Absolutely, but certainly there are lots of different dissections of the numbers, and that number was 2.04 for 2005.
What is your denial disparity ratio for Hispanic for home purchase loans?
Hispanic home purchase in 2004, it was 2.54. In 2005, 2.13. Again, an improvement.
But you're 107 3/19/07 - FINANCE - BILL 060052, ETC. still more than two times more likely to deny an African-American or Latino than a white person.
Our lending policies are totally transparent to race and race does not play a factor in our decisions on our home purchase lending.
Yes, sir. That is the ratio of denials of a minority segment to the denials of a non-minority segment.
So can you explain what your denial disparity ratio is with regard to African-Americans?
Well, as you said right there, a denial disparity ratio of 2.04 would indicate that African-Americans are denied 2.04 times more frequently than --
-- 108 3/19/07 - FINANCE - BILL 060052, ETC. non-African-American applicants.
So it is a true statement that your most latest numbers that you're presenting today show that you are still two times more likely to deny an African-American or Latino a home mortgage than you are a white person; is that correct or is that not correct?
That is correct, but that is not a solitary Wachovia issue. I would point out that all lenders in the Philadelphia market, the denial disparity ratio was 2.28, and we did perform better than all of the peers -- all of the mortgage originators in the market in the past year.
I thought you said you didn't have the numbers for your competitors in the market.
For small business we do not have that data yet. We do have the 2005 data for home-related lending. 109 3/19/07 - FINANCE - BILL 060052, ETC.
And what's the overall denial disparity ratio for home purchase for African-Americans?
What is the denial disparity ratio across the board for the entire market for home purchases?
Home purchases, all lenders, African-American, 2.28, and we're at 2.04.
So your statement to me -- and I'll accept it as being fair -- is that the market itself is two times more likely to deny an African-American and Latino and that Wachovia is no different.
No, sir. What my point that I was making was that the overall market of all lenders, we are in 110 3/19/07 - FINANCE - BILL 060052, ETC. a comparable situation in relation to our peers in the industry where our denial disparity ratio is near or consistent with the market as a whole. So --
But part of the case that Wachovia has tried to make over the last year or two is that it is the highest volume lender within this market, and as the highest volume lender within this market, you could in fact shift those numbers; could you not?
Yes, sir, and we are planning to do that. And to your point of how this relates back to our strategic plan, we are putting additional focus on this, where in 2004, in 2005 when these numbers were originated, the focus was not in the proper places that it needs to be. The plan that we've submitted last summer addresses a number of issues that will not only improve our performance overall as a lender but will be able to have a positive influence and positive effect on these numbers as well. 111 3/19/07 - FINANCE - BILL 060052, ETC.
What was your percentage of home purchase loans to African-Americans?
It is 17.22 percent, and certainly that is not where we would like for that to be and we --
So in the first year of the NCRC study Wachovia only offered about percent of home 17 purchase loans to African-Americans. In 18 the second year of the NCRC study, Wachovia only offered 24 percent, although an improvement, to African-Americans. Wachovia is now at 17 percent, only 17 percent of its home purchase loans to African-Americans?
I don't have 112 3/19/07 - FINANCE - BILL 060052, ETC. any other further questions.
I would add one lighter thing. In 2005, we did acquire a wholesale mortgage operation that originates loans across the nation, and these numbers did -- when we brought those numbers in to our overall numbers, they did have an impact on that, with those being a wholesale lending relationship, and we are taking corrective action to improve that performance. Again, we're two years later than this data shows, so we are in a position of being able to better address that at this point.
You are two years beyond the 2005 numbers you just gave, but clearly you know what your 2006 numbers are.
We do not know in relation to peer and we are still scrubbing that data to ensure the integrity of it. It was submitted to the regulators on March the 1st, but we're 113 3/19/07 - FINANCE - BILL 060052, ETC. still in our data integrity review and have not received our data integrity checks back from the regulators to ensure the quality of that.
No. I know what they are, but it's not a matter that we can make those public until we've done our thorough data integrity review.
I'm not at liberty to say whether they were better or worse at this time because the review is not final.
Another one of the issues that was raised with regard to your lending performance was despite the fact that Wachovia does have a good branching pattern, it does have a substantial amount of branches within low- and moderate-income neighborhoods and substantially minority neighborhoods, 114 3/19/07 - FINANCE - BILL 060052, ETC. that that is still disturbing in light of the fact that the home mortgage lending and the small business lending is not being offered in an equitable way to those communities, and so there were several activists and advocates concerned about the closing of two branches by Wachovia. Can you tell me the status of those two branches?
Certainly. Later this year Borinquen Financial -- or Federal Credit Union will be occupying one of the two closed financial centers. The second, no determination has been made.
And are you in negotiation with any particular bank or institution?
I can't at this juncture, Councilman. 115 3/19/07 - FINANCE - BILL 060052, ETC.
In light of the fact that the most recent data that you can give us is that Wachovia only offered percent of its home purchase 6 loans to African-Americans in the latest 7 data available, don't you think that 8 there would be a particular concern of 9 this Committee about what happens to the 10 other branch, particularly because that 11 branch is in a neighborhood with a 12 considerable African-American population? 13
Councilman, first, 14 I do understand it's a particular 15 interest for this Committee. Secondly, 16 as you are aware, I believe aware, we've 17 opened two other financial institutions that are in origination to low- and moderate-income tracts at the same time that these two have closed. So we still have over 66 percent of our branches in low or adjacent to low- and moderate-income tracts.
But when someone who lives in that particular 116 3/19/07 - FINANCE - BILL 060052, ETC. neighborhood knows you've closed a branch and they hear that in 2005 you only offered percent of your home purchase 5 loans to African-Americans, they have to 6 be even more concerned about the fact 7 that there is no bank there. I mean, 8 after that community putting its deposits 9 in that bank and obviously not being able 10 to access them equitably in terms of 11 pursuing the American dream of 12 homeownership, if that bank then 13 disappears, they have to feel that much 14 more disenfranchised. 15
Councilman, in the 16 case of the two financial institutions 17 that were closed, the two branches, we have another branch that's four-tenths of a mile away from one of the branches that closed. In the other, eight-tenths of a mile. Within those zip codes there are nine federally chartered banks and 11 federally chartered banks. So there still is access to capital.
But not 117 3/19/07 - FINANCE - BILL 060052, ETC. necessarily equitable access to capital.
I'll ask the question one more time for the record, although I think you've already answered it to the extent that you can answer and to the extent that you've put forth numbers. Do you know for a fact that your strategic plan is improving the credit gaps that existed in terms of home purchase loans and small business loans to African-Americans, to Latinos and to low- and moderate-income communities, to businesses with revenue of less than a million dollars a year and to those seeking businesses less than $100,000, in those areas that were identified by NCRC? Is your strategic plan actually addressing those disparities and filling those gaps and can you give me any specific statistic or number that would prove that? 118 3/19/07 - FINANCE - BILL 060052, ETC.
As you're aware, the strategic plan did go into effect in July 1st of 2006, so the numbers that I have to report to you are in the first six months. We have not been analyzing it per each individual segment in terms of minority group or income group, but I can tell you --
But that is in fact what we asked you to do in submitting the strategic plan and implementing the strategic plan in private discussions and negotiations and every discussion we've had. I said I'll be fair about this. I'm going to simply look at the data and look at the numbers and look at how you're performing or not performing and whether you're improving or not improving. I'm not telling you where you should be. I'm not telling you 119 3/19/07 - FINANCE - BILL 060052, ETC. how to get there, but unless you can directly answer the question in terms of whether you have filled any of those credit gaps with regard to home mortgage lending and small business lending to African-Americans and to Latinos and to women and to low- and moderate-income neighborhoods and to smaller businesses, I have no way of knowing until we receive our next comprehensive study whether the bank still ranks as bad as it did before. And one of the things that we have agreed upon, although the City has put out to bid and accepted a bid of a firm, actually a joint venture between two groups that will look at 2005 and 2006 and give us those comprehensive numbers, one of the things that we agreed upon was that Wachovia would track it itself and be open and honest about where it's performing and where it's not. And if that's what we agreed upon and I ask you for the information -- first of all, you told me you would provide it to me on a 120 3/19/07 - FINANCE - BILL 060052, ETC. routine basis privately. That has not happened. So now I'm forced to ask you publicly. Even the last time we ran into each other, Mr. Gish, you asked me was everything okay, how am I feeling about Wachovia today. I said, I'll be feeling a lot better when you give me the numbers. Is that not what I said to you?
But I can't feel any better about Wachovia because I don't have any new numbers to make me feel better; is that not true?
I would be glad to provide you with the data, Councilman Goode, and we do have the data and as of your end, we were running 156 percent of our plan to date on our goal. So we are exceeding our targets and what we had set 121 3/19/07 - FINANCE - BILL 060052, ETC. out to do, and I --
Our targets for overall lending in low- and moderate-income census tracts as defined by our strategic plan.
The strategic plan was supposed to address disparities in the studies. I don't care what targets you set for yourself if in the end the outcomes are not that those disparities have been addressed. So what you're saying to me is that we've identified disparities, you've come up with a strategic plan, your goals for the strategic plan, you're happy with how they're proceeding, yet you can't comment on whether they have actually addressed those disparities or not. That's ridiculous. And, in fact, you mention that your strategic plan represents less loan volume than your previous lending; is that not true? 122 3/19/07 - FINANCE - BILL 060052, ETC.
When we created that strategic plan, it was based on what we thought we had the ability to experience in terms of outside factors such as market demand and interest rates and other factors.
It represents a lower loan volume than what we had experienced in the past, but we will be pleased if we're able to have a demand that exceeds that commitment, and, in fact, for the first six months that we've tracked that information since --
See, I just want to be honest with this Council, that when your CEO went around throughout this Council, throughout City Hall bragging about a billion-dollar commitment and then when your CEO decided to brag about 123 3/19/07 - FINANCE - BILL 060052, ETC. over half-a-billion-dollar commitment to low- and moderate-income neighborhoods, I just want you to say for the record that what he was saying is, You should be proud of that even though we're doing less than we did in the past.
We formulated that commitment based on what we thought the market demand, other factors would be. It has nothing to do --
It is less because we thought the market would impact our ability to have that demand.
If I understand why it's less and it's less because of interest rates and for a 124 3/19/07 - FINANCE - BILL 060052, ETC. number of different reasons, one, I'm not going to be impressed with your loan volume, because I know it's less. But then when you come back and the only numbers you say you have are about loan volume and I already know it's less but you then can't tell me the percentages as they relate to areas where you showed disparities in the past, to me you think we're stupid. You think you're going to play bigger is better, we have a higher loan volume than everyone else, when in fact I know that your commitment is less, I know you can't tell me anything about resolving any disparities that we asked you to resolve within the strategic plan.
We were not prepared today for being able to provide you data for the first six months of that commitment with respect to disparities. What we were prepared --
What did you think I wanted to know except for whether you resolved your disparities? 125 3/19/07 - FINANCE - BILL 060052, ETC.
I understand. We were prepared to provide you information about what we were doing in terms of our performance against that commitment, where were we performing better, from our perspective, in those categories where we were -- you had identified in earlier meetings as lagging behind our peers, specifically home purchase mortgages and small business lending.
Ms. Allen, what percentage of home purchase loans to women, female borrowers?
Again, I apologize for us not being prepared to be able to provide you the detail by category within those lending areas.
Thank you, Madam Chair. Councilman Goode has addressed 126 3/19/07 - FINANCE - BILL 060052, ETC. the issues regarding the procedure by which once you make a decision to close down branches how you proceed with informing the community. I would like you, if you would, to please provide to the Chair your numbers around home mortgage lending and small business lending for women, if you would. And to the earlier testimony which talked about 260 community partnerships, could you just tell us how many of those or what amount of those 260 are in the Philadelphia area?
That is the number of organizations in Philadelphia County that we have had active partnership with over the past three years.
Are 127 3/19/07 - FINANCE - BILL 060052, ETC. there further questions? (No response.)
Thank you very much. The Chair now recognizes Jonathan Stein and Donna Bullock, CLS. After CLS we will have Ronald Johnson, National Coalition of Blacks for Reparations in America.
Good afternoon, Madam Chairwoman Blackwell. I'm Jonathan Stein, general counsel at Community Legal Services, joined by my right, Steven Buvel, who directs our Community Economic Development Unit at CLS. We're here on behalf of a coalition of organizations across the City interested in ensuring that banking institutions are accountable and responsible to their communities. First we'd like to thank each of the Councilmen in the Chambers here -- Madam Chairman Blackwell, Councilman Goode, Councilman Ramos, Councilman Kenney, Councilman 128 3/19/07 - FINANCE - BILL 060052, ETC. Greenlee, Councilman DiCicco, Councilwoman Blondell Reynolds Brown -- for supporting so enthusiastically and unanimously the ordinance that is now law that requires, for the first time, City depository banks give the City and City Councilmembers prior notice before a branch closing. The City of Philadelphia may be the first city in the nation to have such an ordinance, and we really appreciate the quick action and response that City Council has made to this issue generated by the behavior of the stealth closings that we've seen of Wachovia Bank that brought this ordinance into fruition. I think what that ordinance is is essentially a message to the banks that it's not business as usual, that banks must be held to standards of accountability of community responsibility, Wachovia as well as other banks in the City. Since our prior January 31st 129 3/19/07 - FINANCE - BILL 060052, ETC. testimony, I wanted to just update Council on what has transpired. The federal banking agency of the Office of the Controller of the Currency, OCC, held one of its first-ever hearings in recent times about the Wachovia branches hearing held February 27th in North Philadelphia, which focused not only on the branch closings of Wachovia but also on their broader practices, the lending practices that Councilman Goode and you have brought to air today, inadequacies in small business lending and home purchase mortgage lending, as well as the lack of the bank's commitment to fight predatory lending. They have refused to essentially engage and agree to a proposal to have a product that could be a rescue loan for those losing their homes from predatory lenders. They've refused to engage us with initiatives to deal with home repair issues in the City, et cetera. You have asked about the two 130 3/19/07 - FINANCE - BILL 060052, ETC. particular closings at Front and Allegheny and I think we applaud the effort that one of those -- the Front and Allegheny branch will be going to Borinquen Federal Credit Union for one dollar, but to the surprise of all of us, when Wachovia earlier in the year said that, We're going to keep these two branches at Front and Allegheny and Germantown and Lehigh, the other branch, which they didn't mention this afternoon, that they were going to keep those two branches in-house so they can transfer them to another banking institution, although they've done that for Front and Allegheny, when it comes to Lehigh and Germantown, on February 27th, to the surprise of everyone, Mr. Gish, who is here, announced to everyone that they were essentially reneging on an oral commitment they made to keep that branch in-house so that they could transfer it in a way as they did with Front and Allegheny to Borinquen and instead of 131 3/19/07 - FINANCE - BILL 060052, ETC. going down that path, which they said to a number of organizations they would do, they said, We're reversing ourselves, we're going to give the Germantown and Lehigh branch to a realty organization to sell to the highest bidder. And so there's a real unknown there as to what Wachovia will really do with that site. It's in North Philadelphia.
It serves a low-income and minority community, and we know -- the only fact we know is that they've reneged on an oral commitment they made, just made two months earlier, that they wouldn't give this property at Germantown and Lehigh to their realty company but would keep it in-house, and that's something that unfortunately the witnesses you just heard did not directly respond to. The only thing you've heard from them on branches was that that Germantown and Lehigh branch is in negotiation. It's now mid March. They closed in early December. They knew they would be closing it last summer. It's 132 3/19/07 - FINANCE - BILL 060052, ETC. now empty with no bank there. And they said that they have two new branches in low- and moderate-income areas. Well, they didn't give you the addresses of them, did they? One of them, we believe, is at 21st and Market at the Commerce Square building. Now, on someone's map, that may mean low- and moderate-income area, but in our maps, as we can walk there in three minutes, I don't think a downtown business area at 21st and Market can be considered a low- and moderate-income area. And so that's what they're telling you in this sort of game of where branches are and how they're described. The last time they were here, they said, We have branches in and adjacent to low- and moderate-income areas, which is another stretch they've used in language, which is not quite in the language that the federal agencies use. They don't talk about adjacent. They talk of being in an area. And we 133 3/19/07 - FINANCE - BILL 060052, ETC. don't really consider -- I don't think anyone who has lived in the City for any number of years would consider 21st and Market to be a low- and moderate-income area. If I could just respond directly to what we heard this afternoon. After the direct question to Mr. Knott about Community Reinvestment Agreements from Councilman Goode, I think we heard finally an answer, a direct response from Mr. Knott saying that, Yes, we are against Community Reinvestment Agreements as a matter of policy. Now, that means they will not enter into any written agreement with any groups or a coalition of groups so that what they commit they can be held accountable to. They can issue press releases. They can issue, quote, plans. They could distribute many copies of that on many desks in City Hall, but when it comes to something that they can really be held accountable to, including in a court of law, they stop 134 3/19/07 - FINANCE - BILL 060052, ETC. short of that. If they want to hold someone who takes a loan from them accountable so they can sue somebody or foreclose on their house, you can bet that from the get-go they're going to ask for a written agreement, not just a smile, a press release or a plan. So there's a real double standard they're holding the community to here. And we are not one organization. We're representing a coalition of groups. They include Action Alliance of Senior Citizens; Eastern Philadelphia Organizing Project; Ceiba, which is a coalition itself of five Latino organizations; the Philadelphia Unemployment Project; NAACP; Women's Community Reinvestment Project and others, including suburban groups. So we have presented ourselves to Wachovia not as a single organization but as a regional coalition seeking changes in their practices that not only affect one block, they affect the entire city and 135 3/19/07 - FINANCE - BILL 060052, ETC. region. So they have made a strategic plan decision not to engage, not even to talk, because Mr. Gish called me up two weeks ago and said, We're no longer going to talk to you. We'll talk to an individual group, to one of their, quote, partners, an individual partner. They won't talk to a coalition. And they certainly made clear this afternoon they won't put anything in writing after months of maybe talking negotiations.
That is not a responsible, accountable bank, and I think this City Council can hold them to a standard of accountability, which includes negotiating in good faith with a coalition that's responsible and entering into a written agreement when something is resolved. And we've been open to negotiations for months now and we've begun them, but every month or so Wachovia says, We won't talk to you anymore. And we've heard that for the 136 3/19/07 - FINANCE - BILL 060052, ETC. second time a couple of weeks ago. I really need not go into other aspects. I think Councilman Goode has found that either this bank has no 6 answers to questions and they knew -- they've had two months -- they've been on notice for many months about what questions this Council is seeking from them, and for them not to show -- and, remember, they continued an appearance. They've put off coming to this Council. But they finally come today. They bring someone from North Carolina, they bring their Regional President, and yet they don't have answers to very basic questions. And these questions really go to the heart of whether they are being fair and responsible to minority communities, to low-income people in the City. And we see at least in two major areas, of home purchase mortgage lending and in small business lending, that they are failing. And you have to wonder they're not putting anything forward to 137 3/19/07 - FINANCE - BILL 060052, ETC. show progress despite criticism and they're saying, I guess, trust us or we're big, we're the largest bank in the City, so we can do anything we want. And, unfortunately, in the state of the law that often bankers have written at the federal level, at the local level at least we have a City Council that we have to take our hats off to, is acting extremely responsible here and reasonable, too. )
And I think you've acted respectfully and reasonable to this bank. You've asked reasonable questions. They haven't come up with answers, or at least some of the answers they've come up with show they're going backwards, not forward. And I think it's time to say to this bank you're fed up. There's a time when a bank has to understand that there are consequences to not being direct with a legislative body and not, more importantly, making progress on how it 138 3/19/07 - FINANCE - BILL 060052, ETC. treats low-income and minority people, and I think that time is now, and we urge the Council of this Committee to support Councilman Goode's bill to de-list or de-authorize this bank as a City depository. Thank you. (Applause.)
Thank you very much. Tell Donna Bullock we miss her. Obviously you are not she.
Mr. Stein, just one quick question. What's been your experience with other banks? Is there a general rule of thumb? Have other banks entered into agreements? Have others not entered into agreements?
Or have 139 3/19/07 - FINANCE - BILL 060052, ETC. you tried to get --
Well, the history we have is with essentially the Wachovia predecessors. I mean, in 1998, we entered into -- a number of groups, the state Attorney General had one agreement, the EPOP organization had another, the NAACP, Action Alliance had another, and entered into written agreements after negotiation with First Union Bank, and there are other agreements that were held with other banks earlier than that. First Union is essentially Wachovia. They had a name change about four, five years ago. So essentially the predecessor bank of Wachovia entered into agreements in '98, and we don't see any reason why they couldn't enter into an agreement now.
I guess you answered it slightly different than what I think I was asking. Other banks, have you tried or are you aware of other groups -- maybe there hasn't been these 140 3/19/07 - FINANCE - BILL 060052, ETC. attempts to enter into agreements with other banks, or has there never been the need to do so that you saw?
In the past, there have been agreements. There's nothing pending other than these requests of Wachovia right now.
I know right now, but I'm just -- what I'm trying to get on record, is there a history here? I mean, is Wachovia being completely different than other banks? Are there banks that as far as written agreements, there's some that do it that way, there's some that do it another way? Do you know where I'm going with this?
Yeah. I mentioned three agreements that were entered into in 1998 with First Union. Before that, I believe -- and my colleagues could probably refresh my memory -- that with IVB there was an agreement earlier. They often took place around a new bank emerging in the City or a merger 141 3/19/07 - FINANCE - BILL 060052, ETC. happening or something like that. And so there is a history, including in other cities as well.
So First Union would be the example that you've used?
Has there ever been an attempt -- I'm just throwing out a name -- with PNC? I don't know. Has there ever been an attempt to have some kind of agreement, or did you feel the need to do it?
We haven't represented any groups that have had an action against PNC.
I used PNC as an example. Are we looking at a situation that's very different here, or what? That's what I'm trying to get at, I guess.
Well, you have a situation where in two key areas of community responsibility, small business 142 3/19/07 - FINANCE - BILL 060052, ETC. lending and home purchase mortgage lending, you have Wachovia far off the mark from other banks. And as I mentioned in my January 21st testimony, it's not only the data that Councilman Goode and the City Council has commissioned and has before it; if you look at other indicators, like on affordable home purchase mortgage lending, the Pennsylvania Housing Finance Agency has a major affordable housing product which they make available through banks across the state. And Wachovia is the second largest bank in the state, but they rank No. 18 statewide in providing this affordable housing mortgage product to customers. And to make that real nitty-gritty and specific, in 2006, last year, there were 1,233 affordable housing product loans that came through the Pennsylvania Housing Finance Agency that resulted in 1,233 people in Philadelphia receiving that product. Wachovia only processed 21 of the 1,233. That is, one 143 3/19/07 - FINANCE - BILL 060052, ETC. percent of those affordable housing loans were processed by Wachovia, which is another indicator. So when you look at various indicators, you see some serious problems with how this bank is doing business in the City.
I understand your criticism, but I guess I was just trying to limit the question of the actual written agreement. So you're saying that it was their predecessor you did have a written agreement with?
And you never really attempted to get some with others?
No. We haven't represented any other groups against another bank regarding a CRA.
Are you aware -- I don't want to beat this thing to death. Are you aware of any groups that have tried to deal with other banks 144 3/19/07 - FINANCE - BILL 060052, ETC. like this either way?
Not currently. It's a rather -- it's not an easy task of groups particularly to -- but I would say that other banks are being held -- will be held to similar obligations.
At the OCC hearing back in February, we had learned from the OCC that banks did enter into written CRA agreements with community groups.
Okay. That's where I was going. Thank you. Thank you, Madam Chair.
Thank you very much. Are there further questions? (No response.)
Thank you very much. Ronald Johnson, National Coalition of Blacks for Reparations in America. There was someone else here from the same organization. Is it Harry Ricketts or Minister Ari Sesu Merretazon? 145 3/19/07 - FINANCE - BILL 060052, ETC.
Thank you. Welcome. Please identify yourself for the record, begin your testimony, and thank you for your patience.
Good afternoon. My name is Ronald Johnson. I'm here to represent the National Coalition of Blacks for Reparations in America. To Finance Committee Chairwoman Jannie Blackwell, good afternoon to you and your distinguished colleagues of the Finance Committee, as well as everyone who is present in the City Council Chamber. My name is Ronald Johnson. I'm here today representing the National Coalition of Blacks for Reparations in America, also known as N'COBRA. More importantly, I am a voice for my African ancestors who are enslaved in this land we know today as the United States of 146 3/19/07 - FINANCE - BILL 060052, ETC. America and never received justice for the suffering they had to endure. I am also here today to petition the Finance Committee to divest all City of Philadelphia monies from Wachovia Bank. Before I put forth my reasons why Wachovia Bank should be dropped as a depository of the City of Philadelphia monies, I want to share with everyone in this room a legal principle called unjust enrichment. Unjust enrichment is when a man or entity enriches itself unjustly at the expense of another man or entity. Wachovia Bank has been enriched unjustly by its acquisition of banks that profited from the enslavement of African people. One may argue that slavery was legal. That is a fact, but because slavery was legal, it did not make it morally or ethically right. Human lives were destroyed and forever altered by the institution of slavery. Although Wachovia Bank apologized for its role its predecessor 147 3/19/07 - FINANCE - BILL 060052, ETC. banks played in the slave trade, I do not believe it was sincere. In my opinion, Wachovia Bank was doing what they thought was politically correct. Wachovia Bank took a hard stance by saying they were not in the reparations business. N'COBRA found Wachovia's position on reparations to be unacceptable and called for a national Divestment of Wachovia Bank Campaign at its national conference in June 2006. For a point of reference, Swiss Banks were forced to pay victims of the Jewish holocaust one and a quarter billion dollars as a settlement that they profited from Nazi war crimes, according to a report released by the Reuters news agency in New York. The Washington, DC-based law firm of Cohen Milstein Hausfeld and Toll represented Jewish holocaust victims in this settlement. I cited the Swiss Bank settlement to the victims of the Jewish holocaust to say to Wachovia Bank and 148 3/19/07 - FINANCE - BILL 060052, ETC. everyone who can hear my voice and/or read this testimony that a precedent has been set for a bank who has been unjustly enriched to make financial compensation to those individuals or groups who have suffered financial losses at that bank's expense. By refusing to dialogue around this issue of reparations for African-Americans, I feel Wachovia Bank has disrespected all African-American people in this city, who happen to make up roughly 50 percent of the population. If the Jewish or Asian community were making a similar claim for reparations, Wachovia Bank would roll out the welcome mat. Wachovia Bank should not profit another penny from African-American people. Divest now, City of Philadelphia, from Wachovia Bank. It is the right thing to do. Thank you.
Thank you very much. 149 3/19/07 - FINANCE - BILL 060052, ETC. Are there any questions for Mr. Johnson? (No response.)
Thank you. Please identify yourself for the record. Whoever would like to go next is fine.
My name is Mr. Harry C. Ricketts, Jr., a/k/a Brother Okanga Thosto (ph). Greetings. Madam Chairwoman, Councilwoman Jannie Blackwell, all Councilwomen present, Councilmen present, ladies and gentlemen and to our security element, greetings. In the name of our Lord and savior Jesus Christ, I say heaven oh. Good afternoon. I am a member of the Philadelphia chapter of the National Coalition of Blacks for Reparations in America, a/k/a N'COBRA. Our chapter's main question we bring to the table is not only about divestment of funds. We're trying to get what Councilman Goode 150 3/19/07 - FINANCE - BILL 060052, ETC. is bringing to the table about divestment of the funds of Wachovia Bank. The other main question that our chapter brings to the table is, Wachovia Bank, what is your reparations plan? Now, Wachovia is also involved in a few restaurants, fast food restaurants. One to be specific is Wendy's restaurant. Now, I bring that to the table or bring that to your attention to the Councilwomen and Councilperson now, I bring that to the table because there are advertisements of Wachovia Bank in Wendy's restaurants, and these Wendy's fast food restaurants are of a high population in low-income areas. Also, I will bring -- I'll be brief. I will bring more information at the next meeting. So I gather there will be another meeting, or I hope and pray that there will be another meeting. And we thank the Council for inviting our chapter to bring this attention of the 151 3/19/07 - FINANCE - BILL 060052, ETC. situation about Wachovia Bank, the concerns that not only we at N'COBRA have, but there are other people, the population of this city, have concern about how Wachovia Bank as really not being so welcome or red carpet to our sisters, our queens and the low-income population of this city, be it Africans or being Spanish or, say, other -- what I want to say is other populations or other like, say, what is it -- well, I'll just say other groups or other populations. I'll say that. Now, like I said before, I really hope and pray that there's another meeting with this situation. We can get more people out to a meeting like this. This means a lot to the low-income personnel of this city. Thank you so much for listening. Have a nice day. May the Lord bless you and yours.
Thank you, Mr. Ricketts. 152 3/19/07 - FINANCE - BILL 060052, ETC. Minister.
Yes, ma'am. Thank you. I do realize the hour is getting a little late, and I would like to revise and extend my remarks I made in testimony on February the 20th, but I'd also like to just --
Yes. My name is Ari Sesu Merretazon. I am the Northeast regional representation for the National Coalition of Blacks for Reparations in America and I am a Board member. And I just want to connect my testimony to Wachovia's representatives back in January 21st and just set this thing in a real sense. They failed to recognize the authority of the City Council. It's about recognition. On January 21st they sent a band of lawyers to do nothing but filibuster. Today they sent some Vice-Presidents that had no relevant 153 3/19/07 - FINANCE - BILL 060052, ETC. information based on the requests made by this Council. So it's about smoke and mirrors for them. And they failed to recognize the position of their relationship to citizens of this city and the municipality Council of this city. So they first think that we must meet their needs as opposed to them meeting our needs as a municipality. Now, on February 20th of this year I submitted testimony regarding Wachovia Bank's non-compliance with the requirements of Section 17-104 of The Philadelphia Code, Prerequisites to the Executions and Validity of City Contracts. This section requires any City depository authorized to accept City deposits under Section 19-201 of The Philadelphia Code to annually certify compliance with Section 17-104. And I quote, "If such depository has disclosed slavery policies sold by it or its profits from slavery, to provide the City with a statement of financial 154 3/19/07 - FINANCE - BILL 060052, ETC. reparations, all under certain terms and conditions," end of quote. I submit that the failure to comply with Section 17-104 alone is sufficient and substantial enough for this Council to revoke the depository status of Wachovia Bank, notwithstanding that Wachovia has arrogantly stated for the record that it has no intentions of paying reparations and thus refuses to submit a financial reparations plan as required by the Code. Additionally, however, my testimony this afternoon is a moral appeal to your hearts and minds that Wachovia, despite its superficial efforts of corporate responsibility, under certain terms and conditions, is still today at this very moment undergirding and advancing a de facto public policy which is a vestige of the legacy of its enslaving predecessors starting from the beginning with the Bank of North America. During the sanctioned of 155 3/19/07 - FINANCE - BILL 060052, ETC. enslavement of blacks, Wachovia's enabling predecessors were unjustly enriched by the totality of black people's existence and condition in America based on a public policy defining blacks as human commodities and their labor as cheap tools to produce great wealth. Wachovia has inherited a large portion of that wealth and refuses to repair the wrongs of its predecessors, the sins of its fathers. Wachovia's predecessors' absolute power over blacks allowed them to operate an efficient and effective enslavement system. Make no mistake about it, many of Wachovia's predecessors were slave holders and slave merchants, starting with its original founders, Robert Morris and Thomas Willing, and the government provided the environment and the legal context and framework that allowed oppressive public policy to exist and operate and profit corporations for over 300 years. 156 3/19/07 - FINANCE - BILL 060052, ETC. " This is the context which Wachovia is operating in today without recognizing it. They refuse to recognize their historical relationship to enslavement. They refuse to recognize this Council based on the information that the Council had requested from it. Fundamentally now, the rationale behind the introduction of Philadelphia's slavery disclosure law is to no longer allow corporations with predecessor institutions which profited from enslavement of blacks to use a legal framework to do business with the City of Philadelphia without submitting, 157 3/19/07 - FINANCE - BILL 060052, ETC.
quote/unquote, "a financial reparations plan" to remedy the effects of enslavement on black citizens of Philadelphia today. Therefore, we are asking your offices, the City Council of Philadelphia, to uphold and revoke Wachovia's depository status, unless and until Wachovia provides the City with, one, a full impartial study on the impact of its participation in the holocaust of enslavement on African-Americans and, two, a financial reparations plan, with input from N'COBRA, based on its full disclosure of its predecessor institutions profiting from enslavement and the contemporary vestiges of enslavement. Now, I thank you for the time to present this. I know the hour is late, but it's key for us to engage in some discussion with this, because Wachovia's policy is not to even discuss the matter. So as long as we have public 158 3/19/07 - FINANCE - BILL 060052, ETC. discussion on the issue and raise questions, pro and con, we need to begin to germinate the symmetry to lay out the full issues and show the relationship of Wachovia, not only to date but also in the past, that affects today directly. I thank you for the time.
Thank you very much. Are there any questions? (No response.)
The last and final person, Margaret Williams. Are you here? And then is there anybody else here on this bill? Stan Shapiro. All right. Is there anyone else? All right. And Jim Royal. Is that it? They will be the final three to testify on this. And then for members of the Committee, we have one last bill. Thank you for your patience. Thank you. Please identify yourself for the record. 159 3/19/07 - FINANCE - BILL 060052, ETC.
Yes. My name is Margaret Williams. I'd like to say good afternoon to City Council and I thank you so much for giving me the opportunity to speak. I would just like to let you know that Wachovia Bank not only is involved in other issues as far as slavery or whatever, they also stole my house. Wachovia Mortgage Company -- I have all the proof to prove it. They stole my house in sheriff's sale in 1998. When I did my investigation and proved to them that they stole my house, they came to City Hall and vacated the judgment. They never notified me that they vacated the judgment. They vacated a judgment three years later because I was fighting for my rights. Now, after they vacated the judgment, they concealed the sheriff's sale off of public records. I have my documents here to prove there is no 25 sheriff's sale on my records. It only 160 3/19/07 - FINANCE - BILL 060052, ETC. states "vacated." Now, it goes deeper. I contacted the President of Wachovia Bank. He sent me to a lawyer in Reading, PA. His name was Steven Adams. Mr. Adams sent me a letter stating Wachovia had no 8 missed mortgage payments of my account. Now, I have a letter from the attorney. So I said, Well, why did you take my house? So he said to me, Oh, I thought you told me if I give you the letter, that you would go away and leave me alone. I said, Do you think I'm that stupid? Guess what he did? I have a recent letter from him as of three months ago. He threatened me with a certified letter. He said, If you come into this office or even call Wachovia office again, I will have you arrested for harassment. And plus he had the Police Department to call my house and threaten 161 3/19/07 - FINANCE - BILL 060052, ETC. me. He said, I dare you to come into this bank. And I think that was one of the most crucial things of my life. They never even apologized to me. He just took advantage of me because I'm poor. And he told me, You go find yourself a lawyer to fight against us and I guarantee you they won't do it, because they have that much connection into Philadelphia and they know like a lawyer on my stand of my income would not fight against them. They too powerful to fight. But, you know, I'm not giving up. I have my receipts to prove that my house is paid for, and I'm going to continue to fight. Even if I have to go to Reading and get arrested, I'm going. They giving back my house. And I thank y'all. (Applause.)
Thank you very much, Ms. Williams. We've known her for many years 162 3/19/07 - FINANCE - BILL 060052, ETC. and she's been fighting this issue. Stan Shapiro. Thank you for your patience, all who are left to testify. Thank you. Please identify yourself for the record.
Hello everybody. I'm Stan Shapiro and I am here in my capacity as Second Vice-Chair of Neighborhood Networks. I'm not going to add anything to the record with respect to Wachovia Bank. Enough has been said, and all of it is pretty awful. Neighborhood Networks does support this legislation and does believe Wachovia is eminently qualified and deserving of being discharged as a depository for City funds. I just want to point out the only thing that I'd like to add really to the record is something that's in the law and it's really incredibly unfair aside from what's been on the record, and, that 163 3/19/07 - FINANCE - BILL 060052, ETC. is, that the banks in the City get special treatment under the business privilege tax. They pay a small fraction of what other businesses pay as an industry, and they should be held as an industry to a particularly high standard of performance and of performing as good corporate citizens in the City of Philadelphia, and it's clear from the disparity records that Councilman Goode pointed out and it's on the record now that as an industry, they're underperforming. Wachovia is the biggest member of that industry, and it is clearly high time that they are held to the performance that should be expected of them. They get these preferential rates and they provide nothing in return. They also earn profits from their status as a depository, and it's very outrageous that they've been able to get away with what is on the record today.
Thank 164 3/19/07 - FINANCE - BILL 060052, ETC. you very much. Are there any questions for Mr. Shapiro? (No response.)
Thank you. Always a pleasure to see you. Mr. James Royal. Thank you. Welcome. Thank you for your patience.
Thank you. Good afternoon. My name is Reverend James Royal. To the Chairman, to the Committee, I'm going to be short. I just want to echo everything that has already been said about Wachovia Bank, and I do believe that the work that the Councilman has done -- I think someone said it right before me, especially being spearheaded by Councilman Goode -- we appreciate all the work that he's done. But we need to straighten these matters out and I think starting here, taking that bank off the list, even though they might be the big dog in the house, we got a lot of big dogs in the house, but we also have a lot 165 3/19/07 - FINANCE - BILL 060052, ETC. of little ones, and if they had loaned money to small businesses and helped people finance their businesses, people would have a place to work and they could pay their bills. But when they go about not to -- to divest the neighborhood and the -- I guess you could call it testimony they gave this afternoon, I was really surprised at the Vice-Presidents and those folks that's supposed to be up the ladder. I guess they're supposed to do some foot work and everybody is supposed to go away. But I just want to commend the Council, and we support the efforts of the movement by Councilman Goode and we hope that this will hopefully turn the tide, because things are not going to get any better, and Wachovia is not the only one in the house that's doing those type of actions. Thank you.
Thank you very much. 166 3/19/07 - FINANCE - BILL 060052, ETC. Any questions for Reverend Royal? (No response.)
Thank you very much. The last bill to be considered today is Bill No. 070072, commonly known as the "green roofs" legislation. The Clerk will read the title of the bill. While he is reading that title, we ask Charlie Miller, Mr. Tim McDonald, Thurman Brendlinger and Jill Kowalski, as well as Alisha Deen-Steindler and Christine Knapp to come forward. After that, we will hear the Administration and then we will enter our stated meeting for our hearing today. Thank you very much.
Bill 070072, an ordinance amending Chapter 19-2604 of The Philadelphia Code, entitled "Business Privilege Taxes," by providing a "Green Roofs Tax Credit" for costs incurred to erect a "green roof" that supports living vegetation, under certain terms and 167 3/19/07 - FINANCE - BILL 060052, ETC. conditions.
Thank you very much. Charlie Miller, we assume that you will be first, and you may speak in any order you choose. Thank you very much. Please identify yourself for the record and begin your testimony. Thank you. Thank you for your patience.
My name is Charles Miller. I am the owner and President of Roofscapes, which is a company in Philadelphia dedicated to the design and installation of green roof systems, and I'm here because we have been involved in building green roof projects across the country for the last ten years and it's only been recently that I've had business in my own home town, which is very exciting to me. And in particular, the new Philadelphia stormwater management regulations recognize green roofs as a mechanism for addressing or complying with those portions of those regulations. 168 3/19/07 - FINANCE - BILL 060052, ETC. I'd like to just define briefly how I look at green roofs and their use as a valuable way of improving the environment in the City. First of all, green roofs are related to landscape systems, which have actually been around for quite a long time, and we recognize these around Philadelphia as plazas on the streets, which are actually over top of buried structures. They're shallow soil systems. They require waterproofing. All the technical challenges associated with installing a green roof are familiar to engineers, and nothing novel about them. What is novel is that green roofs are designed to be much thinner and lighter and less expensive and easier to install, and they're intended to provide specific benefits in terms of energy and in terms of stormwater runoff mitigation. The principal benefits associated with green roofs are that they 169 3/19/07 - FINANCE - BILL 060052, ETC. extend the life expectancy of the roofing systems that they overlie and, therefore, add value in that way. As I said, they can be very effective in complying with stormwater regulations regarding rate, quantity, water quality. They have been used effectively in Europe for the last years to address combined sewer 10 overflow issues, which is a major problem 11 in Philadelphia. They can be used 12 effectively to address small storm 13 flooding events, which are all too 14 typical in Philadelphia. And they are a 15 way of replacing open space or pervious 16 area quality to the surfaces that they're 17 applied to. 18 They also have energy benefits 19 inasmuch as green roofs have performed 20 effectively as reflective roof surfaces do, so-called Energy Star roofs, which are white and designed to be cooler. Green roofs will actually maintain the roof in a more cool condition and will be more durable in their performance than a 170 3/19/07 - FINANCE - BILL 060052, ETC. white roof would be. And in certain circumstances, depending upon the building, they can confer benefits to the owners of the buildings in terms of energy savings. " This is based upon research done by Columbia University using data collected at Penn State University, and shows very convincingly that green roofs outperform white roofs in terms of being cool roof systems. The temperature diagrams also shown were collected from a prototype project here in Philadelphia, and the red lines show the temperature measured underneath the green roof, the blue lines are the temperatures measured on an identical and adjacent gray roof, classic Philadelphia rubber roof, and this roof was only -- is only two and a half inches 171 3/19/07 - FINANCE - BILL 060052, ETC. thick, and you can see the tremendous benefit in reducing the temperature variation and -- well, essentially the temperature variations and reductions in summer temperatures in particular during the mid-day times. And in the winter, it even confers benefits inasmuch as long as there's some water in the roof to still freeze, the roof temperature never drops below 32 degrees. From a stormwater standpoint, green roofs, from sort of an engineering mathematical point of view, look just like tension basins and, as such, can be designed to provide the same types of benefits as, in this case, small distributed tension basins would provide. These benefits aren't speculative. They can be calculated.
There are models that we use, which can estimate them with precision. Some of the remaining slides sort of point out some of the principles involved, which are that we're trying -- 172 3/19/07 - FINANCE - BILL 060052, ETC. we're not just doing a roof here. We're creating a landscape and everything that that entails in terms of quality of life, aesthetics for the City, enriching the life being in the City. There are many, many different ways to build these systems. The goal always is to keep them as light and as thin as possible and as low cost as possible for the benefits that they provide. So there are -- I have shown in a couple of these slides some of the many materials which are being used, to stress the point that this is a technology which has been around for a while. Its elements are well known. Some of the remaining pictures show just examples of green roofs of different depths and types, some irrigated, some not irrigated. And the point being that especially in a city, all sorts of green attractive environments can be created while in the 173 3/19/07 - FINANCE - BILL 060052, ETC. course of adding to the city basically from an engineering point of view a device or a system or a -- well, that is providing a specific engineering benefit. I've been talking about mostly the green part of the green roof. Everyone tends to be more concerned about the waterproofing part of the green roof and I don't want to neglect that. I would say that there are many excellent waterproofing systems available that are well tested, and many of these have been proven over time to be very durable and, in particular, some of these have a long record of use in Europe where green roofs have been continuously in service for over 40 years at this point. Some waterproofing systems will require an additional layer to protect the waterproofing from roofs, and that is a commonplace or an add-on. I wanted to stress that especially when you're trying to use green roofs to achieve an objective, 174 3/19/07 - FINANCE - BILL 060052, ETC. policy objective, which I think this bill 3 is aimed at, to encourage use of green roofs to obtain a benefit for the City as a whole, the idea is to keep things as inexpensive as possible and so the easiest way to do that is keep it simple, use materials which are simple, use as few components as possible, use techniques which allow rapid installation, cover large roofs when possible to get the most benefit and the best value, unit cost value. And these are all things which will tend to come to pass when there's an incentive for people to utilize these techniques. The last several slides show an example of one of these simple systems, which was installed recently at Wal-Mart, a Wal-Mart project in Chicago, as part of their citywide green roof program. And as you can see, the whole emphasis here is on using material which is blown into place, seeding a roof instead of planting it out, protecting it from wind with 175 3/19/07 - FINANCE - BILL 060052, ETC. hydro mulch. And this sort of technique and approach can make green roofs an accessible and valuable addition to other techniques being used in the City. That's all I have to say.
Thank you very much. So what do you do if a building is as high as my Cira Center, or does it matter?
The bigger, the better. The bigger they are, the easier they are to do.
Really? And what if your roof is -- is it for new construction or for somebody who might have a leak?
Somebody who might have a roof leak. I mean, is it for new construction?
Oh, no. I think that an ideal time to think about a green roof is -- one thing I should have said is, there is not a city, except maybe 176 3/19/07 - FINANCE - BILL 060052, ETC. Baltimore, in the country that I've seen that's better suited for retrofitting with green roofs, meaning the types of buildings which exist in the City, lots of flat roofs, a lot of heavily built buildings with heavily built roofs. When those roofs start to leak and people are thinking about replacing or waterproofing, that is the logical time to re-roof and, in doing so, to add a green roof. And if it's done on a large enough scale, the cost can be reasonable. If it's done in a more piecemeal fashion -- one roof here, one roof there, three this year, eight next year -- it will always be a boutique sort of thing. But when a city gets behind a program, like Chicago has and like Philadelphia now is, that can transform the marketplace and it becomes a feedback cycle where more work produces lower cost produces more efficient work and more projects.
Thank 177 3/19/07 - FINANCE - BILL 060052, ETC. you. Explain again how this is financed, paid for, this whole initiative.
Well, right now it's paid for by building owners which are either doing it because they -- right now it's a completely voluntary thing. It's being done by people who see the benefit to the City and to the environment of installing a green roof. That's changed now with the new stormwater regulations inasmuch as green roofs will now be counted as open space. So in constrained sites where land surface, the ground, is very limited and you have an objective or -- really not objective, a mandatory reduction of 18 percent in impervious area, the roof 19 becomes an obvious place to go. 20 So I think this already, in terms of clients that are approaching us, indicates that people are taking a serious look at this. But it's still a costly venture, so some sort of incentive to sort of bridge the gap to make this 178 3/19/07 - FINANCE - BILL 060052, ETC. affordable I think could have a transformative effect on the use of this and similar techniques.
Thank you very much. I just want to give you a practical example of what could have happened differently had we been involved in this technology earlier on in our history. In Councilman DiCicco's district, from Washington Avenue to Oregon Avenue on Columbus Boulevard, ten years ago, 15 years ago, there was virtually no development that happened down there. Within a decade or a little more than a decade, there are literally hundreds of thousands of square feet of flat roof that have come about as a result of Home Depot, Wal-Mart, Lowe's, 179 3/19/07 - FINANCE - BILL 060052, ETC. Ikea. I mean, you can go down the list of the literally hundreds of thousands of square feet. None of them have green roofs, but all of them are connected directly into the stormwater system. And our stormwater system is not a separate system. It's both sewer and stormwater. Over the past six, seven, eight years, especially the residents west of those facilities, of those stores, have experienced a tremendous amount of terrible flooding, basically coming about as a result of quick downpours that happen over in the summertime and the spring where you have a lightning storm, a thunder storm that drops three inches of water in a period of a couple of hours. All of those downspouts from all of those large roofs are going directly into the stormwater drains, filling up the sewers. And as the sewers fill up, the water has nowhere to go but to back up into the houses. And because so many people in South Philadelphia and other 180 3/19/07 - FINANCE - BILL 060052, ETC. places have dug out their basements and remodeled their basements and use it as rec rooms and bedrooms or whatever, that rainwater, along with the sewage water, comes right back into the house. Theoretically, we could probably, if we had a green roof on every one of those large retail boxes, we could probably go a long way in eliminating that problem. So in the long run, the cost that we're suggesting the City bear, which is a one-time forbearance of up to a hundred thousand dollars in the BPT, I think in the long run saves us money, because I'm sure we're getting sued by every homeowner that gets their basement flooded. I've been with Councilman DiCicco to Water Department presentations that are talking about mitigation issues for the stormwater that costs literally hundreds of millions of dollars, big basins, and one of the suggestions was digging up Marconi Plaza and putting big 181 3/19/07 - FINANCE - BILL 060052, ETC. catch basins in. I mean, all kinds of really interesting ways of solving the problem, when this is a relatively inexpensive, very environmentally friendly and easy thing to do to reduce the pressure immediately on those neighborhoods and also to try to do this in a citywide basis. Because not only can you do it in a commercial property like a big box store or an office building, but you could do it in residences. As a matter of fact, one of our guests today will testify as to a residential housing development in Councilman DiCicco's district that is totally green-roofed. So I recognize the financial cost that the Administration will probably say they can't afford, but I think for the hundred thousand dollars max and the number of people that will initially take advantage of it, I think it really is very cost effective. I wanted to put some context 182 3/19/07 - FINANCE - BILL 060052, ETC. into our discussion.
Does the Water Department basically support the concept, since we're dealing with stormwater as an issue?
The Water Department recognizes that the new stormwater management regulations need to be addressed, and they can be addressed in part, not just solely but in part, by this type of technology that's been used in Europe and in Germany and other countries for 20, years. I'm sorry. 15
Thank 16 you. Thank you. 17 Who is next? Please identify 18 yourself for the record and begin your 19 testimony. 20 MR. TIM McDONALD: My name is 21 Tim McDonald. Thank you, Committee and 22 Chairperson, for allowing us to speak 23 here today. 24 I just wanted to say something 25 about the Water Department, because we're 183 3/19/07 - FINANCE - BILL 060052, ETC. very much in the process of dealing with this right now with two projects that we're working on. I should first say that this is Howard Steinberg, a partner of mine in an architecture firm and a construction company and a development company, and my brother, Patrick McDonald, who is -- we're all partners in a development/design/build company. So what we do is, we find a piece of land and we come up with an idea for a project. We design it ourselves and we build it ourselves. We're architects, we're builders and developers. And every project that we have on the boards right now is completely green-roofed and will continue to be. Two in particular in Northern Liberties, one for a 70-unit residential project at the site of the old stables, which will be the first LEED gold certified multi-family dwelling project in the country, and the green roofs are just one part of that. Another just up the street is a 42-unit 184 3/19/07 - FINANCE - BILL 060052, ETC. residential completely green-roof-covered project with a daycare center. The Water Department has just, as of last week, said that the green roof itself alone is the stormwater management system for these projects. So it doesn't just help to mitigate stormwater management, it is the system itself. They have identified green roofs as a definitive stormwater management system, which we've known all along, but that's a really terrific acknowledgment for the possibility of green roofs taking on that role, stormwater management, in the City, along with many other, which we can talk about. So I just wanted to first say that. The other thing that I wanted to say was that what we're interested in -- Charlie talked about the technical dimensions and benefits of green roofs. We pull back from it and treat that as one of many issues for us when it comes to development in the City. What we're 185 3/19/07 - FINANCE - BILL 060052, ETC. trying to do as developers and architects and builders is actually create sustainable communities, period, sustainable when it comes to managing your own water on site, when it comes to generating your own electricity, when it comes to cutting your energy costs by 50 percent, when it comes to reducing carbon emissions into the environment, reducing the greenhouse effect. So I think that green roofs are a significant step in that direction for this city to become a sustainably oriented development city.
I know I should wait until you're finished, others may have questions, but my colleague, Councilman Kenney, said it's a one-time investment. Well, who maintains these and who pays for maintenance of these?
I depends on the project, but -- maybe you should talk about that.
Well, I think we 186 3/19/07 - FINANCE - BILL 060052, ETC. both have something to say about this. The sorts of projects which the McDonalds are involved in building, these are going to be important recreational and garden spaces for these folks. So maintaining the garden will be a pleasure, not a duty, and an enhancement in their lives, and it improves the value of their buildings because people know that. But for large projects that might cover a library or might cover Ikea or something like that, they have to look at it from a management point of view. And it's been our experience that the most effort that's required to maintain a roof, if it's done by skilled or trained people, is three man hours per 1,000 square feet per year. It's not a lot of time. It's the amount of time that could easily be pulled if you've got crews which are doing other -- are being hired to do other landscape maintenance. This is a tiny fraction of that. And the sorts of plants that are installed in these thin 187 3/19/07 - FINANCE - BILL 060052, ETC. systems are drought-tolerant species that are designed to survive when the weeds can't. They're kind of -- they're designed to be extreme, unpleasant environments for most plants to live in except the ones we choose to be there, and for that reason, it makes their maintenance much less than, say, a garden would be or your background. MR. TIM McDONALD: I want to say something about maintenance, too. The other thing that hasn't been directly stated is that a green roof extends the life of your roof by two times minimum, if not three. So it doubles or triples the life of your roof for one simple reason, because you're blocking UV rays from deteriorating your roof. So it works in all senses.
Yes, Councilman. How long is 1,000 square feet? 188 3/19/07 - FINANCE - BILL 060052, ETC. Double this room?
I still don't know what that means. COUNCILMAN DiCICCO: Ten feet wide.
One of the other important environmental issues -- and this is as the roofs exist today in Philadelphia -- if you fly over or see aerial photographs of Philadelphia, every roof just about is a black-topped roof. As the UV rays and the other elements break that roof down, whenever water comes onto it in the form of rain, either whether it's a light rain or a heavy rain, it picks up the petroleum products of that material and takes with it those petroleum products within the water into the storm drain system. When you have a green roof, the vegetation or the turf 189 3/19/07 - FINANCE - BILL 060052, ETC. and the dirt that's on there filters naturally the rainwater. It's actually dirty from the elements in the sky. It never hits the -- what's the material? The tar roof. Never hits the tar roof, goes cleaner than it would be normally back into the storm system. When all that tarred roof gets the rain on it, it takes those materials with it and puts it right back into the water system again. So, I mean, from long-term environmental benefits, it's a tremendous asset, but I think importantly from a subjective side, we're like the last city that's done anything like this. I mean, Chicago is way ahead. New York has done stuff, Austin, Texas. This creates another cachet for the City with younger people and people who are environmentally conscious who may want to move here and live here and get either a grant, which we're working on next, or a tax credit for establishing a business, a building that they can make environmentally 190 3/19/07 - FINANCE - BILL 060052, ETC. friendly. I think like the Mayor's wireless program that's brought that kind of attention to our city as a high-tech city, being environmentally friendly city, I think, also brings a cachet that brings a certain element of excitement to people wanting to live here.
My name is Howard Steinberg. I'm an architect in Philadelphia and part of this group. Our experience has been in just this short time that we've been working with green roofs in our projects, we're getting increased inquiries about how these could be implemented even at the small-scale residential project, calls from people in the City. But at this large scale, just to put it in perspective, Councilman Kenney is speaking about these large box retail centers. These are upwards of 191 3/19/07 - FINANCE - BILL 060052, ETC. 200,000-square-foot rooftops all within one store. A typical rainfall, couple inches of rain, that equates to, rough calculation, about 137,000 gallons of water just in that one rain that hits the system, hits the stormwater system that has to be processed. So I think there's also another consideration for City government and the utility companies to recognize the savings in not having to treat that water. So there's a savings on this end that helps offset the credits, tax credits, that are being offered or proposed to be offered. So I just commend Councilman Kenney on this initiative and hope that the City government follows. Thank you.
Thank you. Anyone else who would like to testify? MR. PATRICK McDONALD: Yes, Madam Chairman. Thank you, and Council. 192 3/19/07 - FINANCE - BILL 060052, ETC. My name is Patrick McDonald from Onion Flats and I am a registered master plumber here in the City. When we started our last project, which is in Fishtown my brother had referenced, it was very important to me and has been for years knowing that the level of the system that we have here. Howard just touched on it. It's not literally a storm system that we have here. Our infrastructure is so old on the eastern seaboard that it combines, as I'm sure that most of you know, it combines both sanitary waste and storm waste. So every single ounce of water that goes in from a rainstorm across these roofs and picks up the particulates that Councilman Kenney spoke of goes right into, whether it's clean or not, the sanitary system and goes directly to the treatment plant. Energy is being used to do it and also tax dollars. But, most importantly, in my opinion, for these rains that are in excess of a 193 3/19/07 - FINANCE - BILL 060052, ETC. certain amount of inches, over two inches, there's a good portion of that water that is bypassing the system, some of it ending up in some of the homes that Councilman Kenney spoke of and elsewhere in the City, but going directly into, with waste, with industrial waste and home waste, directly into our rivers. It's been a very important situation for me to address over the years, being a plumber, and also in the past decade, a developer. And with the introduction of our project, I went to the Water Department to discuss this situation that I felt I was coming up with that actually cavemen came up with, and that was to reclaim rainwater and actually use it on site to water your shrubberies and whatnot and not put it into the system and overflow the system. The Water Department at that point didn't have many restrictions on that, and being a part of L&I with my license, L&I really didn't have many 194 3/19/07 - FINANCE - BILL 060052, ETC. ideas on it either, and I was basically told by an engineer in the Water Department to just do it. We did it. It was a huge success. We're keeping 6,000 gallons of water every storm out of the sewer system and out of the rivers. And I just think that it's very important for all of us as human beings, let alone Philadelphians, to look at what we're doing as far as people of this planet to enhance the planet instead of just continually taking it away. The other thing that I would like to address is -- and I don't think anybody has mentioned it -- is the heat island effect that the roofs that we have currently in most urban communities has on the environment. The heat island effect addresses the amount of temperature differences that a hot black tar roof has on the environment, on our neighborhoods. There have been studies that 195 3/19/07 - FINANCE - BILL 060052, ETC. have shown right here in University City off of Osage Avenue that one side of a City block was painted -- the roofs were painted white and the other side was left to be the tar black roofs, and the temperature rating was somewhere around two degrees cooler on the left-hand side of the block as it was on the right-hand side of the block. Now, that may not seem like a big difference or like it's a big problem, but with the deaths that we're experiencing every year in Philadelphia and lots of the urban communities with the older people and the poorer people that actually can't get out of their house, the handicapped people that can't leave and can't afford the air conditioning bills, it's very important, in my opinion, to take on ways of lowering that heat island effect. A green roof will -- I'm not sure of the percentage, but it will lower the effect even more than painting the silver roof or the white roof on top in a 196 3/19/07 - FINANCE - BILL 060052, ETC. huge increment. So that's really all I wanted to say.
I just ask for your support in helping make Philadelphia one of the models of green building, and thank you for your time.
Thank you. Would anyone else like to testify? Please identify yourself for the record, begin your testimony. Thank you for your patience.
My name is Thurman Brendlinger, Program Director for Clean Air Council, and I appreciate, Councilwoman Blackwell, for hearing us here today. I'll talk about some of the air pollution effects and positive effects of the green roofs. We're definitely in support of the green roofs tax credit. Clean Air Council is a non-profit environmental organization 197 3/19/07 - FINANCE - BILL 060052, ETC. celebrating its 40th anniversary of its mission to protect everyone's right to breathe clean air. Council has long worked on air quality issues here in the City, and the City itself has a long history for green initiatives. Fairmount Park is one of the oldest and largest City parks in the nation. Its 9,200 acres of green area not only provide recreation space for residents and visitors to the City, but it provides trees and foliage to filter the air and water. Groups like the Pennsylvania Horticultural Society with its Philadelphia Green program have transformed vacant lots into beneficial green spaces, which help reduce the dust particles in the air. Philadelphia reduced the total number of vehicles in the City's fleet and purchased 22 hybrid vehicles to replace older polluting models. And recently, the Philadelphia International 198 3/19/07 - FINANCE - BILL 060052, ETC. Airport purchased 13,000 megawatt hours per year of wind energy, enough to offset million pounds of carbon dioxide, 5 which is one of the substances affecting 6 global warming, from fossil fuel electric 7 generation. 8 In 2005, the Mayor signed the 9 U.S. Mayor's Climate Protection Agreement 10 to take action to mitigate global 11 warming. The agreement calls on cities 12 to at least meet a seven percent 13 greenhouse gas reduction from 1990 levels 14 by the year 2012. The green roof tax credit ordinance assists the City in meeting these climate protection goals. Promoting green roofs is one of many programs that the City needs to implement for it to reach the necessary targets to stem global warming. Green roofs cool buildings in summer, providing for a reduction in the use of air conditioning and a resultant decline in the use of polluting fossil 199 3/19/07 - FINANCE - BILL 060052, ETC. fuel-generated electricity. In the winter, green roofs can insulate a building from heat loss by as much as 5 percent, again saving energy and 6 preventing pollution. 7 Green roofs provide air 8 pollution reduction. The additional 9 vegetation provided by green roof tops 10 would provide more air pollution 11 filtering for the region. Green roof 12 tops last longer, as mentioned earlier, 13 thereby requiring less resources and 14 energy to generate the roofing materials 15 for more frequent replacement. Again, 16 less fossil fuel burning to generate that 17 energy. 18 Furthermore, many materials 19 from recycled products are being 20 developed for use in green roof 21 technology. This new use for recycled 22 materials creates another market for 23 energy-saving recycled products. 24 Clean Air Council urges City 25 Council to adopt the green roofs tax 200 3/19/07 - FINANCE - BILL 060052, ETC. credit ordinance as the next step toward cleaner air and a better quality of life for the citizens of Philadelphia. Our children will thank you for your forward-thinking leadership. Thank you again.
Good afternoon. My name is Alisha Deen-Steindler and I am the Eastern Pennsylvania Director of Clean Water Action. Clean Water Action is a non-profit environmental organization. We advocate for clean, safe and affordable water. We have over 8,000 members in the City of Philadelphia, and we thank you for allowing us to address the Council today on the issue of the green roofs tax credit as put forth by Councilman James Kenney. Stormwater runoff is a huge problem in Southeast Pennsylvania in the suburbs as well as in Philadelphia. We 201 3/19/07 - FINANCE - BILL 060052, ETC. have more stormwater to deal with because of an increase in impervious non-porous surfaces in our region. Our organization works with cities, townships and boroughs throughout the region to adopt more protective water municipal ordinances, including a stormwater ordinance. Why is urban stormwater runoff so bad for the environment? Since the Clean Water Act was passed in 1972, water pollution regulation has focused on water discharges from facilities such as factories and sewage treatment plants, but stormwater is untreated and there isn't just one pollution source to crack down on. It is very difficult for environmental regulators to control pollution when it's coming from everywhere. The reality is, stormwater is a nasty soup composed of a collection of pollution from many, many different sources. Depending on the days, stormwater can have in it sediments, pesticides from lawn care, solvents, 202 3/19/07 - FINANCE - BILL 060052, ETC. metals from brake pads, ethylene glycol and propylene glycol from engine coolant and from de-icing airport runways. In the mix are also car oil and gasoline, sodium chloride, calcium chloride from road salt, pathogens like fecal coliform, and let's not forget chunky bits of trash from the sidewalks. After heavy rainstorms, all of that stuff goes right into the Delaware and the Schuylkill, changing the natural habitat for fish and aquatic plants. Excess nutrients in water can create serious biological problems within water bodies, where algae will take over and stifle natural flora and fauna. Excess sediment can clog fish gills to the point where they cannot survive and species start to disappear from our rivers. In Philadelphia, we have older sewage infrastructure that results in combined sewage overflows during storm events. This means that excess 203 3/19/07 - FINANCE - BILL 060052, ETC. stormwater shares the same pipes as our underground sewer shed. The end result is raw sewage gets flushed into our rivers at 180 outfalls simply because of a lack of capacity. Philadelphia already has a stormwater fee in place, but this fee is not currently based on impervious surface on the property. One of the major economic effects of urban stormwater runoff is flooding and property damage from excess water. In a natural hydrological cycle, when rain falls, 60 percent of that rain goes back into the ground and is retained for groundwater recharge and natural water purification. In an urban setting, only five percent goes back into the ground for infiltration. When we are surrounded by so much impervious surface like parking lots, roads and rooftops, the water has nowhere to go but onto our streets and our basements. Green roofs are part of the solution to urban stormwater runoff. In 204 3/19/07 - FINANCE - BILL 060052, ETC. 2006, the Pennsylvania Department of Environmental Protection released a Stormwater Best Management Practices Manual with statewide guidance on how to deal with the problem. In the manual, vegetated rooftops or green roofs are listed as an effective way to reduce stormwater runoff. S. Green Building Council has a program called LEED, which stands for Leadership in Energy and Environmental Design. Our very own Comcast building will be a LEED-certified building. Green roofs can contribute to between six to points 16 towards LEED certification.
Green roofs offer tremendous water benefits such as reducing stormwater runoff and improving water quality. They provide opportunities for rainwater to return to a more natural hydrologic cycle through groundwater retention, peak runoff reduction and improved water quality. In summer, green roofs can retain 70 to 80 percent of 205 3/19/07 - FINANCE - BILL 060052, ETC. rainfall, and in winter, they can retain between and 40 percent. Additionally, 4 the vegetation on green roofs has the 5 capability to absorb pollutants from 6 rainwater. The same heavy metals and 7 nutrients found in stormwater can bind to 8 the soil instead of being discharged into 9 the groundwater or streams or rivers. 10 Over 95 percent of cadmium, copper and 11 lead can be taken out of rainwater 12 through soil in natural conditions. 13 Green roofs allow a city to restore part 14 of their natural hydrologic cycle by 15 increasing evapotranspiration and, as a 16 whole, reduce the building's ecological 17 footprint. 18 Germany has the highest number 19 of green roofs, covering about 15 percent 20 of all flat roofs in the country. Since 21 1984 when Munich included green roofs in 22 its building ordinance, Germany's cities 23 have developed stormwater taxes and 24 subsidy programs for residents and small 25 businesses. 206 3/19/07 - FINANCE - BILL 060052, ETC. Incentive-based programs work. Chicago is a shining example of how effective incentive programs are for green roofs and green buildings, not only in businesses but residential programs as well. Chicago has green roofs in their city buildings, including their City Hall, and is actively promoting their use. The Bronx Borough has created an Environmental Revolving Loan Fund for zero interest loans to Bronx businesses and building owners that implement energy-efficient measures and new technology that improves the air quality of the borough. The City of Los Angeles, California; Portland, Oregon; and Washington, DC all have programs to encourage green roofs. The time has come for Philadelphia to join that list of leaders in the country. Clean Water Action supports this ordinance on tax incentives for green roofs as a step toward stormwater remediation in Philadelphia and as a way 207 3/19/07 - FINANCE - BILL 060052, ETC. to improve water quality. There are many more actions the City of Philadelphia can take towards reducing urban stormwater runoff and this bill is a big step in the right direction for Philadelphia to become the Next Great City. Thank you again for the opportunity to testify on this ordinance.
Thank you very much. Please identify yourself for the record and begin your testimony.
Good afternoon. My name is Jill Kowalski and I'm the Executive Director of the Delaware Valley Green Building Council. Thank you for the opportunity to testify. S. Green Building Council serving Southeastern Pennsylvania, Southern Jersey and Delaware. Since 2001, we have served as a primary source of educational programs 208 3/19/07 - FINANCE - BILL 060052, ETC. and regional point of contact for users, agencies and companies interested in green building and fostering cooperation and collaboration among organizations dedicated to environmental responsibility and sustainability. Our mission is to advance and support sustainable and environmentally responsible planning, design, construction and operation of the region's buildings, landscapes, cities and communities, mindful of the legacy left behind for future generations. I'd just like to put green roofs in a little bit of a bigger context. The impact of the built environment is often underestimated and misunderstood because it's costs are scattered across different budgets and categories, including construction, material and manufacturing, transportation, commercial, residential, industrial spread all over the place, but it all comes down to built environment. 209 3/19/07 - FINANCE - BILL 060052, ETC. When you take a comprehensive look at the economic impact of buildings, the numbers are staggering. S. S. 2 percent of all potable water, while consuming 40 percent of raw materials globally. S. S. energy consumption and greenhouse emissions annually. This is more than the transportation and industrial sectors. So the decisions you make about buildings have a huge impact on the environment we all live, work and play in. With Philadelphia's overtaxed and aging infrastructure, the City needs 210 3/19/07 - FINANCE - BILL 060052, ETC. to understand, invest and encourage green building practices in both renovations and new construction. Environmentally responsible practices have many benefits, including effectively managing stormwater, increasing energy efficiency up to 60 percent, reducing the urban heat island effect, and improving water and air quality. Today, I am here in support of Councilman Kenney's green roof tax credit. Philadelphia has an underutilized resource in our roofs, one that if properly leveraged could transform the lives of many City residents. There was a lot of expertise telling you about green roofs, so I'm going to skip some of my testimony so I don't repeat a lot of what my peers here have said. Urban environments transform the natural landscape and tend to interrupt biological processes, resulting 211 3/19/07 - FINANCE - BILL 060052, ETC. in deteriorating air quality, degraded water and devastating urban heat islands. Traditional roofs generate intensive reflective heat. In warm climates when air temperatures can reach 95 degrees Fahrenheit, which we unfortunately can feel here in Philadelphia, or higher during the summer, roof surface temperatures can reach 175 degrees Fahrenheit. An increase in outside air temperature over roof surfaces contributes to and accelerates the chemical reaction that causes low atmospheric ozone, a primary component of smog. So I think we all know that black roofs are hot. We have a lot of them in Philadelphia, so we need to start covering some of them up, making them green and making them function as much more than just a roof over our heads. There is an opportunity for leadership here. In the past year or two we have seen a tipping point, an interest 212 3/19/07 - FINANCE - BILL 060052, ETC. regarding sustainability and energy efficiency in the media and general public. Pick up any magazine and the word "green" is on it. High energy costs and global warming concerns have been a catalyst to create a dialogue about what we can do as communities. Roofs are the fifth facade of a building and are underutilized. A long-term goal should be a comprehensive plan to address all roofs of Philadelphia.
So in conclusion, I just want to go over once again the many benefits of green roofs, and they are a single strategy of green building that provides many benefits: cleaning and retaining rain water; controlling stormwater runoff; reducing erosion and pollution; improving overall water quality; reducing urban heat island effect; more than doubling the service of the life of the roof; conserving energy, which means lower heating and cooling bills; reducing sound reflection and transmission; 213 3/19/07 - FINANCE - BILL 060052, ETC. creating wildlife; and, oh, by the way, they're a heck of a lot prettier than a black roof. The quality of life in Philadelphia will improve when these issues are addressed in a proactive, collaborative and integrated manner. Incentives like the green roof tax credit will increase dialogue and encourage widespread adoption of these practices, making Philadelphia a better city to live and work in. Thank you very much.
Thank you very much. I assume this is our last witness today. Thank you very much. Please identify yourself for the record.
Good afternoon. I believe I'm the last speaker, so thank you for your patience and listening to all of us and thank you for giving us the opportunity to speak. My name is Christine Knapp. I'm the Eastern 214 3/19/07 - FINANCE - BILL 060052, ETC. Pennsylvania Outreach Coordinator for Citizens for Pennsylvania's Future, also known as PennFuture. PennFuture is a statewide environmental advocacy organization. We work to dispel the myth that there must be a choice between the environment and the economy, but rather that a strong economy and a clean environment are intrinsically linked. I'm also the local coordinator for the Next Great City initiative. The Next Great City is composed of over 80 organizations here in Philadelphia, all working for the implementation of ten common-sense, cost-effective policies that we believe will improve the neighborhood environment in our city. While the Next Great City Coalition did not make a recommendation specifically about green roofs, we fully back this incentive to create green roofs throughout the City. Our report does recommend green building practices that reduce the environmental impact that 215 3/19/07 - FINANCE - BILL 060052, ETC. building makes on the environment. Creating a green roof is just one of many ways a building can be environmentally responsible and economically smart. Green roofs offer several cost-saving opportunities for the building owner, reduce energy bills in heating and cooling costs. They are estimated to last twice as long, which we already covered earlier. I won't go into that. And for new construction, green roofs also have the potential to reduce the amount of insulation and roof drains that are used for the building. There's many other benefits that have been gone over: sound insulation, the aesthetic appeal, places for recreation. And public policies that support green roofs will help create jobs for suppliers and manufacturers of roofing membranes and drainage layers and light-weight soils and other products that are used in the construction, and also creates jobs for our gardeners, 216 3/19/07 - FINANCE - BILL 060052, ETC. contractors, landscapers, design and engineer professionals as well. The community as a whole benefits from the addition of green roofs in the neighborhood. Areas that experience flooding will appreciate the reduced burden that the building will place on the sewer system. Councilman Kenney mentioned South Philadelphia as an example, which is where I live, and I can speak personally to the sewer back-ups that happen in our neighborhood. Green roofs would just be one way to address that problem, which has made some of my neighbors move out of the neighborhood. A building with a green roof also reduces the amount of ozone and greenhouse gases and the urban heat island effect, which is also already mentioned, and help the City address global climate change. And we already covered how green roofs help reduce air pollution and water pollution. 217 3/19/07 - FINANCE - BILL 060052, ETC. Despite all that we know about the positive effects of green roofs, they are not yet common practice in Philadelphia and, in fact, North America as a whole has lagged behind other parts of the world in understanding the market and the public benefits of green roofs. In Europe, government legislative and financial support at both the state and municipal level have led to the wider use of green roofs, and the technology there continues to grow. This tax credit would be an excellent step towards doing what many European cities and countries have done in helping incentivize and promote green roofs. Additional next steps should include changing the way stormwater fees are collected to be based on how much paved surface a property has rather than based on how much water it uses as it is now. An opportunity to examine the way fees are collected will come next year, which I hope Council will take a look at. 218 3/19/07 - FINANCE - BILL 060052, ETC.
In the meantime, this is another great way to incentivize green roofs and I urge you to approve and support this. Thanks very much for your time.
Thank you very much. I assume that is it from the community. We will now bring forward Bill Kramer, Philadelphia Planning Commission, and Nancy Kammerdeiner, our Revenue Commissioner. While they're coming forward, I will say I think it would have been stronger had the legislation included mandatory care. I mean, we don't need weeds on our roofs, just as we don't need weeds on the ground.
Unless I missed it, I didn't see it within the legislation.
Madam Chair, so I can explain for the record. 219 3/19/07 - FINANCE - BILL 060052, ETC. A business would have to agree to take advantage of the tax credit in order to get the green roof going. Once it's their business, it's their responsibility. It would be no public responsibility. So, for example, we're in discussion with -- we're trying to get a discussion started with Ikea and some of the other big boxes down there. If they had agreed to put on the roof, they would also be agreeing to the maintenance of it. And a lot of these systems are very low maintenance. It's not something you need to do regularly. And it's their responsibility and they would acknowledge that responsibility by participating in the program. So there would be no City Rec Department employees up there mowing grass.
Thank you. Thank you for your patience. COMMISSIONER KAMMERDEINER: 220 3/19/07 - FINANCE - BILL 060052, ETC. Good evening, Councilwoman Blackwell and members of the Committee of Finance. Nancy Kammerdeiner, Revenue Commissioner, and I'm pleased to be with you today to present testimony regarding Bill No. 7 070072. This bill would amend Chapter 9 19-2604 of The Philadelphia Code, entitled "Business Privilege Taxes," by providing a "green roof tax credit" for costs incurred to erect a "green roof" that supports living vegetation. If this bill is approved, a business interested in obtaining a tax credit would first submit plans for the green roof, along with a written analysis prepared by a roof engineer confirming that the structure can support the green roof, to the Department of Licenses and Inspections for review. Once they have received all required permits and approvals from L&I, they submit proof of those approvals to the Department of Revenue with a tax credit application. 221 3/19/07 - FINANCE - BILL 060052, ETC. Revenue will execute a commitment letter with the applicant confirming that the green roof will cover at least 50 percent of the building's roof or 75 percent of the total roof space that can support a green roof, whichever is greater, the maximum credit that can be claimed, and a commitment to maintain the green roof for at least five years after completion or else they have to repay the tax credit. An applicant can claim a tax credit of percent of all costs 15 incurred to construct the green roof, not 16 to exceed $100,000. It shall be applied 17 against the applicant's total business 18 privilege tax liability for the tax year 19 during which the applicant certifies 20 completion of the green roof. Credits 21 unused in that year may be carried 22 forward until fully used. Only one green 23 roof tax credit can be obtained per 24 building, but such credit can be obtained 25 for each building owned by the applicant. 222 3/19/07 - FINANCE - BILL 060052, ETC. If approved, this credit would be effective for the tax year 2007 and thereafter. The costs to the City's General Fund of this tax credit would be dependent upon the number of businesses that opt to create a green roof. There would be no way to predict or estimate this in advance. This would be particularly problematic if the creation of green roofs gains popularity and there are a growing number of applications for the maximum tax credit. Indeed, any reduction in revenue would have an adverse impact on the General Fund, which is already facing more demands for expenditures than can be met by anticipated revenues. The more successful the green roof tax credit program, the more strain it would place on the General Fund. The Administration supports the creation of green roofs as one of many aspects of sustainable design. And 223 3/19/07 - FINANCE - BILL 060052, ETC. you'll hear from my colleague from the Planning Commission in a few moments about the performance-based incentives the Water Department is developing for environmentally friendly methods of dealing with stormwater and the design standards the Planning Commission is promoting. Sustainable design incentives deserve to be sustainable as well. The tax rate for the gross receipts portion of the BPT has been reduced gradually over the last decade and is scheduled for further reductions in the next few years. There have been frequent proposals for the elimination of the gross receipts portion of the tax and some for the reduction or elimination of the net income portion of the tax as well. As the BPT liability of businesses declines, a credit against this tax would provide a decreasing incentive for the creation of green roofs. I urge you to work with the Administration to develop broad-based 224 3/19/07 - FINANCE - BILL 060052, ETC. incentives for environmentally efficient construction instead of this narrowly based tax credit.
This concludes my testimony and I'll turn to my colleague from the Planning Commission.