COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE COMMITTEE OF THE WHOLE CAPITAL BUDGET AND PROGRAM - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, February 7, 2001 9:25 a.m. - - - BILL NO. 010001 - An ordinance to adopt the Capital Program for the six fiscal years, 2002 through 2007 inclusive. Bill No. 010002 - An ordinance to adopt the fiscal 2002 Capital Budget PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DAVID COHEN COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILWOMAN MARIAN B. TASCO COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN ANGEL ORTIZ COUNCILMAN FRANK DICICCO COUNCILMAN BRIAN J. O'NEILL COUNCILMAN DARRELL L. CLARKE COUNCILMAN THACHER LONGSTRETH COUNCILMAN FRANK RIZZO VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 2/7/01 Capital Budget Hearings I N D E X Maxine Griffith. . . . . . . . . . . . . . . . 3 Executive Director, Philadelphia City Planning Commission Robert Dubow, Acting Budget Director. . . . . . 12 Solasade Olanipekun, City Treasurer . . . . . . 14 Richard Tustin. . . . . . . . . . . . . . . . . 17 Acting Director, Capital Program Office Ernie Leonardo. . . . . . . . . . . . . . . . . 21 Director of Strategic Planning and Policy John Kromer. . . . . . . . . . . . . . . . . . . 25 Director of the Office of Housing and Community Development Joe Martz, Managing Director . . . . . . . . . . 75 Joseph Syrnick, Streets Department . . . . . . . 87 William Johnson, Streets Commissioner. . . . . . 76 Charlie Trainor, Chief Traffic Engineer. . . . . 91 Elliot Shelkrot, Director of the Free Library. . 97 James Cuorato. . . . . . . . . . . . . . . . . . 104 City Representative and Director of Commerce Charles Isdell . . . . . . . . . . . . . . . . . 109 Acting Director, Philadelphia International Airport Lauren Bornfriend, Friends of Philadelphia Parks 169 William Mifflin, Fairmount Park Commission . . . 175 3 2/7/01 Capital Budget Hearings I N D E X (Continued) Commissioner Vic Richard, Recreation Department 204 Eric Iffrig, Recreation Department . . . . . . . 222 James Nolan, Nolan Properties. . . . . . . . . . 233 Mike Cooley, M. Cooley Properties. . . . . . . . 241 Wilkin Jones, Friends of Free Library. . . . . . 252 Al Martin and Ed Burnett, Robin Hood Dell East . 259 4 2/7/01 Capital Budget Hearings
Good morning, everyone. This is the Committee of the Whole regarding Bill Nos. 010001 and 010002. I would ask Mr. McPherson to please read the titles of the bills.
Bill No. 010001, an ordinance to adopt the Capital Program for the six Fiscal Years 2002 through 2007 inclusive. Bill No. 010002, an ordinance to adopt the fiscal 2002 Capital Budget.
Our first witness this morning is Maxine Griffith. Good morning. Kindly identify yourself at record and proceed with your testimony.
My name is Maxine Griffith, and I am the Executive Director of the Philadelphia City Planning Commission. It's a pleasure to be here. Before I start my testimony, I'd like to note that although I have been in informal briefings with you, Madam President, with other members of the Council, I believe this is the first time I have formally come before the Body.
We certainly 5 2/7/01 Capital Budget Hearings welcome you.
It's a pleasure to be here. With the thought that a picture is worth a thousand words, we have a brief slide show to both give a sense of where we have been with the Capital Budget and where we are going. New City self-sustaining loans paid with airport and water fees are the largest source of funding at 30 percent. New City tax supported -- 90 million is limited by State and is highly competitive. Substantial Federal and State dollars leverage almost all of these, which are for transportation projects. When we look at the allocations of funds, you can see that neighborhood improvements are the largest allocation at 276 million. Next comes Economic Development and then what we're calling quality of life improvements of facilities which serve all of the City's residents. Under Neighbor Revitalization which goes also to support and will support the Mayor's Neighborhood Transformation Initiative Objectives, 6 2/7/01 Capital Budget Hearings we have Richard Allen Public Housing. The Capital Program provided for news streets, utilities and streetscapes. Raymond Rosen Public Housing, 152 new units. This is at 22nd and Diamond. Southwark Public Housing at 4th and Washington in South Philadelphia, 940 new and rehabilitated units. Also, we're very, very proud of the Changing Lifes Campaign which focuses on the rehabilitation and expansion of our neighborhood library system. This is the Independence Branch Library, 7th and Market. million private was matched with 15 25 million City dollars, and we've now renovated 45 16 of 49 branch libraries. And we've completed one new 17 branch which is now open. Again, the Independence 18 Branch Library. 19 The Haddington Branch Library. The 20 interior renovations are complete. And in this 21 budget year we will complete the exterior 22 renovations. Again, the Haddington Branch Library, 23 you can note the very wonderful fret work on the 24 facade. 25 The George Institute Branch at 52nd 7 2/7/01 Capital Budget Hearings Street in West Philadelphia. It's a small branch, but we're expanding onto an adjacent site. Again, the George Institute Branch. The Walnut West Branch designed for restoration is in this budget year, and construction will be '03. Again, the Walnut -- And the next should be the Widner Branch. This small library was extraordinarily deteriorated. Replacement is planned. There is money for site acquisition and design in this budget year and construction in '03. We're very proud of our support for children. This is a tot lot in Roxborough in the Northwest. Another tot lot in the near Northeast. Soccer and baseball fields being used jointly. Transit service is an important part of neighborhood revitalization. It's also important in terms of getting folks to jobs in the neighborhoods. This is the Overbrook Station, City Line Avenue in West Philadelphia. Wayne Junction Station platform improvements have started. Again, Wayne Junction track and bridge work is completed. And the station 8 2/7/01 Capital Budget Hearings house still needs work, and we'll be moving forward with that. Strawberry Mansion Bridge. The bridge was redone in Phase I, and that work is complete. And painting of metal lattice work in Phase II funded in budget year -- I should mention that I attended and spoke at a State conference on planning, and this bridge was highlighted as sort of cutting-edge work in restoration. Oxford Street Bridge in North Philadelphia. The bridge work has been completed. Gowan Street Bridge. Again, the work is underway. That's in Mt. Airy. Germantown Avenue Bridge. The bridge work will finally get started. Design will start in this fiscal year, and we would expect construction to start in the next. Economic development is a very important part of neighborhood revitalization. This is Main Street in Manayunk, commercial strip improvement in association with the merchants on that strip. It's a site for the 24th/25th Police District, Whitaker Avenue.
Obviously, security is key to 9 2/7/01 Capital Budget Hearings neighborhood revitalization, and police stations are part of the basic community infrastructure. It's funded at million, and site preparation is 5 underway for this project. 6 This is the Cobbs Creek Environmental 7 Center. This neighborhood community center provides 8 environmental programs. We expect if it is not open 9 -- in June -- I'm just been told it will open in 10 June. Very pleased. This is the one of the jewels in Philadelphia's crown, the Art Museum. 17 million is in hand to begin a major renovation project and a modest Capital Program funding required to leverage private efforts. And as you know, there's a major capital company under way by the museum. This is the Blue Bell Tavern in the Southwest, an example of storage preservation work. Many of the Fairmount Park historic properties require renovation. This is the primate house in the Zoo. This ambitious improvement program includes new and renovated exhibits in basic infrastructure renovations. This City generally pays for the latter, and the primate house actually was the 10 2/7/01 Capital Budget Hearings exception to this. This is, again, the Zoo, African Planes. Kelly Drive judges' stand. And here we have the Library. Some money has been provided for a boiler and other HVAC and energy conservation work. There's a Task Force that's been put in place to study the needs of the Central Library and how to best meet those needs by expansion or some other means. The Fire Administration Building. This is sort of an example of the shoemaker's children in the sense that the work here was for fire safety systems to be improved for the Fire Administration Building. The Curran Fromhold Prison. New security improvements and fencing, cell lock system replacement, police forensics lab -- let me point out that the category that we're looking at now is Government Efficiency, those things that make Government work better and sort of leaner. This is the Fleet Management Facility at 63rd and Lindbergh Avenue in the Southwest. It's a new combined fleet management and sanitation facility which will greatly improve operational 11 2/7/01 Capital Budget Hearings efficiency. I haven't been there yet, but I understand the Penn's Landing Hyatt is gorgeous. So the Capital Program obviously supports the City's tourism initiatives. Although, we did not directly fund the hotel, but the general improvements in the Penn's Landing area or part of the Capital Program. Penn's Landing water taxi service, new docks, a million of which comes from the Federal Government. Otten's Flavors in Eastwick Industrial Park. Industrial development and City-owned PIDC managed and marketed industrial parks like Eastwick are a key part of the program. Next we go to our Airport, the new international terminal. Obviously, basic economic infrastructure. You can't be a great city without a great airport. Again, a new regional terminal. I should point out for those of you who didn't see the article that the Wall Street Journal cited our airport as the third best in the country. Unfortunately, the airport for my former city in New York was the worst. 12 2/7/01 Capital Budget Hearings National Constitutional Center Independence Mall. Funds were provided for streetscape improvements and mall improvements. This is the Kimmel Center for Performing Arts. I think this is an old photograph. Things have progressed even more since then. And, finally, we have Chestnut Street in Center City. This is to show sort of emblematic of our support for Downtown retail development. I think what we have tried to do here is to provide for -- appropriately for the stewardship of the City's critical infrastructure. I've been quoted as saying that this was a tremendously difficult task this year. It was. But not only because of limited resources.
Frankly, it's also because in our view, the Agencies, with the help of the Capital Program Office, did an excellent job in putting forward their programs and projects. And so, often, it was a matter of choosing between very fine programs and focusing on, again, those critical needs. We're trying to build on the foundation of previous commitments but to do that in a prudent 13 2/7/01 Capital Budget Hearings way. With that, Madam President, I think we will open it up for questions.
Thank you. Miss Griffith, you state that the borrowing limit set by the Constitution of the Commonwealth of Pennsylvania has impacted the City's capacity to fully fund large-scale renovations and enhancements of important structures. Explain what you mean by that statement, please.
Well, I'm lucky that on my right I have the Director of the Budget Office who may also want to read some of his testimony into the record.
Maybe it would make sense. I have some testimony on how we got to our level of funding, and it addresses the debt limit. Would it make sense for me to read that now?
Yes. As you know, our ability to issue debt is limited by the 14 2/7/01 Capital Budget Hearings Constitution. Under the Constitution, we're allowed to have debt equal to thirteen and a half percent of the ten-year average of the assessed value of the real estate in the City. And at the end of Fiscal Year 2000, the City's remaining debt capacity stood at $342 million. After the passage of the current fiscal year's loan authorization of 162 million, the debt incurring capacity is at about $180 million. The only way our debt incurring capacity can increase is if we retire existing debt or if the assessed value of the property in the City increases. In putting together the '02 to '07 program, we distributed our remaining capacity to meet the minimum needs of our capital infrastructure while not using up all our capacity in one or two years. Factoring in projected increases in assessed value in debt retirements, we determined we could fund about 90 million annually from FY02 through FY05, a little under 46 million in FY06 and approximately 37 million in FY07. Clearly, by the time we get to '06 and 15 2/7/01 Capital Budget Hearings '07, those levels aren't sufficient to meet even the minimum needs of our infrastructure. As a result, we're looking at ways to try to expand out debt incurring capacity or fund capital projects through other financing sources.
What is the Administration's position with regard to what is an acceptable level of debt that the City can carry, and what percentage of the General Fund Budget should be allocated for debt service?
Solasade Olanipekun, the City Treasurer. Currently, the City's payout on its general obligation debt is about 45.4 percent over ten years. What I don't have in hand and I can provide to you is where that falls in terms of comparable cities, whether we're of the average or below the average in terms of how quickly cities their retire their debt. I can provide that 16 2/7/01 Capital Budget Hearings information to you at a later date. I don't have that information available.
What percentage of the City's budget currently goes toward payments on the City's debt, both direct and indirect; for example to pay to the RDA, to PICA?
We can get that information to you in terms of the paydown of the debt versus the overall budget.
How does the administration propose to move forward with large-scale renovations such as City Hall, the Art Museum, the Central Library and the Zoo?
In each one of those cases, I think there's a somewhat different answer. With the Library, as I mentioned during programmatic standpoint. I would ask if the Budget Director might have a response in terms of additional funds or financing that I wouldn't be aware of.
When we mentioned the Task Force for the City Hall 17 2/7/01 Capital Budget Hearings renovations, who is on that Task Force?
Well, I may not have the complete list in memory, and I will get that to you, but we are on the Task Force, the City Planning Commission; the Managing Director's Office is on the Task Force, the Director of Finance is on the Task Force as well as, I believe, a Representative of the Council and several public advocacy organizations including the Foundation for Architecture and I believe the Alliance for Historic Preservation. But that's from memory. I may be incorrect. And I would prefer to get you a correct list.
Yes. And I really don't know of anyone on City Council being on that, to be honest with you.
Do we know what the cost estimate is to renovate City Hall?
I believe it was something around 345 million for total restoration. That's dollars.
Why is the 18 2/7/01 Capital Budget Hearings Administration eliminating City funding for City Hall in FY06? The Capital Program only includes $20 million -- and I believe that's $5 million each year -- to support the repairs of City Hall. I guess at this point in time, you do not know how that money will be spent. And if my memory serves me correctly, I believe that a couple of years ago, it was said to simply repair the roof would cost over a hundred million dollars?
I'd like to ask the Capital Program Office, Richard Tustin, to respond.
And with that being said, I just don't know where $5 billion a year gets us.
My name is Richard Tustin. I'm the Acting Director for the Capital Program Office. As you may know, we're already in the process of doing our first phase of renovation work to City Hall which includes the exterior of the 19 2/7/01 Capital Budget Hearings building: the exterior walls, windows, roof and metal pressing work at the top of the roof. We already have under contract about $17.2 million worth of work which will take us -- the northeast corner of the interior courtyard. It will take us along the east side of City Hall from the east cordal up around the Northeast corner. And almost all of the north face of City Hall will be able to be done under that original $17.2 million. We still have approximately $4 million of unallocated money that we intend on using to amend the present contract that will take us through the balance of the north face of City Hall and also the full north face of the courtyard, on the inside, and the tower. We look at this as a multiyear project. And I'm still talking about the exterior project. And the $5 million a year that has been allocated will provide us enough funds per year to continue that progress around the exterior of City Hall.
So that $5 million would just address the exterior?
Yes. At this point, yes. You are very correct when you mention 20 2/7/01 Capital Budget Hearings that a year ago or so the initial estimate was about $130 million to just do the full exterior of the building. We now have approximately eight or nine months of construction behind us, and we're getting a little better feel for what the actual cost is going to be for the exterior work. So we do believe that over the next five to six years, we will be able to complete the exterior of the building. And, again, it still doesn't address the interior elements of the building. Those interior elements of the building are going to be looked at through this Task Force. And other private funding sources are going to be looked into to help provide the funding required to do that work. But what we're working on right now is, as the City Planning Director said, is stabilizing the building and making sure the exterior is secure and waterproof.
Yes, it is. And that's 21 2/7/01 Capital Budget Hearings part of the work that we're doing right now.
Yes, we are. That's part of the encapsulation of the building. It includes the roof as well. So that is the work that we're doing right now. And we plan to continue for the next several years until we complete all of City Hall with funding through the Capital Budget each year. One of the things City Planning says to us each year -- and it's a wise statement -- is, Don't request any more money than you can absolutely use that one year. So by taking $5 million pieces, if you will, each year, we're certain that we can use that each year, and we'll be able to continue the progress around the building.
But you don't have money in the years of the plan.
At this point, you're correct. I believe it only takes us through the 22 2/7/01 Capital Budget Hearings year --
2005. Good morning. My name is Ernie Leonardo, Director of Strategic Planning and Policy with the City Planning Commission. To answer your question, Council President, the last two years of the Capital Program, as the Budget Director pointed out, are very limited. We dropped from $90 million, the total of tax supported funds, to 46 million in '06 and $37 million in '07. We're just beginning to explore ways to augment that limit because at that limit, you really can't do much for anything, much less for City Hall. So we cut City Hall. We hope perhaps by that time an alternative financing mechanism would will be in place both for City Hall and for all the other kinds of projects that would be severely limited if we had go with them.
Thank you. Miss Griffith, your testimony states that the City will be spending $276 million in support of neighborhood transformation objectives. What are the objectives and the 23 2/7/01 Capital Budget Hearings respective dollar amounts?
Well, as you know, the Neighborhood Transformation Program has not been fully delineated. We hope to come to you, I believe, in a few weeks and brief you and other Members of the Council. In addition, the Director of that program has had a private tragedy and could not be with us today. So I can't speak to the specifics of the program. I can speak to the objectives, and that's why we fairly carefully use the word "objectives." And it is, to say the obvious and to some degree, to eliminate blighted conditions which would include either tearing down or encapsulation or rehabilitation of the City's immanently dangerous and dangerous properties and the maintenance of the resultant property in a way that would not be detrimental to those communities, and to do this pursuant to plans that would be community-driven plans but would also be held to some Citywide standards. As to the allocation of funds, I do know a goodly percentage of the monies would go to the L 24 2/7/01 Capital Budget Hearings & I work, which would be the demolitions, the speedy demolition of the immanently dangerous properties. I would try to get to you in a timely manner whatever other details we have on that, but I don't believe there's anyone from that program here today.
We would appreciate that. A point of information. Councilman Nutter?
I didn't completely get the question. Did I understand the response having to do with capital dollars for all of this demolition activity? Was there something in the question that I either missed or didn't understand?
Let me try to be a little more responsive. I may not have answered the question in as a responsive manner as possible. Obviously, anything we do for neighborhood enhancement, we believe, is supportive of neighborhood transformation objectives, the broad objectives of neighborhood transformation. And that is why that figure is connected to neighborhood 25 2/7/01 Capital Budget Hearings transformation. Again, objectives, not the program in particular. I don't know whether that was as responsive as --
I think I was just trying to understand whether -- I thought you said something specifically about L & I, and L & I dollars and demolition, and I was trying to understand whether there were capital dollars in this budget for L & I to do demolition related to the Neighborhood Transformation Initiative.
No, sir. I was responding to actually a broader question, which probably wasn't even asked, which had to do with the Neighborhood Transformation Program as a whole. The 276 that's cited in my testimony are specifically projects that support the objectives of neighborhood transformation. They are not neighborhood transformation projects, per se.
Also, Miss Griffith, you state that in support of Neighborhood Transformation Initiative, the Office of Housing and Community Development will provide $500,000 in site 2/7/01 Capital Budget Hearings improvements such as new curbs, sidewalks and other infrastructure to support neighborhoods, I guess, that are in blight. Will this be paid out of City-supported debt?
Yes. But I believe that Mr. Kromer is here. I see him waving. I would ask him to come to the mike and speak in a little depth about this neighborhood stabilization program.
I was of the opinion that City dollars were prohibited for this use by the Comptroller's memo that we received a few years back.
Good morning. I'm John Kromer, the Director of the Office of Housing and Community Development. First of all, the intent of proposing this activity in the Capital Program was to address an issue which we discussed in this room over the years, and that is the need for installing curbs and sidewalks on blocks that are in reasonably good condition but just need some improvements to bring a measure of stabilization and further improvement to reinforce the relatively good status of those 27 2/7/01 Capital Budget Hearings blocks. At the same time, as part of the discussion of the Neighborhood Transformation Initiative, there has been some consideration of programs that would improve the exterior facades on residential blocks that, again, don't need total rebuilding but perhaps might need some new windows and doors, some cornice repair, some roof repair or replacement. And I'm familiar with the City Comptroller issue and also with the Law Department commentary on this matter. But I believe that there may be an opportunity to demonstrate to the satisfaction of the Comptroller and the Law Department that a block improvement program of this kind which treats a substantial number of the houses on the block would constitute the kind of improvement project to which the Comptroller --
-- as referred. I've brought it up with his staff, but we have yet to complete a full review of the matter.
Well, Mr. 28 2/7/01 Capital Budget Hearings Kromer, how many blocks do you think could be addressed with $500,000?
The budget would be for a full curb and sidewalk reconstruction, and I believe there are those in this room who could identify how many blocks --
I'm working on that, Madam Chair. I thought the 500,000 was specifically for me. Councilman, I was advocating for you. It just didn't work out. There's always next year, okay? I'm going to be advocating for you again.
I think this will be further conversation for another day because I know I've had constituents constantly calling me about curbs and sidewalks, and I keep telling them 29 2/7/01 Capital Budget Hearings the City doesn't do curbs and sidewalks. It's the property owners' responsibility. And in my view $500,000 is certainly not going to be enough so address ten District Councils. I just can't imagine how far we get with 500,000. And I'm sure that every District Councilperson here must have quite a list of requests for that type of work.
Just one comment -- and I realize there isn't enough time today to discuss the whole program -- but where this approach has been used, in the Model Blocks Program operated by Neighborhood Housing Services and in a more recent program called Blockscape that the Pew Charitable Trust has founded. One important element that triggers the process is block organizing, getting people on the block together to agree on the improvement plan and also to contribute some share of the funding for the improvements.
Mr. Kromer, you're going to have to go into great length about this issue on a later date when you come up with your budget because I think we're all very much 30 2/7/01 Capital Budget Hearings interested in that.
Miss Griffith, in your testimony you indicate that $1.5 million will be available for improvements to neighborhood commercial centers in FY02. What centers will be improved?
I do not have a list in front of me. I was hoping that someone from Commerce might be here.
Also, Miss Griffith, you state that the emphasis of the program is the rehabilitation of existing fire stations with $1.3 million in new funds in 2002 for heating, ventilation and air conditioning systems, roof 31 2/7/01 Capital Budget Hearings replacements and interior and exterior renovations. The funding in this category drops off to $700,000 in FY06 and $500,000 in FY07. Is this sufficient to meet the Fire Department's needs?
At this point in time, we're trying to predict those stations that will require those kinds of repairs and maintenance and renovation work in the immediate future. We also plan this year -- and I'll refer to it in my testimony on an Operating Budget -- to do a survey with each one of the departments that we represent to look at their long-term needs and try to project that out. Quite frankly, we're not quite sure if the year 2006 is adequate ourselves to cover their needs, but we will be able to identify that. We will be working with them to identify that this year and next year so that when that year does come, we will be asking for the appropriate money to keep those facilities up and functioning properly.
If I can just add to 32 2/7/01 Capital Budget Hearings that, Madam President, I think to be honest, we have to say that when you look at '06 and '07 across the board for the reasons that Mr. Leonardo stated earlier, we're looking at, frankly, just not enough money. And I think you can say that straight across the board. In some cases where we completed projects or completed campaigns or initiatives, we can say with certainty that no additional funds will be needed. But I think the global answer for '06 and '07 is that we really have to work with Members of Council, with the Budget Office and others to develop additional sources of revenue or to work with the State to calculate our debt-incurring capacity a little differently. There's just not going to be enough money in those years, those out years.
Mr. Tustin, the funding for the Capital Program Office is reduced from $5.9 million in FY05 and 3.5 million in FY06 and to 3 million in FY07. How do you propose to achieve these reductions, and what happens to your staff?
That is an excellent 33 2/7/01 Capital Budget Hearings question, Council President. As the City Planning Director has said, the Capital Budget will taper off. Most of my staff are Civil Servant employees, so they will continue to function whether it be in this Capital Projects or other roles. We also realize that due to the fact that the number of capital projects will also taper off dramatically in the out years of the program, that we have to review our staffing as well. Our work force is an older work force within our department, and as people retire, especially as part of their drop program and leave for other reasons, we have to very carefully look at the need of our office to replace those people looking at the out years of the program. So this is going to be an ongoing effort for our office over the next several years to see how we can reduce staff if need be to still adequately cover all the capital projects that we work on and also look at other ways of moving the staff to maybe the Operating Budget if need be.
Thank you. I have several other questions; however, at this time, 34 2/7/01 Capital Budget Hearings I will recognize Councilman Nutter.
Thank you, Madam Chair. Mr. Dubow, to shed some additional light on the Capital Fund reconciliation process with PICA, tell us for the record what is in that process and where it is.
Yes. There are a number of projects originally funded by PICA that either came in under budget or for a variety of reasons were never done. As a result of that, there was money from the original PICA issues that we asked PICA to reprogram for other projects. There's about $29 million, and we've asked those funds to be used for -- $9 million for the Worcester School conversion, $3.2 million for improvements to the Art Museum, 7 million for the House of Corrections, three and half million for renovations to Family Court, 4.1 million for renovations to the Central Library and City Hall and 2.1 million for the Manayunk Canal. As it stands now, we've had Council produce a letter that says that these projects are 35 2/7/01 Capital Budget Hearings eligible for PICA funding. PICA is having its own attorney review that letter to see whether he agrees. And if he does, then they're going to take our request to the Board for consideration.
The way the PICA Act is interpreted by our attorney is, so long as we owned a facility in '92 and there's an emergency condition now, the project is eligible for funding. There are other people who interpret it to mean that there had to have be an emergency in '92. So for some of these projects, obviously, the emergency didn't exist in '92.
Are these projects presently in the Capital Budget, or have they ever been in the Capital Budget in some previous year?
Yes. The Capital Budget assumes that these projects all be funded out of the PICA proceeds.
What happens if for some reason we have an adverse decision from PICA?
We either have to not do these projects or use other funds, which would 36 2/7/01 Capital Budget Hearings likely mean that we would have to reprogram out of other dollars of other projects that have funding.
What is your anticipation of the timetable? Thinking about this more positively, what is your anticipation of the timetable at which these dollars would be available for all of these projects?
The most optimistic scenario is that PICA would approve these reprogrammings at its February Board meeting. And then I think the money would be available soon after that. March maybe.
And do you have any assessment at this point of the likelihood of all this working out?
But I think I'm more optimistic because our Council has said that the projects are eligible. I wouldn't want to speak for the PICA Board as to what they're going to do, though.
Thank you. 37 2/7/01 Capital Budget Hearings Miss Griffith, on of the Capital Program book --
Mr. Dubow, what happens if PICA doesn't approve them?
They would use it to refund PICA debt. That's the other option.
We would either not do them or have to find other funding for them, which would mean replacing other projects that have funding.
I know. I didn't say that clearly. We would either not be able to do these projects or have to use funding that is now designated for other projects to do these projects. And that would mean that the projects that are currently funded, you wouldn't be able to do those. 38 2/7/01 Capital Budget Hearings
So we would just play it juggling -- I'm sorry, Councilman.
That's more than fine, Madam Chair. That actually reminds me, did PICA issue any debt --
PICA had issued debt in '92 and '93, I think, for new projects. There may have been a '94 issue for new projects too, but I'm not sure. I can get back to you on that.
So the debt was issued eight or nine years ago. Have we been paying debt service on these borrowed dollars since that time?
So let me make sure I understand the situation. PICA borrowed money on our behalf because we had no access to the capital markets.
For which we are eternally grateful. We've paying debt service on the borrowed dollars for eight or nine years. 39 2/7/01 Capital Budget Hearings
For which we have no 4 access to do things for projects that are needed throughout the City. Is that the situation that we're in?
I'm sorry. Say that again. I want to make sure I understand exactly how you're phrasing it.
We've been paying debt service on it since that time, correct?
We've not been able to use the dollars in the intervening years, correct?
So now we find something to use them for, they borrowed the money for us, we're paying the debt service on it, but we can't use the money?
Technically, they're paying the debt service out of the PICA portion of the wage 40 2/7/01 Capital Budget Hearings tax. But it's revenue that would have otherwise come to us and isn't. So I mean, yes.
They're paying the debt service out of the PICA portion of the tax that the citizens of this City and people who work in this City pay?
You're making a technical point, but you're right. It's our wages. We could have used it for the original projects during those eight years. And for a variety of reasons, projects coming in under budget, we didn't. But we couldn't have used it for other things, which I think is what you're asking.
What were those bonds? Do we have a list of those bonds that were 41 2/7/01 Capital Budget Hearings not (inaudible)?
We can provide that. We have a complete reconciliation of those projects, and we can provide that to you.
I think one of the things that I'm trying to get across, Mr. Dubow, is that at the end of the day, the money is already borrowed. We should be able to essentially use it for what our changing needs are in the course of that time. And if we never use it, it's already been borrowed, and the taxpayers will continue to pay debt service on dollars for which they have no 17 access. That makes no sense. And the PICA Board, with all due respect to them, shouldn't care one way or the other what we use the dollars for as long as we're using them for statutorily-allowed and eligible projects.
Thank you. Miss Griffith, on of the Capital Budget book, it reads, The City will continue to 42 2/7/01 Capital Budget Hearings assess neighborhood infrastructure to ensure that the Capital Program will most effectly support efforts of the NTI; the NTI being Neighborhood Transformation Initiative. Can you give us your sense of the definition of "neighborhood infrastructure"? What does that mean?
Well, certainly, Councilman, it was delineated in part by the slides that were shown earlier that talked about community-based economic development, community-based facilities such as libraries and recreation facilities, et cetera. I don't think until we bring the full program before you, I would want to limit the definition.
Well, I have to assume that the definition of "neighborhood infrastructure" is not limited or necessarily even changed by whether or not we have the NTI program fully laid out or not. We've had neighborhood infrastructure before NTI was a kernel of an idea. So I'm just, as the Planning Director, just trying get a better understanding in this more 43 2/7/01 Capital Budget Hearings public forum of your thoughts and definitions of commonly used terms.
Well, it would be facilities and infrastructure that were neighborhood specific that didn't serve the needs of the general population such as our major institutions like the Art Museum or the Central Free Library.
That these would not be facilities that would serve the general Citywide population but would serve a neighborhood population.
A more localized population. I don't know how good a definition that is, but that would be my general working definition.
How does the City perform its assessment of our neighborhood infrastructure?
Well, in many ways, and I'm going to ask both Director Tustin and Leonardo 44 2/7/01 Capital Budget Hearings to respond, but I believe Ernie outlined for you on Monday one of the newer ways that we intend to undertake this analysis, and that is by delineating neighborhood standards and then judging neighborhoods, in part, by those standards. It seems to us that neighborhood needs are a confluence of two strings of ideas. One are those unique neighborhood-specific elements that will differ from community to community. It would have to do with demographics and history and the unique makeup of that community. But there are other things simply because we're human and we're Philadelphians and we're Americans that we expect: to be able to take our kids to a local library, to play in a park, et cetera. So we see to some extent the formula for making judgments about capital planning with regard to transformation of neighborhoods relating to those two elements and trying to quantify to the extent possible these neighborhood standards.
Let me add to that, Councilman Nutter, it's really a three-pronged approach to assessing neighborhood infrastructure, 45 2/7/01 Capital Budget Hearings the condition and need for continued maintenance. Our Director, Maxine Griffith, has explained one prong, which is a set of standards against which we can measure each neighborhood. And you may be aware, I believe, of the study we did a number of years ago, recreational facilities in the City -- I have a copy here that I can leave with you -- that looked in detail at all City neighborhoods and tried to assess which ones were underserved or overserved based on the standard that we defined. And I did send over to the Council President's office yesterday copies of the 15 standards I had mentioned on Monday. 16 So we do make that assessment. 17 A second way of getting at this question 18 is, we do a life cycle analysis for each type of 19 infrastructure in this City. For instance, a sewer 20 may last 200 years. A street resurfacing may only last seven years. Most buildings would last only 40 years. Then we try to say how much would be needed if you were to maintain that facility in good condition over its life so that we have a general total of what is needed to support the number of 46 2/7/01 Capital Budget Hearings facilities we have currently. The third prong is that each individual department will assess the condition of each of their facilities. And we've had, I think, a great improvement over the last seven or eight years where the departments have been able to hire engineering firms to go out and really look at each individual building and assess its condition.
I don't think it's complete at this point, but I think much progress has been made. And I would turn that over to Mr. Tustin.
I'm trying to understand how we do what we do: how to do you get in the book; what the standards are; are there a uniform set of standards that we compare each facility on that basis, and then that information is then utilized in terms of making the critical decisions and the tough decisions that have to be made as to who is in the book and who is not in the book and when you get in the book, do you stay in the book, or do you just drop out because that was 47 2/7/01 Capital Budget Hearings interesting last year, but it's not interesting this year, and we've moved on to something that's more exciting or sexier. So I'm trying to understand the process.
Let me try to answer that in terms of City facilities and the departments that the Capital Program Office services. We don't service aviation, streets, water or recreation facilities, but we do service most of the other City Departments. Our office is broken down into teams. We have four teams right now, and each team handles three or four different Operating Departments. We meet with those Operating Departments on a regular basis, both their capital staff that we deal with and also their maintenance staff that maintain their facilities. And we try to identify each one of their buildings and the kinds of problems they have. And we try to project out, especially on things like roofs and heating systems, the actual condition of the system today and how much longer we can expect that roof to hold up before it needs to be replaced. When we do that with each department, we 48 2/7/01 Capital Budget Hearings sit down and put together a list of projects that we want to submit for Capital Budget call that year. We also prioritize those projects based on, Can this roof last three years, or is it going to go next year, and it becomes a higher priority of those projects we ask for. We then put together a full prioritized list of projects, and we submit them to the City Planning Commission for Capital Budget call. We then have hearings with the City Planning Commission where they question us, quite frankly, on the urgency of each one of those projects. Let me give you an example. There may be a project that could be considered a multiyear project. In other words, in order to design it and bid it and award it and construct it, it may fall over two years or even three years. In that particular case, we'll then only request the money for doing the design the first year because that's the money we need right away to start the project.
Well, let me ask 49 2/7/01 Capital Budget Hearings this question. Where do we fit in, in this process? Do we just get the end result of it, and after people have made their assessments and after they've looked at everything and after they've made all of the various decisions that need to be made, you just kind of ship it over to us and say, We'd like you to do this? Is that where we are in this process? I appreciate the information you're sharing with me and all of us this morning. I've just not had the wonder of that experience.
If I could put in my understanding, that each agency has consulted with Councilmembers in deriving their recommended list of projects. So at the front end, we would hope and expect that the projects that are coming forward from the agencies and being bedded by the Capital Program Office have some input by a concerned engaged Councilperson. And so that's the front-end consultation. And then, of course, there's this process which is a deliberative process with come give and take where there may be some possibility 50 2/7/01 Capital Budget Hearings for amendments. I would also add that this year, because of the limited resources and the way our job was both difficult and easier, we did not have a lot of discretion. If the roof was leaking, we tried to patch the roof. And if there was a bucket under the trickle of water, we could see the roof needed to be patched. There was not a lot of funds to do the kind of exciting, discretionary or sexy projects that you were speaking to. We really look to, as I said earlier, the basic stewardship of our infrastructure, making sure things didn't fall apart and making sure we made some modest progress on projects that we had already engaged in.
Well, Madam Director, I would always suggest, though, in a time of even limited or more limited funding opportunities, the need for closer collaboration and decision-making becomes that much more critical, at least from my perspective. And I don't know whether it's any easier. It's probably, at least for some of us, a little tougher. 51 2/7/01 Capital Budget Hearings I will say, though, and we'll go through it in the course of today and however long this process lasts, there are items in the budget for which there's been virtually no consultation. There are items not in the budget that I care greatly about and never had an opportunity or forum to try to make a case for them. And there were other decisions made in other places to which I was not a party. So I don't know who decided what, and I don't know how they decided it, but it certainly does not reflect many of the concerns that either I have as the representative for the district or even my constituents. In addition, it astounds me at times, the condition of some of our facilities. And to hear about this process that goes on for some extended period of time, I don't know whether the people who are making the decisions about what gets done or what doesn't get done -- and I know we have a lot of facilities, but it raises the question as to whether or not the people making the decisions have ever experienced some of these facilities and some of the conditions at the facilities, all which 52 2/7/01 Capital Budget Hearings may not be capital-driven. But when you go to try to use some of these facilities in some critical situations, you're not necessarily going to engage in a long debate about whether this is a capital item or maintenance item. We have some facilities that if I had an animal, I wouldn't take it to use some of these places because they are a disgrace. And the fact that we ask the general public to try to use them or our own public employees to work in some of these conditions is quite honestly somewhat disgraceful. And I don't know who goes to these places on a regular basis to see what they look like, but some of our facilities are literally a disgrace. And so in an environment with even more limited dollars, it seems to me that the nature of this process needs to be more closely driven by the people who ultimately have to respond to constituents and their issues and their concerns about what is going on at our neighborhood infrastructure and what is in the budget and what's not in the budget and who made some of those 53 2/7/01 Capital Budget Hearings decisions because I was not a full participant in that process. So I don't take it that anything is in is automatically in and the things that got excluded are necessarily going to be out. And that's the perspective that I'm taking on this particular budget. And we'll just have to go through, in some painful ways, some of those items and some of those discussions because I am not satisfied that there has been a full process here. If someone believes that a periodic or the day-to-day discussions that we have about facilities qualifies as some kind of full budgetary process, they are sadly mistaken. We talk to these people on a fairly regular basis about a lot of different things. And I guess I'll be more mindful in the future that an inadvertent conversation or a by-the-way conversation now qualifies as full discussion about what is going to be in the Capital Budget six to eight months later. I will be much more careful about how I have these discussions and who I have the discussion with and make sure that maybe we note 54 2/7/01 Capital Budget Hearings for the record that this is an official City Capital Budget discussion that may affect what's in next year or what is not in next year. So, Madam Chair, I have a number of questions. You have been most gracious with my time. And I'll be glad to come back. Thank you.
Thank you. The Chair recognizes Councilwoman Tasco.
Thank you very much. This question may have been asked. I've been distracted. When we reach our debt ceiling, how long will we have to wait to fund projects if there is no 16 new money available? And aren't these bonds 30-year bonds, and will we have to turn to paid as we are considering with the Blight Program?
Under our current projections, we essentially get to the point where we can't really fund a full capital program in FY06 where we get to about $46 million in available general fund capacity. We're looking at a number of ways to try 55 2/7/01 Capital Budget Hearings to avoid getting to that point. One as you mentioned is trying to look for other authorities to fund some of our needs. The other is to see whether we can get an amendment to the State Constitution to change the way our capacity is calculated.
It's equal to thirteen and a half percent of the ten-year average of the assessed value of real estate in the City.
Have we ever been in this predicament before where we've reached our limit in terms of capital funding?
Not that I know of. We got to the point in very the early '90s where we couldn't access the markets because our credit rating wasn't investment grade. It didn't have anything to do with the capacity.
How much money exists throughout the Capital Budget that has not been allocated and can be recaptured for more current programs?
I'm sorry. We're trying to determine exactly what -- there are several 56 2/7/01 Capital Budget Hearings answers depending on if -- do you want to restate the question?
How much money exists throughout the Capital Budget, how much has been appropriated but has not been spent and is not likely to be spent and can be recaptured?
I think I can answer that question. At least I'll try. Each year we get a certain amount of money appropriated for each one of the projects. As we do that project, we may come under budget because we're starting with estimates on what it's going to cost to actually do this construction. If we find out that we are under budget on a project, then the money that is left over after that project can now be reapplied to other or projects or is part of the carry forward money. When we put together -- for the departments we service, when we work with them to look at new projects each year, one of the things our Deputy Director on the budget side does is to look at all that money that has been left over unused on other projects, and we factor that into our request. 57 2/7/01 Capital Budget Hearings So if we're looking for $150,000 to do a heating system replacement and we can identify $50,000 left over from a prior project that was not spent, we'll only ask for the hundred thousand dollars trying to reuse that 50 that was left over from the prior year.
Yes. The prior project has to be 100 percent completed. And this is money that is left over, and we now try to apply it towards another project. And that way it keeps our request down to City Planning for capital money. And we go through that process each year before we do our Capital Budget request to see what we have left from projects that have already been completed.
Just for the record, we have some State funding for Dorothy Emanual Recreation Center, $1.5 million. Now that that money is forthcoming, can we begin the bid design, undertake the design bid? I just want it on the record.
Okay. We should get 58 2/7/01 Capital Budget Hearings together and discuss that in more depth with you, and we'll try to work with you in putting that --
If that money has been appropriated by the State and you have it in the Capital Budget, that it's okay, we can file the application with the State, and we can begin the process to design the project?
So all the money that we've been holding for that project, we can now begin to you use?
Okay. Just for the record. Thank you. In previous years, the allocation to District Councilpersons could be designated for special projects at each of the rec centers. Why is the department now counting on those funds for roofing and more permanent repairs? It used to be that you kept -- through improvements to existing facilities, you would do the roofs and you would do major repair on these buildings. Now I'm told that if there's a roof, I 59 2/7/01 Capital Budget Hearings have to take it out of the appropriations when we may have the money for something else.
My understanding, Councilwoman, is that the money we have put in the Recreation Department for the last seven or right years included all kinds of improvements including roofs, boilers, structural work, site improvements. But an initial list was prepared by the Recreation Department showing or reflecting the condition of the facility and an understanding by the design staff of Recreation of what was needed there. And then that list was eventually vetted through each individual Councilperson and that no work would begin unless it was approved by you using your allocations, which were determined ahead of time. But the case was always that the range of kinds of projects that you funded with your allocation included whatever was needed at an individual site.
Yes. Prior to that, there was no specific allocation for Council. There were individual projects. The list totaled anywhere 60 2/7/01 Capital Budget Hearings in Recreation from fifty to a hundred projects each year. Many were small in nature. And there was no 4 formal process in moving forward on those projects with Council. There was an informal process, certainly. But now with the last Administration, we began this more formal process that calls for sign-off from you with a list of the projects that you support.
So you have no 12 money set aside for improvements to existing facilities other than the money that's allocated to each Council District?
With two exceptions. We exempted swimming pools and ice rinks because they're large scale in nature, and the timing is critical to get them renovated. So we didn't want to use up all of your allocation in one year for one swimming pool. So those we do fund separate from the Council allocation.
Well, prior to, I believe, the Rendell Administration, we were not held accountable for the roof and major general 61 2/7/01 Capital Budget Hearings repairs to the facilities. That was used if we wanted to add on to a building or something like that.
But there was no specific allocation to Council. If a Councilperson wanted to expand the building or build a new gym, that was put into the mix of projects to be reviewed. But you weren't held accountable because you didn't have a pot of funds against which you would be accounted.
Yes, we were. Ever since I've been here, I've gotten an allocation for my District every year. That's how we were able to finish some of the projects that had been started or were on the table. But I was not required to use the appropriation for a roof or any major repair to a recreation facility.
Councilwoman, let us review the history and get back to you on that. As a new Administration member and a new Philadelphian myself, I'd like to understand better the history. And I don't believe there's been a change in policy, certainly, from last year. But let us take a look at that and get back to you, if we may. 62 2/7/01 Capital Budget Hearings
Okay. Thank you very much. Who provides oversight for the minority participation construction component in capital projects? Is it the Procurement Department? And for those departments, particularly Recreation, when they can hire under the special services project, who oversees the minority participation for that inclusion?
That's a several part answer. For the projects the Capital Program Office manages, we basically have two types of contracts -- professional service contracts and the actual construction contracts for Public Works contracts. Every year we sit down with the Minority Business and Enterprise Council and review the upcoming professional service contracts we anticipate putting out. And the number and types of those contracts are a result of the Capital Budget that gets approved each year. We discuss with them the nature and type of work that each project includes, and with them, 63 2/7/01 Capital Budget Hearings they help us determine the appropriate level of minority participation for any professional service contracts. So, for instance, our office will try to put out -- we do our professional service contracts through what we call PSR process, which is a request for professional services where we'll go out and solicit four to six architectural firms for a project. And they will submit to us a proposal which identifies the project, the type of services they will perform and the fee to do the work. Now, when we meet with NDEC and we identify what we feel is the right level of participation, we will take a percentage of the projects that we would normally put out, design projects, and we solicit only minority and women firms to do those projects so that we're guaranteed that level of participation if not higher. So we make every effort to make sure that we meet at least that as a minimum level of participation on our professional service contracts. On some of the larger projects, it's not an all or nothing for a minority or woman to be awarded the project. There are percentages of the 64 2/7/01 Capital Budget Hearings project that we require percentage participation. So we may start out with the a 4 percent participation goal for a professional 5 services contract and actually end up with a 25 or 6 27 percent. But we will never be below that amount. 7 On the Public Works contracts, that is 8 really set by Procurement. It's not really set by 9 our office. 10
Last year we were given a 13 million dollars in the Capital Budget to do the 14 remediation of the Logan site. That project is all 15 but done with the exception of the seeding of the 16 actual topsoil. 17 The soil that was contaminated -- and it 18 was basically lead, which was the biggest problem -- 19 has been all removed and taken to a landfill that 20 accepts that type of soil. We then have come back and replaced that foot of soil with new soil. And we've also put in topsoil on top of that. Now, that's all been done to date. The only thing left to do is seeding, and you have to wait until the Spring or at least a month or so down 65 2/7/01 Capital Budget Hearings the road before we start the seeding process. So after that is complete, the seeding project will be essentially completed.
Grass. I believe it's all grass seeding in that triangle where ther are no 9 longer any homes that we all seeded with grass, I believe.
What kind of grass are you going to put there? Is this something that's going to grow into weeds?