COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON LEGISLATIVE OVERSIGHT - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, November 27, 2007 10:30 a.m. - - - PRESENT: COUNCILMAN JAMES F. KENNEY, CHAIR COUNCILWOMAN CAROL ANN CAMPBELL COUNCILMAN DARRELL L. CLARKE COUNCILMAN W. WILSON GOODE, JR. COUNCILWOMAN MARIAN B. TASCO RESOLUTION 070882 - Resolution authorizing Council's Legislative Oversight Committee to hold public hearings to investigate the Administration's failure to enter into contracts necessary... RESOLUTION 070890 - Resolution authorizing Council's Legislative Oversight Committee to hold public hearings to investigate the Administration's failure to enter into contracts necessary... - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2
This is a hearing from a previously recessed hearing of the Legislative Oversight Committee. There is one citizen in the audience from the Ninth District who would like to testify, from Councilwoman Tasco's district. I want to get started with you, sir. Councilwoman Campbell is on her way, and then we'll get with the Administration. So if you could please come up, identify yourself for the record and proceed with your testimony. Please identify yourself for the record and proceed with your testimony. MR. McNEAL: My name is Gerald McNeal. I live at 6601 Opal in the 10th Ward. Today I'm here to testify to the fact of, I guess, dealing with the Heating Assistance Program.
Yes, sir. MR. McNEAL: Just expressing 3 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 some of my concerns about how when trying to contact the Heating Assistance Program I received -- trying to talk to a lady named Ms. Halls, after not being able to speak to Ms. Halls, who was supposed to be a person that I'm -- to start off, in 2002, I needed assistance with my heating, help with my heating. They expressed to me that it was not an emergency. So at that point in time, I paid $800 for heating to make sure my house was heated. In 2005, I called back, because my heater was not operational. They end up telling me that it was an emergency. But in June of 2006, they decided to call me and tell me that even though it was an emergency, we're getting ready to get around to it. I have six kids. With me having six kids, I take care of my six kids. I do have an income of maybe like $2,400 a month, but what I do, I take my kids to school and I deal with my kids. 4 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 So right now that's what I'm dealing with. In 2006, even though they told me it was an emergency, nobody ever got back to me about the heating. When I called, I had to speak to a Ms. Halls, who was not in, a Ms. Adula, who was her supervisor, who was not in. From Ms. Adula, I asked to speak to a guy, Portacella. Mr. Portacella is supposed to be in charge. At that point in time, I received from a Ms. Mayes, I guess a secretary, that Mr. Portacella is not taking calls due to the fact that he wouldn't know where to go with this situation, because he just designates what he wants done. He doesn't really know anything else about the program. And what I'm saying is that this has been a long, long road just to ask for assistance. I pay my taxes. I have car insurance. I have a car. And I basically take care -- try to help my community, try to do the things that I'm 5 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 supposed to do in my community, and it's been like going through red tape. Every time I turn around, there's -- to this point today, nobody has come out, helped me with my heating system. I try to heat my house the best way I can, which is with heaters, this, that, the other. And that's what I'm here to testify.
So your heater today, as we speak today, is still not functioning? MR. McNEAL: Yes.
Is there someone here from the Heating Assistance Program that I can refer this gentleman to? Could you please see those two gentlemen in the back and see if we can't get something expedited for you. MR. McNEAL: So that's basically it.
Yes, sir. We'll just have to wait and recess until Councilwoman Campbell gets 6 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 here, unless Councilman Goode has any questions for anybody.
In an effort to expedite the hearing, what we'd like to do is to have Mr. Hanna, Mr. Koonce and Ms. McColloch come to the witness table and receive some questions from Councilwoman Campbell. You won't be required to read your testimony. We can enter it into the record. The Chair recognizes Councilwoman Campbell.
Mr. Hanna, before I really get into it, I'd like you to give me an honest opinion of what you think has really happened here and the damage to the residents of 7 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 the Fourth Councilmanic District, because this has not been effective and it's been incompetent, but I'd like to hear what you think.
Thank you, Councilwoman Campbell. My name is Kevin Hanna. I serve as Secretary of Housing, the City of Philadelphia. Before I respond to your question -- and, believe me, I will -- I need to apologize to this Committee for not being at the previous hearing. As fate would have it, I had been scheduled to attend an out-of-town conference literally months before that hearing was even called. So it was very difficult -- in fact, that conference has to do with a committee hearing that will take place tomorrow. So it's not a slap in the face of the Committee, but just an unavoidable circumstance. After having come back from that conference, however, I did view the tape. 8 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 And, Councilwoman, in response to your question, I will tell you -- well, in fact, as I have told you in private -- in viewing that tape, I was personally and professionally embarrassed by what took place. Not so much for what took place at the hearing, but for the cause of the hearing to start with. In my testimony -- and, again, Councilman, I won't read it, but my testimony offers a sincere apology. I take full responsibility for a number of things, not the least of which is the provision of inaccurate information to you in particular, Councilwoman, but to other Councilpeople as well, inaccurate information which you depended upon to make certain decisions. Based on that inaccurate information, I know you have put or raised some people's hopes to where -- or to a point where we may not be able to meet those expectations. And that, as much as anything else, again, causes me personally and professionally 9 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 an awful lot of embarrassment and chagrin, and for that, again, I sincerely do apologize. I don't know that -- in fact, I will say that there was no -- there was a complete absence of malice in --
I don't think you can say that. I don't think you know what's in another person's heart. I think you can only speak for yourself.
Point taken. Certainly on my part, there was a complete absence of malice. In providing that information, I had absolutely, in fact, no reason to want to unnecessarily raise your or your constituents' expectations. Again, as we've discussed privately in your office, I wish we could do three times as many basic systems repairs as we are able now to get done in the City of Philadelphia, but with the resources that we have, we can't. There were certain aspects of 10 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 our reporting, of our ability to gather information and present that information that was lacking. To some extent, I was unaware of a lot of those inabilities. I am certainly aware of them now. And, again, as my testimony points out in one of the last couple of paragraphs, I've taken it upon myself and we've made it a point to redouble our efforts to fix those inadequacies that are in the system as they are now, those inadequacies which caused us to provide you inaccurate information. It's our hope in the not too distant future we'll fix what's wrong with our reporting capabilities and be in a position to provide to you information that's both accurate and reliable, information on which you can make more prudent decisions.
Thank you, 11 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 Mr. Chairman. Good morning, Mr. Hanna.
I believe in the interest of time and just moving forward, the question that was posed is really about the future. At different points throughout this hearing we may discuss what happened in the past and that will come up again. I think the question that's been posed is what is going to happen.
From a couple of different -- well, let me answer that from a couple of different perspectives. From the perspective of systems, with the reorganization, NTI provided funds to upgrade an antiquated system that was being used at the RDA. That system has not been implemented completely. Both the Executive Director and I, along with MOIS, have recommitted ourselves to fix what was wrong in that system. So in answer to your question 12 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 from an IT standpoint, we'll devote the resources, the training necessary --
Mr. Hanna, I think you know my question is about the money.
I'm coming to that, and money has a lot to do with the NTI systems issue as well. From the standpoint of the transfer ordinances or transfer bills that were passed by Council, the first 1.2 million, there's no issue with that.
1.3 million. There was no issue with that. The issue is with the second 1.2 or 3. In sitting down with staff, with the Mayor, it was decided that the commitment -- even though money had not actually been spent, the commitment to do two and a half of the three projects, the Administration feels, is a commitment that needs to be stepped up to. Again, even though the money has not been spent, 13 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 it's the Administration's view that those commitments still need to be stepped up to. In the case of one of the three --
You're telling me commitments are not made to be broken when they have to be? You tell me that it's more important to worry about vacant lands, vacant houses than senior citizens living in houses that are falling down, that can end up in the street?
It's more important about property than it is about the well-being of those senior citizens who stood in line when the Mayor ran for reelection and they went on faith and believed in him even though the bug 14 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 problem came up, they stood out there because they believed in him and believed that he was really for them and would look out for them? You think this is right?
No, ma'am. I'm not saying that. One is more important than the other. Certainly the provision of necessary basic systems repairs to people's houses, to their roofs, to their heaters, to their drywall, to floors that have holes, certainly that's more important than just about any other thing that we do and, as a result, BSRP is funded with more money than just about any other program that we administer. The question, I think, is as much a political question as anything else.
Mr. Hanna, are there any NTI funds that are not committed?
Any NTI funds that are not committed? Can you define for me 15 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 "committed"? Because all of the money is allocated in one way or the other, but not all of it has been spent.
Programs? Yes. Specific projects? No. That's why I asked you to define the word "committed" for me.
For example, there are NTI funds that are committed to single family new construction. There are NTI funds committed to multi-family --
Because originally there were no NTI funds committed to Basic Systems Repair; is that correct?
I wasn't here when the original NTI budget was crafted, but I know in the year that I got here, in 2002, NTI funds were in fact diverted from other sources to BSRP.
I'm glad you used the word "diverted." Basic Systems Repair was not an original purpose of the NTI program. Yet at some point, there was a decision made to divert funds from the original purpose to Basic Systems Repair. I believe that was probably a good thing. So the request now is that we look at further expanding a decision that was originally made by the Administration to divert NTI funds in the Basic Systems Repair because it might be a better use of funds than was originally intended, which is a decision the Administration made when they originally decided to divert funds. And so I'm asking whether there are funds that are not committed to 17 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 projects that can be diverted to the expansion of the Basic Systems Repair Program. That's a yes or no question.
Let me explain to you why it is a yes or no 10 question.
Let me explain to you why it's a yes or no 14 question. NTI funds are bond funds sometimes used in collaboration with funds from the General Fund, sometimes used in collaboration with funds from the Community Development Block Grant Program. We have, I believe, four different bills in the Appropriations Committee hearing on Thursday where we will be transferring funds to any number of different causes, probably in some cases housing purposes. Do you know if any of those bills in committee on 18 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 Thursday morning are a transfer in funds from one purpose within government to other housing purposes?
Do we have anything in the transfer ordinance on Thursday? MS. McCOLLOCH: I'm sorry. I'm not familiar with the specific bills --
Please identify yourself. MS. McCOLLOCH: I'm sorry. Deborah McColloch from the Office of housing and Community Development. We have requested funds be transferred to support the weatherization and weatherization workshops this winter. It's $200,000. I do not know, Councilman, if that's in one of the bills that you're hearing on.
Could someone from the Administration tell me what the purpose of Bills 942 and 952 is and whether there are funds being transferred from the General Fund for housing purposes? 19 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882
We can get that to you, but don't have it right now. 942 and 952?
That's correct. And whether there's $1.3 million there. Thank you, Mr. Chairman.
Yes. Mr. Hanna, let's go back. I remember distinctively last summer I spoke to you after I had met with the people from the Phase I Mt. Carmel project, and with them in the room, I called you and they told me they were being forced to do properties that they did not want to do, and I thought that was asinine, and I asked why did they have to do that. I not only asked this of you, I asked this of Mr. Koonce, and I was told that my predecessor did not want to spend the money they wanted to spend on the project they really wanted to do, so they were 20 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 told they had to do something they didn't want to do, that they thought was unnecessary in order to later be able to do what they really wanted to do. Now, can you explain that to me?
Because I spoke to you about it, and when I asked you why, you said because they really -- my predecessor really didn't want to spend the money on what they really wanted at that time.
I couldn't have said that to you, because I wouldn't have known that level of detail on that particular project. You may have gotten that response from someone else in the conversation.
No. I said it to you in the presence of them. 21 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 They were in the room. Because it was very confusing to me that they were being forced to see about acquiring properties that they said they didn't even want nor were they in their plan, but they were told this is what they had to do. And I remember, if I go in a little further, I recall being told that my predecessor's chief of staff, former chief of staff, had pursued it because they felt this was the best way for them to get to where they really wanted to get. Now, that's asinine to me. Why would they be encouraged to acquire something that they didn't want in the first place?
I have absolutely no answer for that, Councilwoman. I don't know why they or anyone else would be encouraged to acquire property that they don't need that doesn't fit into whatever else they were looking to do.
You know, Mr. Hanna, before I started this 22 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 program, I had a serious conversation with you and I told you about these people that were suffering in silence, these people that we wanted to reach. We spent the entire summer, not on vacation, on reaching out to every minister in the Fourth Councilmanic District, every block captain, every Town Watch group, every committee person, every church, every store, to reach out for people who really needed help. You know what it is to interview people that are living on $44 a month or living on $237 a month or a mother of four living on $549 a month? You know what it is to have a senior citizen call you and tell you they're living in a nursing home because they couldn't put a roof on their house and if you could just give me a roof, I can go back and finish my last days? Now, I remember I talked to you last week and I believe you told me your parents were having their 57th wedding 23 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 anniversary.
And that's blessed. They're fortunate, they have you. What if they didn't have you and they needed help? You think this would be the right way to handle them? You would want to see them there suffer? You would spend $280,000 to build houses in a section of the City that you could only sell for $80,000 and you're giving up $200,000, but yet you don't want to spend 10,000, 6,000 to stabilize these people's homes, to stabilize the neighborhood, to keep the City going? And you're going to tell me it takes four months to find out they made a mistake? That's total incompetence over there. No 20 one deserves a salary over there that takes them four months to find out that they can't count. And the terrible thing about this is, nobody had the decency to call me and tell me this or to write me. 24 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 You're playing games. What they've done over here is despicable. It is despicable. We don't even do this in politics. We don't do that because we know people need help, and that's what your agency is supposed to be there for, and they have failed. They failed miserably.
Councilwoman, again, I take full responsibility for that. That buck needs to stop somewhere and I'm the guy sitting in the corner office who is ultimately responsible for what comes out of that department. And, again, I have no response to your statement. I don't deny any of it. Certainly people who live on poverty or sub-poverty level salaries or sources of income ought to get not just this department but this City's help in trying to improve their circumstances. You're right, if my 77-year-old father or 75-year-old mother, either together or apart, were in this situation, I'd be 25 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 livid. Frankly, I'd be livid. That, as much as anything else, is the source of my embarrassment and why, again -- I don't know how much longer I'm going to be with the City. I have not had a chance to talk to the Mayor-elect, so I don't know what his plans are for the next Secretary of Housing, whether it's me or not. What I will pledge to you is that for as long as I'm here, whether it's 60 days or another six years, I'll redouble my efforts to make sure that as many people as possible receive the benefits of the Basic Systems Repair Program as is possible with the resources that I'm given.
These dastardly acts that have been perpetrated against these poor defenseless disenfranchised people is just unspeakable. It's just unspeakable how anyone whose livelihood comes from the money being placed there to take care of poor people could perpetrate such a 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 conspiracy. I have a problem with this. It's the worst display of arrogance, incompetence also and insincerity and being hypocrites, because they're supposed to be there for these little people. If we don't protect them, who protects them? I just have a really serious problem with this. I think the City needs to look at itself, because your agency has failed the needy. I think you might have started all right, but it's a complete mess now. And if this is what the reorganization did, then they shouldn't have had the reorganization. Because you're in total chaos, as far as I can see. And I've talked to the Controller, and he thinks it's utter chaos also. A lot of the information that I'm getting right now still is not true. They said they spent 180,000. They didn't spend $180,000 of the money, but yet they would try to justify a lie and 27 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 say that they did. Who makes them God that they make decisions about these people's lives that need help? I'm going to ask you some questions. I'm going to give you a copy of a letter that I forwarded you dated June 8, 2007, a copy of a letter I forwarded to you dated June 20th and a copy of a letter that I forwarded to you on July 12, 2007. I would like these items to be made part of the public record. In the June 8th letter to you and copied to Michael Koonce I cancelled three NTI acquisitions totaling over $1.3 million and requested an accounting of any and all expenses that were incurred on those acquisitions, as well as an accounting of all NTI acquisition expenditures attributed to the Fourth Council District. Mr. Hanna, was my request delineated in the June 8th letter clear and precise? 28 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882
Does this letter state that if you have any questions, please contact me? If it was not clear and precise, why did you not contact me for clarification? Was my request delineated in the June 8th letter fair and reasonable? Mr. Hanna, was it fair and reasonable?
I'm conferring with Mr. Koonce, because this information ultimately would have come from his shop. Yes, Councilwoman, I would say that the request that you made was fair and reasonable. I might hasten to add that I don't have the date of our response, but attempts were made to respond to these letters. Again, I don't have the responses in front of me, but I know there was an exchange between Mr. Wetzel and perhaps people on your 29 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 staff.
I don't think so. I was elected to represent the Fourth Councilmanic District, not Mr. Wetzel, not my staff. I sent the letter under my signature. I should have been the one that was contacted. I represent the Fourth District, not them.
Of course you do, but, Councilwoman, it was our understanding that if we had any specific detailed questions, that we were to consult with and confer with Mr. Wetzel.
Mr. Wetzel works for Council. I don't believe I ever gave you that impression, because anyone that knows me knows I am a hands-on person, and no matter how minutia it is, I want to know it. So that's not true. Anyone that deals with me knows that.
Well, let me then restate my response. No, we did not respond directly back to you, but we did 30 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 respond to these requests by sending what we thought were appropriate responses back to Mr. Wetzel. Mr. Wetzel, after having reviewed our responses, got back to us saying that no, there were shortcomings, he needed this, that or the other, and there was an exchange that went on, for the most part, over the summer.
What steps did you undertake to ensure that I would receive a complete and accurate response and what follow-up did you undertake to ensure that I received a response?
Do you want me to respond in terms of these specific letters or going forward what steps we were prepared to take?
In 31 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 response to my letters.
These responses were assigned to an individual on my staff, an individual who is no longer on our staff. That individual was asked to pull together the information that was needed through whatever means necessary and to respond in writing, again, to Mr. Wetzel. I reviewed that information before it went out to you. I assumed -- and this goes back again to my testimony -- I assumed that the information that was provided to me was in fact correct. In hindsight, it turns out that it was grossly incorrect and inaccurate.
Can you explain why some five months after I made this request I have not received a complete response to my request yet?
Can you 32 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 explain why five months after I have made the original request I have not received a complete response to my request?
Again, it goes back to -- well, a couple things. It goes back to our systems and it also goes back to the nature of the request. What you had asked for in your June 8th letter, among others, was an accounting of what had been spent for these three specific projects. These are the three projects to which I referred before. These projects were committed to by your predecessor. Budgets were created for the cost of acquiring these properties on behalf of Allegheny West, Resources for Human Development and Mt. Carmel.
Point of order. Allegheny West, which was charged in my district, it should have been charged to the Eighth Councilmanic District. You need to check that.
The 33 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 Fourth Councilmanic District was charged for things that were done with Allegheny West that should have been charged to the Eighth Councilmanic District. I don't think that's very accurate.
And that's a part of my point, that budgets were put together and what was provided to me were the estimated costs of the acquisitions. I did not know that the acquisitions had in fact not taken place.
No, Councilwoman. Again, this goes back to what I said before. I depend on what my people tell me and --
They're 34 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 supposed to be your eyes and ears.
That's a very tough question. I screw up every day, at least every week, in my job, and thankfully, by the grace of God, I haven't been let go for my --
But they are paid to do a competent job. They are paid to do what they're supposed to do in the right manner, and if they don't cut it, then they shouldn't be there, because the people are suffering because of it. It's no excuse to keep someone if they're incompetent or if they don't do what they're supposed to do or they don't report to you like they should and keep you aware of what's really going on. There's no excuse for that. Having received no response from you, I sent the June 20th letter. I again repeated my request for an 35 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 accounting of all NTI acquisition expenditures attributed to the Fourth Council District. Again, having received no response, I wrote to you again on July 12, 2007 repeating the same request as was made in the two previous letters. Mr. Hanna, having received these three letters from me, I am sure that you had gauged that there was an important request. Is it your management style to just ignore requests made by members of the City Council? Can you explain your apparent indifference to responding to this request?
No, ma'am, it's not my management style to ignore requests by City Councilpeople. Again, as I said before, on several occasions, we attempted to provide the information that was requested in this June 8th, June 20th and subsequent letters. Those attempts were met with correspondences from Mr. Wetzel stating what the shortcomings were and why what our response -- why our 36 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 response did not quite match up to what, in his mind, you were actually asking for.
I want to ask you some questions regarding the three acquisitions I cancelled and the $1.3 million of the NTI bond proceeds I transferred by City Council resolution on September 20, 2007. I'm going to give you a copy of an OHCD report that listed all properties and each acquisition that was allegedly approved by City Council for the Fourth Council District which my office received prior to June 8, 2007. For the three acquisitions that I cancelled, Mt. Carmel Phase I, RHD Carroll Park and Allegheny West Forgotten Blocks, would you read what it says in the Status line for each of these acquisitions.
What it says about Allegheny West, about Carroll 37 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 Park, Mt. Carmel. What does it say from the Status line?
I'm not quite sure which document you mean, but in looking at the one that's labeled OHCD Acquisition Report Received Prior to June 8, 2007, for Mt. Carmel --
If the document to which you're referring is the one labeled OHCD Acquisition Report Received Prior to June 8, 2007, in that report in the Status column for Mt. Carmel, Philadelphia Neighborhood Housing Services Homeownership and Carroll Park, the highlighted column, the words that are there says "acquisition underway."
Mr. Hanna, I'm going to give you a copy of an OHCD report that listed all properties and each acquisition that was allegedly approved by City Council for the Fourth Council District which my 38 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 office received on June 13, 2007. For the three acquisitions that I cancelled, Mt. Carmel Phase I, RHD Carroll Park and Allegheny West Forgotten Blocks, would you read what it says in the Status line for each of these acquisitions?
Post June, that same column for Mt. Carmel, Philadelphia Neighborhood Housing Services Homeownership and Carroll Park, the highlighted Status column reads "not proceeding."
Mr. Hanna, I'm going to give you a copy of the spreadsheet that OHCD provided to me that is a status report on NTI Fourth Council District acquisitions. It is dated September 10, 2007. I would like the spreadsheet made part of the public 39 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 record. Mr. Hanna, for the acquisition called Allegheny West Forgotten Blocks, what number appears in the Expenditures to Date column?
Mr. Hanna, for the acquisition called RHD Carroll Park RFP, what number appears in the Expenditures to Date column?
Mr. Hanna, for the acquisition called Mt. Carmel Phase I, what number appears in 40 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 the Expenditures to Date column?
Mr. Hanna, at the bottom of the spreadsheet, there is a line titled Balance Available for Programming. What is the amount indicated in the column titled Expenditures to Date?
Mr. Hanna, two documents that I received from OHCD after June 8th which I have given to you today acknowledge the cancellation of three acquisitions in the Fourth Council District; is that correct?
Yes. The two documents that I received from 41 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 OHCD after June 8th which I have given to you today acknowledge the cancellation of three acquisitions in the Fourth Council District; is that correct?
The spreadsheet I received from OHCD on September 10, 2007 indicates that no 10 funds were expended for the three acquisitions I cancelled on June the 8th; is that correct?
The spreadsheet I received from OHCD on September 10, 2007 affirms OHCD's acceptance of my decision to cancel three acquisitions on June 8, 2007; is that correct?
The spreadsheet that I received from OHCD on September 10, 2007 states that $1,343,285 of NTI bond proceeds is available for 42 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 programming; is that correct?
No. 6 That's not what I asked you. Please answer what I asked you. I said the spreadsheet I received from OHCD on September 10th states that $1,343,285 of NTI bond proceeds is available for programming; is that correct?
Yes, that's correct, as indicated by the term "balance available for programming."
These reports were given to me by the government agency that you oversee, correct?
Would you agree that any reasonable person would have felt secure relying on this information?
Based upon these reports, could a reasonable person come to the conclusion that three acquisitions were cancelled and there was at least $1.3 million available for programming?
I was told at the last hearing of this Committee that the reports were inaccurate. Are you telling me that after three written requests, numerous e-mail requests from City Council staff 44 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 and months of waiting, the report issued under your supervision is inaccurate?
Can you today state unequivocally that members of this Council can rely on the accuracy of the NTI District Council Acquisition Status Report?
If a report were issued today or reports provided in September?
What makes them be -- you're saying they can rely? Is that what you're saying? They can rely now, but they couldn't rely then?
No. What I am saying is that information provided before, including and especially the information provided you, was inaccurate. I've not -- I can't speak to information provided to other Council districts, because I haven't seen it. I haven't had 45 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 a chance to review it, nor has Mr. Koonce, I would imagine, personally. So I can't vouch for the reliability of other information provided to other Councilpeople, at least not at this time.
Tell me, do you people take Council so lightly that they think they don't have to be honest, they don't have to put their best foot forward to give them accurate and correct information so they can serve their constituencies?
Councilwoman, my office, my department, absolutely does not take providing information to Council lightly.
We have evidently provided information that was inaccurate, but that was not as a result of our 46 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 taking the request as anything but serious.
Prior to the last hearing on this matter, you requested a meeting with representatives from my office to discuss the cancellation of these acquisitions. Attending that meeting in addition to you were Deborah McColloch, Michael Koonce, Anthony McIntosh and Andrea Schwartz of the Law Department; is that correct?
During the course of that meeting, Ms. McColloch was quite persistent in letting you and others at that meeting know that she had personally made verbal commitments to one of these projects; is that correct?
Ms. McColloch was quite persistent in letting you and others at the meeting 47 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 know that she had personally made verbal commitments to one of these projects.
As I recall, Ms. McColloch did stress the fact that commitments were made to --
That is not what I said. I said that she made. There's a difference. She's a civil employee. She's there to do what needs to be done for the department, not make commitments. She's not an elected official. The people haven't empowered her to make decisions for them. She may make some for the agency, but not for the people. So where does this personal part come into it about personal commitments? That's hogwash. You can't tell me that this government doesn't constantly change their commitments.
I don't know that Ms. McColloch -- and, of course, 48 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 Ms. McColloch can speak for herself, but I don't know that Ms. McColloch represented that the commitments were hers personally as much as commitments that had been made by the previous Councilperson that our office was basically instructed to carry out.
He's gone. He's gone. Do you think January 15th the new Mayor is going to do what Mayor Street did? He's gone. We changed courses, new ground rules. So I don't even want to hear about this. That's superfluous. I had made a decision. Maybe the circumstances were different when I made my decision than when he made his. I made my decision based on the needs of the constituency of the Fourth Council District, not on personal feelings, the needs, the people out there that were suffering. And that's what the people empowered me to do, to make decisions for them, to protect them, to be their guardian when they need it, and 49 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 that's what I've tried to do. During the course of that meeting, Ms. McColloch stated repeatedly the verbal commitment was to an organization that OHCD had a longstanding relationship with; is that correct?
I'm sorry. I'm trying to understand the question. That the verbal commitment was?
No. I didn't say verbal. She stated repeatedly the verbal commitment was to an organization that OHCD had a longstanding relationship with; is that correct? MS. McCOLLOCH: I'm sorry. I want to make sure that I answer the question correctly.
I'm not asking you. I'm asking him. You'll have your turn to speak to me. I'm speaking 50 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 to him.
Again, there was one word in that question I didn't understand. I keep hearing "verbal commitment was" something that --
Because evidently it was not a written commitment, it was a verbal commitment. I don't think that's hard to differentiate.
No. I just wasn't sure if that was the word you used. To be quite honest, Councilwoman, I don't remember specifically.
Oh, I do. I was quite surprised when this was reported to me. You and I had often spoken about my desire to help the poor, the elderly and disabled homeowners in the Fourth Council District. During these conversations, you spoke of the respect you had for my decision to move these funds in the BSRP program and that 51 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 no one in the Administration had ever expressed to me that they were opposed to the cancellation of these acquisitions. So can you understand how surprised I was when I was told by my staff of the position Mr. McColloch had taken?
In light of recent time, I feel compelled to ask you if you were opposed to my decision to cancel three. Were you?
Then why did you tell me you supported my decision?
Why did you? You told me you supported my decision.
I did support your decision. Councilwoman, let me elaborate 52 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 on that answer. I did support your decision. Based on our conversations, I agreed with your logic for wanting to transfer the money. Again, I did not know that this information that you just referred to was erroneous. But I had absolutely no problem. In fact, I think those were my exact words. I had absolutely no problem with what you were looking to do. After, however, it came to my attention that these numbers were erroneous, that in fact if not monies spent, then commitments were made and that these three organizations made certain decisions, made certain other commitments based upon our, both the legislative and the administrative side, our commitment to these projects, it became a much more -- a much dicier situation. It wasn't just a matter of this 1,343,000 and some change being available and uncommitted. It became more a matter of a conundrum. On the one 53 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 side, we certainly have this need by your constituents for basic systems repairs, but on the other side, these three CDCs made certain commitments based on a previous commitment to them that the City would fund certain acquisitions.
CDCs don't come before people. We're talking about people with no roofs. We're talking about people with no plumbing. We're talking about people with no 13 heaters. They don't come before people and their needs. The government is supposed to be responsible for the people first. That's your moral responsibility. And when people elect you and put you in office, they empower you, thinking that you're going to take care of them, that you're going to do the best that you can do for them to make it better for them. This has not been the case here at all. It appears to me that OHCD never planned to honor my requests to cancel three acquisitions funded out of 54 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 the Fourth Council District acquisition fund. It seems to me that the reports I was given by OHCD that acknowledged the cancellation of the acquisitions were only given to appease me and that after I left office, OHCD would implement the acquisitions. I feel that way because your position to my decision only arose after I moved the $1.3 million of NTI acquisition funds to the BSRP program on September 20th, the very funds OHCD needed to implement the acquisitions I cancelled. Mr. Hanna, can you explain to this Committee why it took my transfer of NTI acquisition funds to uncover any opposition to my decision to cancel certain NTI-funded acquisitions and why didn't anyone have the guts to just call me and tell me how they really felt about it instead of being so deceitful?
I would argue that the movement of that 1.3 -- the proposed movement of that $1.3 million was not the 55 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 impetus for opposition to reprogramming the $1.3 million to BSRP. It was at that point that it was decided, we decided, particularly Mr. Koonce in listening to his testimony a couple weeks ago at the previous hearing, that Mr. Koonce went back and did his own review to determine for himself just how much money had actually been spent. It was at that point also that I had my own conversations with the Administration relative to the issue that I just brought up relative to commitments versus -- commitments and the budgets that those commitments create versus the actual expenditures, and the decision was made at that point that even though, again, money had not actually been spent, but that the commitment itself was a strong enough representation that any funds that were dedicated for that purpose ought to remain for that purpose.
But they were my funds. Listen to what I'm 56 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 saying to you. They were my funds that belonged to the Fourth Council District, to the people in the -- how dare you make a decision and not call me and come and sit down and talk to me about it and it affects the people that I represent. You're going to tell me you think that's right? You're going to make decisions that affect their lives, their well-being and yet no one tells me anything about it? And they kind of sneak in the back door and that's how I find out what's going on?
Councilwoman, I will admit to you that we ought to have been more up front with you once the decision had been made and as much as about the decision, about the logic that led to the decision.
I'm going to give you a copy of a letter that I forwarded to you on October 29, 2007. I would like to make sure this letter a part of the public record. Since you 57 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 have not chosen to respond to this letter, I'm asking you to respond now. Mr. Hanna, are you prepared to amend PHDC's contract and add the 1.3 million of NTI bond proceeds that I transferred on September 20th to the BSRP program?
If you just give me a minute to review the letter itself. Councilwoman, I believe that this letter was responded to, but it was responded to, excuse me, by the Mayor on behalf of OHCD.
I said I don't believe you're Mr. Mayor. I sent it to you. Yes, the Mayor sent me a letter, but you have to speak for yourself. I didn't write the Mayor. I wrote you.
And 58 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 courtesy dictates that I should have gotten an answer, regardless of whether I liked the answer or not. Every tub has got to stand on its own feet. You can't hide behind the Mayor or anyone else.
If I write you, then I'm going to give you respect. I expect the same respect to be reciprocal. I'm going to respond to you. You may not like what I say, but I'm going to respond, and I would expect the same from you.
Councilwoman, in the five years that I've been here, for the most part, the people in this room 18 will attest to the fact that I've not hidden behind the Mayor or anybody else. Again, you're absolutely right. I should have responded to your letter to me. In response to your direct question as to whether or not we're prepared, I'm prepared, to move money from -- NTI dollars from one place to 59 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 another in the amount that you're requesting, no, I'm not prepared to do that.
Because of the reasons stated, that although I acknowledge the importance of what you're doing, although I agree with the logic behind what you're looking to do, the commitments that were made to other projects in this particular situation have to take precedent.
Councilwoman, you asked me why. You didn't ask as to whether or not my logic was right morally or otherwise. I'm giving you my reasoning. Well, I'm giving you my answer and my reason for my answer. Now, it's certainly your prerogative to question or even to disagree with my answer. 60 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882
Mr. Hanna, do you make your own decisions or are you told what to do?
Okay. So then what you're really saying, this is coming from higher than you; is that correct?
No. What I'm saying is that it's the Administration's view that the commitments that were made to these three organizations have to in this particular situation --
I'm going to give you a copy of this letter. I want this letter, I think I said, entered in the public record. I stated whatever contracting processes are required, either through amending an 61 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 existing PHDC contract or entering into another contract that allows PHDC to assess these funds as of July 1, needs to be undertaken immediately. Let me ask you this: According to the Controller, which we will deal with, the money that I'm being told was spent was not spent. Now, I don't think that the Controller would have a reason not to tell us the truth. Say you used $200,000. Take the $200,000, but you give my poor people the rest of that money that they need for their repairs. It's not important about that. It's important that they get what's left to take care of their needs. Now, tell me, is that possible?
I've not seen the Controller's report. I've not talked to the Controller, so I'm not quite sure where he's getting his numbers from or --
Again, I've not 62 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 talked to the Controller, so it's --
It's hard for me to respond to something that the Controller is doing without having been able to ask him my own questions.
I know that you received similar letters from Councilwoman Tasco and Councilman Savage. Given the fact that you know how great the need is for this program, what steps did you undertake to make sure that these funds were made available as rapidly as possible?
With the Basic Systems Repair Program, monies, actual dollars, aren't expended until the work is in fact done. For the Fourth, Seventh and Ninth Districts, particularly for the 63 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 Seventh and the Ninth Districts, that money -- well, those repairs are still ongoing. Once those repairs are done, that money will be available for them. Those contractors will not experience any delay in being paid for the work that they got done.
Do you stand by your statement to the Inquirer that implementation of the Basic Systems Repair Program has been delayed because HUD was two months late in authorizing the funds needed for the program?
I remember having that telephone interview. I don't know that that was a direct quote or an accurate direct quote, and certainly all of us have been misquoted by the media. I will say this, however: That we could not contract with PHDC for any funds until we received our -- we, as in the City via OHCD -- received our letter from HUD confirming our contract or the contract between the US federal 64 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 government, HUD in particular, and the City of Philadelphia. Until that happened, we could not contract with PHDC.
Do you acknowledge that HUD has nothing to do with these NTI bond proceeds and they could have been under contract sooner by amending an existing PHDC contract?
HUD has everything to do with everything we do, by virtue of the fact that all of our salaries are paid for with CDBG or other federal dollars. HUD has made the determination --
We're not talking about salaries. I spoke to the regional head -- Senator Specter made it possible for me to speak to the regional head of HUD, and he told me HUD had nothing whatsoever to do with the funding, the process of the NTI, and that's completely false. And I do have a letter that pretty much says that from 65 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 him.
HUD has nothing to do with NTI, that's correct, but HUD has everything to do with the programs that we decide to --
I'm talking about NTI. I'm not talking about other programs. I'm talking about that NTI money, that bond money. That's what I'm talking about.
You're right, that is City of Philadelphia -- that is a City of Philadelphia obligation.
If these funds would have been made available to PHDC in July 2007, would persons on the Seventh and the Ninth Council District waiting lists have received service sooner?
No, Councilwoman, I don't think they would have. I've given a lot of thought to this, again, having reviewed the tapes from the last -- from the other hearing. I am well aware of 66 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 Mr. McIntosh's statement at the last hearing. I'm well aware of Ms. McColloch's statement at the last hearing. They contradict. Ms. McColloch says that it wouldn't have made any difference. Mr. McIntosh stated -- in fact, I think the term he used was "absolutely" --
Why wouldn't it make a difference? If the funds were available, they had the contractors, who usually don't have a lot of work to do in the summertime, why wouldn't it have made a difference?
I'm getting to that. Having contradictory responses to that particular question, I decided to go and do my own research and find out for myself so that I could make my own -- 67 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882
I talked to members of my staff. I talked to members of the PHDC staff. I talked to folks who had once worked for PHDC and once worked for OHCD.
Mr. Hanna, listen to me. I find it inconceivable. You've just sat here and testified to me today and told me that your staff has not been honest with you, they have not been accurate, they have not even been considerate of how bad they make you look by their actions, but yet you would trust their opinion. That's amazing.
Councilwoman, I would be an idiot to go back to the same people who provided me that information. 68 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 I didn't go back to those same people. I went to people who I thought had no skin in this game, people who had nothing to gain nor lose by providing me information as long as their identities were kept anonymous. Those are the folks to whom I went. And, yes, to a large extent, I do trust what they told me.
That's all, Mr. Hanna. Mr. Chairman, I want a ten-minute break. I need a ten-minute break.
We have a request for a ten-minute recess. Thank you. Just hang in there. (Short recess.)
Please come back into the session for a moment. I want to try to cut to the chase on this. Is there any available NTI money for the Fourth Council District?
In addition to the 1.3 million already transferred, we have 69 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 made the determination that approximately $500,000 would also be available.
And you're basing that on the fact that you believe there's money been committed from NTI for two specific projects?
That's why I said at the beginning two and a half. For two projects, yes. For --
Allegheny West and Mt. Carmel. For Carroll Park, three properties, as I understand it, have been purchased. Another 11 or so were planned. Those 11 can be cancelled.
We have a preliminary report from the Controller's office that says that on Allegheny West and on Carroll Park that he sees no 22 evidence of any Council authorization for either Allegheny West or Carroll Park and that according to RDA, NTI funds are not committed to acquire Allegheny West 70 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 properties or Carroll Park properties.
Could I have the -- I'm sorry. My name is Michael Koonce. I'm the Executive Director of the Redevelopment Authority. I'd like to have Deputy Director David Thomas, who has been working with the Controller, respond.
My name is David Thomas, Deputy Executive Director for the Redevelopment Authority.
According to a preliminary report by the City Controller that I have received from Councilwoman Campbell's staff, he sees no 24 evidence of any Council authorization for Allegheny West or for Carroll Park, and 71 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 according to the RDA, according to what this report says, is that NTI funds are not committed to acquire Allegheny West properties or Carroll Park properties. Could you comment on that?
The first part of your statement, that Allegheny West and Carroll Park, no Council ordinance, is correct. The second part of your statement, no funds are committed, that depends on who you ask, if you will. Because there's no Council authorization, funds obviously could not be committed.
So I guess based on that answer, then, wouldn't that money be available for programs or acquisitions in the Fourth District?
Again, that's not a question for me to answer. That would be somebody else. 72 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882
I'm probably the person to answer it. I'd need to sit down and talk to Messrs. Thomas and Koonce. Not having seen, again, that Controller's report, I'd have to sit down with the RDA staff.
But I guess the confirmation that there's no Council ordinance would make the funds naturally non-committed or uncommitted. You can't commit the funds without Council action, right?
I believe that if they have no 22 authorization from Council to proceed and spend that money, that money belongs to the Fourth Council District.
You can 73 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 comment.
I'm sorry. If I may, the Redevelopment Authority does not have a Council authority to expend any dollars for the projects Allegheny West, the portion of the Fourth District for Allegheny West, nor Resources, the RHD properties. It does have an ordinance 10 that allows us to expend dollars on behalf of Mt. Carmel.
Okay. So the funds that were potentially going to be committed through our authorization on Allegheny West and Carroll Park, those monies should be available.
Except that it's my understanding from Mr. Hanna's testimony that the Administration has said if the money is committed, then it has to stay committed.
But it's 74 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 not committed, because it wasn't authorized to be committed.
See, I guess -- look, we have like 40 days left for the Administration. I don't know what's going to happen with any of this stuff. The new Mayor may have a totally different idea on how to handle this stuff. The Allegheny West and the Carroll Park properties, if they're not committed and the money is not there, they're probably not going to happen in the next 40 days. Is there some way to divert or redirect the money into the BSRP program in the Fourth District to kind of take care of some of these people in the last 40 days that we have to help them?
But, again, following that logic -- and, again, Councilwoman, I've said it before in private. I'll say it publicly. I agree 75 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 with what you're looking to do. If we do follow that tact, Councilman Kenney, then in 45 days and thereafter where do we look for, where do we find the money for those other two projects once they do kind of kick back up? That's the dilemma.
We don't know at this point whether or not the new Administration is going to even prioritize Allegheny West or Carroll Park. So I think what we know now is that there are people out there that are in need. There's some money available. Because we have not authorized commitment of the funds, it would seem like the easy -- not easy, but it seems like the most direct thing to do is to use that money to fix those heaters and roofs, and even if it goes further than 45, 40 days, it goes 45, 50, 60 days, I'm sure the new Administration is not going to stop the repair of people's homes for money that's been committed to that purpose. And it 76 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882 seems at this point, after all these hearings -- and I don't really necessarily want to have another one -- that may be the fair thing to do, since there is no authorization for commitments on either of these projects.
Councilman Kenney, Councilwoman Campbell, let me do this -- and Lord knows I've got back of scars that comes from having sat in this position in other committees, so I'm not looking forward to another committee hearing either. I understand what you're getting at, Councilpeople. As I said before, the Administration has made this policy decision. I am half of the Administration, as I defined it. Let me have a conversation with the other half of the Administration, as I defined it, to see if maybe this might not be a reasonable resolution to this thorny problem.
It would seem a nice holiday gesture. 77 11/27/07 - LEGISLATIVE OVERSIGHT - RES. 070882
For the record, I'm going to tentatively recess this hearing until December the 11th at o'clock. Hopefully we won't have to 9 have it, but I just want to keep the 10 record open if I can.
And if in fact by then we resolve this, then -- well, hopefully we will have resolved this so that your wish can be granted.
Thank you. (Committee on Legislative Oversight adjourned at 11:40 a.m.) - - - 78 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on November 27, 2007, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)