You can try it. But it says, current estimate, 75.5, and then -- for '03. And then in '04 it says 102 million, if you include the contingency CDBG, which is 20 million. But then it says, Community Development Block Grant, 82.49 million. It says it is 7 million over the 74.5. 9.3 percent increase. These are not our numbers. These are 326 Bill Nos. 030004, 030008, and 030010 - 2/24/03 Administration numbers. In other words, what I am saying is, you are not disagreeing with my numbers. These are not my numbers. You are disagreeing with the budget director's numbers.
I am not. I do agree. My only point is, from a budget standpoint, as it relates to the appropriations for Fiscal Year '04, we did two things. As in the past, OHCD has requested what we call a reserve appropriations to cover any possible additional funding for the year. That amount is $10 million. In addition to that, we requested an additional $6 million in increased appropriations to allow us to reestablish prior-year grant award balances and roll those appropriations over into the current year. It was a policy that was established by the financial department. I think it was about two years ago. And we have been trying to comply with that on a year-by-year basis.
No, I am not saying the 327 Bill Nos. 030004, 030008, and 030010 - 2/24/03 numbers are not correct.
Mr. Hanna, you see an Office of Housing, federal resources, number one line item, Community Development Block Grant?
You see in Fiscal Year 2002, it says actual, $54,813,000? Budgeted, $55,273,000. Current estimate for 2003, 75.5. Then you see an increase. And you see it says a 9.3 percent increase?
Councilman, these figures were put together by the city's budget department. I would have to assume that they are accurate.
You are assuming there is a 9.3 percent increase from '03 to '04?
Please identify 328 Bill Nos. 030004, 030008, and 030010 - 2/24/03 yourself.
Rob Dubow, city's Budget Director. Since these are, essentially, grants to the city, we usually, when we do the budget, build an extra appropriation capacity in case we get more grants than what we actually anticipate we are going to get. So I think what Mr. Lyles has been trying to say is that, what they actually anticipate getting is really lower than the 82.5, but that we have built more appropriation power into the budget in case there are grants that we don't foresee now that we do get during the course of the year.
Because what we are really showing is an increase to the appropriation level that we are showing, you know, in '04. So for grants --
Let me ask you from your standpoint. Because you are not in the housing business; you are in the budget business. Do you see it as an increase? 329 Bill Nos. 030004, 030008, and 030010 - 2/24/03
I see -- well, I want to answer your question, but let me do it in a way that I think will accurately portray what we are doing here. I think what we have done is given them an increase in appropriation power in case funding -- in case grants that we don't foresee now actually come in. But I don't -- I wouldn't take the leap to reflect that it means they will actually be able to spend more money next year than they are spending this year.
I am just asking whether there is more money available next year than was expected -- that is expected to be spent this year. Is there actually more appropriation power for next year than is estimated to be spent this year?
The answer to that is yes. Which is different from actually having 330 Bill Nos. 030004, 030008, and 030010 - 2/24/03 more money next year. Because the money may not come in. If it does come in, we have the appropriation power to spend it. If it doesn't come in, then we don't spend it.
I have watched the number from year to year, and I understand what is spent is not anywhere close to what's budgeted. And we could have gone through the whole discussion of program income and beyond in terms of what's available and what's not spent. That's not really what I was asking. But what's being told to community development groups, even though we don't know what's going to come from the federal government yet, is that there is definitely a cut; when actually the appropriation, according to this -- this is what I want to go by, is a budget briefing book -- which says there is an increase.
Yes. And we will always put in an increased appropriation power for a grant in case more money comes in.
Okay. Next question. Thank you, Mr. Dubow. Bill 716 was passed and it became law in 331 Bill Nos. 030004, 030008, and 030010 - 2/24/03 October of 2001, which mandates that percent of all CDBG resources go towards economic development done by community development corporations. Do you expect to be in compliance with that law next year?
According to the budget briefing book again, in terms of the appropriation, it shows a 23.7 percent decrease in money going to the Commerce Department for economic development for CDBG resources. Can you explain that 23.7 percent decrease? MS. McCOLLOCH: I want to make sure we are still on ?
Yes. It is Line Item 6. MS. McCOLLOCH: I am sorry. We will have to give you a more complete answer. I can't answer it at this moment.
But a percent 23 decrease is not a major policy decision? MS. McCOLLOCH: I am sorry. I am still looking at it. I apologize. 332 Bill Nos. 030004, 030008, and 030010 - 2/24/03
A percent decrease is not a major policy decision? MS. McCOLLOCH: Is not a major policy decision?
It is a question. Is 7 a 23 percent decrease a major policy decision? 8
Why is there a large 10 cut in the amount of CDBG being made available to 11 the Commerce Department for community economic 12 development? 13 I know the answer. I just want you to 14 put it on the record. 15 MS. McCOLLOCH: This discussion is still 16 about the change in the numbers. Because it is a 17 combination of a decrease in Community Development 18 Block Grant fund and a decrease in available 19 programming. 20 But your question about a policy 21 decision regarding how we spend the funding is that 22 we are expecting reduced resources for next year. 23
Reducing it from, roughly, 9.9 million, the current estimate for this year, to 7.5 million next year, is a decrease of 333 Bill Nos. 030004, 030008, and 030010 - 2/24/03 about 2.3 million, which is a 23.7 percent decrease. Which I assume is a major policy decision, to cut economic development funds available through Community Development Block Grant?
If your question relates to the Administration's commitment to economic development --
My question is, why is there a cut? And why is there a cut at the level of 23.7 percent?
That question, Councilman, I am sorry, we are going to have to come back to you on.
I don't want a written response. I actually need you to come back and answer that question in particular, why there would be a 23.7 percent decrease. I believe the answer is probably because some of the money wasn't spent that was anticipated to be spent this year. If that turns out to be the answer, I need you to put it on the record and explain to me why, and why the money isn't moving, if it isn't moving, doesn't need to be available for next year 334 Bill Nos. 030004, 030008, and 030010 - 2/24/03 at the same level. If that is the answer. But I need the actual answer to that question.
Thank you. Next question. What's the status of the Settlement Grant Program? MS. McCOLLOCH: Settlement Grant Program has been discontinued as of January of 2003. 11
Can you give me the 12 short answer as to why it is being discontinued? 13 MS. McCOLLOCH: It has been discontinued 14 for a combination of reasons. 15 One of which is available resources 16 projected for next year. Another is that we have an 17 arbitration, there was a labor issue and arbitration that the arbitrator ruled that the city could not contract out inspection services; that we would have to have inspection -- that inspection services would have to be done in-house by OHCD staff, rather than being contracted out. And because of a change in the federal regulations surrounding lead paint, we are required to do lead paint inspections in order to give out 335 Bill Nos. 030004, 030008, and 030010 - 2/24/03 the settlement grants. We cannot give out the settlement grants without having the lead paint inspections. So the combination of those three factors, the requirement for a lead paint inspection, the requirement that we would have to have all of the work done in-house rather than contracting out to inspection agencies, and the expected reduction in resources for next year combine to make the decision to end the program during this fiscal year, although we are meeting all of the commitments of people who had signed agreements of sale as the cutoff date.
This does not explain the decision to me. Tell me if I am characterizing the program wrong when I say that it is probably a program that requires the least amount of subsidy and has the highest level of leverage in terms of private investment? MS. McCOLLOCH: I think that's accurate.
But a program that requires the least amount of subsidy and has the highest ratio, leverage ratio, in terms of 336 Bill Nos. 030004, 030008, and 030010 - 2/24/03 public-to-private dollars, is the first one you cut? MS. McCOLLOCH: Well, the demand for the Settlement Grant Program has been going down over the past several years. At one point several years ago we were spending over --
Regardless of demand. If it is actually the program that requires the least amount of subsidy and has the highest ratio of leverage in terms of private investment, it should be the last on the list to be cut. I mean, if you are spending $150,000 per unit to sell at $60,000 -- we already know it is a system that doesn't work, but I won't even belabor that point. But to cut a Settlement Grant Program that requires the least amount of subsidy and has significant private-sector investment that comes from it doesn't make much sense. It says that you want a more subsidy-driven program. MS. McCOLLOCH: The issue's really surrounding the lead paint requirements and the requirement for -- 337 Bill Nos. 030004, 030008, and 030010 - 2/24/03
How does that impact the program to the extent that you have to discontinue? MS. McCOLLOCH: It impacts the program to the extent that in order to carry out the requirement for the lead paint inspections and then the lead paint treatment, although the subsidy appears to be only an $800 -- the $800 grant that is going to the client, in fact it is much deeper because of the administrative costs.
But it quite possibly could still be the program with the least amount of subsidy and the greatest amount of private. MS. McCOLLOCH: I don't know. I haven't done that analysis.
That's what I was going to ask you next. Is, in terms of all CDBG-funded program, what are you leveraging in terms of private-sector investment for each public dollar spent? MS. McCOLLOCH: I don't have that information for you today.
Do you do that calculation? Do you know the leverage ratios of 338 Bill Nos. 030004, 030008, and 030010 - 2/24/03 your programs in terms of, for each public dollar you spend, what you are getting in terms of private-sector investment?
If you can forward that through the Chair. And I believe that information was forwarded last year per my request, and that's where we saw that the leverage ratios were nowhere close, and the Settlement Grant Program stood out as a shining star in terms of a good investment and a much better investment than what is typically more public-subsidy driven to the extreme. In fact, it had a positive leverage, as opposed to a negative leverage.
Not to dispute that point, but, however, to expand upon the lead-based paint issue. If a given settlement grant were $800, it would not be unusual to expect the lead -- if that house involved lead-based paint, it would not be unusual to expect the lead-based paint abatement price tag to be somewhere in the 10 to 15 thousand 339 Bill Nos. 030004, 030008, and 030010 - 2/24/03 dollar range. So we spent 800 for a settlement grant, which in a vacuum, or before this new lead-based paint legislation became law, was actually, with that $800, brings a potentially $12,000 payment along with that.
You still have positive leverage, as opposed to spending $150,000 on a unit that you are going to sell for 60.
I can't speak to that right now. But at issue is, where do we find the other $12,000 plus for the lead-based paint?
If you can forward to me the leverage ratios for all the CDBG funding programs through the Chair, and also why the Commerce Department is being cut by 23.7 percent, I would appreciate it. Thank you.
Good afternoon. Let me say thank you for spending another wonderful Friday with me and coming to our meeting in Logan on 340 Bill Nos. 030004, 030008, and 030010 - 2/24/03 Saturday morning. I just have a couple of questions. On -105, Ms. McColloch -- and I will address my questions to her, since she is used to it -- and I have not had an opportunity to go through this page by page, so I just glanced at it a little bit. So I am sure we will get into a lot of the details during the budget, but I just wanted to call your attention to it. Where you have development financing for homeless and special needs housing, there is no 14 appropriation for 2004. Is that someplace else? MS. McCOLLOCH: Yes. Because this is the Community Development page, and we need to look on the Grants Revenue page, which is the HOME funding.
The HOME? MS. McCOLLOCH: Because the Community Development funds are on the page at the top where it says, "Fund," and it says, "Community Development." That's the CDBG Community Development Block Grant fund. And on the page that at the top will 341 Bill Nos. 030004, 030008, and 030010 - 2/24/03 say, "Grants Revenue," is HOME funding. You are looking for housing, special needs; right?
I see the advocacy here for accessible housing. MS. McCOLLOCH: You can see, like, the fifth one down, it says, "Homeless and Special Needs Housing Development Financing." And it is listed as 3 million for FY '04. And that's -- it is on this page because it is HOME funding, rather than Community Development Block Grant.
All right. So you do have it in there. But, you have cut the funds? MS. McCOLLOCH: No. It was 3 million in '03 and projected to be 3 million in '04.
Okay. One question about $300,000 from Logan, from Santora. Have you all put that in here anyplace? MS. McCOLLOCH: That's the special -- the EDI grant for Logan. 342 Bill Nos. 030004, 030008, and 030010 - 2/24/03 That doesn't appear in this budget. It is in the current year budget, rather than the FY '04 budget, so it doesn't appear in this.
So we can spend that now; right? MS. McCOLLOCH: Yes. That money is available now.
Thank you, Councilwoman. It is very disappointing to me to see that we are cutting Youth Build. I think they received a million dollars last year, and for '04 it is 500,000. I think that really affords an awful lot of young people an opportunity that they otherwise will not have.
Madam President, I have had discussions with the chief of staff specifically about that, among other programs. 343 Bill Nos. 030004, 030008, and 030010 - 2/24/03 And the expectation is, the hope is, that we can find that difference from other sources. So that once all is said and done, the organization, hopefully, will not be cut come next fiscal year.
I just think it is a wonderful, wonderful program. As I said, I think it affords many young people an opportunity that they certainly otherwise would not have. The Chair recognizes Councilman Nutter.
Thank you, Madam Chair. First, Ms. McColloch, how are you? MS. McCOLLOCH: I am well, thank you.
And, Mr. Hanna, my recollection is this is your first time to City Council?
Let's not make it your last. Pleased to see you here this afternoon. I have not had the pleasure of meeting you or your company. But if we can spend a few special moments here this afternoon, and then somewhere in the course of the rest of the year I am sure we will have a chance to talk. 344 Bill Nos. 030004, 030008, and 030010 - 2/24/03
Very good. I am looking forward to it. The discussion about the lead paint issue and the questions that Councilman Goode was asking I thought were quite intriguing. And I wanted to ask you, did I hear you say that it costs 10 to thousand dollars to do a 11 lead abatement? 12
It could. Okay. The reason I ask that question is, I remember last year we had just the biggest, one of the big issues last year, was about lead paint abatement. A number of activists were in. There was a significant backlog, as mentioned in the Five-Year Plan. I think it was 1400-some-odd properties. And I thought my recollection from that time was that the advocates, at least, and I think Commissioner Domzowski from the Health Department, I thought the numbers were somewhere in the $1,500 to 345 Bill Nos. 030004, 030008, and 030010 - 2/24/03 $2,000 range for abatement. Now, obviously that's a function of size of house and all of those kinds of issues. But I have not heard anything approaching to 12. 6 What's the source of the 10 to 12 7 figure? 8
It is anecdotal. I can't 9 give you a specific source. Mine is more anecdotal 10 than anything else. And, as you said, it depends, obviously, on the size.
Anecdotally Philadelphia. And, again, it depends on the size of the house and the amount of paint used in the house.
All right. If you could get back to us on that, I would greatly appreciate it. I was pleased to participate, actually this was with former Mayor Rendell, the 10,000th 346 Bill Nos. 030004, 030008, and 030010 - 2/24/03 person to receive a settlement grant was actually in my district in Overbrook. Was just a great time with the family. And it seems to me that, I mean, again, as the Councilman pointed out, some of the economics here, without getting into that debate for the moment, when you talk about 150 to 160-some-odd thousand dollars in costs for a house that might sell for 50 to someone making or so, we can 11 debate that one for a long time. 12 But when you raise the question of where 13 will we get, even from your perspective, the 10 to 14 12, it seems to me that we get that 10 to 12 from 15 the same place that we got the 150 and save 16 ourselves a few dollars. But we can come back to 17 that discussion during CDBG time. 18 I think you were also asked earlier 19 about the housing agency reorganization. And I took 20 your testimony down to be 6- to 18-month process, which I didn't completely understand. But I also wanted to point out to you that the last time I think we received information about this was probably at budget time last year, in the May, June 2002 time period, and we are told then 347 Bill Nos. 030004, 030008, and 030010 - 2/24/03 that it would be about months. I am starting to get left with the impression that this is a floating 18 months, somewhat of a standard response to the question. And I guess I am now just trying to understand why, months later, it is still 8 months. 9
A lot of that, Councilman, 10 has a lot to do with the fact that this, my 11 position, was only filled three -- two months ago. 12
I understand that. 13 But let me stop you there. 14 This discussion has been going on about 15 the housing reorganization probably way before a 16 time that you were possibly thinking about coming to 17 Philadelphia. This discussion is about, minimum, 2 18 years old, which is 24 months ago. So, I mean, I am not trying to put this one in your lap. But, you know, we are pleased to have you, and it needs to be on somebody's lap, so you get to catch the red ball. I am assuming a number of things were happening before you got here.
Yes, I would assume so, as 348 Bill Nos. 030004, 030008, and 030010 - 2/24/03 well.
You are asking me to speak 8 to issues and initiatives and efforts that were made 9 before I got here. 10
Well, I understand 11 that. 12 But in that regard, since you kind of 13 opened that door, the third paragraph of your 14 testimony talks about, Ideally, the consolidated 15 plan hearing should occur prior to the consideration 16 of the Operating Budget by City Council. However, 17 as in the past ten years, the budget calendar has 18 been accelerated and the hearings are reversed. Well, obviously that's been going on for some time before you arrived. But, I mean, you figured that one out, and now we are having a discussion about when the CDBG hearings should take place. So, I mean, you didn't create the accelerated budget schedule either, but you 349 Bill Nos. 030004, 030008, and 030010 - 2/24/03 mentioned it in your testimony.
I understand that. We don't have to do it that way. And, again, similar to MOCS, you know, the Council might be more than willing to accommodate the proper structuring of that process. I mean, the reality is, as I remember it, I think it was either last year or the year before, we also realized that the way we do the process is somewhat behind the schedule of the federal government. We are having a discussion about, or we will have a discussion about, CDBG funding that was appropriated, I believe, last October. Correct? MS. McCOLLOCH: Actually, last week. Yes. I mean, it is part of this federal fiscal year that started October 1, but that appropriation was passed by Congress last week.
I understand. Why don't we move the CDBG hearing process in the plan up?
That's a very good question, one that I will commit to you to look into for next 350 Bill Nos. 030004, 030008, and 030010 - 2/24/03 fiscal year. Obviously we are kind of into this one already.
Well, where are we in terms of putting together that plan? Do we have a preliminary plan put together yet? MS. McCOLLOCH: The preliminary plan will be issued no later than March 6, which is a week from Friday.
And then, according to the ordinance, the preliminary plan has to sit for 30 days? MS. McCOLLOCH: Right. There is a preliminary plan. There is going to be a hearing on the preliminary plan scheduled for --
That's the one that you guys do. MS. McCOLLOCH: Yes, we have a hearing on the preliminary plan. That, I believe, is scheduled for March 20. We will then, as a result of that testimony and other work that we do, issue a proposed plan, which is submitted to Council. Council holds its own hearing on the proposed plan, and subsequent to that we finalize 351 Bill Nos. 030004, 030008, and 030010 - 2/24/03 the plan and submit it to HUD.
Right. Well, I mean, I think, in accordance with the secretary's, you know, pointing out what the appropriate process should be, we should probably give consideration, as he is now just starting, to making sure that, to the extent possible, that the CDBG plan and its hearings line up coincidental to the city's Operating Budget hearings and do it all at the same time. I mean, according to the testimony, that makes more sense; right? MS. McCOLLOCH: Yes.
I just want to be sensible. MS. McCOLLOCH: Yes. And we have suggested that schedule in the past. We didn't suggest that schedule this year. But we have suggested that schedule in the past and it hasn't been what you folks want to do.
Why hasn't it happened? I mean, this is not the first time it has come up. 352 Bill Nos. 030004, 030008, and 030010 - 2/24/03 MS. McCOLLOCH: No, it is not the first time it has come up. In general, the City Council has wanted the plan -- wanted the plan hearings later in the year.
So you have been asked to produce it later? MS. McCOLLOCH: This year we did not ask to present the budget now. In part -- I don't want to say that. We did not ask this year to present it early. In past years we have asked to present it earlier, and it hasn't been the wishes of the Council to have the hearings earlier.
Okay. Not that you have to. I mean, nobody asked me, but, that's okay. I don't speak for the body. But you can produce it earlier; is that what you are saying? MS. McCOLLOCH: We could produce the preliminary plan earlier in the fiscal year, if that's -- if that was what was wanted.
Well, it seems to me that it provides maximum flexibility that the 353 Bill Nos. 030004, 030008, and 030010 - 2/24/03 earlier you do it -- MS. McCOLLOCH: Yes. I agree.
No one can stop you, I don't think, from doing it early. Now, whether we take it or not is a whole separate story. But then we impose a bit of a deadline, if not a compressed time to consider it, on ourselves. But, I mean, I guess I would almost say, regardless of when you think we are going to take it up, why don't you just produce it. And if we decide to do it later on in the year, that's kind of on us. But, you know, for some of us, we might think that seeing all of this information and all of this data and all of the money flowing at the same time might actually be helpful. MS. McCOLLOCH: Agreed.
Let's talk about, putting the organization aside, let's talk about number of staff. And do you anticipate any reductions as a part of the larger or overall personnel reduction efforts? 354 Bill Nos. 030004, 030008, and 030010 - 2/24/03
Councilman, to a large extent, again, that will depend upon the financial resources that we have to work with. We are looking at ways to -- ways to provide the services with fewer people or with less money. For instance, as I talked about before, the idea of perhaps funding certain initiatives with alternative sources, other than CDBG.
What would be, for that example, what would be the alternative funding sources?
I will throw out one. There may be some sources from the state that might be available for it. State social services money might be available for it. In addition to that, we are also looking at several folks who are taking advantage of the DROP program, and the idea of not hiring to replace those folks. In addition, as in some other 355 Bill Nos. 030004, 030008, and 030010 - 2/24/03 departments --
Do you know how many people you have in the DROP program?
I can't give you that number right now. I can get it to you by the end of the day tomorrow, certainly by the end of this week. But in addition to that, there are also positions that are funded, but not filled. Eliminating those positions, as well.
Okay. You had made reference earlier to the entities that report up through you. I am sorry. I did not write quick enough. Would you list those again.
They all report, the directors of those entities now report, to you?
And you made reference to PHA. And I understand that that's a whole separate entity. And we have, naturally, one 356 Bill Nos. 030004, 030008, and 030010 - 2/24/03 of our colleagues serving on the Board. Who are actually at this time, who are the other Board members and who is the present Chair of the PHA Board?
The Board members I couldn't answer. But I do know that, obviously, Ms. Blackwell is one. Joyce Wilkerson is another. The other three or four I don't know off the top of my head.
I am assuming Ms. Reynolds is still there, Joe Rousher is still there. And who is the fifth? Congresswoman Brady. And who is the present Chair of PHA?
Let me ask you about of your testimony. The president asked you about $10.2 million, and it is in the first paragraph, an increase in City Neighborhood Transformation Initiative funding of $10.2 million. So now OHCD gets NTI money? 357 Bill Nos. 030004, 030008, and 030010 - 2/24/03 MS. McCOLLOCH: Yes.
For a bunch of different programs. And I know you were trying to point out what the 10.2 was. Do I understand in the next paragraph that on top of that 10.2 there is another 20.2? MS. McCOLLOCH: The next paragraph is what the authorization is. So that the additional authorization for the HOME Program, 60 million for the HOME Program, 5.7 million from HOPWA, 20.2 million from NTI.
I got that. How does that relate to the 10.2? Or, is there any relation between the first paragraph, the 10.2, and the second paragraph, the 20.2, both of which are coming from NTI. Are they related in some way? You are not going to do to me what you did to Councilman Goode, are you? You are not going to take me all the way back through an authorization question. MS. McCOLLOCH: No. I am giving you the answer. The 10.2 million in the first paragraph 358 Bill Nos. 030004, 030008, and 030010 - 2/24/03 on of the testimony is the funding that was just presented as part of the transfer ordinance 4 that came to this Council last week.
That was for the acquisition? MS. McCOLLOCH: No. That 10.2 was for those programs that I just mentioned a few minutes ago, of funding that's going to come to OHCD. 2 million for the Phila Loan Program, 2 million for HRP.
Which transfer ordinance are you talking about, the ones we just did or the ones from last year? MS. McCOLLOCH: No; the ones we just testified on the transfer ordinance last week. I believe it was Thursday.
This is FY '03 money? MS. McCOLLOCH: The 10.2 that's referred to in that paragraph, yes it is the money that's being transferred. It was put at L & I originally, but now it is -- it needs to be put at OHCD for the expenditure. So that's the FY '03. 359 Bill Nos. 030004, 030008, and 030010 - 2/24/03 This 20.2 million is what's projected in the NTI program statement for the next fiscal year.
For FY '04. MS. McCOLLOCH: For FY '04. Some of which, this million, are for those sorts of 7 programs that would be at OHCD. 8
Obviously we haven't 9 seen the FY '04 program budget and statement for the 10 NTI program. 11 But that means that you are getting an 12 additional $10 million increase above and beyond 13 your FY '03 level? 14 MS. McCOLLOCH: What's projected for NTI 15 funding, yes. 16
What are go going to 17 do with the additional $10 million? 18 MS. McCOLLOCH: I don't know without 19 looking at the budget, the NTI program statement. I 20 don't remember off the top of my head.
Let's go to the second paragraph, appropriations are also being requested to provide funding for Section 108 loans in the amount of $10 million and $15 million for interim construction assistance and bridge loan 360 Bill Nos. 030004, 030008, and 030010 - 2/24/03 programs, respectively, should funding become available in amounts similar to prior years. Are we talking about $10 million to go in Section 108 loans for housing? MS. McCOLLOCH: It could be housing or it could be economic development.
Well, I would like to know which. Or, are you saying both? MS. McCOLLOCH: The authorization would allow for either one. Housing is not projecting to take out any additional Section 108 loans.
I would certainly hope not. So what's the $10 million for? MS. McCOLLOCH: That would be if the Commerce Department has additional development deals that need one-way loans. So the Commerce Department loans, in that sense, are real loans that gets paid back to the city; whereas, the housing 108 loans really just become grants.
Right. MS. McCOLLOCH: So the housing program 361 Bill Nos. 030004, 030008, and 030010 - 2/24/03 is not projecting any additional 108 loans.
And I think last year did we have no money going into Section 108 loans? MS. McCOLLOCH: We had no new 108 loans for housing.
That's what I thought. Now, this $15 million, what is that for? And, is that new? MS. McCOLLOCH: There again, that's an appropriation for construction -- for inner-construction loans, bridge loan financing, should we want to do that. But there is not -- I can't tell you today that there are five projects lined up to use that, to use bridge loan financing.
Did we have the same line item last year? MS. McCOLLOCH: Yes.
And what was the level of funding? MS. McCOLLOCH: It has been appropriated at $15 million for several years. 362 Bill Nos. 030004, 030008, and 030010 - 2/24/03
I understand about appropriations. How much did you actually use, or how much did you get? MS. McCOLLOCH: Less than 5 million. We have three bridge loans out right now.
When you do these, and you created these appropriations -- I mean, this does kind of, to some extent, go back to the earlier discussion -- I mean, you understand that there is, for anyone who kind of reads just the plain English, you understand that you are creating the impression that these dollars are potentially ready and available. But the reality, it sounds like, is, you create this appropriation power of 15, but you end up only spending 5. I mean, where is this additional $10 million of appropriation power? Who do you think is filling that, or where are these unforeseen, unknown grants that may pop up one day and somebody calls 363 Bill Nos. 030004, 030008, and 030010 - 2/24/03 the city and says, you know, "We got an extra sitting around. Do you think you would like to have it?" MS. McCOLLOCH: We welcome those kinds of things.
I understand that. 8 Have you gotten any of those calls lately? 9 MS. McCOLLOCH: No, I haven't gotten any 10 of those kinds of calls. It just allows the city to take in additional grants. The example from last year was the one that Councilwoman Tasco mentioned. There was an additional $300,000 for Logan, and having additional appropriation authority allowed us to accept that grant. We are currently applying for an additional $500,000 from the state in TANF money. If we get that award, this will have the appropriation authority to accept that award.
Let me ask Mr. Hanna a question. Do you have any plans or what are your thoughts, rather, with regard to what I have always characterized as excessive program and 364 Bill Nos. 030004, 030008, and 030010 - 2/24/03 administration costs related to the CDBG program, the result of which is, I think, in what year, 27? MS. McCOLLOCH: What year are we in now? We are in 28, we are going into 29.
I believe in Year 28 we are spending a little more than $31 million of the total appropriation in program and administration costs out of this year, including the reprogram income, I think is $79 million? Does that number sound about right? MS. McCOLLOCH: That's only of the Community Development Block Grant. But, yes.
And then, I mean, just to fill out the rest of the question, and then I think for the next seven, eight, nine years we also have approximately $14 million a year in principal and interest payments to pay off all the HUD 108 loans that we put -- Section 108 loans, rather, that we put in past housing production. And you have got more than 50 percent of the allocation not going out on the street when you add those up.
Let me speak to the 365 Bill Nos. 030004, 030008, and 030010 - 2/24/03 excessive question first. I don't know if I would necessarily characterize the level of OH, PH, RDA, personnel, or staffing as excessive. But I will say this, that the cuts --
I am not making the argument that people are making excessive amounts of money. Ms. McColloch and I have been through this 8 million times, and prior to her Mr. Kromer. We had just some wonderful, happy, smiley conversations about it. But I know about the percent rule and 15 I know that it is unlimited on the program-delivery 16 side. 17 But, I mean, I have for a good long 18 while here taken the position that we are 19 shortchanging people in need who could benefit from 20 the dollars to be spent by, essentially, subsidizing, if not paying, most of their salary with money that should be going out to deliver services or build houses or do economic development, and a whole host of things, and that most of those people should be over on our side of the ledger, on 366 Bill Nos. 030004, 030008, and 030010 - 2/24/03 the government side.
And that was the point I was going to make, Councilman. The fact that, with the entitlement being cut by some undetermined amount, that, along with, quite frankly, the fact that the new guy, a new guy is here, at least those two things will force us to look at doing things differently from an administrative side in particular, given the lack of money or that fact that we won't have as much money to -- I don't want to use the word "play" glibly, but we won't have as much money to work with, is a better term, this year than we did last year, as compared to last year. That being a cold and hard empirical fact will force us to look at things differently.
I am going to make the assumption that you are on the regular General Fund payroll, that you are not being paid by CDBG funds.
My salary is paid, for the 367 Bill Nos. 030004, 030008, and 030010 - 2/24/03 most part, by CDBG funds.
I read in the newspaper. I think your salary is 175; right?
What is the split between the General Fund and the CDBG funds on the salary?
I would expect that a lot of it has to do with the fact that each of the organizations that provide housing services report to me.
But you are, again, based on at least what I have read, I thought one of the major components of the position was also to work on the whole issue of market-rate housing and neighborhood revitalization in places that may not even be CDBG eligible. 368 Bill Nos. 030004, 030008, and 030010 - 2/24/03 Or even if they are, because almost the entire city at this point is CDBG eligible, but, given the limited resources, many of the neighborhoods don't see significant CDBG resources. So, I mean, how is it that a significant component of your job -- again, maybe you can break out for us what those components are -- but I was left with the impression that a big part of what you were going to be doing was also working on market-rate housing. And, obviously, the people who are in the service-delivery side of the various agencies, whether RDA, PHA, I am sorry -- RDA or PHDC or PCDC or, I mean, even the law department and a couple other agencies, some of those people, a part of their salary was being covered by CDBG funds. I did not realize that a hundred percent of your salary was being covered that way. I just assumed that you were on the General Fund payroll, like all the other secretaries. Mr. Dubow, all the other secretaries are on the General Fund payroll?
So what's the 369 Bill Nos. 030004, 030008, and 030010 - 2/24/03 rationale here?
First of all, let me back up again. You are absolutely correct, Councilman, there is a part of my job that is involved with the planning -- and I emphasize the term "planning" -- of market-rate housing throughout the City of Philadelphia. That is a part. That is not -- I think it is incorrect, again, to characterize it as, I think your term was, significant or a large portion of my time. That is not a large or significant portion. Any given day, I may not look at market-rate housing at all.
In a given day, I may not look at market-rate housing as a part of my job at all. It may not come across my desk at all on a given day.
I am simply saying, from 7:00 to 7:00, my typical work day, I may not have 370 Bill Nos. 030004, 030008, and 030010 - 2/24/03 any involvement with market-rate housing for whatever reason. It may be that that day was spent with a Councilperson going on tour of his or her district. So I only say that to say this, that market-rate housing is certainly a portion of my job; it is not the most significant portion. HUD regulations provide that, to the extent that the provision of, let's say, market-rate housing in any way helps to eliminate or break up blight, then, from HUD's perspective, that is an acceptable expenditure of CDBG funds. To give you a specific example. If in a given neighborhood there is a high concentration of blight or poverty, to the extent that mixed-income housing is developed in that neighborhood, by definition the density of blight or poverty in that neighborhood is going to be disbursed or decreased. In HUD's view, that is an acceptable -- that's an acceptable use of CDBG administrative funding.
Well, fine. I mean, I got that. And, I mean, I have read the regs a few times in my time. 371 Bill Nos. 030004, 030008, and 030010 - 2/24/03 I guess, I mean, there are always these situations where just because someone is either playing by the rules or has filled out the form correctly or that something is legal doesn't necessarily mean that it is right. Now, refresh my recollection on the person or neighborhood is CDBG eligible based on what percentage of median income?
That's a very, very broad question. I mean, the question needs to be more specific.
I can narrow it down. Isn't it that 51 percent of the people in the area are at 80 percent or less of the median income of the specific city in question? Isn't that the definition of CDBG eligibility? MS. McCOLLOCH: Yes. It is by census track, that's correct, eligible census track. An eligible low-mod income census track has 51 percent of the residents at or below 80 percent of median.
And what's the median income in Philadelphia? 372 Bill Nos. 030004, 030008, and 030010 - 2/24/03 MS. McCOLLOCH: 40 -- I don't know.
That's for a family of four. And that's a guess. I always hesitate to do that.
So 80 percent of that is about 45, 46, 47, 48, somewhere in there? MS. McCOLLOCH: For a family of four, 80 percent of median is $47,600, give or take a couple hundred.
Okay. And if you are in that neighborhood or if you are a part of that family of four and your household income is $48,000, which then makes you eligible to receive at least the services of the CDBG program -- whether you get them or not is a totally different story -- but you are at least in the neighborhood that's eligible for the services at 48. 373 Bill Nos. 030004, 030008, and 030010 - 2/24/03 MS. McCOLLOCH: Yes.
And, I mean, we are now in a situation where our secretary over all the programs, out of that program, and based on that eligibility, and based on that level of poverty, we have decided -- and I don't have any issue with the salary; the salary is what the salary is and you are going to work hard and you are going to earn your keep -- this is a discussion about whether or not, at least from my perspective, as I am now hearing this for the first time, whether or not it is appropriate to have the secretary at $175,000 being paid out of the CDBG program, for which we only get the dollars that we get because certain people are in poverty or at certain poverty levels. And whether or not that particular salary and that particular job should be on the regular government payroll, as opposed to, basically, on the backs of people who are poor. That's the real question here. And, so, it is not about whether you are functioning in accordance with HUD guidelines. I assume that you are. My question is more the philosophical 374 Bill Nos. 030004, 030008, and 030010 - 2/24/03 question, and it has been a long-standing one before you got here, about a whole host of government employees who are paid out of the resources that, if we weren't paying salaries, that amount of money would be going out on the street to provide services to poor people. Do you have any perspective on that?
Is that a question? Is it rhetorical? I am sorry, I didn't get the question.
I usually identify my rhetorical questions. No; it is a question. And I guess I am asking you, do you have any particular perspective having that kind of salary coming off the CDBG dollars, which are designated for a certain group of people, under certain circumstances. This is, what's that, four times the income of people who are eligible for the program.
Right. Or whether the salary, which, again, is not an item of dispute, big job, whether that salary should come from the General Fund. 375 Bill Nos. 030004, 030008, and 030010 - 2/24/03 Do you have any perspective on that?
Yes, I do have a perspective on that. When you start to make those kinds of statements or ask those kinds of questions, a next logical question then becomes, well, at what point, at what salary level, does it make sense to provide CDBG funding, for instance. Do you match the two? Should anyone making over $48,000, who happens to have a family, who happens to be in a family of four, should anyone making over $48,000 also be paid from General Fund? And if 48 is too low a number, maybe it is 96, twice that amount. When you start to ask those kinds of questions, in my mind, and this is my perspective having just heard that philosophical question here for the first time, when you start to ask those kinds of questions, a number of other philosophical kinds of questions also beg to be answered. I certainly don't want to get into that debate here, but that's the first thing that kind of occurs to me, Council, when that kind of question is posed. 376 Bill Nos. 030004, 030008, and 030010 - 2/24/03
I don't think the question is so much about what's going on with the people who are eligible under CDBG guidelines to receive the money. I think the question really is more about what the government does with its employees. So that is the question, that's how the question is framed. I think that there are a whole host of people who are receiving their salary as a result of services they provide through the CDBG program who are probably making 30, 40 thousand dollars. Now, we can debate until the cows come home whether or not those folks should be on the government payroll or not, and we will just kind of go round and round. You know, this is kind of in the realm of when the Supreme Court talked about, you know, certain things, you know, I can't necessarily define it, but I know it when I see it. I think that number on the CDBG program is an excessive number. And, I mean, I share with you, since we are here, I mean, I am rather stunned that we would be doing that. 377 Bill Nos. 030004, 030008, and 030010 - 2/24/03 Again, assumption is always a bad thing to do. For all the other secretaries, they are on the government payroll. Saw the number in the newspaper. You know, fine. Bring the guy in. He has got a lot of work to do, the consolidation issue and a whole host of things. I never imagined for a moment that, given that kind of number, that it would be coming out of the program that is designed for low- and moderate-income people. So, I mean, it is just a surprising piece of information. It is somewhat astounding. Philosophically, yes, I have a problem with it. I think you probably picked that up. And, so, rather than worrying about what people who are eligible are making or not making, I think it just becomes, you know, more of kind of a personal decision, a personal comfort level that whatever it is you are doing -- and you are earning your keep, and there is no dispute about that -- that you would rather be on one payroll versus another, given how it might look or how it might appear to the people who are trying to get service. I mean, you know, there is probably a 378 Bill Nos. 030004, 030008, and 030010 - 2/24/03 fair amount we could do with -- I mean, especially in a declining CDBG environment -- with another 175 for people who are, in some instances, barely making it. That's all. So, I mean, we can certainly continue to talk about it. But I would at least ask you in a private, quieter kind of moment to give some additional thought to it.
Thank you. Last question. On -106, can someone explain this line item, OHCD reserve appropriations for FY '04, 22.$9 million? What does that mean?
In the budget book, 4-106, about the middle of the page. There is a $22,922,072. Appropriations reserve to reestablish prior years' award amounts that have been liquidated or have not yet been obligated in the city's accounting system. Did we just find $22 million here recently? 379 Bill Nos. 030004, 030008, and 030010 - 2/24/03