COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE OF THE WHOLE - - - Wednesday, March 15, 2006 10:30 a.m. - - - Room 400, City Hall Philadelphia, Pennsylvania - - - FY 2007 OPERATING BUDGET HEARINGS - - - PRESENT: ANNA C. VERNA, President BLONDELL REYNOLDS BROWN W. WILSON GOODE, JR. JACK KELLY JAMES F. KENNEY FRANK RIZZO JANNIE L. BLACKWELL DARRELL L. CLARKE JOAN L. KRAJEWSKI DONNA REED MILLER - - - V A R A L L O Incorporated Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 FY '07 OPERATING BUDGET HEARINGS - 3/15/06
Good morning, everyone. This is the continued Public Hearing of the Committee of the Whole. I would ask Mr. McPherson to please call the first department to testify. MR. McPHERSON: The Department of Public Property.
Good morning. Please identify yourself, for the record. And, Commissioner, we do have a copy of your testimony. So if you would abbreviate it, I would make certain that the stenographer has a copy. It will be transcribed in full.
Joan Schlotterbeck, Public Property Commissioner. Good morning, Madam President and members of City Council. With my on my right is Deputy Commissioner Herzins, on my left is Deputy Commissioner Joseph James. Overall, we have a net increase in 3 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 our budget of approximately .4 percent in '06. The increases are in Class 100, Class 200, Class 300, and Class 400. And Class 800, actually. And we also have an increase in our SEPTA subsidy. We have a water fund increase and an aviation fund increase. The noteworthy items in our facilities division would be that we have completed the move of the District Attorney and her staff to a new location on Chestnut Street; that we have continued to work with the Capital Program office on security matters in our triplex, as well as City Hall; that we are working with the Managing Director's Office to undertake the consolidation of maintenance; we've taken the first department into our department, and that would be fire, and we have four others listed to follow. We also intend to have a consolidation of centralized warehousing with respect to maintenance items as a part of this consolidation. Communications. We have been successful in remediating any problems related 4 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 to the 800 megahertz radio. We will be upgrading dispatch consoles and software. And we will have five additional radio frequency channels added. Space utilization. We continue to do our best to make the best use of what we have and to reduce our rent rolls. Real estate. We have the surplus property initiative, which has been very successful, and we are doing a good job of moving that forward and adding it as a long-term commitment in the Five-Year Plan. Special events. As everyone knows, we continue to support many activities in many agencies across the entire city as it relates to special events. One thing I needed to -- neglected to say at the beginning of the testimony that I am requesting in my '07 budget a total appropriation of $223,811,780 in all funds. Thank you, Madam President. We are here and ready to take any questions you may have.
Thank you very 5 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 much. Commissioner, you mention that your department has undertaken the consolidation of several maintenance operations. Can you tell us the time line of these consolidations and, certainly, what are the projected benefits of the consolidation?
Well, the first department that we have consolidated is Fire Department. Approximately eight employees, we may get a few more, depending on their status on payroll at the time of the change in the fiscal year.
We are going to follow that with Health, Library, Streets, and Fleet, and DHS.
The one obvious for me is that we will be making better utilization of our entire staff, so to speak. We will be centralizing in Zoning the 6 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 operations so that we have clear understanding of the needs in a certain area of the city. And, from that area, we will have our teams routinely and systematically go through the work orders to deliver the services in a better and more systematic manner. We also anticipate having savings in our material supplies, better utilization of vehicles. So, we anticipate a lot of added value.
You mention that the city will begin to create a centralized warehouse, serving the entire city, beginning in FY '07, after selecting an implementation strategy. What is the status of this project, and can you tell us who will be responsible for the implementation?
The project is a long-standing initiative from the Managing Director's Office. The intent has always been to consolidate, along with the maintenance, all materials and supplies that would be needed; and be able to delegate and centralize 7 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 those operations right out of this one warehouse. So we are starting with Fire, with Public Property, and, of course, with Police, which we took on five years ago now. So we have -- we are beginning to build, like, a store operation, if you will. And it is -- basically, the initiative is mine to enact and implement, with the jurisdiction and supervision of the Managing Director's Office.
At this point in time, we have not identified an absolute location; but what we have is an operation currently already in Fire. And now that we have absorbed it, we are going to leave those materials there. We have materials that we currently store. And we are hoping and we believe -- and I actually know for a fact -- when we consolidate these other departments, there will be other real estate that we will be able 8 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 to take advantage of at that time. And we will be able to store -- and we haven't decided yet whether it is more economical to zone those operations along with the maintenance or to have a central location where we receive and deliver and disburse materials.
And do I understand that your department will be responsible for the implementation?
You know, Mr. McPherson and I were speaking earlier. And I think that many years ago, in the '80s, we did have a centralized warehouse. And then we thought we were going to be very efficient. And we did away with that and we decentralized it, and now we are centralizing it again.
This centralization is strictly related to building 9 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 materials; it is not at all to suggest that we would be consolidating other material needs for other city agencies. So the benefits to this for long-term planning for the city is that, if we have any kind of a natural or a disaster of any kind, we can go to one place and one department and be able to tap into the resources needed. So, you have to think of it only in those terms.
All right. You mentioned that this initiative is projected to save $3.2 million through FY '10. Are these savings included in the Five-Year Plan?
You also mention in your testimony that you are decreasing your utility funding by $360,000. Can you tell us how you can reduce your utility budget in this time of 10 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 ever-increasing costs?
I will ask that the Municipal Energy Director, Kent Miller, come up and explain that for you.
I think he had told us that we were going to be saving quite a bit this last year, and I really don't know how much we saved. So, maybe he could let us know.
Good morning. My name is Kent Miller. I am the Executive Director of the Municipal Energy Office. To answer your first question, the reason why we expect a small decline in the utility budget in FY '07 is because we expect gas prices to fall. When we do gas price estimates, we look at the forward prices that are available on various exchanges. And we also speak with PGW, who does gas price forecasts, and we use their numbers to forecast our gas prices. So if you look at the detail, you will see that we expect electricity prices to 11 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 increase somewhat and gas prices to fall somewhat. So, that's the answer to your first question. The answer to your second -- do you want to follow up on the first, or shall I go to the second question?
I think I would like to hear your response to the second question.
On the second question, the city has been successful in reducing energy use. In FY '04, we used 231 million kilowatt hours in the General Fund accounts. In FY '05, that fell to 214 million kilowatt hours. It was a very significant reduction in electricity use between FY '04 and FY '05. We expect a further reduction this year and another reduction in FY '07.
The savings? Well, on the electric -- consumption is down. Consumption. 12 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 On the gas side, we also reduced use in gas. Gas usage fell from about 820,000 MCF, which is a million BTUs, to 770,000 MCF; but, those costs were overwhelmed by the tremendous increase in natural gas prices. So we have been reducing usage, as we set out to do; but, at the same time, energy prices have been increasing, particularly on the gas side. So we're going in -- we're doing what we can by reducing energy use, but we're still subject to the energy price increases that are affecting everyone.
I just have one other question. Commissioner, with the surplus property, for FY '06, how much do you anticipate will be generated in FY '06 and FY '07?
I am going to ask the Deputy Commissioner, John Herzins, to answer those.
We anticipate in the rest of this fiscal year, '06, to bring in 13 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 a little over $6 million, and an additional $8 million in the next -- to million 4 dollars in the next fiscal year. 5
Wouldn't it be $10 6 million in the next fiscal year? According to 7 the documents we have, it indicates it would 8 be 10. 9
Currently we have 10 eight properties sold, a little over $3 11 million, with another 5 and a half million 12 dollars under agreement. And the next fiscal year we have offers in on properties totaling so far about 8 million.
Great. Thank you. The Chair recognizes Councilman Rizzo.
Thank you, Madam President. Commissioner, you wrote a letter dated February 10, and I will quote, "Please be advised that the City of Philadelphia is 14 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 distinct its Urban Garden Program at the Penrose and Port Mifflin garden plots in order to pursue other opportunities with this property." I know it is not your responsibility to be sensitive to people that garden there; you are just doing your job and telling them to leave. But I would hope that we're doing something to work as a government -- maybe not Public Property, but as a government -- to relocate these folks. Could you comment? I understand the commission here, but I think that we need to do more than just chase them.
Well, Councilman, I am very sensitive to the folks down there and those that are gardening. And John and I have been working very closely with the community organization called Fact, ward leaders, Council people.
I have gotten nothing from you officially about this, other than the constituent sending me your letter.
Actually, if you 15 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 had called me, I would have been happy to discuss it with you.
No. I meant, I think it would have been nice that the department, maybe not you directly, would have informed all the Council Members, especially, you know, the District Council -- maybe you did that -- but the At-Large Member that is interested in issues like this. I have gotten no communication. So maybe it is an oversight, but I got none from you about this. And, again, I am not suggesting this is your responsibility. Your responsibility, in my opinion, is to do what you have to do, move the people off, if there is an alternative. What's being planned for the site?
Well, it is part of our surplus asset initiative. And what we have done, to answer the first question, is, we have spoken to -- and John can go into it in more detail than I -- but, there is a standing urban garden agreement program that 16 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 is operated out of RDA. And we have talked, and we intend to talk, to anyone that's interested in pursuing the continuance of gardening through that program. There are plenty of opportunities. And, in many instances, they may be closer to the homes that they actually live in, than going all the way down to this remote area of the city.
So what happens to the folks? Because, obviously, they are going to start preparing their gardens. And you have them out of there by April the 10th, structures included, if there were any illegal structures. So at this point we're less than a month away from your deadline. Where are we?
Well, actually, that letter was -- we amended the time frame. We did not give them a lot more time, but through the end of April. And we posted it a week ago Friday. And we have asked that they take things that are important to them and valuable 17 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 to them away from the site.
I would appreciate -- and I think that the hearings that we had were very effective. I believe that the communications folks did a great job in squaring away the 800 radio megahertz radio system. But I would love to see a close-out of where we are. We talked about a lot of things during the hearings; about extended warranties, maintenance agreements, et cetera. So what I would like provided to the Chair is where we are with that particular issue -- I think that's something we asked for during the hearings, but I don't believe that we have ever received -- on exactly how much money we spent, what we were reimbursed for, where we stand with warranty, extended warranty, if any. So I would appreciate that info to be provided to the Chair so we can kind of close out the 800, hopefully, if we don't have any other significant issues with that. But I have no clue on what this cost 18 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 the taxpayers of the City of Philadelphia to fix the problems associated with 800 megahertz radio.
So you are looking for an overall explanation of the funding, start to finish?
Yes. I would like to see -- we spent a lot of money, a lot of Public Property time, a lot of communications' people time, Motorola spent a lot of time here. And I just want to see at this point what we got out of this whole -- I don't want to use the word "boondoggle." What has Verizon done? I know we have had a lot of trouble. And I am finding out now that a lot of problems we did have were communication line issues, T1 lines, rather than Motorola issues. So I think we really need to have a report. Nothing fancy; something that says this is where we are, that Motorola is going to continue to absorb costs of problems that may develop. 19 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 Because I think that we spent a tremendous amount of money on trying to resolve the problems, some that we probably can't even identify in personal hours, et cetera, testing, and all the police involvement in the problem. And I understand that there is still a lot of concerns at the Fire Department level about the system. And what we are planning to do about -- I understand we are going to add some repeater receivers for the fire department. Again, I don't know much about that. But I would just like a summary of how sound the 800 megahertz radio system is and what the vendors are doing to continue to support that system.
One last thing. And then I will come back for another go-around. You talk about surplus property. And there is an issue that caught my aye in 20 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 the Legal Intelligencer; where there was a court challenge to an appraisal, that the appraisal for the particular property at 36th and Grays Ferry was $160,000, and it -- finally, the courts ruled that the property was worth over a million dollars. I am hoping that the estimates, the assessments or the appraisals, that we get for the properties are realistic; that it doesn't turn out to be an initial appraisal of 160, the owner -- this was an eminent domain issue -- that it turned out to be the property turned out to be worth a million dollars. I don't want to see us giving away surplus property. So what are we doing? Are we doing one appraisal, two to verify the one that we have? If we are starting to sell surplus property, how am I assured that the taxpayers of the city are being compensated appropriately for the disposal of a property, the appraisals that we get?
Well, 21 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 Councilman, I would not do anything but the right thing ever by the taxpayers. We are doing two appraisals, and we are taking the average between the two. And they are professional firms and well known in the community and in the industry.
Could you provide to the Chair the appraisals for all of the properties that you have on the list? How many properties are on the list?
There are currently, Councilman, around 52 properties on the list.
Could you provide to the Chair the list of the properties and copies of the appraisals, please, so we could maybe get those looked at by other professionals to see how accurate are the appraisals we received? Because this is really unfair, in this one particular case. And it just goes to show that an authority gets an appraisal for $160,000, it goes to court, and the court rules that it was worth over a million. I mean, that's not a good situation. 22 FY '07 OPERATING BUDGET HEARINGS - 3/15/06
No. This is an example of an appraisal that didn't work very well. Madam President, I will wait for the next go-around.
Actually, we will find whether or not we can release the appraisals. I mean, we have been holding that kind of information tight to the vest. We have people responding to RFPs. And we have lately been successful at getting more than the appraised value, so giving that kind of information out is not necessarily in the best interest of our whole program.
You are not sharing it with the average public; you are sharing it with an elected official. So I think that, if we need to go to the Law Department and fight over it, we will do that. But I think we really need to know, at least I need to know, that the firms that 23 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 we are hiring are in fact appraising them appropriately, and they are not being low-balled. This caught my eye, this particular document. And I was very clear that -- hopefully it was clear -- that this was not you; that this was just an example of a transaction that occurred with one of our authorities. And it turned out that it was very unjust to the person that the property was taken away from. It went from 160 to well over a million dollars.
Thank you, Madam President. Good morning, Commissioner.
I have a series of questions regarding SEPTA. 24 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 Is Public Property involved in new lease negotiations with SEPTA?
What's your most recent involvement? Last meeting, last phone call, last --
Actually, I just got an e-mail late yesterday with -- it's sort of a detail issue, but it is all relevant to the overall plan for our new strategy for the negotiations. So as late as last evening, I got an e-mail from the Law Department.
So the increase in SEPTA subsidy is based upon the formula in terms of increase in state subsidy?
How often is that 25 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 money disbursed to SEPTA? Is it quarterly payments, twice a year?
I believe it is twice a year. I'm sorry; it is quarterly.
On at least two occasions that I have been here, I believe two occasions, City Council has chose to transfer that fund, those funds, away from Public Property because we have issues with SEPTA; because we are completely outvoted on the Board because of a disproportionate amount of the fare box revenue comes from Philadelphia, and we simply have no control. Including the fact that we can't even get out of the lease that expired on December 31 with them. What sorts of checks and balances would you suggest that Council put in place to address these concerns regarding the subsidy until we come to a new lease agreement?
Well, actually, that's a difficult question for me to answer personally, because I'm not the point person at this point for the overall strategy for the Administration. It is, actually, being FY '07 OPERATING BUDGET HEARINGS - 3/15/06 handled through the Law Department. And they are very much -- they are very aggressive and very involved right now in those negotiations.
I say this with all due respect. So if Public Property is just serving as a caretaker for the subsidy, does it really make a difference whether that money is controlled by Public Property or controlled by City Council?
Well, it makes a very big difference to the Administration, yes, that it is controlled by Public Property.
Thank you, Madam President. Good morning, Commissioner and deputies. 27 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 Commissioner, what's Public Property's relationship with the Vacant Property Review Committee?
Well, we are one of the people that are -- John represents me on the Vacant Property Committee, John Herzins. According to the ordinance that established the committee, I am probably responsible on behalf of the Administration for final sign-off on all the properties.
That's recommended by Vacant Property Review Committee?
That's correct. There are -- don't ask me to rattle them off, but there's at least six or eight other agencies that represent the Administration; City Planning, L & I, Revenue. I am drawing a blank. But there is a whole host of -- Planning. There is a whole host of people sit there. And each one of them have reasons to be there to represent the best interests of 28 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 the taxpayers in terms of disposition of the property.
And your representative is a voting member of that committee?
So if that committee votes and recommends that a property gets disposed of to an applicant, it then goes to the Redevelopment Authority?
Councilman, after the committee makes a recommendation, it comes to -- the deed is prepared or the right of entry or urban garden agreement, it comes over to the department for the Commissioner's signature.
I'm not sure where in 29 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 the process the resolution comes in. Redevelopment handles that, Redevelopment Authority.
You don't act on the disposition based solely on Vacant Property Review Committee; is that correct?
You may give them entry authorization, but not act on the disposition; correct?
So once the property gets recommended by VPRC, goes through -- your department or the Redevelopment Authority for disposition? How are the properties disposed of?
The final deed comes over to the Commissioner at the very end for the transfer.
The deed comes over from the Redevelopment Authority for Joan's signature. That's the final, end of the 30 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 process.
I believe the deed probably is not sent over until there is a resolution from Council.
From Council. So once the resolution is authorized by Council to be disposed of, it goes to you for final resolution?
For signature. At what point are you authorized to make a determination that a resolution -- a property that was referred by VPRC, and a resolution was prepared and authorized by Council, at what point can you make a determination that that property will not be disposed of?
Actually, I think because I have the final right -- I sign representing the taxpayers, I can reserve the right to pull the deal at any time, I believe. But what we have done since I have 31 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 become Commissioner is, we do not want to be in those situations. So what John does, oftentimes we get the agenda, we pull items before they are even presented; so that they are not an issue at the table, where folks are believing they are going to get a property, where I have yet to have my say on whether or not I think we should proceed in the manner recommended. So we have tried not to be in a position where they have been reviewed and approved out of VPRC and then I, for whatever reason, may have a question about what we're doing and why we're doing it.
Well, it is my understanding that there are a number of properties that have been recommended by VPRC, resolutions have been prepared and authorized by Council, but yet they are not being disposed of to those applicants. Can you tell me --
In many instances, Councilman, what's happened is, I get, frankly, a letter on my desk telling me, 32 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 please sign. And I don't have the backup information, I don't have the details, I don't necessarily know that the due diligence was done by the other agencies involved in this; such as, RDA, OHCD. So what we have also done is, we have reached out to OHCD. And we now have an open dialogue where, if I have a specific question about something that could be two years in the pipeline -- because oftentimes this process takes as long as two years -- that I am out there asking, is there something that you can give me in written form that shows me the due diligence that was done on your end. Because there are times when I can't understand the benefit of giving a valuable property to someone for a nominal consideration. So I do stop certain transactions, and I do ask questions.
So the process that's established as a result of the policy to do asset sales, are you suggesting that 33 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 that process has sufficient due diligence in terms of disposal? Because I have seen those properties move relatively quickly.
We identify an asset, we determine that it is surplus.
Of course it is approved by my boss. They know that we are putting it on the list. We get two appraisals from PIDC. They advertise, they market the property for us. And then we send out the RFP, we have responses, we have -- as you may know, in certain instances we had to meet with community organizations in your community. And then if everything is said and 34 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 done, and we have the sale price determined, we sell the property.
So you are suggesting that the process is purely internal, no public participation, has more due diligence than the process that is extremely public in nature, i.e., Vacant Property Review Committee, where there is a vote by all the agencies in a public way, then a vote by the City Council of Philadelphia authorizing the acquisition or disposal of a property, you are suggesting that --
Actually, I am not suggesting that at all. No. I guess it is hard for me to explain. But, again, when I became Commissioner, there were items on the agenda approved through the committee that had not gotten to my desk as Commissioner, and they are two years old. So when it comes across and it is a right of entry as John said, or it is a final disposition, it is a deed -- it is all reviewed by Legal before it gets to me. So 35 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 the legal issues I can see have been cleared through the city's Law Department. What I don't see is all the paperwork from the due diligence from two years ago. So if I find something that I personally, my own judgment, does not look right, I feel uncomfortable signing, I have a couple of questions, I pick up the phone and I have called either John Coates -- but now I have a running dialogue with Debbie McColloch, and I get written responses. So I'm not suggesting for one minute that my process is better than the Vacant Property, not at all. I am just trying to explain how and why I would ask questions of a certain property that's been recommended. Because sometimes it takes years before it is finally ready to be signed by the Commissioner of Public Property for final disposition.
If there is a property that VPRC requested be sold at fair market value, the assumption is that there is 36 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 an appraisal.
Why would that property not pass through the normal process?
We have -- we do have that happen through vacant property.
My understanding is that there are a number of properties that are recommended for sale, fair market value, that have gotten appraisals, and those properties are still not moving for some reason.
Every month on the agenda, on the Vacant Property Review Committee, there are items that are on the agenda for being sold at fair market value, as well as for transfer for nominal. So that, since I have been attending, has been a monthly feature that the RDA has put on the VPRC process.
I understand 37 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 that. My question is, why are properties that have been recommended to be sold at fair market value, that have gotten appraisals -- and I am assuming that's required -- why are those properties not being disposed of?
I'm not -- believe it or not, I am not familiar with any items right now that have been through the process, selling for fair market value, that I am holding up.
Once it is approved at the VPRC for sale at fair market value, then the appraisals are ordered by the Redevelopment Authority. We don't control the length of that process. So, as far as I know, we don't -- I don't know of any that are being --
You are telling me you are not holding up any properties that were approved by VPRC and Council for fair market sales? You are saying you are not holding up any properties at Public Property? 38 FY '07 OPERATING BUDGET HEARINGS - 3/15/06
Like I was trying to -- well, I was trying to explain, I think I have had two very lengthy e-mails from Debbie McColloch. And I would say in each instance, there were approximately 100 properties associated with each of those memorandums, which is to say that I did ask detailed questions. She sent me the explanation, that they had been vetted through the proper channels, and all the due diligence was done. My reason for asking, again, was because, in many instances, they were two and I think there were a few that were five years old. So I didn't have the benefit, because I wasn't Commissioner at the time, of knowing any of the details associated with these. So because I was signing, I did hold them up and ask questions. But I have -- I'm 39 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 going to say approximately 200 of them have moved. They don't leave VPRC and land on my desk; they go -- depending on what they are, they have other stops before they come to me.
I agree. And that's, to some degree, my point. I mean, there are a number of checks in the process. And I am not understanding why, given the nature of that process, why the buck ends up stopping at your desk, and the properties are not being moved.
I know, like, sometimes when VPRC has approved a property for sale at fair market value, it still may not reach the Commissioner's table for signature, maybe, for about a year. I mean, we don't control that process, the department.
Which puts me in an awkward position, admittedly. Because it would assume -- then if it gets to my desk and I have a question, it has traveled a year to get there, and then here I am saying, you know 40 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 what, can I just find out the thinking behind this disposition, why are we doing this. And --
So why don't we just send -- VPRC makes it recommendation. Why don't we just send it to Public Property? Why do we send it to RDA, if you are going to have to review it anyway?
Because that's the way the program has been set up by ordinance. I don't have the ordinance with me. Isn't that correct, John?
If the ordinance 19 were changed, and it went directly to Public Property for review, would you suggest that that's a --
Well, I would suggest that that's something I can ask the Law Department, yes. I don't know that that's a bad 41 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 thing, get permission up front from the owner, so to speak.
Because I think that is part of the problem. I mean, it does end up I am the final signer, so it probably would make sense to have us up front. But I don't really know the legal implications of that. Because they are going through, you know, other processes; Housing, RDA, OHCD.
It just seems like there has to be away to streamline that process. I mean, a property that's owned by the city, and we are selling it at fair market value, it shouldn't take a year to sell a property. I mean, that's -- the assumption is if we own it, there is a clear title; right?
Properties that have been sold for fair market value at VPRC, the only interaction that we in Public Property have is at the time of approval, at the vote, and then it is the final end stage when it 42 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 comes to Joan for signature.
So we are not involved in any of the process; just a voting right on the VPRC, then it comes to me for signature. Which is why we started pulling things off before they got on the agenda. Well, they got on the agenda, I'm sorry. Before they were brought up in the committee meeting.
Councilman, one process that the Commissioner and I were working with the Law Department to speed John's signing deeds that come over, we have developed a checklist that RDA now has signed off on. Accompanying every transaction will be the checklist to let the Commissioner know is this an affordable housing project. It is just a check sheet of, you know, is it for nominal, is it fair market. 43 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 Because, prior to that, the Commissioner received these deeds with no 4 backing, nothing; she was just asked to sign. So this will be a speedier way. She will have a clearer understanding of the deal.
You need to know that I am being told something entirely different. And I am being told that there are a number of properties that are in the pipeline, and that pipeline is stopping at your shop, and all the required due diligence as it relates to the committee and the Redevelopment Authority has been done. And I am being told it is a substantial number of properties that are not being authorized.
But you may -- I mean, it has been a bumpy road. It has definitely been a bumpy road. Because it was business as usual, and I had a different approach to the way I 44 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 handled signing documents that came before me. That's, basically, where it all started. And we, I believe, have made major progress, just like John said. We have sat down with the legal people from RDA, our people, John Coates, Debbie McColloch and I are now in an open dialogue. I did -- two stacks of deeds were passed, probably, within the last two months. So there was a log jam. But I don't have any sitting on my desk right now where I haven't reached out, nothing, and said what's the disposition. I haven't been asking any questions of anything. There is nothing on my desk.
But I am open to being a part of the solution. I am not trying to be part of a problem. I am definitely open to --
I have known you for a while, and I am not suggesting that that's the case. It was just, I mean, I have the 45 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 responsibility of dealing with constituents. I know one, actually, young lady who was early in her pregnancy when she went to VPRC. And she had a team of people that were prepared to help her rehab a house. And her thought was that, once she had the child, she would be able to move into this new home. She has had the child, the child is now three months old, and she is still waiting.
Do you know the address of that property? I'm not suggesting that -- I mean, we can look at it.
I have that. But I don't want to do is have you just take care of that one problem and not fix the systemic problems as it relates to the process.
The reason I ask for the address is because I would like to find out where it is. And if it is on my desk, I would be happy to take responsibility. But I can tell you, it is not. 46 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 But maybe that would help me understand some of the time delays, as well. I mean it could be helpful. I could probably pick up the phone, and John could call John Coates, and we could see where it is. If it is sitting in our Law Department -- they have a review process they have to go through.
I am being told that this is being held up at your shop. Because her mother came down to the office and wanted to know, you know, my daughter needs to move into this house, we have people committing to do some work in the house. And then she calls, oh, guess what, my daughter had the baby. Wow. Now this is three months ago, and she still hasn't gotten title to the property. All right. Okay.
I am going to contact the Redevelopment Authority; find out, you know, specifically what properties that, 47 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 in their estimation, are being held up on their end, and I want to see if that can move. And then, hopefully, we can sit down. Because I am Chairman of the Public Property Committee, and it is important that this particular issue be resolved. Because it makes no sense for publicly owned property to take a year to sell. I mean, that's just makes no sense whatsoever.
I think you will be shocked at the process. Because it does, in many instances, not my words, from RDA, takes upwards to two years, start to finish. And I can't answer the whys.
Having worked in government for years, there is nothing that 19 shocks me as it relates to government. 20 Thank you.
Thank you. Commissioner, just to go back on the appraisal, just the properties and the 48 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 appraisal value. And I would like to comment on what you said about some of the properties selling for more than the appraisals value. I don't have much confidence in an appraisal, if it was sold for more than the appraised value.
I think it is called good marketing and strategies, and also competition in the market out there, and the type of property.
Part of that included an appraisal; not just the structure itself, but also the market?
But my point being, if we are appraising something for a 100 thousand and it sells for two, I'm not sure we got the bang for our buck from the appraiser.
Councilman, there is a lot involved in the process, too. If we receive four bids for a property that is, say, $10,000 above the 49 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 appraised value, we go back, then, to the four respondents and say, do you want to make a final and best offer, and give that higher number. Then they bid even higher. And that's oftentimes how the bid goes above the appraised value.
I am aware of bidding up an appraisal. Somebody wants it they are not on it, they will bid up on it. There is not question.
I'm not sure of the appraiser can reflect on a particular sale how far up the respondent is willing to go.
I want to go into another area, because we had some cases recently where reimbursement to the city wasn't being handled very well. I would like to know, Public Property, when it comes to a special event, how do you handle reimbursement? When we do an event, let's say a parade or concert or 4th of July, or we work for a private sector -- I am not talking about, necessarily, a city event, where we do the concerts in the park or 50 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 whatever; I am talking about special events. Tell me about how it is structured, how we bill for special events.
Special events process is actually handled by Gloria Jackson, Managing Director's Office. So the whole process of reimbursement, billings, approvals, it is all done under the jurisdiction of the Managing Director's Office through Gloria Jackson.
But if it is your work force doing the work, communications, setting up communications, if it is stages, and your people that do it so well do the work, how does Public Property get reimbursed? So my question for the information to the committee is, I would like to see how that process works. Even though it is coordinated out of the Managing Director's Office, you are the workers and your people are the ones providing the service. So I would like to see -- and if we need to bring the Managing Director back for a 51 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 recall on this question, but I think we can get enough from Public Property -- I would like to know how you account for the money spent by Public Property for special events. I would like to know how our collection is on that. Are we physically getting paid? And have we ever written off any money as a result of someone not paying for special events? So the question is -- and I understand you say you are just, basically, told by the Managing Director's Office to go do this stuff, but how does your department account for that? And I would like to know have you gotten your money.
We would be happy to give it to you in writing, but it isn't quite that -- we actively participate in the discussions of whether or not this is an event we should do. We establish what it is going to take from our department, whether it is communications or facilities people, stages, microphones, whatever the case may be. We 52 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 tell the Managing Director what that's going to cost. That is told to the person asking for approval for the event. To the best of my knowledge, they get 100 percent of the money back. In the event that they don't, they are not quite so eager to engage that request the next year. And that's pretty much how it works. But, we can get that for you in writing.
Again, I am not talking about the community stuff that we do. I am talking about, we do a major event, and you support that major event. You are working for the private sector. Again, I am not talking the good stuff we do around the city. But I want to make sure that these big vendors that come into the city and get support from the city are paying their tab.
They are, and it is well documented. And it is very coordinated.
We can do that. 53 FY '07 OPERATING BUDGET HEARINGS - 3/15/06
The big question is, have we written any of that money off?
I can't answer that directly. But I tell you that it is my understanding, because I have been doing my job a very long time, as well, that in the event that someone commits, knowing full well what it is going to cost them -- it could not just be Public Property, there could be other departments involved -- they accept the cost, and then they turn around and not reimburse the city, we don't necessarily look favorably on engaging them the next year.
I'm not so sure we have. But, we will have to find that out.
If they haven't paid, and you don't want to do business with them the next year, the obvious is that they hadn't paid their tab. I want to end on the fact that I think you have done a great job with the 54 FY '07 OPERATING BUDGET HEARINGS - 3/15/06 replacement of the elevators. And I hope they stay as nice and clean as presentable as they are, and I hope they don't get abused. But your commitment last year to make sure that those elevators were replaced -- and I think you have put it on the fast track with capital programs -- I think everyone involved in that should be thanked. Because it has been a big improvement to visitors and also we that work here in this building.