COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING - COMMITTEE OF THE WHOLE AND HOUSING, NEIGHBORHOOD DEVELOPMENT AND THE HOMELESS - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, June 1, 2005, 1:35 p.m. Resolution 050388 - Resolution approving the annual Program Statement and Budget for the expenditure of the Neighborhood Transformation Initiative Bond Proceeds for Fiscal Year 2006 PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN JAMES F. KENNEY COUNCILMAN JUAN F. RAMOS COUNCILMAN DAVID COHEN COUNCILMAN FRANK RIZZO COUNCILMAN FRANK DiCICCO COUNCILMAN DARRELL L. CLARKE COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN MARIAN B. TASCO COUNCILMAN MICHAEL A. NUTTER COUNCILMAN BRIAN J. O'NEILL COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JANNIE L. BLACKWELL COUNCILMAN RICHARD T. MARIANO V A R A L L O Incorporated Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, PA 19103 215.561.2220 215.567.2670 2
Good afternoon, everyone. This is a public hearing of the joint Committee of the Whole and Housing, Neighborhood Development and the Homeless. I would ask Mr. McPherson to please read the title of Resolution No. 050388. MR. McPHERSON: Resolution 10 050388, a Resolution approving the annual Program Statement and Budget for the expenditure of the Neighborhood Transformation Initiative (NTI) Bond Proceeds for Fiscal Year 2006.
Who is going to be testifying with NTI? The Chair recognizes Councilwoman Blackwell.
Thank you, Madam President. As the President has stated, this is a joint hearing. As most of you know, today's hearings will focus on three pieces of legislation. The first is Resolution No. 25 050388, which adopts the NTI Program Statement 3 for fiscal year '06. The second is Bill No. 3 050059, which creates a new Housing Trust Fund, and the third is the Community Development Block Grant application, Bill No. 6 050294. Since the NTI Program Statement is technically being heard before our joint Committees of the Whole and Housing, we're asking that we hear testimony on this program, on the NTI program, and report it out. After which I suggest we reconvene the Committee on Housing in order to take testimony for the Trust Fund and the Block Grant. By doing it this way, I'm sure we'll be able to streamline the process more efficiently. As for questioning the Administration, I also ask that for each bill 19 and resolution, we allow the Administration to testify and then immediately allow for public testimony. Once this is done, then we can bring the Administration back for questions. We've done it this way for the past two years. It seems to work and it seems to get us moving forward in a time-wise more 4 expeditious way, and we appreciate everyone's cooperation. Thank you, Madam President.
You're welcome. Good afternoon. Please identify yourself for the record and proceed with your testimony.
Good afternoon, Madam President, Madam Chairwoman and members of City Council. My name is Patricia Smith and I'm the Director of Neighborhood Transformation --
Excuse me, Ms. Smith. Do you mind pulling the microphone closer.
My name is Patricia Smith and I'm the Director of Neighborhood Transformation. I'm here testifying today in support of Resolution No. 050388, approving the FY06 Program Statement and Budget for the 5 expenditure of NTI bond proceeds. In January 2000, Philadelphia neighborhoods faced severe challenges: Abandoned cars rusted in the streets, vacant buildings collapsed to the ground, empty lots were buried under mounds of debris, and drug dealers controlled corners in too many neighborhoods. 6 percent population loss during the 1990s. Few building permits for new construction were issued. Housing values had stagnated, and in many neighborhoods, cynicism and despair flourished. The City stood at a critical juncture. The situation called for decisive action. On April 18, 2001, Mayor Street unveiled the Neighborhood Transformation Initiative, a $296 million strategy to eradicate decades of blight and stimulate new investment in our neighborhoods. Today our investments are paying off in ways that no one could have imagined then. Increased home values are creating 6 new wealth in communities. Police have shut down notorious drug corners. Our citizens walk on cleaner, safer streets. The City is poised to start growing again. S. Census update, population loss in the City has slowed to a near standstill, and if the trend continues, the City's 45-year long population loss will halt by the end of the decade. Philadelphia once again is the place to be. The Administration set a number of bold goals for NTI, and I am proud to say that by the end of calendar year 2004, we had met or exceeded many of them. By demolishing 6,022 dangerous buildings, we are eliminating a significant threat to public safety. Crews from the Managing Director's Office cleaned every vacant lot in the City in one year and continue to clean lots as part of a City-wide maintenance schedule or request. Through a partnership with the Pennsylvania Horticultural Society, we have greened and fenced three million square feet of vacant land and contracted with nine 7 community-based organizations who employed 70 neighborhood residents to maintain lots in several neighborhoods. We have towed nearly 225,000 abandoned cars. These blight removal activities are improving the look and the feel of our neighborhoods and clearing the way for new development. The NTI five-year plan also envisioned 6,000 new units of market-rate housing coming on-line. Today more than 10,000 new market-rate housing units -- and by "market rate," we mean not subsidized with public subsidies -- are planned, underway or completed. We have far surpassed our five-year goal of 3,500 affordable housing units, completing 6,175 by the end of 2004. Cranes, bulldozers, dump trucks and newly framed houses have become familiar sights throughout the City. Hundreds of Philadelphia residents are working on jobs created by NTI demolition projects. 4 percent of the demolition work, and the City has awarded 19 million in demolition contracts to minority-owned firms. 8 To complement this surge in construction, we are strengthening neighborhoods by investing NTI bonds in existing homes. 3 million in grant and loan dollars to more than 19,000 homeowners. The expanded Philadelphia Home Improvement Loan program has more than doubled its annual production. To help our most vulnerable homeowners, we have increased annual funding in FY, it should say, 2004 for the Basic System Repair program and doubled the budget for the Adaptive Modifications program two years in a row. New loan products are helping people avoid predatory lending, and we continue to reach out to homeowners through "Don't Borrow Trouble" and "Protected by Knowledge" campaigns. Home Buy Now, our Employer-Assisted Housing program, is making homeownership a reality for employees of local businesses, and more than 600 first-time home builders receive settlement grants each year.
We are also committed to seeking new resources 9 for housing and community development activities. Today you will hear testimony on Bill No. 050059, authorizing the creation of the Philadelphia Housing Trust Fund. 5 million in its first year of operation. The Administration has worked closely with members of City Council, the CDC and housing advocacy communities on drafting this legislation. I respectfully urge your favorable consideration of this bill. It will provide a much-needed infusion of capital for affordable housing in the face of shrinking federal funding. With respect to the FY06 NTI Program Statement and Budget, the cornerstone funding for NTI, as we know, is provided through bond financing. 6 million of NTI bonds. In March 2005, we completed the final tranche of NTI bond issuance. 4 million. The total five-year NTI budget is 10 296 million, which is 21 million more than we anticipated in our FY05 projected budget. The 21 million additional funds are all tax-exempt government purpose, which limits their use to public safety activities and grant programs for emergency home repairs and other physical improvements. In FY06, we are proposing a 31 million budget that will support our core activities, such as public safety demolition, housing and neighborhood preservation investment and technology improvements. The FY06 budget will be the next-to-last year of NTI funding. 5 million remaining of NTI bond funds for demolition and settlement grant assistance. The million in additional funds from the 19 final bond issue is going toward restoring our 20 five-year residential demolition budget to 21 140, to the level it was first approved in FY03. It will also support the Philadelphia Home Improvement Loan program and two new programs, the Equitable Development Strategy and Commercial Corridor Support program. 7 million effort crucial for addressing neighborhood change. Investment in neighborhoods is the key to building long-term economic prosperity for the City. But a hot real estate market has the potential to spark gentrification, a cycle of rapid development, real estate speculation and rising taxes that causes the displacement of long-term residents. In order to address these concerns, the Equitable Development Strategy seeks to promote mixed-income development and support affordable housing, educate homeowners about their options for addressing increased real estate taxes, inform neighborhood residents about market conditions and development plans to counter misinformation, analyze available data and develop additional strategies for protecting long-term residents. The Office of Housing and Neighborhood Preservation will lead this effort and begin rolling out program activities in neighborhoods that are 12 experiencing rapid real estate appreciation and major public and private investment. One potential use of NTI bonds for equitable development is maybe to write down mortgage interest rates to enable low- and moderate-income families to purchase homes in neighborhoods which they otherwise could not afford because of high sales prices. 1 million in tax-exempt government purpose bonds to fund activities that will protect the health and safety of residents and improve the physical appearance and quality of life in neighborhood commercial corridors. This effort is consistent with the Mayor's Economic Development Blueprint, which prioritizes increasing investment in neighborhood commercial corridors as a means of sustaining the positive changes initiated by NTI. The Mayor's office of NTI will work with District Councilmembers and the City's economic development entities to identify appropriate public investments and leverage 13 private investments on commercial corridors. During the summer, the Administration plans to meet with each district Councilperson to understand their vision, goals and priorities for the stabilization and enhancement of commercial corridors in their district.
We plan to put the resources of the Commercial Corridor Support program to work to support the achievement of these goals in the next year. This emphasis on commercial corridors is a gateway to the next phase of neighborhood transformation. As you know, I will be stepping down from my position at the end of the fiscal year. I will leave my post in the capable hands of Eva Gladstein, the current Executive Director of the City's Empowerment Zone and Renewal Communities. The integration of the City's neighborhood economic development activities with NTI is a necessary next step towards holistic neighborhood change. The significant impacts we have made in blight removal, 14 housing development and preservation and improved government delivery systems must be supported by strategic investments in neighborhood commerce. These investments will promote commercial corridors as healthy, vibrant hubs for steadily improving neighborhoods. Our collective efforts will help realize Mayor Street's vision that all neighborhoods should be great places to live, work, learn, shop and play. Madam President, Madam Chairperson and members of City Council, I would like to take this opportunity to thank you and to acknowledge your contributions to the success of the Neighborhood Transformation Initiative. Without your support, this work and significant achievements would not have been possible. I respectfully request your favorable consideration of Resolution No. 21 050388. Thank you.
Thank you. Good afternoon, Mr. Hanna. Are you 15 going to be testifying on the resolution?
No. 5 Very well, then. I have a couple questions I would like to ask. On of the NTI Program Statement, you give a breakdown of the drawdown by fiscal year and by category. Can you give us the breakdown by year, by category and by the Council district of the drawdown?
Of the drawdowns? I don't have the drawdowns by Council district. I did provide -- when we did our individual briefings, for example, I did have information on the demolition expenditures which were broken out by Council districts and the amounts in each area. The stabilization dollars were broken out by Council district, as well as the acquisition funding, which is also included by Council districts within the Program Statement and Budget.
But shouldn't that be part of the Program Statements? 16
My understanding is that we should give the breakout by Council district of what we were proposing for each fiscal year in terms of projecting the budget. It was not my understanding that we also had to provide as a part of the Program Statement a breakout of the actual drawdowns, but that's information that we can easily pull together.
Well, can you give us a status of what has been spent or obligated by Council district and their available balances?
Yes. Well, for example, Councilwoman, in Council District 1 on the NTI Demolition program, the total amount available is 10.1 million. That includes all of -- which we go over with each district Councilperson in our briefings, and an additional 267,234. Now, not all of that has been drawn down. Right now, for example, of that amount, the contracts to date is approximately 5.5 million. So about 50 percent has been drawn down. There is pending contracts for 4.6 17 million. For the Council District 2, as we reviewed in our meeting, the total NTI program is 9.6 million. The number of demolitions contracted to date is about 8.9 million, and then the number of demolitions remaining to be contracted represents about 736,000. So that's on the demolition, and then with the capsulation is 268,000. As I said, I can pull this information together, but we did review it with each district Councilperson. In addition, in the book, there's a breakout of the acquisition, again, which we go over.
I think everybody would like to see a composite with every district, and apparently you're reading from something that you have. If you don't mind, can we have copies of that, please?
While that is being done, the FY06 Proposed NTI 18 Budget is a little over $31 million. What is the councilmanic breakdown of these funds within their respective categories?
With respect to the Demolition program of million, 5 million of 7 that will be going into the Department of 8 License and Inspection Emergency Curbside 9 program. That operates on a City-wide basis 10 to respond to emergency calls. So we're not able in advance to project where that money will be expended.
In addition, the 4.2 million in large vacant demolitions, those are primarily large building demolitions on a list that we had worked with the Department of Commerce with, and from my recollection, they're primarily large buildings in, I believe it's, the third, the fifth, the eighth and probably the seventh. I can pull that paper out.
Is there anywhere that we can refer to where 19 these big buildings are located and how they were selected?
Basically we worked with each district Councilperson, the Department of Commerce and the Department of License and Inspection to identify imminently dangerous buildings that, if demolished, will cure a public safety issue, and we prioritize that. The Department of License and Inspection then goes into Equity Court to receive an order to complete the demolition. We initially back in, I think, fiscal year 2003 started with a list of about 60,000 demolitions -- I mean, 60 large building demolitions, and then we update it periodically, and I can give you the updated list again.
I just don't know how any other district Councilperson feels, but I'd like to know what the breakdown is and why the breakdown wasn't included in your submission as far as each councilmanic district.
Again, I mean, I 20 used the template and the format that was approved in the original NTI bond ordinance 4 with respect to drawdowns. I mean, I just didn't anticipate that question. I apologize for that. As I said, we can get you that information. That's not a problem. And I already have pieces of that just as my, you know, background information.
Well, I, for one, would like to see that for my district, if you don't mind.
Again, when we sat down in our individual briefings, I provided that information.
Can you explain why you're not budgeting any NTI funds in FY06 for land acquisitions and retaining wall reconstruction?
We still have $52 million. The total NTI budget for land acquisition that was approved in FY05, this fiscal year, totals $74 million, plus we, by swapping dollars, added another 15 million, to bring the total to 89 million over the five 21 years. The 52 million, which is shown in FY05, a great deal of that money is still available, but our recommended total budget is 89 million. We did not allocate any new dollars of the million because the type of bond 9 proceeds we had were not suitable for land 10 assembly activities. They were more suitable 11 for what we call -- we had the excess in 12 government purpose bonds. So that's another 13 reason why we didn't budget new dollars out of 14 the bond proceeds out of the 21 million that 15 we yielded over the projection from this year. 16
It 17 would appear that we have three new line items 18 in FY06, 4 million for affordable rental 19 development, over 2 million for equitable 20 development strategy and over 2 million for 21 commercial corridors support initiatives.
Can you tell us how and what these line items are and how these funds will be used and in what 22 areas of the City?
Okay. The $4 million was actually originally approved, for rental development, was originally approved in FY05. We did not expend any of that money because as the proposed use stated that the bond funds will be used for low-income housing tax credit projects to fill the gap. What we have found is that while bond proceeds can be used for low-income housing tax credit projects, what has happened is that it cannot be used for nine percent tax credits. They have to be used for four percent tax credits. So what we're proposing this year is to like make the language more flexible so that we're able to use the $4 million not only to help subsidize affordable housing and mixed-income developments or other affordable housing. So we're trying to make -- we made the language more flexible so that we're able to use those bond proceeds in accordance with the legal requirements and not adversely affect basis on a tax credit project. The Office of Housing and 23 Neighborhood Preservation is working with developers throughout the City to introduce them to the possibility of how to use a four percent tax credit for some of the larger multi-family projects that are being proposed throughout the City. We think that the best use will be projects where you may subsidize or 30 percent of the units and the 10 remainder of the units are market rate, but 11 it's all in the same context. 12 And we've talked to, I think, 13 developers throughout the City who have active 14 projects who may be interested in using this, 15 and as we said in our briefing with the 16 President, if you know developers who might be 17 able to use this type of funding for rental 18 development, we'll be more than happy through 19 OH&P to sit down and talk them through it. 20 The Equitable Development Strategy, as I said, is a proposed strategy of the Administration to really focus on a couple of things. And not all the bond proceeds will be used for this, but, first of all, identifying through data analysis areas of the City that 24 may be vulnerable to gentrification because of the increasing values. The bond proceeds itself, as I stated in my testimony, one way that we might be able to use them is to write down the mortgage interest rates for low- or moderate-income family, enabling them to buy in a neighborhood where the sales price might otherwise be beyond their reach. That's one possibility. The second possibility is to also use this money to augment home improvement loans and grants, particularly grants for long-time homeowners within neighborhoods that may be experiencing neighborhood change. Again, we have not identified the neighborhoods. What the intent is is to look at data and analysis to come up with three to five neighborhoods in which we think these type of strategies could work. I don't know if you want to add anything more to that, Kevin.
Well, not a whole lot. Just to say that -- well, to reiterate what -- I'm sorry. My name is Kevin Hanna. I 25 serve as Secretary of the Office of Housing and Neighborhood Preservation. Just to reiterate what Pat said, the Equitable Development Strategy is a new program and one that's being created as a result of escalating home values in certain neighborhoods and also in reaction to the advocates', the communities', neighborhoods' fear, concerns of gentrification. As Pat said, one of the first things we need to do is get more information as to which neighborhoods are in fact, as opposed to in theory, but in fact in danger of going through gentrification. Armed with that information, we try to implement the kinds of programs, specifically the mortgage write-down that Pat alluded to, try to implement those in the appropriate neighborhoods. One other, just as kind of a postscript, one other initiative we still need to do some more research on, but one other initiative that we're looking at providing under this particular program involves providing money to individuals whose utilities may be in danger of being shut off for whatever reason. These monies -- again, over the next couple of months or so, we'll look at those and other specific needs of potentially gentrifying neighborhoods.
And with respect to the Commercial Corridor Support program, again -- I'm sorry.
With respect to the Commercial Corridor Support program, the intent there is to do infrastructure improvements, eliminating dangerous conditions and otherwise with eligible bond uses focus on commercial corridors that may need extra support. A major priority of the Administration is to begin to look at our neighborhood economic development strategies, particularly commercial corridors, and this funding is intended to augment the existing resources. Again, we hope to work with the Council as well as the economic development 27 agencies to identify potential corridors for this use. As I testified, Councilmembers, particularly district Councilmembers, may be aware of corridors within their neighborhoods where it may be able to benefit from this extra resource.
Thank you. I have a number of questions that I'd like to ask. However, I note that several of my colleagues have their lights on, so I would like to recognize Councilwoman Tasco.
Thank you. Good afternoon. This question may be redundant, but in determining that the $10 million would be appropriated for demolition, have you targeted the areas where the demolition will take place?
The new dollars, the 10 million, we are allocating 5 million of that to go to the Department of License and Inspection as part of their regular Emergency Curbside program, which operates on a City-wide basis. We are in our third -- our fourth year of the targeted program. We 28 expect -- that money was previously approved to continue that work. We expect somewhere around, I think, close to 1,600, 2,000 demolitions in FY06 we've already funded. So the intent of the new dollars is not targeted. It's part of the L&I's Emergency Curbside program, which has always operated on a City-wide basis as opposed to targeted. And then the other 5 million is to support the OCIP money dollars which we committed to, the Owners Controlled Insurance Product, as part of the targeted program, the final year of the program administration and management of the large targeted program, and also to offset some of the costs that are incurred for hard cover of electrical wires as a result of the OSHA mandating that workers not be within ten feet of live wires. So the other 5 million goes to support the program administration of the targeted program of last year -- the last two years, I guess.
I'll come 29 back to some programmatic stuff. I don't have any questions on the dollars, Madam President. I'll come back, Madam President, on some other stuff later.
Thank you. The Chair recognizes Councilwoman Miller.
Thank you, Madam President. Could you explain again and give a good example of how the commercial corridors will improve as a result of this new initiative, the Commercial Corridor Support initiative?
This is my understanding of some of the key concerns around commercial corridors and the physical appearance: Often businesses are looking for support around streetscape improvements or facade treatments. There are a lot of second and third floors which are vacant on commercial corridors. This could be used to alleviate any public safety problems. 30 What I think is critical here is really trying to figure out, given the constraints on bond proceeds and the needs of a commercial corridor, is really almost going to be, I think, a case-by-case neighborhood or district-by-district type of expenditure working with the district Councilperson. It's hard for me to say this will be exactly the way we would use it at this point in time. As I testified, it's the plan of the Administration to sit down over the summer, really look at various commercial corridors within the district, talk about their needs, look at the resources we have available and to determine to what degree these extra dollars could be helpful.
One example, Councilwoman -- well, actually, several examples would stem from certain state funding. Often times the state provides funding that needs matching dollars, local matching dollars, in order to make it happen. I think business within our sites might be one of those, so to the extent that we can better 31 assure ourselves of getting that money by providing these kinds of dollars for matching purposes.
Okay. So basically the money is targeted or the program is targeted to the physical improvement of the district --
Okay. Thank you, Madam President. I'll have some questions a little later.
Thank you very much. Councilwoman Blondell Reynolds Brown.
On of your document, there's discussion of the 32 Philadelphia City Planning Commission preparing a report and partnerships in a number of different areas, including arts and culture. What is being done in the areas of arts and culture at this time? It also mentioned that a report will ultimately be drafted and submitted. So could you just give us an update on where you are in that process as well?
I believe it was close to 31 neighborhoods were identified for comprehensive planning activities, either facilitated by the Planning Commission directly or supported through other organizations, like the Delaware Valley Regional Planning Commission. What the Planning Commission did at the beginning was sort of like identify the key areas that Planning would address, and one of them was arts and cultures. So, for example, I think in the neighborhood of Strawberry Mansion, it talked a lot about the role of the parks and other community facilities to support arts and culture. So 33 that's just one of the tenants. At this present time, and I believe I can have Victoria Mason-Ailey speak directly to it, but I believe there's about eight plans that have been fully completed. Others are in the process of completion out of the 31.
Yes. Some of them may already be on the City's website and we can make available to Council. I know the Planning Commission periodically updates each district Councilperson on community plans in their area.
Please. I'd be interested in the arts and culture piece as well. On and of your document, 20 there's discussion to the MBE/WBE 21 participation and it says that 41 percent of the subcontracts within the Demolition program have been awarded to minority-owned businesses, with five percent to women-owned businesses. 34 Discuss for us whether or not this is an improvement and what accounts for the small percentage of women-owned participation.
We set a very aggressive goal for the NTI Demolition program around minority contracting opportunities and we also set an aggressive one for women-owned businesses. With MBEs, we have exceeded that goal. I mean, we looked at 35 percent. And historically I believe the Department of License and Inspection may have been like around 20-something-odd percent. Even in the Emergency Curbside program as a result of the work that's taken place, L&I is about 35 percent of its contracts going to minority-owned business. With respect to women-owned business, I don't know if it's the nature of demolition work or not, but there aren't that many women-owned firms that have the experience already to carry out. There are some women-owned firms that, for example, signed up and are participating in the 35 African-American Chamber of Commerce Emerging Contractors program. The same is also on work force participation. The Diversity Apprenticeship program aggressively outreaches or tried to recruit women for demolition-type work and apprenticeships in certain areas, and, again, it's lower than we had hoped goal-wise with respect to women-owned companies and workers.
What do you think has contributed to exceeding the goal? What factor or factors do you think made a difference?
Well, I think there were a number of things with respect to the NTI, what I call, the Targeted Demolition program. One of the things that we did at the outset was restructure the contracting methodology. We kind of used what we call a GC model where a prime contractor is awarded the contract but then is required subcontracting out. It will enable more subcontracting opportunities. So what we found and experienced is 36 that, for example, the prime contractor may subcontract out the asbestos removal work. They may subcontract out some of the post demolition treatments or the hand demolition work, and there are more minority-owned firms that did that type of work. So I think that was a major factor and a major learning. Historically under the City-wide demolition, Emerging Demolition program, we sort of like had a separate contract for each activity. So a person would receive the contract to do the demolition work or somebody would -- we would put out requirements for a contract for asbestos work. So we think by using what we call the GC Subcontracting Model, that enabled more subcontracting opportunities. I think --
How many of the prime contractors were people of color?
Coming out of the emerging contract, right now on the NTI Target program, I believe we have one contractor --
Yeah, that's prime. That's on our small bid packages, and that has been a successful bidder. We've had a number other bid, but they have not been successful. And, yeah, that's LP Group. And then, of course, the whole purpose of the Chamber's Emerging Contractor program is to build the capacity of minority firms as prime contractors as opposed to subs.
And then finally on this line of questioning, 55 individuals have been accepted into the building trades?
One of the things that we did as a part of the NTI Demolition program early on is to partner with the Diversity Apprenticeship program, and we went to the Philadelphia PWDC, Philadelphia Work Force Development Corporation, supported their application to do training, life skill development to place minority workers and women workers in apprenticeships, get them into apprenticeships or find jobs for them, 38 and that's been fairly successful. Given the amount of funding that was available, the goal the first year was to enroll 100. They did enroll 100. The second year, which is fiscal year '05, because of cuts, the goal was 50. I think the first year it was around 40, 41 that ultimately were enrolled in various apprenticeship programs. And then this year, I think it's around 12. I have to go back to my notes.
Yeah. Primarily because of the demolition work, there was a lot of emphasis on laborers, on that trade, but there are also people who successfully went into electrical, carpentry and there's one other that really --
Yeah. But it's not all across the board. I would say carpentry, electrical, laborers and there's one more. Maybe it's -- I don't know if asbestos removal 39 is a trade, but it might be something like stucco, plastering, that type of work.
Okay. Thank you for your testimony. Thank you, Madam Chair.
You're welcome. The Chair recognizes Councilman Cohen.
Thank you, Madam President. About how many conferences or sessions have you had with district Councilmembers on the Council as a whole?
-- NTI budget? We briefed each district Councilperson on the budget specifically during the last month that we were able to schedule a meeting with or their staff person. We also had a briefing for At-Large representatives yesterday. And then ongoing, I want to emphasize, that in addition to these briefings, staff from the 40 Managing Director's Office or staff from OH&P continuously work closely with each district Councilperson around specific projects, update them on the status of various acquisitions and demolition activity in their districts.
Would you be able to give us a rough percentage of time spent with all district Councilmembers as against the time spent with all At-Large members?
I would say -- I mean, there's ten district Councilpeople. I would say about -- that's the overwhelming majority of the time. So I would say maybe 75 percent, 80 percent.
How much was the percentage? Did you say 80 percent? I didn't hear you.
I'm very sorry. I said about -- I would say about 75 to 80 percent of our time over the course of the year, because, again, a lot of the work is the nitty-gritty of what's going on with the demolition activity or acquisition or a 41 particular development project. So there's a great deal going back and forth.
So as far as the Administration is concerned, Council At-Large people don't have much concern about the program or much involvement; is that accurate?
Well, we try to be responsive to any inquiries and requests of information from At-Large Councilpeople as well, but we generally focus during the course of the year on project-related activities.
Well, I wonder if you could put together the list of conferences you've had with the district Councilmembers during the current fiscal year and the list of those you've had with At-Large Councilmembers.
Listing the amount of time. Because I think that we have two Councils operating, one that the Mayor and the Council At-Large, one that the Mayor and the district Councilmembers are concerned 42 about, and then there's a second-class citizenship among Councilmembers, the Council At-Large with seven members having practically nothing to say about the important stuff in Council, which revolves around dollars. Everything in government, like in private business, deals with dollars. So I'd like to get the study from you. Could we have that, do you think, in the course of a week?
I'd like to find out what time is spent. Because I have studied the Council Charter, Home Rule Charter, and I don't see that there's any basis for treatment of two separate classes of Councilmembers, those with strength and those who are figure heads. Secondly, on problems involving economic development, who handles those? Are there any that fit that category?
Problems that involve -- well, generally speaking, the economic development work falls under the 43 Department of Commerce. There's also neighborhood economic development that's carried out through the Renewal Community and Empowerment Zone. That's been like the primary focus in terms of economic development activities. It was the Commerce Department, for example, that led the Economic Development Summit that was, I believe, in the fall of 2004 and worked on the Economic Development Blueprint, of course with input from other sectors of government.
Well, is there any funding that's determined by the Commerce Department or are there any amounts of money dedicated to the Commerce Department where they have a contract administrator overseeing the work?
I think if you're talking about the CDBG funding for community economic development --
Certainly part of, 44 a relatively small part, but a part of the Block Grant dollars are allocated to the Department of Commerce for economic development purposes. Relative to --
In this fiscal year budget, we're proposing allocating $2.1 million in NTI bonds to support neighborhood economic -- commercial corridor improvements. So that will be 2.1 million. The Mayor's office and NTI will be working with Commerce and the economic development agencies, PIDC, PCDC, et cetera, and the City Council to talk about how that 2.1 gets expended. But this is a new activity for the NTI bond proceeds, and the intent is to begin to augment. 45
No. This will be the first fiscal proposal for commercial corridor support.
Now, with respect to NTI expenditures on specific assignments, is there any contract administrator that supervises it, oversees it to see that it's done or done properly? When you give somebody a contract, who then has the responsibility for seeing whether that contract has been carried out and how effectively it's been done and whether it's been done in a satisfactory way?
What we have done in the past with respect to our housing programs, for example, the contracts are actually let by the Office of Housing, and their contract administrators manage and monitor those expenditures. With respect, for example, to the retaining wall, that goes through the Streets Department, because it was associated with 46 their mission, I guess you would say. With respect to the demolition activity, the contracts are let through the Department of L&I, and L&I is supported, since that's such a large and multi-faceted program, with the work of Hill in terms of keeping track and reviewing invoices and submissions and that type of information. But the contracting agency is the Department of License and Inspection.
And who in NTI oversees whether that work is done by the contract administrator appointed by the agency or the company or whoever does the work?
Well, again, my office, which I'm part of the NTI unit, is part of the Mayor's staff, and my role is to -- for example, when a City agency draws down money in support of a demolition contract, I review it and sign it, sign off on it, along with the Budget Officer for the department and other signatories to that activity. So it's several pieces. And then it's transmitted to the Redevelopment 47 Authority that draws the money down, because the money actually sits with the trustee, and then it's disbursed in accordance to those --
And then when the work is allegedly done and payments have to be made, who checks to see whether the work is done?
Again, it depends on the nature of the activity. With demolition, L&I is involved in the final inspections. With respect to the housing programs, it depends on which housing program it is, but it's usually the operating department that actually does that level of monitoring.
So do you check, do you demand whatever -- give me an example of where you have given money to an operating department to get some work done.
Let's take, for 48 example, I guess like the loan programs. That was a new program, the PHIL Loan program or some of the Anti-Predatory Loan program. The contract is made -- an RFP is issued, a provider is selected, a contract entered into. Then reports come into the Office of Housing. An individual on my staff or myself, because I have a very small staff, will either participate in team meetings with the provider. For example, I went to a quarterly meeting that was convened by the Greater Philadelphia Urban Affairs Coalition where they brought together all the various banks that were participating in the Anti-Predatory Loan programs and housing counselors at that program. We had talked about what was working, what wasn't working, lessons learned, where we needed to change things, that sort of stuff. But it's really -- the contractor in the operating department is the lead agency, supported by myself or one other staff person as part of a team.
Well, could 49 we take a fiscal year, say, fiscal year 4, the year before this year, and list all of the funds advanced to departments for specific projects? Could you give Council a report indicating what was done, when it was completed and who examined the work done to see whether it was done in a satisfactory fashion and what was done where it was not properly done? I mean, I'm having difficulty pinning down what happens after money is paid out. It seems to me that money is paid out and then a nice group of people get together and they chat about the work and that's it. I'm sure that you must have some examination of the work done. You surely don't give people money and then forget about it.
No, we don't. I'll be happy to provide you copies of reports that we receive.
If you could send it to the President, that would be helpful, and she could get it around.
All right. Now, I would like to see if you send money to specific departments, like the Commerce Department, on economic development, if there are other areas in other departments involved, if you could list the departments, including the Commerce Department, and the amount of money they were given during, say, fiscal year 4.
You're welcome. The Chair recognizes Councilman Clarke.
I've got a couple of questions. Is there anyone here to answer questions about demolition specifically, or do you want to handle them? 51
All right. Earlier, I think it was last year, Council passed an ordinance that required notification prior to demolition, and there was some discussion about how that process would take place. There was some thought of doing mailings, postings. I think we ultimately ended up doing postings by inspectors to adjacent property owners, back, forward, side, side. How is that process working, or is it working?
I haven't heard that it hasn't been working. The letters go out through the Department of License and Inspection to the adjacent homeowners. Occasionally -- the only one I can speak to, and it's maybe anecdotally, one time we did get a phone call at my office from someone who got some sort of letter and it was clear that it was telling them that there was going to be demolition in the neighborhood and they were concerned did that mean their house, and we 52 said no and we explained that that was just letting them know that there would be activity within their neighborhood.
Either L&I or Rob Solvibile is here, as well as Tumar Alexander.
Good afternoon. My name is Robert Solvibile, Acting Commissioner, Licensing and Inspections. We get a mailing, a list of the addresses in the immediate community from the demolition a block by a block, a square block basically, from the sites of the demolition and we send a mailing to the houses notifying them that demolition will be taking place in their community.
We receive the mailing list from Hill, and L&I has the letters sent out.
Hill International goes out and physically surveys 53 the adjacent or did they have that in their database?
I believe they have that in their database from the surveys. Prior to demolition, we go and survey the neighborhood, doing a tour with the Councilpeople and the community group, and from that, they produce the mailing list to us and we put the sticker on the envelopes and have them sent to the immediate neighborhood residents.
I believe it's a block by a block. I think it's a block beyond, back and front. In other words, if it's east, west, north, south, a block. If it's on the 1800 block, it would go to the 1900 block and the 1700 block of a street and then east and west of the block or north and south.
Is that process done only for demolitions that are done relating to the NTI-Hill International? 54
The plan demolitions, the curbsides, actually we would not have the time to do that.
There are currently two demolitions, one that L&I does. Are all those only curbsides?
And other than that, you would have to get a targeted demolition area, a bid package?
Okay. During the course of the demolition, who is responsible for monitoring that process? I know earlier on in the discussion we talked about having people out on the street. We even talked about having some notations on jackets or shirts so people would clearly understand that these people are from the City 55 or they're from L&I or they're from Hill in the event that there are any concerns during the course of that demolition process. Where are we at? Because I haven't, frankly speaking, seen anybody out there.
Each demolition package has its own dedicated inspector. Each plan demolition package has its own dedicated inspector, who that's their particular duty. Now, if the package is small, say, 10 or 12 and not a large one, they'll go from one site to another site within that vicinity. But they make all decisions and interact working with Hill regarding the demolition. And if they're not there, the supervisor of the unit will have -- make sure someone covers that area for the inspector if there's any problems.
All right. When you say "inspector," you mean an L&I inspector?
L&I and also Hill has an inspector at each site, and we work together. 56
I will speak for the L&I inspector. They're assigned to that site while the demolition is going on, whether it's -- if the contractor works on an off day, like a Saturday, the L&I inspector is to be there. The only thing is, he might not be quite there the whole day if he's sharing another district nearby. He'll go from one site to another site to ensure that the work is being done properly.
Is that a uniformed -- how would a person know that that person --
We assign them. In the wintertime, we bought jackets that have big L&I on the back and in the springtime, they have lighter jackets that have L&I on the back, and then we also have given them shirts that aren't quite as predominant with the L&I 57 on the back but it says License and Inspections on the chest. So most times they're in that -- that's the garb we want them to wear out there. That's why we purchased it for them.
When we first talked about this process, if my recollection is correct, we talked about a Community Engagement Unit from the MOCS that also participated in that process. Is that still in place, or was that early on?
I think it's not as large as it was, because there was some staffing losses within MOCS, but there is still working MOCS on helps or assists, particularly when we need to let people know about -- there's concern about elderly people around asthma issues, things of that nature.
Tumar Alexander from the Managing Director's Office. Councilman, yes, we still have an Engagement Unit from MOCS that go out to sites. We typically send them out to some of our larger-scale demolition sites and some 58 where we may have some community issues. I can presently say I know the area in Logan and in Grays Ferry package, along with -- they're on a special assignment in Kingsessing to fix up some stuff that we may have left.
So if a citizen or a community group may come and say, We have a fair amount of demolition take place in a particular neighborhood and we saw no 12 one, there was no community engagement, there was not adequate notification or adequate follow-up or monitoring during that process, you would be able to say on this particular day, on this particular week, this particular inspector or that particular community unit was involved on site? To that level of specificity, you could tell us who was out there, who was responsible?
Yeah. Our Community Engagement Unit keep weekly logs that they have to turn in. They actually have to turn it in daily, then they turn it into a weekly log. 59 When there's been situations where letters may not have -- people have said they haven't received letters, we've doubled that up, as we did in Councilwoman Tasco's area, by doing door-to-door flyer drops. So where we see a shortfall or a perceived shortfall, we do try to go back and correct it.
Okay. At the end of the process, the conclusion of the demolition, you then have an aftermath. What's the process? Is there an inspector to talk about the aftermath of the site, both the demolition itself, was it done properly, was there proper screening, proper treatment of the vacant lot, proper treatment as it relates to the perimeter of the site?
The building inspector and the Hill representative sign off on that the demolition was done according to the specification, and that is forwarded to -- I've kept that responsibility on myself, even after I was made Acting Commissioner, and I sign off on all the demolitions and I ensure that the signatures are there and that 60 everything is -- the paperwork is in order. I co-ensure that. So it is signed off by both Hill and the L&I inspector, otherwise it does not get paid.
What about the perimeter? What about the site conditions, separate and aside from the actual demolition?
We authorize payment in phases. Demolition, if the demolition work was complete, we will pay for the demolition and hold back, I believe it's, ten percent. I'm not quite sure of the retainage that's held on anything that's approved. I believe it's ten percent. And then if the stucco is done, we'll pay for the stucco. And then also with the lot treatment, if it's called for on that site, which I believe most times it is, they'll pay for that phase when it's done, upon completion. And it's approved, each phase, by the same type of procedure. L&I inspector, 61 Hill representative, then it comes to me.
What about the perimeter of the site? Sometimes when demolition takes place, actually more often than not, there's an aftermath, there's sometimes debris, materials, some cases damage to the adjacent properties, on the sidewalk, in and around the perimeter of the site. Who is responsible for that?
The L&I inspector -- the contractor, demolition contractor, is responsible and the inspector and the Hill representative will not sign off on it until they're satisfied that the sidewalk has been repaired, that the debris that may be left on the surrounding area in the backyard of another house is removed. That was the main purpose of having the inspector there, so they would see it right away and stop it from happening, instead of the contractor operating on his own. Also, I believe you mentioned damage?
There is immediately on any damage, we notify Risk Management and they come out --
Who notifies Risk Management? Is it the responsibility of the homeowner? Because from time to time, we get a call from a homeowner. It's not generated from the Department or Hill International.
If it's an obvious damage that the inspector or the Hill representative can note, they will immediately notify Risk Management and have them come and start the assessment of the claim immediately. If the homeowner would call the inspector or the Hill representative is not aware that there was damage, the homeowner would be given to Risk Management to handle, and it's exclusively -- we in the past would try to make repairs on our own without letting Risk Management or the insurance company be aware of that. That was highly -- we were told not to do that, to work within the parameters of Risk Management and the insurance company. 63
And, Councilman, I was just reminded, in an emergency situation, a broken window, we will make a repair immediately, but still have Risk Management come out.
All right. So you're telling me if there's a situation where a week or two, three, a month that the site conditions around the perimeter of that demolition are such that it's totally not acceptable to that community, debris everywhere, demolition material everywhere, then that particular inspector both from Hill and the Department of L&I has not done their job?
If the situation as you described is allowed to happen, somebody is not doing their job, yes. And it could very well be that the contractor is being held -- payment is being held, that between Hill and the L&I administrator for that job is working with the contractor to 64 tell him get this done properly. But it's been my understanding as a whole -- now, nothing is perfect -- that the process improved greatly under the way we've been doing it with the NTI program.
So if that contractor is paid and it's found that the inspector, both Hill and the City's inspector, should not have signed off because that work has not been done, then what recourse do we as the City have?
Disciplinary action would be against -- from L&I, we would call the -- we would investigate as to what happened, and I would, more than likely, make a determination whether I would turn it over to the integrity officer or the supervisor of the unit to handle discipline for the employee who didn't do their job right.
The contractor would be -- also steps would be taken against him. We have, in working with NTI staff and 65 Hill and L&I, have had contractors suspended, removed, disciplined, not allowed to do work with us anymore. We've done that. That's daily day-to-day operations, especially in demolition. As you know, when you're destroying property, it creates a lot of debris, dirt and unrest in the neighborhood.
Right. Okay. Thank you. One last question, and I know a lot of people have questions for this round. The legislation in Harrisburg that authorizes essentially the increase in the fees for recording of deeds that will subsequently create the Housing Trust Fund, what's the status of that? Is there a House bill and a Senate bill? Where are we at with that?
Councilman, I was going to get to that once we got to the Housing Trust Fund legislation, but it's my understanding that there's actually both a House bill and a Senate bill. I've forgotten the numbers. The House bill was voted favorably out of the first committee. It is 66 now, as of yesterday anyway, in appropriations. The Senate bill, I think, is in committee, but they're both expected to be voted out and voted upon by the end of this session before they go out on recess.
Is it your understanding that there's different language in the two bills?
All right. Okay. I'll come back on the next round. Thank you, Madam Chair.
Thank you. Ms. Smith, I'm going to be somewhat persistent. In FY06, the Proposed NTI Budget is over $31 million. I would like, as a district Councilperson -- I don't know how the other district Councilpeople feel about it, but I personally want to see a councilmanic 67 breakdown of these funds within their respective categories.
And I really don't know why that was not made part of your submission.
Again, not all the different categories lend themselves to a breakout, at least going forward, as to the expenditures by councilmanic district. With respect to the expenditures that have already occurred, we can say where that money has been spent. For example, one year we put significant amount of money into the Basic System Repair program. I can give you a breakout of what's been expended to date, but we don't know where somebody applying for those resources will come from. So I will do that for each of the categories for which I can provide information.
You talk about stabilization. I notice that -- and I don't want to talk about who got what, 68 but I would think that there is a high rate of vacancies in the first, second and fifth districts and yet 50 percent of the stabilizations occurred in other districts that don't seem to have the same amount of -- (Applause.)
Again, the information that I pass up to you also broke down by Council districts the stabilization expenditures. We allocated from the beginning with the FY03 program --
No, no, no. Is this what you're referring to, what you just gave us today?
Now, that indicates to me what the estimated cost is. It doesn't tell us how much it actually costs or how much remains in the budget for my particular district.
You tell me the number of demolitions and the estimated cost.
On where you talk about the vacant property stabilization, 33 were allocated for Council District 2 and 33 stabilizations have been completed. We have not put any new money into the vacant property stabilization.