They're going. They're going. The $275 million in bond proceeds have been allocated. They haven't all been spent, but they've been allocated. So unless we can come up with additional funds to replace the NTI dollars, we'll be forced to go back to previous NTI funding levels.
Understood. The Chair recognizes Councilwoman Tasco.
Thank you. Good afternoon. I have a couple of questions. 246 Whole - 3/2/05 - No. 050003
According to Section 21-1111 of the Code, the Ordinance 5 that establishes the City's community development and federal consolidated plan process expires in fiscal year 2006. What is the Administration's plan for new legislation?
You've got us on that one, Councilwoman. We were, at least I was, unaware of the fact that that Ordinance 12 expires at the end of 2006. Obviously we'll take a very close look at it now.
Considering the President's, President Bush, proposal to shift the Community Development Block Grant Program from HUD to the Commerce Department, what steps have you taken to prepare for this proposal and what is the possible impact of this proposal on the City?
Let me address the second question first. 247 Whole - 3/2/05 - No. 050003 The possible impact is nothing short of devastating. As most of you know, the Bush Administration has, along with the idea of moving monies from HUD over to Commerce, has with that also recommended huge, very substantial cuts in what would be left of the block grant, CDBG block grant as opposed to SSBG. If all of the recommendations are in fact implemented, it could result in about an 80 percent cut in what the City of Philadelphia sees as its annual block grant appropriation. I can't imagine what this department or what this City would do from a housing development and housing preservation standpoint. I mean, that would -- not just virtually; that would almost entirely wipe out whatever programmatic monies we have available, not to mention wiping out most of the entire staff. So the effect would be devastating. I mean, I don't know that we could recover from something like that if the proposed cuts all happen. 248 Whole - 3/2/05 - No. 050003 Relative to what we're doing to try to avoid that happening, the Mayor is a very active member of the U.S. Congress of Mayors. In fact, in January, we attended a meeting in DC where -- a meeting that turned out to be something of a strategy session. In that meeting it was discussed that we would -- "we," the City of Philadelphia in connection with, I think, Columbus, Sacramento, San Francisco and a number of other cities -- would ban together for a letter-writing campaign from the Mayors, as well as from the federal legislators from those and other states. I've been told recently that Senator Santorum has actually written a letter to the Bush Administration decrying the proposed cuts and asking that the cuts be avoided if not this year, then in perpetuity. So there's been a huge outcry not just from the City of Philadelphia but from other large cities. A parenthetical point there is the fact that not just large cities are going to be hurt by that, but all of those 249 Whole - 3/2/05 - No. 050003 the smaller municipalities will as well, because for the most part, those block grant monies because they're so flexible, as opposed to HOPWA or HOME monies, because block grant dollars are flexible, smaller municipalities use that money for everything from street light to roads to sewers to developing houses. And so if a small municipality were to lose that $231,850, that would be even more devastating for them. So there's been a ground swell of support, depending on how you look at it, for the block grant, both from large cities as well as from rural communities.
Yes. I would just like to put on the record that I am strongly opposed to the legislation and will be meeting in DC with the Congress of Cities and will be visiting their congressional delegations on Tuesday, I think the 16th, and our lobbyists are opposing this legislation. And it does impact -- we do represent small towns and cities all over the country, and it has been a topic of discussion 250 Whole - 3/2/05 - No. 050003 for the league. What is the current status of the proposed reorganization of the OHCD, PHDC and RDA?
We are literally in the thick of it. We have hired a team of consultants who are helping us to pull that together. It is going to be -- it is a three-phase project. We are in the middle of the second phase. The second phase involves pulling together information from other cities, as well as formulating teams both within -- well, the teams consist of individuals both from the Office of Housing as well as related areas, like NTI, L&I, Planning. Those teams will take a microcosmic look at a number of different work areas in the Office of Housing. Once they complete their work, their work will be compiled. That compiled work will go towards -- well, will inform and help to structure what the new Office of Housing needs to look like. I mean, from the standpoint of a bunch of different areas, not 251 Whole - 3/2/05 - No. 050003 the least of which is, say, work rules, the way people have -- their job descriptions themselves, the level of training for everybody from typists to supervisors. We expect that in the next six months, we should be in a position to announce a new reorganized Office of Housing. But we're in the thick of it right now.
Okay. I have one other question. I want to go back to your budget. On of the budget detail, who are the vendors that will receive the 195,000 for advertising and promotional activities for housing and opportunities, and generally what kind of things would they be doing?
. MS. McCOLLOCH: I see it. 252 Whole - 3/2/05 - No. 050003 I'm Deborah McColloch, Director of Housing. I'm sorry, Councilman, I don't know off the top of my head, but I can provide that information.
Would you provide it to the President? MS. McCOLLOCH: Yes.
Excuse me. On that item, I think 200,000 was for FY05 and 195,000 in FY06. We don't know what that was for? MS. McCOLLOCH: I'm sorry. It's to pay for the advertisements that we need to place in the newspaper when we amend the plan, when we advertise our hearings, when we have advertised bids. Whatever sorts of advertising we need to do as part of the program, this is the line item that pays for it.
What is the impact of the budget cuts and a reduction of ten budgeted positions? What impact has that had on your department? 253 Whole - 3/2/05 - No. 050003 MS. McCOLLOCH: The impact has been doing more with less. We have one fewer member of the contract administration staff. So that the other staff members in that department need to pick up the contracts that that person had. We had several positions that were budgeted and unfilled, which we dropped from the roster in this way to save money. So we're continuing to provide the services that we've always provided, but everyone has to work harder. Everyone has to take on a little more level of responsibility.
How many vacancies did you have that you didn't fill as opposed to how many actual people were laid off? MS. McCOLLOCH: A couple of these -- we had a couple of retirements that were not layoffs but were retirements, and those slots were not filled. We had five vacancies that were not filled and then we had two retirements and three layoffs from last year. 254 Whole - 3/2/05 - No. 050003
You're welcome. The Chair recognizes Councilman Ramos.
My principal question was asked by my colleague, Marian Tasco. You used the word "decrease" 12 times in your statement. You used the word "cut" at least twice. My eyesight is not the best. I think David's eyesight might be better than mine. So there's a lot of the word "decrease" here in your statement and "cuts," and I have the same concern, that this is not even taking under account the question of Councilwoman Tasco, that it's probably going to get worse. Are we doing any planning ahead in the event that things continue to get more and more negative for the urban cities in this country? I mean, we're kind of planning 255 Whole - 3/2/05 - No. 050003 and -- let me stop here and thank you on behalf of the hundreds of thousands of people in this City for the Housing Trust Fund, the collaborative effort and the partnership with the community and elected officials and interested parties and different housing organizations. Coming from being a housing activist for a lot of years, like some of my other colleagues around here, Jannie and the Mayor and so many of us and the Council President, that this was something that we needed to do, and it brought a lot of happiness to those of us that have allocated for this for so many years and the new advocates out there that sometimes are louder than the way I was. But anyway, do you have any planning going on? How are we going to handle this? Because we're going to have a serious housing crisis in this country and it's going to affect this City in a very, very big way.
Well, for the most part, you answered your question for me. The Housing Trust Fund is one step, a huge step, 256 Whole - 3/2/05 - No. 050003 but one step in that direction, that of trying to develop alternative-to-federal sources of funding. In addition to that, we are also looking at not so much with OHCD but more with the Redevelopment Authority and PHDC. We're also looking to become more entrepreneurial, within, obviously, the parameters of the law. But we're looking to be more entrepreneurial so we can generate internally more funding to help replace or supplant the monies that we anticipate losing over the next couple of years. Your point, though, is very, very well taken. Since I came on board back in 2002, we've gone from roughly $72 million in our annual block grant allocation to now just under 60, right at $59.X million. That's pretty steep. That's a pretty steep hit to take over a relatively short period of time. The bad news is, that's the good news, that over the next couple of years, the decrease may be even more steep. We should be okay for this upcoming 257 Whole - 3/2/05 - No. 050003 fiscal year, but after this upcoming fiscal year, I mean, for the most part, all bets are off. We are encouraged by the fact that we have what appears to be bipartisan and bicameral support for the block grant in Washington, but, again, with the -- let me back up a little bit. This is not the first time that the President has sought to cut the block grant in this way. He's not sought to move it over to Commerce before, but he has proposed deeper cuts that have been actually implemented in the past. Our hope, our expectation is to continue to kind of stave off the level of cuts he's been proposing at least to the point where we can kind of replace the money he's taken out through other means, like the Housing Trust Fund.
Thank you. 258 Whole - 3/2/05 - No. 050003 The Chair recognizes Councilwoman Blackwell.
Thank you, Madam President. We're all very concerned about the loss of CDBG funds. You referenced in your remarks the American Dreams Initiative. Can you tell me a little bit about that, what funds we got and where they were spent, a little bit about the American Dreams Downpayment Initiative? MS. McCOLLOCH: The American Dream Downpayment Initiative was a new initiative last year. It is HOME funding that was segregated out to provide down payment assistance to families that are first-time home buyers. We have crafted a program that's just now -- just in the last month we've issued our first few grants in which people are eligible for up to $10,000 in down payment assistance or six percent of the sales price, whichever is less. It is available to people who are 259 Whole - 3/2/05 - No. 050003 purchasing properties through programs that we support. So it's not available to just anyone in the City. It's for people who are buying properties that we're rehabbing or supporting the new construction. And it's tied to housing counseling. The people that participate must receive housing counseling from one of our funded counseling agencies, and then they can receive the assistance for the down payment. It's also geared toward helping folks in those neighborhoods that are at the high end of our assistance, so that people who might not otherwise be able to afford one of the houses, modern income people but wouldn't quite be able to afford one of the houses, this can provide that kind of assistance. So that we're not targeting a neighborhood that we haven't been able to help as much before.
Given this rumor about President Bush and money going through Commerce, will this money be affected that way or will there be a push for money to go through our Finance or Commerce 260 Whole - 3/2/05 - No. 050003 Department? MS. McCOLLOCH: Well, this is HOME money, and under the Bush proposal, HOME money remains with HUD, and so this pot of money would not go to the Commerce if the proposal that President Bush has put forth moves on.
Is there other money that we traditionally get, given all the rumors that these dollars, even CDBG dollars, could be transferred? Will we have to do business differently in addition to the cut? Do you suspect that we'll have to do business differently? MS. McCOLLOCH: Well, there have been proposed cuts to -- well, the short answer is, yes, we would have to do business differently, in that the money is coming through a different part of the federal government and we don't really know exactly how that would work, I mean, what those requirements would be, how we would get those funds and so forth, would we end up having what would now be two different plans, one to 261 Whole - 3/2/05 - No. 050003 go to Commerce, one to go to HUD. I don't know. There have been a lot of -- there's been a lot of discussion about making revisions to the consolidated plan, but none of those have gone forward, so I don't know whether that would happen or not. And we would be having to just work through, with whatever federal agency is providing the funding, the set of requirements that that agency was putting on the funds.
Given the fact that the time line could be about the time we finish our budget, how do you suspect that this will affect our general CDBG hearings on the -- because we generally would have them at least by early June. Do you expect that we'll have enough information to have a hearing by then? MS. McCOLLOCH: Well, these proposed cuts of the President's would affect our budget a year from now. The money that we'll be bringing back to this body when the hearing is scheduled in May or June, or 262 Whole - 3/2/05 - No. 050003 whenever that gets scheduled, is the money from last federal fiscal year. So we have all of that money and we're moving forward. We've just issued the preliminary con plan. You all received a copy of it today, and we'll be moving forward. It's this time a year from now when we get our entitlement for what will be our FY07 budget that will have the impact, that the Bush cuts would have the impact on our budget a year from now.
That picture doesn't sound very pretty, because by that time, the NTI monies will long be gone and will we have any housing programs at all? Councilman Cohen, your light was on earlier. Do you want to be recognized, sir?
Yes. I want to know what will be the impact for the year that we're dealing with now? MS. McCOLLOCH: There is no 25 impact on the new Bush proposal for the 263 Whole - 3/2/05 - No. 050003 current year. The Bush proposal for cuts will affect us a year from now, our fiscal year '07.
Were there cuts this year? MS. McCOLLOCH: Yes. There were cuts this year of $3.3 million in Community Development Block Grant, almost another million dollars in HOME funding, smaller cuts in the ADDI funding that we were just discussing, the American Dream Downpayment Assistance, and about 300,000 cut in HOPWA.
What were the stated reasons for the cuts? MS. McCOLLOCH: The budget that Congress passed had less money, and so by the funding formula that the City gets, we got less money.
Democratic 264 Whole - 3/2/05 - No. 050003 and republican parties.
In Washington. That's where the vote was made and the cuts were made, right? MS. McCOLLOCH: Well, Congress passed the budget.
Well, what was the vote? MS. McCOLLOCH: What was the vote on the budget? I'm sorry, sir. I don't know.
I just think it's important that the budget hearings at the local levels we learn who are the forces that are moving the cuts and why they're moving, because it seems to me that the country is threatened with a reversion back to the old days when federal governments applied practically no support for any form of housing or any other personal needs, where life was regarded as not being worth community effort and that everybody had to juggle on their own 265 Whole - 3/2/05 - No. 050003 and God help those that couldn't make it. And if that is the case, then I think those of us at local government levels have to know about it so we can inform our people. I am a little distressed at our treating this as just a natural event, it's going to occur and sort of there's nothing that can be done about it. Though I was heartened by a party report about cities getting together to do something. I think it's the duty of this Council in considering this budget not only to consider the budget but to send out the alarms of the people that elect us as to what's happening in the country, and they realize that if both parties are to blame, let's blame them both openly. Let's not hide behind the fact that the democrats often are what are called light republicans. Sometimes they're heavier than the republicans in bad policies, and let's name the republicans that are not doing the job. What did you say about Senator Santorum before? He's the third-ranking U.S. 266 Whole - 3/2/05 - No. 050003 Senator. He's from Pennsylvania. I haven't heard of a decent thing he's done yet. Were you indicating that he had done something decently so we can celebrate his finally doing something for rather than against the people?
You can decide on whether it's decent or not, but the Senator has come out publicly against the proposed Bush cuts to the block grant.
That's a good thing. Let me clarify one other thing relative to efforts being made to fight this. I mean, we are not -- I repeat, absolutely are not just kind of sitting on our hands taking this as a fait accompli. We are fighting like nobody's business against these cuts. In fact, there is a thought that the Bush Administration is throwing out 80 percent as kind of a paper tyrant, that they're really shooting for something like 40 or 50 percent, figuring that 50 sounds better than 80. 267 Whole - 3/2/05 - No. 050003 Our position is the cut ought to be closer to zero, that these programs ought to be left intact in their entirety. Because in the past we've been looking at anywhere from five to ten percent cuts, and we've screamed and balled over those. A 40 percent cut will be just as devastating. And, again, we are not sitting back. We are doing everything that we can.
That raises a question, because I am a little bit active politically in the City and my ward votes very heavily, but I have not received any information from democratic sources or from City government sources that enable me to go out and alert the people that I have a responsible to alert to events going on indicating any real crisis. Like I take sharp issue -- I understand your motivation is of the best, but to say that we have to do more with less is really nonsense, because if you could have done more with less, you should have done it last year and you had seven too many workers 268 Whole - 3/2/05 - No. 050003 last year. If this year with seven less workers you can do as much as you had as you did before with seven more workers, that's just showing you you weren't efficient. So I think it's time to come clear and be honest, because I think you're just being brave in the face of oncoming disaster, and we've got to be ready to meet that disaster. And I see that the current national administration seems to want to reverse everything to the prior -- to Franklin Delano Roosevelt days when government acted in a way that told people they had to fend for themselves, and we know how tragic those days were. And finally we thought government began to accept its true responsibility, but now we're moving backward again. Now, if I'm wrong, we ought to put out the right information so I can be corrected, but if I'm right, we've got to ring all kinds of alarm bells. And apparently you agree, maybe not with the detail, but you agree that it's more likely that alarm bells are needed than commendations for the 269 Whole - 3/2/05 - No. 050003 President's program.
Oh, absolutely. We do agree that alarm bells ought to be rang locally --
Well, I'm suggesting that government agencies, instead of putting on a staunch proud face and saying, By God, they're making us do more with less, begin to tell the truth, and the truth is that services are being cut drastically. And if you lose seven people out of how many people you had before -- you said there was seven reductions. I think there were five vacancies that were not being filled and two retirements that are not being filled? MS. McCOLLOCH: There were ten more employees at OHCD last year than now, five vacancies that weren't filled, two retirements and three layoffs.
Well, either you were overstaffed last year, and I don't believe that at all, because I know of the wave of budget cuts that have occurred previous years, or else they're just cutting 270 Whole - 3/2/05 - No. 050003 the agency down to prevent it from performing its services as well as it used to. I think you ought to sound that kind of alarm or phrase it the way you see it, to let people know that their real interest in what government can do for them are being shattered, and that unless there's a change of policy -- let the Evangelicals that are supposed to have been so strongly in support of President Bush figure out for themselves, but you've got to give them the information needed as to why they have to have a change in Bush policies. They apparently helped elect him. They can perhaps persuade him to change his policies. But in any event, the American people need the truth, and I suggest that instead of just giving us these figures and being brave and stoic in the face of adversity, you stop being brave and tell us the real facts. Tell us how badly we are being hurt by these cuts. Thank you, Madam President.
271 Whole - 3/2/05 - No. 050003 You're welcome, sir. Are there any other questions or comments from members of the Committee? (No response.)
Seeing none, thank you very much. This Committee will stand in recess until Tuesday -- oh, I'm sorry. I'm sorry. I didn't see you. The Chair recognizes Councilman Clarke. I didn't see you coming in.
We'll get an opportunity to ask you fine folks questions later on.
Okay. Fine. So this Committee will stand in recess until Tuesday, March the 8th at 10:00 a.m. Thank you very much. (Committee adjourned at 5:00 p.m.) - - - 272 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on March 2, 2005, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)