You're correct. Yes. We had an Adult Education Program in Germantown that was closed. The South Philadelphia office, an office in Frankford, Youth Web program at Broad and Olney or a little below Broad and Olney. And I think that was it at the time, but quite a few, yes.
And they were all closed as a result of funding being cut?
They were closed as a result of funding being cut and redirected.
Okay. Thank you. The Chair recognizes Councilwoman Tasco.
Have the funds declined significantly since the program was instituted years ago?
So if you said the offices were closed because of cutbacks and re --
Reallocation. Reallocation to new programs or existing programs?
Yes. Yes. The existing programs are OSH, the Office of Supportive Housing. We gave them money to support shelter services. The Department of Recreation, we helped fund six senior centers, and the Health Department for lead abatement and childhood obesity services. 205 3/11/08 - WHOLE - BILL 080156
These services fall within the guidelines of the funds that were appropriated for this program?
So who on the state level or federal level challenged the reappropriation?
Department of Community and Economic Development on the state level.
We are still funding them until we find this year when we do a new work plan. Whether or not that will continue, I don't know.
Who made the decision to -- I'm asking you because you were there. 206 3/11/08 - WHOLE - BILL 080156
And you're the grant writer, and you decide if the grant is appropriate or not appropriate. So who made that decision to close these offices?
Because the offices are part of the overall framework of the program, right?
Because I wasn't asking those questions. The two programs you have existing, the reentry programs, were they programs already existing and receiving funding from the City as part of the MOCS program? 207 3/11/08 - WHOLE - BILL 080156
Those two -- well, the one program, the main program, has been in existence since 2006, and last year the second reentry program was opened. So Fiscal Year '07.
Correct. That's housed at Impact Services. I don't know if you're familiar with Impact Services.
The employees who work in the Managing Director's Office, are they providing services that fit within the guidelines of the dollars, of the program dollars?
The money came out of MOCS? 208 3/11/08 - WHOLE - BILL 080156
So you're going to provide to the President a list of these employees and what they do?
We are. What departments they're working, what their titles are, what they do and what their salaries are.
Well, I'm sure you're probably trying to figure it all out yourself. You just got there.
Thank you very much. I don't have any more questions.
Thank you. The Chair recognizes Councilwoman Sanchez.
I guess along those same lines, I'm assuming, Madam President, that they're going to -- 209 3/11/08 - WHOLE - BILL 080156 we're going to get a listing of employment locations. Do you know how many locations you have that are serviced through this MOCS organizational chart? How many locations do you have?
There are -- actually, I mentioned before that there were two locations, but it's actually three. I didn't count 990 as one in my head. We also have a location at 6th and Lehigh.
In the library there. And also where Workwise is located at 1234 North Broad Street.
Are any of the folks at the Northeast City Hall under MOCS or MDOs? Is there an overlay?
Not anymore. We used to have a staff person at the Northeast. We do have staff that co-locate at the North Philadelphia City 210 3/11/08 - WHOLE - BILL 080156 Hall, but not anymore at Northeast.
I know that you inherit kind of this system. What moving forward -- I'm assuming you're making some assessment. What do you think is going to be the overarching goals of the Mayor's Office of Community Service so that we can move forward? Can you give me an idea?
I could not tell you exactly right now. That's something we're really working on, but I can tell you one of the things that I plan to do is to meet with all Councilmembers individually to kind of get your ideas to help me turn MOCS into what it really should be.
In terms of since we have a grant writer that's assigned to MOCS, what are the funding sources that you've gone after traditionally and have there been any missed opportunities that you think we should be looking at? 211 3/11/08 - WHOLE - BILL 080156
I'm the Director of Grants and Programs. It means I oversee the grants we have. I'm not a grant writer.
So you're the program compliance person versus the actual person who writes the grants?
So do we have anybody through the Mayor's Office of Community Service that's looking at grant opportunities at the federal or state level?
We actually are training -- having one of our employees, since Mr. Ridley arrived, has her in class training to become a grant writer, and she is going to be very good, I think, once she's finished her classes. 212 3/11/08 - WHOLE - BILL 080156
Do you see any duplication of services between the Mayor's Office of Community Service and the Managing Director's Office?
Probably in some cases, but because we are charged with a specific population, we are supposed to service people, residents of Philadelphia, who live at or below 125 percent of the federal poverty level, and the Managing Director's Office can service anybody. I think that's where the distinction lies between the two.
From your number of personnel, how many of those folks are bilingual in any language?
In what languages? 213 3/11/08 - WHOLE - BILL 080156
How do you see yourself working with the new 3-1-1 system?
That's something we were looking at. So right now I could not tell you, but I'm excited about it.
I've heard you say several times that I guess your objective is and responsibility is to help people with services who are below the poverty level. How are you servicing them? I know you said that you have employees in the Managing Director's Office who go out and clean lots. I mean, how are you being of service to those people?
We provide a variety of services. Our Fatherhood Initiative services 600 non-custodial fathers, helping them reconnect with their children, getting them back into 214 3/11/08 - WHOLE - BILL 080156 the system so they're paying child support again. We provide employment services to ex-offenders who are coming out and need employment. So we fund employment services. We provide services through OSH. We get those numbers for those persons who go into shelter. We provide services to over 7,000 senior citizens a year through six senior centers. That's an example of some of the services we get. And the Mayor's Action Center gets 60,000 calls for services, and those are linkage or I&R, information and referral services, yearly that we provide. We pay for the staffing.
Why were these programs placed under MOCS? Do you know why? And not in DHS or Health, one 215 3/11/08 - WHOLE - BILL 080156 of these other for the courts?
So they came out of an initiative out of the Mayor's Office of --
Yes. The Fatherhood Initiative, we wrote the program, as we did wrote Workwise. We wrote the -- actually, our then-Executive Director, Donna Cooper, wrote the grant for Workwise.
And for the Fatherhood Initiative? Because my understanding is that the Philadelphia Workforce Development Corporation has a similar program. How are we working with other quasi kind of City agencies doing similar stuff?
Well, there are quite a few fatherhood programs, and they 216 3/11/08 - WHOLE - BILL 080156 all target different populations. We're targeting the younger population.
Now, should Councilman Greenlee get a call from one of his constituents that he was just released from prison and he needs a job desperately, can Councilman Greenlee refer him to your office or are you working for inmates and preparing them for when they're released?
If the Councilman gets a call from an inmate, someone who is recently released from prison or about to be released from prison, he can call the Reentry Center at 685 -- or they can call 685-3615 and arrange to go in for services.
Okay. Mr. McPherson is asking if there is a cut-off period when they've been 217 3/11/08 - WHOLE - BILL 080156 released.
They could have been released ten years ago. If they need the services, as long as they're an ex-offender, they can get the services.
Your office services individuals as opposed to target neighborhoods?
Well, it depends, because our office, our Community Engagement Unit, will go out to a neighborhood and identify block captains or if there's an issue in that neighborhood. They can get a lot clean-up or if they need beautification, 218 3/11/08 - WHOLE - BILL 080156 they'll work with the whole neighborhood in that sense, yes.
But the neighborhood does not have to fall within the income guidelines?
No, but usually, generally 99 percent of the times, someone in the neighborhood does and so they get the documentation and that covers the whole neighborhood.
I like the clean-up because it does help a lot of citizens. It helps a whole neighborhood.
You're welcome. Any other questions? (No response.)
We look forward to receiving that information, Mr. Ridley.
Thank you. MR. McPHERSON: Office of Housing and Community Development. (Witness approached witness table.)
Good afternoon. Nice seeing you. Please identify yourself for the record and proceed with your testimony. MS. McCOLLOCH: Good afternoon, Council President Verna and members of Council. I am Deborah McColloch and I am the Acting Director of the Office of Housing and Community Development. I am here today to present testimony on the Office of Housing and Community Development, OHCD's, proposed Operating Budget for Fiscal Year 2009. The 220 3/11/08 - WHOLE - BILL 080156 proposed Operating Budget under the Community Development Fund, Grants Revenue Fund, Housing Trust Fund and General Fund will also be presented in the spring to the Finance Committee on its hearing on the Consolidated Plan that includes the budget for Community Development Block Grant, CDBG, and other housing programs for Fiscal Year 2009, or what we call CDBG Year 34. Ideally, the Consolidated Plan hearing should occur prior to the consideration of the Operating Budget by City Council. However, as in the past 15 years, the hearings are reversed. Should the results of the Consolidated Plan hearing require adjustments to OHCD's Operating Budget as adopted by Council, there will be time subsequent to the adoption of the Consolidated Plan to amend the Operating Budget. The complete Fiscal Year 2009 proposed budget will be presented as part of the Consolidated Plan hearing. 221 3/11/08 - WHOLE - BILL 080156 Due to the nature of its funding, OHCD is required to plan its annual budget to comply with the federal objectives as outlined in the annual Consolidated Plan. HUD's mandated goals are the creation of suitable living environments; the provision of decent, affordable housing; and the creation of economic opportunities. These federal goals inform the agency's commitment to create a local environment that will improve the quality of life for residents and businesses of the City of Philadelphia. This commitment is demonstrated through OHCD's support of the City's core service goals of, one, promoting healthy and sustainable communities; two, promoting jobs and economic development; three, providing outstanding customer service to clients with a high performance government operation; and, four, demonstrating the highest standards of ethics and accountability. 222 3/11/08 - WHOLE - BILL 080156 OHCD intends to measure the success of its Fiscal Year 2009 operations by establishing specific outcome goals for its core activities, which may include providing housing through new construction and rehabilitation, counseling services, preservation of homeowner properties, and community gardening. In delivering these services, OHCD strives to meet a high level of customer service. Reductions in federal funding continue to have an impact on community development programs in Philadelphia. Federal funding has decreased by 17 percent over the past six years, 18 including a three percent reduction from 19 the last fiscal year. However, the 20 General Fund is supporting two OHCD 21 programs. 22 The proposed General Fund 23 budget allocates $4 million to support 24 the vacant land stabilization and 25 maintenance activities of the 223 3/11/08 - WHOLE - BILL 080156 Pennsylvania Horticultural Society and $1 million to support the affordable housing programs of the Housing Trust Fund. million in the Housing Trust Fund, and million in the General Fund. This Operating Budget represents the costs for all housing programs, as well as the salaries for all OHCD, Philadelphia Housing Development Corporation, PHDC, and the Redevelopment Authority, RDA, staffs, rents, materials and supplies. My written testimony then breaks out each of the categories. The decrease in budget Class 100 is the result of OHCD reducing its budgeted staff level by 20 positions, from 110 positions in Fiscal Year '08 to 90 positions in Fiscal Year '09. This reduction is being achieved without 224 3/11/08 - WHOLE - BILL 080156 layoffs, by eliminating vacant positions.
Because these positions have not been filled, no impact on service levels is anticipated. The increase in budget Class 200 is primarily the result of additional Section 108 loan funds and increasing the capacity for the Interim Construction Loans. In previous years, OHCD was authorized to secure a Section 108 loan to support housing production programs, which will be received this fiscal year. OHCD needs sufficient budget authority to spend the loan funds. In addition, OHCD offers Interim Construction Loans to non-profit housing developers to reduce development costs, and it needs budget authority for this activity. OHCD strives for inclusion in its programs of all portions of our population. Total non-governmental contracts awarded in Fiscal Year 2007 totaled approximately 78 million, of which 24 million, 32 percent, went to 225 3/11/08 - WHOLE - BILL 080156 disadvantaged firms. In conclusion, despite the continued reductions in federal funds, OHCD is committed to providing housing and community development services in a professional and ethical manner, to meet the Mayor's goals of creating healthy and sustainable communities, promoting jobs and economic development, and providing a high level of customer service in a high performance government environment. I'd be happy to answer any questions that you and other members of Council may have.
Thank you very much. The Chair recognizes Councilman Greenlee.
Thank you, Madam President. Good afternoon. MS. McCOLLOCH: Good afternoon.
My office received some questions about a fund that 226 3/11/08 - WHOLE - BILL 080156 I'm told was at least for the last five years part of OHCD budget, the Childcare Facilities Fund. MS. McCOLLOCH: Yes.
And I understand it's not in there this year. Has it been transferred somewhere else? MS. McCOLLOCH: The Childcare Facilities Fund for the past five years was funded with Community Development Block Grant funds, but that funding was a result of a swap that was done five years ago with NTI bond proceeds. It had originally been intended to be funded with NTI bond proceeds and then it was determined that that was not an eligible program under the NTI bond proceed requirements, and so we essentially swapped it with CDBG funds. So we funded another activity that was eligible for NTI with NTI and put that into the Childcare Facilities Fund. But in that sense, it was never part of the Community Development Block Grant budget. It was 227 3/11/08 - WHOLE - BILL 080156 only there because of that swap.
Do you know where it's going to be now? MS. McCOLLOCH: I don't know.
Do you know, is it going to get anything? MS. McCOLLOCH: Well, we have --
Because I understand they're responsible for funding a lot of what seems like pretty good programs, so I'm trying to figure out what happened to it. MS. McCOLLOCH: Well, we have not yet issued our preliminary Consolidated Plan, which will come back before this body usually in May when you all schedule the hearing. So we have not yet released our preliminary plan, although we expect to do that this month, in March. But as of now, I don't have a source in Community Development Block Grant funds to support the Childcare Facilities Fund. 228 3/11/08 - WHOLE - BILL 080156
Okay. In your testimony you talk about ideally it would be better to reverse the Consolidated Plan as opposed to the Operating Budget. What is the reason? I know you said for years. 8 MS. McCOLLOCH: Mostly it's 9 because we don't receive the funding 10 allocation from HUD until very late in 11 the process. The federal fiscal year is 12 October, and we don't usually -- it 13 starts October 1st, and we don't usually 14 receive our award of funds until often 15 times January, and then there are a whole series of federal requirements that we have to meet for holding hearings and we would have -- in order to do that, we would have to start those hearings to meet the federal guidelines in September, but in September we don't have our federal allocation yet.
You don't know what you're going to get yet. And the cuts in employees, is 229 3/11/08 - WHOLE - BILL 080156 that part of the problem with the federal cuts? MS. McCOLLOCH: We're not laying anyone off. It's just vacancies that haven't been filled.
Okay. But not filling them, is that -- MS. McCOLLOCH: That's in part because we think we don't need that number of people and in part because we have a reduction in federal funds, so we need to match our resources.
Okay. Just one last thing. On the Housing Trust Fund -- I guess other people might have questions about that, too -- I see it's, what, 21.1 million. I know, again, I received some concerns that there might not be enough money in there. What conversations have you had from various organizations that will use this? How have you come up with that money so far? MS. McCOLLOCH: How have we been spending it so far? That is the 230 3/11/08 - WHOLE - BILL 080156 budget authority, which is really about one and a half years times what we anticipate earning. Our budget last year, as budgeted last year, we had $14 million in the Housing Trust Fund. We never spend it all in one year, just because the development process takes longer than that. We issue requests for proposals. By the time we get those back and get the money out to the groups that are using it, it takes longer than one year. So this budget authorizes us a higher amount than we'll actually earn, because there will be some carry-over from the prior fiscal year.
Tell me about the counseling services program. Are you maintaining the current number of counseling agencies? 231 3/11/08 - WHOLE - BILL 080156 MS. McCOLLOCH: Yes.
Are they receiving any cut in funding? MS. McCOLLOCH: We haven't issued the preliminary plan yet, but I do not anticipate reducing funding for housing counseling.
I guess we've talked about it. Let me just ask you about the budget and the staffing levels. Kind of refresh my memory about the layoffs. MS. McCOLLOCH: In Fiscal Year 2005, between the three agencies, OHCD and PHDC and RDA, we had an overall decrease between those three agencies of a little over 300 staff positions, 303 positions, and then we had some layoffs that occurred and some people were then hired at OHCD. But the total between those three agencies, the total number of decreased positions was 59.
Of those people who left, were there any 232 3/11/08 - WHOLE - BILL 080156 individuals who were seeking employment? Because we were told during this whole layoff and reorganization no one would be left without a position. Is that the case? MS. McCOLLOCH: A total of 73 employees were laid off overall, and of those, only three are still out on layoff. Two folks found employment elsewhere and four people were offered a position and declined the position. So we do still have three people who were laid off that we haven't -- that haven't either been hired at the City or found other employment. We still have three.
Are there any lawsuits pending as a result of that whole scenario? MS. McCOLLOCH: There are no 21 lawsuits, although there is a union arbitration that's outstanding.
There are none? MS. McCOLLOCH: There's no like 233 3/11/08 - WHOLE - BILL 080156 lawsuit, individual lawsuit, but there is a union arbitration.
There's a union arbitration about the whole process? MS. McCOLLOCH: Yes.
Okay. PHDC, they come under -- they're an independent agency? MS. McCOLLOCH: They're an independent agency, but the funding for their staff positions and so forth is included in this budget.
You're welcome. The Chair recognizes Councilwoman Sanchez.
Thank you, Madam President. Thank you, Deborah, for coming before us today. I had a couple of 234 3/11/08 - WHOLE - BILL 080156 questions. There's been a lot of discussion about the Housing Trust Fund. Given your expertise, in an ideal world, because some of us are not in agreement with the one million, what would you see us needing that Housing Trust Fund to be just to sustain it at level with the decline in the housing market? MS. McCOLLOCH: Well, the --
Given the proposed projects online, because we have some projects that are online. MS. McCOLLOCH: We have any number of projects that are in the pipeline, and the decline in earnings this year for the Trust Fund is about -- I don't have it exactly, but it's about on par with the million dollars that's been proposed in terms of what's being earned, because every real estate transaction in the City earns funding for the Trust Fund, earns money for the Trust Fund.
So you 235 3/11/08 - WHOLE - BILL 080156 said the decline was? MS. McCOLLOCH: I think -- we're only halfway through the year.
And it's about a million dollars already? MS. McCOLLOCH: No, no, no. 8 What we project it to be between now and the end of the fiscal year. And not even quite that high, because there are some interest -- we earn interest on Trust Fund dollars that are sitting in the City's coffers.
One of my issues is learning the alphabet soup in the conveyance of properties. Why is there different processes for the Vacant Property Review Board, RDA and PHDC? MS. McCOLLOCH: There are three different conveyance properties because they're in fact three different entities. PHDC is a private non-profit corporation. VPRC, Vacant Property Review Committee, is a committee of City Council that disposes of City-owned property, and the 236 3/11/08 - WHOLE - BILL 080156 Redevelopment Authority is a state-chartered authority that disposes of properties under the redevelopment law of the State of Pennsylvania, Commonwealth of Pennsylvania.
The previous Administration's policy was that we were going to sell everything at market value. What is the new policy, or has one not been articulated yet? MS. McCOLLOCH: One has not yet been articulated.
In the case of -- an example, I asked for an overlay of all of the publicly held land in my district and was overwhelmed about the large number of vacant properties that I have in the 7th, including PHA, which is not part of this alphabet soup. How do you propose moving forward we look at streamlining the conveyance and making it more clear and transparent, if you have any recommendations? MS. McCOLLOCH: Well, we're 237 3/11/08 - WHOLE - BILL 080156 working internally to create a property disposition policy, as you just mentioned, so that there will be policy for all publicly held land within sort of the auspices of OHCD to carry that forward, and we're also working to create a land bank, which would be another way to have a transparent process for acquisition and disposition of land.
Now, we fund community development corporations as well as NACs. In your restructuring of this, do you see any overlays, duplications or the need to increase the work that we're doing at that level? MS. McCOLLOCH: Well, the NACs and the community development corporations carry out two different functions. Many community development corporations hold NAC contracts. NAC contracts are really designed to service ombudsman in their neighborhoods to help people work through the various City programs, to do planning at that very 238 3/11/08 - WHOLE - BILL 080156 basic neighborhood level, and to be an information and referral service. And so, as I say, some CDCs have a NAC contract where the NAC informs the policies -- the planning and work of the NAC informs the work of the CDCs, the development work, and then in other neighborhoods, we have NACs who are independent of CDCs, but usually work with them because they work with all the neighborhood organizations.
How do we measure their work? MS. McCOLLOCH: How do we measure the work of the NACs? They have specific contract -- they have contracts for specific activities that they are supposed to carry out. They submit monthly reports. We have a staff that works with them, the Neighborhood Program Coordination staff at OHCD that works with all of the NAC organizations.
Do you have any recommendations moving forward 239 3/11/08 - WHOLE - BILL 080156 around how we better coordinate some of those activities? MS. McCOLLOCH: I think we need to look at those neighborhoods where we have CDCs and NACs in the same neighborhood so we're confident that they're working in concert with each other. So we need to review all of the work of the NACs.
In terms of our Community Block Grant money, what is our decrease this year? MS. McCOLLOCH: It's about --
Our expected decrease. MS. McCOLLOCH: It's about three percent, which is 1.9 million.
So the elimination of positions will offset that, or how are we reprogramming to take that hit, that cut? MS. McCOLLOCH: We are -- that's what we're working on, the preliminary plan that will be issued 240 3/11/08 - WHOLE - BILL 080156 soon. We're looking at those areas that we can -- that we need to reduce because we have fewer resources, and one of them, as I described here, will be to have some vacancies just go unfilled and to look at each of our programs to see where can we better use our resources.
In the Basic Systems Repair program, in the 7th Councilmanic District we allocated about a million dollars of our NTI proceeds. What is the waiting list and is that data available by district of folks waiting for the Basic Systems Repair program? MS. McCOLLOCH: I don't have that data with me today, but I can get it for you.
Would you pass that on to the Chair? That would be great. Thank you.
Can we have it for all of the districts, please? MS. McCOLLOCH: For the waiting 241 3/11/08 - WHOLE - BILL 080156 list, right?
Yes. And how many people are on the waiting list, how old is the waiting list.
I would like to know if the Basic Systems Repair office has updated that list, because when I requested the list last year, there were people who were on the list who were in my old district in '91. MS. McCOLLOCH: Yes, it has been updated. Yes, it has been updated.
Now, have you all put a system in place so that when someone calls in, they are immediately identified in the correct district? MS. McCOLLOCH: Yes. They've made those corrections. There was some -- I'm not the technical computer person, but there was -- they had an old 242 3/11/08 - WHOLE - BILL 080156 database that they have now corrected. So the people will be properly assigned to the correct district by address.
Another piece of information I'd like to get from our housing counseling services is, we've been talking about this increase in sheriff's sales and these mortgage foreclosures with all of these that are scheduled to reset. Are they tracking the number of clients that are coming in specifically around predatory lending and sheriff's sales and do we have any idea by area? MS. McCOLLOCH: Yes, they are tracking that. I don't have that data here, but I can get it, because it's tracked. We have a new system that we started last July called Counselor Max, which is a new way of gathering data for our housing counseling clients. So we 243 3/11/08 - WHOLE - BILL 080156 can provide that.
Is there anything there that's different than the national trend that we're seeing or is it even more alarming? MS. McCOLLOCH: I don't think it's any more alarming than the national trend. I think, if anything, we have one of the largest housing counseling programs in the country. I think our housing counseling agencies have meant that we have -- I don't want to say that we have fewer foreclosures, but the impact of the counseling agencies have meant that folks who might have otherwise had their homes foreclosed upon have not because they've been participating in our housing counseling programs.
So we have those numbers, how many foreclosures we -- MS. McCOLLOCH: Yes.
I'd like to get that data. Thank you. 244 3/11/08 - WHOLE - BILL 080156 Thank you, Madam President.
You're welcome. The Chair recognizes Councilman Clarke.
Thank you, Madam President. Good afternoon. MS. McCOLLOCH: Good afternoon, Councilman.
A couple of quick questions, to some degree centered around the inclusionary housing proposal that we are halfway there. During the discussion -- first, thank you all for participating and hosting the meetings that got us so far as it related to the program and the contributions from the staff. During the discussion, it became increasingly clear, not a surprise to anybody who is paying attention, that there are some concerns about the market-rate development in the City of 245 3/11/08 - WHOLE - BILL 080156 Philadelphia, although we are not suffering the levels of suspensions and housing starts as on a national level, but we are starting to see some evidence of it, as referenced by the reduction in the recording fees, therefore revenue to the housing. In the last couple of years, I know that part of the strategy was to pay some attention to market-rate housing as opposed to the traditional role of OHCD dealing primarily with affordable housing. As we move ahead, is that going to be a continued strategy where we just don't deal with the affordable housing component as it relates to the City of Philadelphia, that the OHCD, or whatever agency is so designated, will play a role in working to make sure that our housing market doesn't continue to go in the tank or to try and come up with strategies to stimulate the housing market generally? MS. McCOLLOCH: Well, obviously the core services of OHCD are for 246 3/11/08 - WHOLE - BILL 080156 affordable housing. I would anticipate with the newly designated Deputy Mayor for Commerce and Economic Development and Planning that those sorts of issues would be reviewed at that level to better coordinate with all the development agencies in the City to ensure that assistance is provided to big developments, no matter what they are. But in terms of OHCD's core, we'll continue to be -- our core services are for affordable housing.
Are you required to do that based on funding sources? MS. McCOLLOCH: Yes.
So was the ability of, I guess, Kevin Hanna because he was the -- not the OHCD Director, but he was -- MS. McCOLLOCH: Secretary of Housing.
So that gave him the flexibility of dealing with 247 3/11/08 - WHOLE - BILL 080156 all aspects of -- MS. McCOLLOCH: Well, and that those services were primarily planning services, because under the Community Development Block Grant regulations we can do planning at that sort of larger scale, if you will, overall scale, but we can't provide -- except insofar as there may be some market-rate developments that have affordable housing units included in them, then we could support those affordable housing units as part of an overall strategy of a market-rate development, which we've done some in your district.
Right. Getting back to inclusionary housing, the most difficult part of that process is coming up with what we now call cost offsets. We no longer use the term "incentives." A number of the market-rate developers, particularly the BIA, has hired Econsult as their consultant, and within the next week or 248 3/11/08 - WHOLE - BILL 080156 two they're going to be giving us a set of recommendations on what cost offsets should be included in the second phase of the bill, which will be the implementation phase. Who in the City or what department, because the complexities associated with that, will be a part of the process of analyzing what they submit to us? Because I know when you hire a consultant, you kind of skew the consultant to come out with the result that you want them to come out. So I don't anticipate that the Econsult report will be as favorable in terms of what cost offsets can be available as I would like. MS. McCOLLOCH: I think it would be a combination of the Office of Housing and Community Development and the Deputy Mayor's Office. We'll work with Mr. Altman and us.
One of the things that we're going to need at the 249 3/11/08 - WHOLE - BILL 080156 end of the day, we're going to have to have a cost associated with whatever cost offset. As an example, we introduced a bill that calls for a credit towards your BPT, your business privilege taxes, for a developer who builds an affordable unit, and the question was asked in the formulation of that ordinance what should the percentage be. Frankly speaking, we didn't know, so we just threw a number in there, but if it's 50 percent, realistically what's the cost associated with that number, that 50 percent, as it relates to the ability to use that as a cost offset for an inclusionary housing unit, and that's the kind of level of detail that we're going to be requiring. MS. McCOLLOCH: Right. We would work with the Deputy Mayor's Office.
Okay. The assumption is -- and I've actually had some preliminary discussion with him and I'm looking forward to working with him, 250 3/11/08 - WHOLE - BILL 080156 because he seems like -- plus his parents grew up in Strawberry Mansion, so he has a leg up on me right there. That will be helpful, because I understand the report is coming out. And, Councilwoman Blackwell, don't be concerned. I don't think we'll get any more support because of his heritage in Strawberry Mansion. Fortunately, she didn't hear that. I would like to be prepared to as quickly as possible have you all support us in reviewing those analyses, and I believe the housing advocates in the community have also submitted a series of cost offsets, but at the end of the day, we need to have a dollar figure associated with that. MS. McCOLLOCH: Okay. Yeah. I'm sure that I would work on it with other folks from the Deputy Mayor's Office.
All right. 251 3/11/08 - WHOLE - BILL 080156 Thank you. I'll see you at the CDBG Block Grant hearings. That will be a much more exhaustive and extensive questioning. MS. McCOLLOCH: I look forward to it.
You're welcome. The Chair recognizes Councilman Jones.
I think you're probably one of the longest term members of Housing since forever. You look good. MS. McCOLLOCH: He knew me before I had gray hair.
A couple of things, though. According to the City's Year 33 Consolidated Plan, which the City 252 3/11/08 - WHOLE - BILL 080156 is required to submit to HUD annually, Philadelphia has 153,302 households which income is 30 percent of the area median income. Of that 68 percent, 104 households pay more than 30 percent of their income for housing. Furthermore, 46 percent of them, or 70,000 households, pay actually 50 percent of their income towards housing. In light of the fact that we're losing HUD revenues every year, I think we're applying for $53,718,000 worth of HUD assistance, and in addition, ten million of that has to go to prior year repayment; is that right? MS. McCOLLOCH: Yeah; for prior year Section 108 loan payments.
My question becomes, in light of the economy, in light of the fact that poverty is on the rise, in light of the fact that 23 percent of our folk are living under that 24 guideline, housing prices going up, where are they going to be able to be housed 253 3/11/08 - WHOLE - BILL 080156 and how are they going to afford to keep this up? We have a sheriff's sale looming crisis on subprime lending. I need to know, what is our thinking as an Administration on how we deal with that when we have a Housing Trust Fund we've given $1 million to, and I don't know who actually makes the decisions for our land banking and things like that. So if you could help me to put my arms around this, that would be helpful. MS. McCOLLOCH: Well, when we issue our preliminary Consolidated Plan, it will outline our budget and strategy for addressing a whole variety of needs for affordable housing. Again, we want to maintain our core services of new production of affordable units, both rehab and new construction, housing counseling, Basic Systems Repair grants to maintain homeowners. I always maintain that BSRP is really the largest homeless prevention program in the City, 254 3/11/08 - WHOLE - BILL 080156 because that's what keeps people in their houses. So obviously the need far, far, far exceeds the resources, and so every year we have to make those sorts of strategic decisions about where do we put our money and how are we going to do it, and so that's what we'll be back here in May outlining that to you.
We really are faced with a tsunami effect, and as the City prospers, so does the increase in housing value and, therefore, the least of us are being forced into a renters environment. So I'm going to constantly, along with the Chairman of Housing, Councilwoman Blackwell, who has fought this fight for a very long time, ask those questions and see how we can be innovative. I just need to know, where does the money for the land bank come from? MS. McCOLLOCH: Well, the money for the land bank -- the idea behind the 255 3/11/08 - WHOLE - BILL 080156 land bank is to have all of the publicly owned property be in one place to make it easier to dispose of. As Councilwoman Tasco mentioned before, currently each agency has its own processes for disposing of land, and the idea is to create a process by which everyone understands this is how you get land from the land bank. For the past five years, acquisition has been funded with NTI bond proceeds, and so we've acquired properties through the Redevelopment Authority at the request of Councilmembers, each Council having its own district budget and so forth, each Councilmember having its own district budget. So acquisition has been through the Redevelopment Authority.
Okay. The Housing Trust Fund, who is the decision-makers in that Trust Fund? MS. McCOLLOCH: The Trust Fund budget is presented as part of the 256 3/11/08 - WHOLE - BILL 080156 preliminary Consolidated Plan. So that budget will come before this body for review and approval. There is an oversight board, as established by a Mayor's Executive Order, that makes recommendations about the Trust Fund budget, and then those recommendations will be included in the Consolidated Plan and then it comes back before all of you.
During this past reorganization in the prior Administration, is there going to be a continued -- I mean, are we going to continue the way it was? Are we going to -- I mean, has there been any thought to that? MS. McCOLLOCH: I think we're still in discussions with the Mayor's Office about what additional strategies the Mayor has for how he wants the housing agencies to be structured, and so we've been talking about it.
Well, just as a thought, listen, I agree that 257 3/11/08 - WHOLE - BILL 080156 probably Basic Systems Repair is the most important type of program. I know new housing is important, but when you look at what a new house costs and what the subsidies are involved in it, I think we do ourselves a service by trying to keep people that are struggling to make ends meet right now with an inability to make repairs, making them whole by giving them a roof, giving them a heater and allowing them to hold on until the economy catches up and their incomes catch up. So as a strategy, I know we have in the 4th Councilmanic District taken advantage of that, and I know in the 5th District they have sought a different strategy, which we're proud of, which we're very proud of, but we would like to in the 4th continue that. I think it's a good idea. I applaud you on that. But we would like to make sure that the proper resources are given to that so that the people that are looking at the sheriff's sales, that are looking at how to make decisions on 258 3/11/08 - WHOLE - BILL 080156 their limited income, fixed income often on how they repair a heater. I'll never forget -- and I know this is not -- I'm singing this song to you because I want you to feel it, too. A woman sitting in the cold telling me that the reason she was sitting out in that mall was because it was warmer in that mall than was in her home, because her heater was broke. That resonated with me. So as I got to Council, I promised her, and I'm going to keep that promise, that we fight for those kinds of programs so that they can make those needed repairs so they can stay in their homes, which is often their most largest investment they're ever going to make in their lifetime. Thank you, Madam Chair.
You're welcome. The Chair recognizes Councilwoman Blackwell.
Thank 259 3/11/08 - WHOLE - BILL 080156 you, Madam President. Ms. McColloch, I know this isn't our detailed presentation. I just wanted to mention that we met with the Affordable Housing Coalition yesterday and Rick Sauer and his new appointee today about both obviously on funding, where we thought the monies would come from and what we can do. So I suggested to them that we all have to do our part to consider those issues and resources and that they meet not only with you but Mr. Altman, and we'll go from there. MS. McCOLLOCH: Okay.
So anyhow, we'll talk more in detail at a future date, but we know the issues from our Trust Fund meetings that everybody is worried about more funding across the board. MS. McCOLLOCH: Right.
Thank you. Thank you, Madam President. 260 3/11/08 - WHOLE - BILL 080156
You're welcome. The Chair recognizes Councilwoman Tasco.
Yes. Ms. McColloch, did you have jurisdiction over the PHIL-Loan program? MS. McCOLLOCH: It's carried out through the Redevelopment Authority, but, yes. I mean, the Redevelopment Authority is actually the ones that implement that, but it's in the contract between OHCD and the Redevelopment Authority.
Are you aware that the funding was cut for that? MS. McCOLLOCH: No. Cut -- I'm sorry.
As I understand it, the banks and the Coalition came up with a program to provide funding for people who had less than perfect credit and then the City guaranteed -- 261 3/11/08 - WHOLE - BILL 080156 MS. McCOLLOCH: Oh, I'm sorry. Now I know what you're talking about. There was a program that was being supported with NTI bond proceeds to supplement, if you will, the PHIL-Loan program.
Right. Are you aware that the funding was cut, taken from that program? MS. McCOLLOCH: Well, the remaining NTI -- the bond proceeds had been spent and then the remaining portion of it, of NTI bond proceeds, I believe were reprogrammed to support the PHFA HERO Loan Program, which the assumption was that that would sort of be taking over that.
But that was a statewide program. That program we had was a local program. The subsidy for the PHIL-Loan program was a Philadelphia program. MS. McCOLLOCH: Yes.
And I know 262 3/11/08 - WHOLE - BILL 080156 it's not your doing. I'm just raising the issue of why would they take the Philadelphia dollars and give it to the state. MS. McCOLLOCH: I think it's to supplement the state money that would be allocated for Philadelphia, but I think the issue at the local level -- and I don't have the details here today, but I think the issue at the local level was that there were very few loans that were actually made as a result of that.
There were 240-some loans made and only two defaults. MS. McCOLLOCH: Of the PHIL-Loan program, but not of that -- I don't think it was that high for that special program supported with NTI bond proceeds. But I don't want -- I can get the details. I don't want to give you misinformation.
Well, I don't know, and I'll get the specifics 263 3/11/08 - WHOLE - BILL 080156 myself, but as I understood it, it was supposed to support and guarantee the funding for those people who had less than perfect credit, and they had only had -- they had only two defaults and, therefore, the bank stayed in the program, but the money that was appropriated for that program was given to the state, which gets diluted before it gets back to Philadelphia. So we'll talk further about that. MS. McCOLLOCH: Okay.
Thank you. Are there any further questions of Mrs. McColloch? (No response.)
Seeing none, I thank you. MS. McCOLLOCH: Thank you.
This Committee will stand in recess until 264 3/11/08 - WHOLE - BILL 080156 tomorrow, Wednesday, March the 12th at 10:00 a.m. Thank you. (Committee of the Whole adjourned at 3:50 p.m.) - - - 265 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 11, 2008, 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.)