counseling. And I can't tell you the exact number of organizations that were cut. It was in the -- I'm just thinking off the top of my head. I would say eight organizations were cut.

How many?

Eight, I think. I would have to double check exactly, but it's around eight

The cuts that were made were for any of the eight, would they represent significant cuts in the budgets of those particular organizations?

In some cases, three organizations were not funded -- that we funded 120 6/4/02 - FINANCE - BILL 020275, RES. 020285 last year were not funded for Year 28.

Three of those eight were not funded at all?

Correct.

And the remaining five you're saying split up, $600,000 worth of funding? Or is it the eight that's splitting up the $600,000?