COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COUNCIL COMMITEE ON FINANCE Room 400, City Hall Philadelphia, Pennsylvania Wednesday, June 6, 2001 12:15 p.m. ORDINANCE NO. 010373 - Community Development Block Grant PRESENT: COUNCILWOMAN JANNIE BLACKWELL COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DAVID COHEN COUNCILMAN JAMES F. KENNEY COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN MARIAN B. TASCO COUNCILMAN RICHARD MARIANO COUNCILMWOMAN DONNA REED MILLER COUNCILWOMAN JOAN KRAJEWSKI VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 6/6/01 - ORDINANCE NO. 010373 I N D E X Carey Scott........................... Mass Moore........................... John Kromer, OHCD.................... 3 6/6/01 - Finance - Bill No. 010373
I have been asked by Councilwoman Donna-Reed Miller, Chair of the Education Committee, to announce that the public hearing on Resolution No. 010324 before the Education Committee for 10:00 this morning has been cancelled and will be rescheduled at the call of the Chair. Thank you. My name is Naomi Williams. (Finance hearing at 12:15 p.m.)
Good afternoon. We will reconvene our finance hearing. We're sorry for the delay. This hearing is to consider the Community Development Block Grant Application, Bill No. 010373. Having said that, we have two people who didn't get to testify at our last two sessions on this application. We will call on them now. We have Carey Scott and Lance Moore. Good afternoon. Identify yourself for the record and begin your testimony.
I'm replacing Richard Pirdy. 4 6/6/01 - Finance - Bill No. 010373 I'm representing the Mantua Community Center in place of Mr. Pirdy, who couldn't be present today. Basically I'm going to run down our program. We have a summer day camp now in session which contains over 100 youth. We have a children's community meeting that's held every second Wednesday at 6:30. We have the continuing Share program, which we give out food for the seniors every first Wednesday. We have meetings with Jamie Edwards to start the computer program. Mellon Bank and PECO Energy have donated some computers. They have upgraded the Windows 98 and Microsoft office. The center was the site for the census. For this participation, the center received T-shirts, sweat shirts, basketballs, footballs, volleyballs, nets, jump ropes and electric air pumps. Community children were taken to trips to the Black Wax Museum in Baltimore, Maryland, also Crystal Cave and the Aquarium, and like 50 youth attended. 5 6/6/01 - Finance - Bill No. 010373 The Philadelphia Housing Authority installed heating systems and the gas has been restored, thanks to Ed Rendell. The center has been awarded $5000 from the Philadelphia School Board to run the after-school program. There had been some renovations made, such as painting, light fixtures, exercise, door handles, locks. A door has been installed in the gym to secure the chairs and tables. Plumbing work has been done and things have been repaired on a volunteer basis. There also has been a meeting with Vicky Edwards of L&I to discuss the possibility of the center becoming the license facility for after-school programs. We also run a 12-and-under youth basketball team for the children in our community, which has just won a championship. We gave them a banquet which Jannie and Mr. Brown attended. Also, in the upcoming events, on August 22 we're having a community day fair, which will 23 be located on 39th Street between Haverford and 24 Wells. 25
Thank you very 6 6/6/01 - Finance - Bill No. 010373 much. Certainly we absolutely support all your work at Mantua/Haverford Community Center, and certainly Mr. Pirdy as well. You do an excellent job under the most difficult of circumstances. Mantua is a special area. We've really tried to focus on it and ask the Mayor to do so in his blight program. And, certainly, we are committed to helping with the center and doing all we can to support your program. We thank you for coming out today.
Good afternoon. Identify yourself and begin your testimony.
My name is Mass Moore. I represent Help Homeless Enrichment Liaison Program. I'm here today to talk about constructing a community center. We want to construct a multi-purpose community center on the corner of the 1400 block of 17th Street, which happens to be 17th and Master. I don't know if anybody is familiar with it or has been down there lately, but it's basically a war zone. 7 6/6/01 - Finance - Bill No. 010373 We have a lot of drugs there. We have crack on one corner, we have serp (ph) on another, and in between we've got everything else. What we propose to do -- we would like two lots and four buildings. One of them -- well, three of them had been burnt out for over ten years. What we propose to do is turn these lots and buildings into a community center with multi-purpose services; meeting rooms for community groups, community-based center for abandoned cars, abandoned buildings, lots, trash all the things in the initiative of Goal 1. We also would like to offer it as a substation from the CDC and the City of Philadelphia so information come can go both ways. As is said in the second chapter, the last sentence, it say, "The community residents do not feel they have a voice," which is very true, especially in the Mantua Street area. We basically don't have too much of anything as far as census concern coming down. We hope to change that by providing information 8 6/6/01 - Finance - Bill No. 010373 for the City to act as certain things. We're helping with community-based information and also helping the police department to do their role by giving information or pointing out problems that we have. We also would like to ask the City of Philadelphia why it's been so hard for us to obtain these properties. Why for the last six months we have been hitting several stop gaps. It seems like 70 percent of the neighborhood is abandoned. We get more and more abandoned buildings every day. If we were to get these buildings, it would already, just by the transfer of the building and construction of these buildings -- start of construction of these buildings for the community center -- it would change the neighborhood because the exact location is right across the street from where several drug dealers do their work. By the construction of this, I'm quite sure that they would have to move. So already before the building was put into effect or any classrooms or any students or people playing or any youth come into the 9 6/6/01 - Finance - Bill No. 010373 school or any seniors have seen movies or whatever active occupations, we will have changed the neighborhood. The point is these buildings are abandoned; some of them are burnt out. If we can catch them now, they're still constructable. If we go through another winter, we're going to lose at least one, maybe two, because the roofs are starting to leak. Now we have dry weather, we can put the roofs on before the winter. If we go through another winter, the City of Philadelphia will gain two more lots and the community won't gain anything. We really believe in this multi-purpose community center to the point we have started to circulate a petition. We have also started a new organization called Master Street Homeowner's Association. We're really starting to get people -- we're not asking for a lot of money. We're going to use the resources of the community. Construction -- it's a very good possibility that construction can be done by a lot of church members. 10 6/6/01 - Finance - Bill No. 010373
Exact address is 1401 through 1411, which is Councilman Clarke's district.
I just suggest you make contact with him. Certainly he supports all neighborhood development. It's a great project. We have one in West Philadelphia. I'm sure he would be very, very happy to meet with you and hear about your plans for the area.
Actually, I have submitted several proposals to the Councilman. Today was the first time I've ever seen him. I'm not saying he's not supporting the program, but what I'm saying is we're having a hard time getting --
He's a very, very committed person and very involved in housing and economic -- 11 6/6/01 - Finance - Bill No. 010373
Well, you know, my mom always said the proof is in the pudding and a picture is worth a thousand words. I'm not saying the City is not trying to change the neighborhood. I'm saying the fact is this: Reverend Wells owns a whole block on Master Street, which nothing has been done. Communities -- there's no organization that's doing anything for the community. We have come along and we're trying to put it together. We're not an experienced non-profit -- non-profit has been in existence for nine years. We have not done any major projects. We're not a CDC. We have, with the limited resources we have, done some things. We're not getting any support from the City. I'm continuing to hope that the City of Philadelphia may be -- even to the point that I never got a notice for this hearing. I was supposed to be on a mailing list and they say I was on the mailing list. I never got a notice. The funny thing about it is if the OHCD didn't lose my application for the vacant lot program, I would not have been down here today. 12 6/6/01 - Finance - Bill No. 010373 This is the way it's been, officially, with us. I don't know if it's just we've been the victim of misfortune. I'm not saying the system does not work. All I'm saying is I'm trying to bring attention to a neighborhood that is in between two large CDCs, but virtually has gotten no support from the City of Philadelphia.
Thank you for your testimony. Would you make sure you leave your name and address with Mr. Scott Wilds. Scott, would you take his name and address and make sure he's on your mailing list for notices? If you see him, he'll make sure you're on the list. Let me say again, for the record, that's why our hearing is taking so long. Everyone battles about dollars for their community. This organization, and certainly all the Members of Council, know Reverend Wells very, 13 6/6/01 - Finance - Bill No. 010373 very well. We've worked with him over the years and certainly support One Day At A Time and all the programs they have. It is a battle of dollars. There's never enough. We're fighting to improve our neighborhoods. I speak for Councilman Clarke when I reiterate that he's certainly committed to trying to do that as well. Mr. Kromer, will you now come forward. We will begin our questions. Maybe I'll start with a few that I have. While he's coming forward, we would like to say that we passed out copies of amendments to this application to all Committee Members, and we also passed out a letter from the Mayor. We will deal with that after we deal with our questions. I have about three questions. (Mr. Kromer steps forward.)
Over the past two days of testimony, you responded to many citizens or many concerns regarding perceived cut in development for homeless programs by saying that while $2 million has been allocated in Year 27, there's an actual carry-over from 14 6/6/01 - Finance - Bill No. 010373 800,000 from Year 26. Can you tell us where that is, or how can you assure us this is in the plan?
For the record, John Kromer, Office of Housing and Community Development. The carry-over was made at the time when special needs proposals were evaluated earlier this year. And the proposals that met the threshold requirements of the request for proposals process totalled $2.8 million in requests. So that $800,000 was added to the $2 million line item, proposed line item, at that time. It is in place. As I indicated previously and will indicate to you in writing, that will stay in place so that every qualified special needs proposal received in response to the RFP will be funded.
Thank you. In Year 18, Southwest CDC was funded to provide services to the economically depressed neighborhood South of Baltimore Avenue; however, as mentioned during Thursday's hearings, the area bordered by 52nd Street to 15 6/6/01 - Finance - Bill No. 010373 Cobbs Creek, Baltimore to Kingsessing remain severely underserved. We would, thus, like to ask again that it be placed on the SOCA, Support Our Community Association, CDC, which is an existing group that has been around for the past years. 8 Since no broad vision is in place for this 9 area, we would like to request that a technical 10 assistance planning grant be issued to help 11 this organization develop strategic planning to 12 partnership with smaller organizations such as 13 New Breed Community Council, Sherwood CDC, and 14 Cobbs Creek Town Watch, who are involved in this area. This organization has been very patient over the years. We've tried to work very, very closely with them. They have certainly spearheaded such areas and issues as Bernice Arms, a senior citizen housing development. We just repaved through the Fairmount Park a basketball court at 61st and Baltimore. We're trying to get funded with Kenny Gamble a work force development grant and a grant that deals with hospitality from the City, all of which 16 6/6/01 - Finance - Bill No. 010373 they will spearhead and lead in terms of community input and job training. So we're asking again, would you certainly look into the possibility of them receiving a technical assistance grant so they can feel they are an equal part with other organizations. They're a little frustrated feeling that we've left them out and they have no avenue for inclusion.
Yes. The approach we would take would be to confer with Maxine Griffith and the Planning Commission staff and make sure that we're on the same page with respect to the planning of Jack Dibbs in scope for the area. And then make the commitment within that framework. We will do that.
I know we've said it over the years. It's just an area -- and even though Southwest CDC technically is supposed to go down to Baltimore Avenue, in a real sense it just doesn't happen. It's a totally separate neighborhood from Elmwood. And the services never really get down to Southwest. 17 6/6/01 - Finance - Bill No. 010373 My last question is about the Empowerment Zone. Since we're talking about cutting funding, how does the 33 million for fiscal Year 2002 and the extension to 2009, how does that fit into our CDBG funding? Is that the best way we should use these dollars for Empowerment's own activities, given the fact that I assume they are funded elsewhere or from the federal government? Can you expound on that?
Yes. I don't think there would be any change in our policy with respect to the Empowerment Zone. In order to secure the Empowerment Zone grant award, Philadelphia, like other cities, had to show a certain amount of leveraging of other funds. So a very specific commitment of community development block grant funds was made at the time of the application. I believe it's binding on the City to keep that commitment. I'm not really concerned about that, however, because the commitment was for the kinds of activities that we really want to support anyway. Housing rehab and Parkside, 18 6/6/01 - Finance - Bill No. 010373 for example, combines CDBG funds with Empowerment Zone funds. And we want to do those rehabs. I don't see any change. I don't expect any increased commitment, but I certainly expect it will keep our commitments. I'm confident we're doing the right thing by the community in doing so.
Thank you. Can you give us a list of the small non-profits? We met after our last CDBG hearing and they said they were willing to even meet with small groups and try to help hem out. Can you give us a list of some of these small non-profits who have responded to RFPs to try to make sure we follow up as well with them? In addition to that, can you tell us even how the City can help these groups coach and groom to better prepare them for years in the future?
Yes. To extend our discussion the other day, we'll identify the organizations. In those instances where we're already providing some technical assistance or capacity building support, we'll identify what 19 6/6/01 - Finance - Bill No. 010373 we're doing and with whom. And then we'll identify those groups for which we're not providing any service so that we can figure out how to address that.
Thank you. Mr. Kromer, can you tell me what is the application before us? What year's funding does it represent?
It's really for fiscal Year 2002. The federal name for it is Community Block Grant Development Year 27.
I'm under the impression that the City does not use CDBG money, that we cannot use that until there's specific approval of an application.
Has the application for year -- because federal government uses a different monthly basis for its fiscal year than we do, I'm very careful of the years. My impression is that for during the 20 6/6/01 - Finance - Bill No. 010373 current fiscal year right now of the City's, that we are just beginning to use money that was available under the Year budget as of 5 last October had application been made in 6 timely fashion for approval. Is that correct 7 or am I wrong on that? If so, correct me. 8
The funding that's being used 9 to support the program in this current fiscal 10 year, Fiscal 01, is money that was approved in 11 the federal budget in the latter part of the 12 Year 1999. 13 So, like many other cities, and I think 14 this is an issue we should look at, the federal 15 fiscal budget, federal budget is approved for 16 October federal fiscal year and then nothing 17 happens. The City doesn't do anything until 18 the following spring when we go through our 19 community development block grant process and 20 then we apply for those funds, which are then 21 available for nearly a year. 22
We wait nearly nine months 25 after the start of the federal funding year 21 1 6/6/01 - Finance - Bill No. 010373 before we request and draw down the federal funds that are authorized for us.
Well, that's the way the process has been since 1980. I think that's one approach that needs to be re-evaluated. Because in my view, the sooner we get our money, the better off we'll be. That's an issue that's being reassessed now.
Let's get back to the first question. I'm asking whether the application before us involves funds that are already available by the federal government to us, except for the fact that we have not applied for their use and gotten approval.
Yes. The funds that we're about to apply for were available last year at the time of the approval of the federal budget.
Does that indicate that there's so much money available that we don't really need the money for nine months, we can afford to wait?
No. I think that's good to reassess this process that's been ongoing for 22 6/6/01 - Finance - Bill No. 010373 21 years and consider going after the funding sooner. We are reassessing that.
Do you know of any reason why it would not make sense for us to consider the CDBG budget at the same time we consider our own City budgets?
To date, and there has been some consideration of this, but to date I don't know of any reason why we should not do that. The assessment of that alternative has not been completed yet. It's all mechanics. We might have the option to authorize this budget early in the year, as we do the operating budget.
That ought to give us, if we did reconsider and move up the time, it would give us, at least for one year, an additional funding amount?
Let me go back to my very first question. Are we, in this application, considering getting authorization from the federal government for money that's already been available, or for money that won't become available even if authorized by the 23 6/6/01 - Finance - Bill No. 010373 federal government until next October?
The answer is the first of those two. We are about to apply with Council's approval for federal money that is already available.
Thank you. The same area, and then I'll get back to some of the items raised the other day. Do you have any of the history or any understanding as to why the City chose this type of funding cycle process as opposed to any other -- I think I've operated under a premise that the process that we're going through now leading toward a July submission was for an application going to the government upon their review, and that the dollars coming down were out of their fiscal year in October -- at that point I guess that's October 1, 01 but fiscal 02 for the federal government. So getting it from an approval last year had never been laid out in the way that it has 24 6/6/01 - Finance - Bill No. 010373 just kind of come out, whether directly or by happenstance, in this year's cycle. And obviously since you've been at Housing, that's the way it's been and was explained. Do you recall, ever, a discussion about how this all came about?
I really don't. I can only speculate. One factor may have been that in past years there was a lot of extra money, unspent money. So the idea that this City should go after the money and get it in order to get more resources earlier may not have been viewed as a priority then. I'm just guessing, but that may have been the case. Back then, there was plenty of unspent money.
That must have been a nice time. Based on these discussions, and you may have touched on some of this with Councilman Cohen, do you have a suggestion or recommendation going forward as to how we would do this such that our regular budget process and the application and the dollars -- for 25 6/6/01 - Finance - Bill No. 010373 whatever reason, I do have a little bit of discomfort about the notion that somehow dollars are sitting waiting for us to capture them. Obviously the projects ultimately get done. There seems to be something unusual about literally almost waiting nine months when we obviously have great need now. What would be a different cycle?
There are two options I can think of. I've had some informal discussion with the budget director and some of his staff, only very preliminary, but it seems worth considering these two options, and maybe others. One is that the Community Development Block Grant could simply be heard during the period January through March of every year, at the same time as the operating budget and the capital program are heard. Council would then ordinarily act on the block grant application in late March. The application will be sent to HUD and we'd have our funding well before the start of the fiscal year. 6/6/01 - Finance - Bill No. 010373
You're still getting money approved in the previous October?
Right. So the more aggressive approach would be to consider a planning process in which we estimated the amount of block grant funding that would be forthcoming and presented to Council a proposed plan based on that. I'm not that concerned about the estimating; we do that all the time in connection with other grants. There hasn't been a wide variation in the level of federal funding available from year to year. But if you were to do that more aggressive approach, perhaps we could have Council review an action during September, so that immediately after the authorization of the federal budget, our application would be in Washington and we could have an expectation of the funding in January. That's a very ambitious approach. We would look at the feasibility of that and 27 6/6/01 - Finance - Bill No. 010373 explore that with Council. I believe that's another option.
Let's talk about particulars of Year 27. When you were here the other day, I had to leave early on Thursday, we had some other discussions about what's in the Year 27 plan and what's not in it. There have been two charts which have slight differences about projects that are this kind of term of art, projects in the pipeline. From what previous years, or is there any particular previous year or years most of these projects come from, or are these unfinished primarily from Year 26, or all over the place?
And the one list I have, which was given out the other day, has a list of projects. I have not had a chance to compare them. The number seems to be seven hundred-something projects, 792 projects, $44,435,000. Today there was a new list with 632 -- sorry -- units those are, for 34,795,000. Which is the correct list? 28 6/6/01 - Finance - Bill No. 010373
Today's list is correct. The lower number was derived by a very careful review of the original list and a deletion of any activity that had not previously been published in the Year plan. 7
I believe the biggest example 10 is the universal community homes west of Broad 11 Street development, which was originally 12 anticipated as an extension of a King Plaza 13 Hope 6 development. 14 There had been expressions of support for 15 that phase of development ever since the Hope 6 16 award was received. The funding and the 17 proposal had never been included in the 18 community development block grant plan. So it 19 was not made part of today's list. 20
If you could provide 21 us information on pretty much a line-by-line 22 analysis of what the difference is between the 23 list from the other day and today's list, that 24 would be helpful. 25 Now, can you tell us exactly what does 29 6/6/01 - Finance - Bill No. 010373 this list mean or what does it represent in terms of the reality of -- how much money do we have available for what anyone would call bricks and mortar projects for use to complete in the pipeline projects? How much money do we have?
The funding available for that purpose is the funding identified in the housing production section of the budget in the Year 27 plan. That includes the items on of the Year 27 plan. The primary sources of funding are neighborhood-based home ownership production, roughly 1.3 million. And then neighborhood-based rental production, the $5 million line item, same page about two-thirds of the way down. In addition, this is the page where the special needs housing development financing line item of 2 million appears. So those are the basic sources of funds to support those development ventures.
Well, somehow in one of the many meetings this morning I'm now 30 6/6/01 - Finance - Bill No. 010373 without my Year 27 book, but that's not a problem. How do these projects on the new list, 632 units, $34,795,000, how do they actually get which ones -- what is the schedule? How is this all going to happen?
The approach we would propose to use is the same as the approach we've used in the past; that is, to fund first those ventures that are ready to go. We believe that all of them are feasible, however, some of them are waiting for other funding, for example, tax credit investment equity and so on; others are not ready to go for other reasons. The first dollars would be spent on those ventures that are ready to go.
No, that's not the answer. On this list, which are in the category of ready to go?
I don't think any of them are 31 6/6/01 - Finance - Bill No. 010373 ready to go at this point, or they wouldn't be on the list.
Just yet. But during the course of the fiscal year, starting July 1, I expect starting in the first quarter of the fiscal year, we'll have several development ventures ready to go to settlement and requiring that funding.
I can't tell you now, but we could come up with a reasonable projection of which ones they would be, based on what the Redevelopment Authority staff knows of the development that's coming up. So we can provide that for the first quarter of the fiscal year.
A list of the development ventures that we believe will be ready to receive Year 27 funding.
When do you think 32 6/6/01 - Finance - Bill No. 010373 you'll have that?
By Friday, along with the other information that's been requested.
You're saying by Friday you can provide a list of the projects that you think will be in a ready-to-go status by the end of the first quarter of the next fiscal year?
The issue from last year -- we went over a number of items with regard to some reporting requirements and production of documents. There was a lot of discussion about administrative costs. There was a discussion about funding for which -- as I'm now recalling, some of the discussion was similar to this year. There was concern expressed about getting a list to the Council or even providing by way of a resolution these various plans. And, obviously, you weren't going to be able to do the plans in 90 days, but that you'd tell us how you were going to engage in that process. 33 6/6/01 - Finance - Bill No. 010373 It's my understanding, as of at least this morning, that a document apparently was sent over some time last September responding to those provisions in the last year's bill, Year 26, 000344. I had planned to ask you a series of questions about that, because I have not seen any response to that during the course of the year. Again, it's now my understanding that a document at least was sent and we'll have an opportunity to go through it. I won't ask you about that. The concern, though, was with regard to a process that would entail coming back to Council with a resolution laying out which projects are actually going to get funded and that no dollars be spent until such a resolution came over to us generated some level of concern. Can you tell me what the problem is with that?
I really wasn't in on the discussions with Council members, so I don't think -- 34 6/6/01 - Finance - Bill No. 010373
It was literally the same discussion we had last year when I proposed -- at that time I had proposed that the dollars not be spent on the projects until we knew what they were and what was going to get funded. That did not stay in the amendment to the CDBG bill at that time. That discussion has resurfaced. So I wanted to get a fresh understanding of what the problem is with that particular approach.
Well, the approach that we support that I think has worked effectively in past years and that I support again in proposing the approach for this year is simply that we fund the consolidated plan and Council reviews the plan, and once they act on the plan, we basically fund the contents of the plan. If there are changes --
I understand. What do you mean by the plan, since at least in the 35 6/6/01 - Finance - Bill No. 010373 Year 27 plan it is not project-specific?
Well, it really is project-specific. That, to me, is the point of the list. The list simply extracted from the plan every single -- the identification of every single project identified. Those are the only development ventures that we would fund in Year 27.
Hold on. On Thursday, I took down your responding to someone else. You made a statement that you will make commitments, but not set aside dollars. What does that mean?
Within the framework of the Mayor's program, we will commit to working with Council members to address their development priorities through the process that's outlined here and presented as part of the Mayor's presentation of the neighborhood transformation initiative. We'll get the Planning Commission involved, look at the market characteristics of the area, get the community involved. We discussed this last year. We'll look at not 36 6/6/01 - Finance - Bill No. 010373 simply the issue of are you going to give me money for a development venture, but the broader context and the issue of where does it make sense to invest public money and what kind of result are we going to get. That's a process that is planned to take place City wide and the Council priorities would be included in that process and be a special focus of our intention.
Is that the process that would be utilized to determine which of these in the pipeline projects will go forward?
No. I believe my response was in reference to questions to what about new stuff that hasn't been mentioned yet. The projects that are in the pipeline now represent a commitment that the administration has made to Council and to the public to support the development of these ventures.
No. The amount of funding in Year 27 is not going to be adequate to support the funding of all those ventures. 37 6/6/01 - Finance - Bill No. 010373
What is the funding gap? What is the gap between the funding available from Year 27 and -- I guess the number here is, I'm assuming, 34,795; is that --
Yes. And the sources, just looking from the block grant -- as I said, the sources are on and is on the order of $12 million. That's why the issue of our resource based and the need to look beyond the block grant is so critical. We've begun doing that. I think there's some opportunities to expand the resource base. We need to find more. One small case in point is the East Popular Sales Housing, which is on the list. The developer owns a non-profit Friends rehab. And Friends rehab, as their representative testified last week, has reached an agreement with the Philadelphia Housing Authority such that the Housing Authority will be putting up $3 million in PHA capital funds to help support a portion of this venture.
Is this the El Fanzo 38 6/6/01 - Finance - Bill No. 010373 Deal One?
When the list here says for that particular project, I don't know where it is or anything about it. I'm not picking on it, you made reference to it. The list says City subsidy $1 million.
Well, at the time when we received the proposal in Year 26, they needed a million dollars. Since that time, they've reached agreement with the Housing Authority. The Housing Authority was making a commitment that was not available previously. We can look at our $1 million and see if we can't reduce that in light of the relationship that's been established with PHA.
Perhaps. We'll have to look at that in light of the new resource that's emerged. 39 6/6/01 - Finance - Bill No. 010373
Is there any scenario under which a project that is on this list would not get done?
All of the development ventures on that list have received funding for acquisition or pre-development of some kind. And in order to receive that funding, each of those ventures has been reviewed by Housing Agency staff. That review usually picks up problems with feasibility. In a vast majority of cases, development ventures that get to that point get done. My expectation would be that every one of those development ventures would be funded and implemented.
Every one of the projects on the list, your testimony is you expect to get funded and completed.
That would depend on readiness to go to settlement, and also on the availability of CDBG dollars. Once we run out 40 6/6/01 - Finance - Bill No. 010373 of Year 27 dollars, we wouldn't have anymore CDBG dollars to spend on these ventures and would have to either find other dollars from other sources or wait until Year 28. We prefer not to wait and to find the resources instead to complement what we do have.
Let me go back to the question. The application goes in, do you expect over the next few months, July, August, September, that these particular projects on the list will immediately start getting CDBG funding, or did you say that, okay, that source is now available and there are other sources that you're looking at, and in the combination of all of those variety of sources, you will then figure out which projects get which funding.
We'd like to do both at the same time. I think the overriding principal would be readiness to go to settlement. We will scrutinize every single one of those ventures and look for opportunities to blend our resources with others. I don't think it's fair to anyone to hold 41 6/6/01 - Finance - Bill No. 010373 up the process and put off a venture that's ready to settle. I think we can do both with reasonable effectiveness.
Do you think you'll be able to have a list that tells us which will be ready to go by the end of the first quarter of the new fiscal year?
What is it that you don't know today that you're going to know on Friday?
I would need to get some information from the Redevelopment Authority staff that processed these proposals and review the underwriting. I'd expect they could provide a very reliable estimate of what's expected to be ready to settle during that quarter. I don't have that now, but I think we could get it quickly.
The other concern was about waiting for a resolution to lay out what projects are going forward. There's concern about programs possibly coming to a hault and a 42 6/6/01 - Finance - Bill No. 010373 whole series of events. Do these programs all run out of money on June 30?
The Community Development Block Grant year, like the City's fiscal year, begins on July 1. So we would need to have funding available as of July 1 for a variety of activities.
No. But we certainly 13 committed it all. We have no new money for the 14 ongoing activities. 15 In the past years, the process has been 16 that the City's Finance Department has advanced 17 funding to OHCD in anticipation of the 18 Community Development Block Grant. When the 19 block grant funding becomes available in 20 September, Finance is paid back. So that's a 21 process we propose again this year. 22
What did you mean when 23 you said when the Community Development Block 24 Grant money becomes available in September? 25
Well, following City Council 43 6/6/01 - Finance - Bill No. 010373 action on the block grant proposal, the proposal is submitted to HUD. There's a period of processing at HUD, and finally a commitment of the federal funds. That commitment is not received until September or late August at the earliest. So the funding is advanced to fill that gap.
From the earlier conversation, I was under the impression that when the application went in, whenever it goes in, the money is instantly available. Are you saying that is not actually the case and that it's not available until September?
That is not the case. The federal money is not available until September. Our past experience is that the advance from finance is instantly available because Finance had the assurance that the application has been filed and that the money will be forthcoming to repay.
What then was wrong 44 6/6/01 - Finance - Bill No. 010373 with the idea that you would send back a list for approval by resolutions of the spending of the dollars when you had actually figured out what you were going to spend them on if it's not the case that the federal funding is actually being held up, because during those two or three months you're actually not using the federal funds, but apparently the practice has been that you've been working with an advance and then repayment? What is the problem?
I really can't get into details, having not participated in the discussion. One point I can make is that there's some real value in having this document and saying it's not approved or saying it got approved or got approved with this amendment, rather than saying, Well, this portion is okay, but we're going to have to come back for this -- you know, things get complicated.
I wasn't suggesting that the bill itself wouldn't be approved. I think there was some internal issues about spending and spending priorities and the like. 45 6/6/01 - Finance - Bill No. 010373 But I would be hard pressed to think the feds really care too much about our own internal discussions, as opposed to a fully approved signed bill with the application going to the federal government, right?
I understand that. I'm thinking of my office's communication with the community and the need to be clear about what's happening.
Tell me, lastly, how many tax credit deals did we do in the past Year 26?
I don't have that information right here, but I can give it to you. The Redevelopment Authority has a good record of that. Your question relates to how many tax credit awards were received during Year 26?
And what were they, and what was the project, and how many units and how much? Tell me one more time what you expect to have by Friday? 46 6/6/01 - Finance - Bill No. 010373
We will provide -- we will identify the projects on the list that will be ready to go to financial settlement during the first quarter of the coming fiscal year, July, August, September.
At that time, would you be able to give any information about the remaining, whatever doesn't make that particular list?
Yes. I think we could provide a reasonably accurate estimate of the amount of funding that will be committed to those ventures and what is remaining after those commitments are settled.
Let's say you put that list together, July comes, you start making your evaluations of these various projects, let's say it's August and you have something that's ready to go, what are you funding it with at that point? How are you funding that project that's 47 6/6/01 - Finance - Bill No. 010373 ready to go in August?
That funding would come from the City advance that would be repaid from the block grant when the federal funds kicked in?
How do you put City dollars into these projects? I guess the City dollars have less restrictions than the CDBG?
None of the development ventures are funded with the City advance, none at all.
None of the development ventures are funded with the City advance. For that initial period of the fiscal year, any development venture that was ready to go to settlement would be funded from any available prior year funding that we might have, and the prior year funding would be repaid when the Year 27 money came in. If no prior year's funding were available at all, then we would have to postpone settlement for those early development ventures that came in early.
One last time, what is 48 6/6/01 - Finance - Bill No. 010373 wrong with an approval process by a list of projects by resolution in 90 days after the start of the fiscal year? What is the problem with that?
Again, there was a discussion that I didn't really participate fully in. From my perspective, it's very helpful in communicating with the community to be able to say, here's the document that was acted on by Council and everything in this document has been authorized and we will stand to support this program immediately, rather than to say certain activities have been okay'd but we've got to go back to Council for certain other activities. It makes it harder to communicate and convey the sense of a unified program. This is only my perspective on this. I'm sure I missed some other aspects of the discussion.
You're just saying it's easier when this is done that it's completely done and you can go to the groups and say you made it in the book, although -- I take from your earlier testimony -- isn't there 49 6/6/01 - Finance - Bill No. 010373 a possibility that someone could get -- if we just did the normal process, isn't it possible someone could get through this part of the process and still not have a completed project or a funded project?
Yes. But the underwriting skills of the Redevelopment Authority are such that if you make it in, you're probably going to get funded because they've reviewed the feasibility and they've -- their review is pretty accurate.
With regard to last year's bill, we had some discussion the other day about the increase in your general administration of program delivery costs. Again, as you know, whatever your response was to this particular section was only generally made available to us today. So I don't know what you may have said in that response in this particular section. Can you tell me how you responded to the provision that says, "It shall be the policy of the City that beginning in CD Year and each 25 CD year thereafter, the City will consolidate 50 6/6/01 - Finance - Bill No. 010373 administrative functions associated with each agency participating in the CDBG program in order to avoid duplication of services and reduce administrative costs," especially in light of the fact that that line in the plan goes from 29 million to 31 million this year? How did you comply with that particular provision?
The major activity that has occurred at OHCD and the other housing agencies has been a little bit of belt tightening so that we've been able to hold, for the most part, our operating costs level, despite the fact that we have contract-mandated salary increases that are coming into play during this period. Rather than increase proportionate with the contract-mandated salary increases, we've held the funding level. More importantly in terms of addressing the broader issue, the housing agency organizational structure is being evaluated now by the Mayor's office with some outside help. We participated in providing the material that has been requested 51 6/6/01 - Finance - Bill No. 010373 in connection with that evaluation. My understanding is that there will be a full presentation of a consolidated housing agency plan later this year.
Lastly, on that particular point, you don't necessarily reduce your cost to the CDBG program by having a new line item for L&I for $1.9 million. It seems we're going in the wrong direction. Why would you do that?
The new line item is a correction of the budget presentation that has been used in prior years. The funding for the L&I activity, which is inspections and abatements of code violations, has been in the plan now for well over a decade, but has been part of a separate line item in the program section. After looking over that situation and after some discussion with L&I last year in which we were able to identify the proportion of funding that was actually used for staff, we felt that it would be more accurate to place that expense in the property overhead category, 52 6/6/01 - Finance - Bill No. 010373 rather than present it as a program expense. The issue of whether L&I inspectors shall be funded from the block grant is one worth considering. But I don't think there's any disagreement that we need those inspectors. We need some funding source for those inspectors. I know that the question of is the block grant the right source is being reviewed and we'll deal with that. I know that that staff is absolutely essential.
Thank you. - - - 53 6/6/01 - FINANCE - BILL NO. 010373 (Proceedings now being stenographically recorded by Josephine Cardillo, Registered Professional Reporter.) - - -
Thank you very much, are their questions from members of the committee? (No questions.)
Seeing none. . . Seeing no questions, this will conclude our public hearing.
Excuse me. I don't believe I mentioned this in my previous testimony. I would like to request a waiver of the rules of Council to permit first reading at this week's meeting.
We will hold up so that the stenographers can change. - - - 54 6/6/01 - FINANCE - PUBLIC MEETING
Thank you very much. Again, this concludes our hearing on Bill No. 4 010373. We will enter into our stated meeting. It has been distributed, the proposed amendments to this bill as well as documentation from the Mayor, or a letter from the Mayor, as well as specific amendments. We will not read them now. We believe that everyone has them. It has been distributed widely and also to the stenographer and it will be made a part of the record. I would, therefore, like to ask for a motion from Councilman -- one moment. (Councilwoman Blackwell confers with colleagues off the record.)
All right, it has been requested that an explanation be given for the Mayor's letter. Rather than do that, I will ask the clerk to read the Mayor's letter into the record, and we will not read the amendments. After the letter is read, we will entertain a motion to approve the amendment. Thank you.
"Dear Councilwoman Blackwell: Councilmembers have raised several 55 6/6/01 - FINANCE - PUBLIC MEETING concerns about Bill No. 010373. First, the Administration has been asked to clarify its plans for spending the block grant and other federal resources that are made available this year. Attached to this letter is an aggregated list of activities the Administration proposes to fund via the Year 27 Consolidated Plan. Where possible, specific addresses or development names are provided. In other instances, as with homeowner rehabilitation or counseling programs, the programs are available citywide on a first come/first served basis. "The activities the Administration proposes to fund are developments that in many cases have been in the pipeline for years. In most instances, members of City Council have worked to shape the projects and actively support them from their inception. Many of these deals first receive City financial assistance for planning activities, then acquisition funding, and now, at last, our position to receive actual support for construction. A more thorough discussion of these projects and activities is provided in the Year 27 Consolidated Plan. Reference is specifically made 56 6/6/01 - FINANCE - PUBLIC MEETING to . "Second, as has been pointed out on a number of occasions, the list of activities proposed for funding in Year 27 does not include many new projects. In the Year 27 application, the Administration proposes to fund previously made commitments as it works to develop a new strategic framework for investing into neighborhoods and for identifying additional resources to support our neighborhoods. Over the course of the summer, the Administration looks forward to working with Councilmembers as a group and members individually to assure that Council concerns are reflected adequately in the City's plans moving forward. "Third, last year Council amended the legislation supporting the Year application, 18 directing the Administration to respond to the 19 specific questions within 90 days of the enactment. 20 During discussions over the last few days, it was 21 represented that the Administration has ignored the 22 requirements attached to the adoption of the Year 26 23 application. A copy of the Administration's timely 24 response is attached. If the response falls short 25 of Council's expectation, the Administration 57 6/6/01 - FINANCE - PUBLIC MEETING certainly will work through the coming year to respond more directly to the issues raised. "Few issues we confront present the City with challenges as great as those arising in our neighborhoods. I look forward to working through the myriad of issues with the members of Council so that we can start the fall with a shared vision of what we can accomplish in our neighborhoods. "With warmest regards, I remain,. "The Mayor."
All right. So, "Sincerely, John F. Street." And that is his letter, and we submit that for the record along with all of the documentation he submitted and an amendment. At this point, the Chair recognizes Councilman DiCicco for the purposes of a motion to approve the amendment to Bill No. 010373 as has been distributed to everyone.
I make a motion that the amendments to Bill No. -- excuse me.
Excuse me. Hold on for one second. (Committee members confer among 58 6/6/01 - FINANCE - PUBLIC MEETING themselves off the record.)
Excuse me. We will have to pause a moment. I'm being told that there are some concerns by the President that are different than those that I understand to be. So we will be in recess for five minutes. (Brief recess.) (Proceedings resume.) - - -
Thank you for your patience. Again, the Chair calls on Councilman DiCicco for the purposes of supporting an amendment to Bill No. 010373.
Thank you, Madam Chair. I move for the adoption of the amendment to Bill No. 010373 as reported into the record. (Duly seconded.)
A question on the motion. Madam Chair, it's crystal-clear that the wording about what I'm going to ask about is not a 59 6/6/01 - FINANCE - PUBLIC MEETING part of the resolution, but I do recall in the public hearing that the Executive Director of OHCD, Mr. Kromer, did make mention that he would be able to provide certain information to the body by, I believe, this upcoming Friday with regard to projects that are on the list that's been the topic of discussion and what their status is. His terminology was in a "ready-to-go status" for the first quarter of the new fiscal year. I would ask the question, Madam Chair, whether it is possible to have that statement, if not commitment, made by Mr. Kromer a part of this particular resolution -- I'm sorry, as a part of this particular amendment to make sure that we're clear on what we expect to receive. Is that possible?
On bended knee, actually, he's asking for this, Mr. Kromer.
Take advantage where you can. The first section of the proposed 60 6/6/01 - FINANCE - PUBLIC MEETING amendment talks about no later than 90 days after the beginning of the fiscal year, certain reports and plans and assessments and the like are to be submitted to City Council. I guess the question is whether or not as a part of that section, we would also get this list that Mr. Kromer talked about having availability as early as this Friday, that that would be a part of that particular section.
At the hearing, a number of requests were made, and I agreed to provide certain information in response to those requests, and I certainly will do so. I'm not sure that it is necessary to amend the amendment in order to enlist any of those requests. I will certainly be responsive, as I always have been, but the choice is really the committee's. I just wanted to underscore that as with this commitment, I will provide the information requested and agreed to.
Thank you very much. Thank you, Mr. Kromer. 61 6/6/01 - FINANCE - PUBLIC MEETING It has been moved and seconded that the amendment to Bill No. 010373 be approved. I will now entertain a motion to approve Bill No. 010337, as amended, with the suspension of the rules.
I'm sorry. All in favor for the amendment as distributed that it be approved. All in favor, aye? Opposed? The ayes have it and so the amendment to Bill No. 010373 is approved. I will now entertain, Councilwoman Tasco, a motion to approve, as amended, Bill No. 19 010373 with a suspension of the rules.
Madam Chair, I move that Bill No. 010373, as amended, be reported out of committee with a favorable recommendation and a request for the suspension of the rules so it can be read at the next Council session. (Duly seconded.) 62 6/6/01 - FINANCE - PUBLIC MEETING
All in favor? Opposed? The ayes have it. So this consolidated plan CDBG application is reported out. Thank you, everyone. Thank you from both sides.
Public property is next. And we will hear that -- that should be short and sweet, the Chair tells us. Thank you, thank you, members of the committee, and thank you, Mr. Kromer and everyone from the Administration. (Adjourned 1:48 p.m.) 63 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Wednesday, June 6, 2001, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE ON FINANCE BILL NO. 010373 __________________________________, MAUREEN BRODERICK, Registered Professional Reporter __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter