COUNCIL OF THE CITY OF PHILADELPHIA CONTINUED PUBLIC HEARING AND PUBLIC MEETING BEFORE COMMITTEE ON FINANCE - - - Room 696, City Hall Philadelphia, Pennsylvania Thursday, 6/6/02 9:36 a.m. - - - CONTINUED HEARINGS ON: BILL 020275 - Authorizing the Mayor, on behalf of the City, to file an application with the United States Department Housing and Urban Development (HUD) for a Community Development Block Grant (CDBG) as required by Section 104 of the Title I of the Housing and Community Development Act of 1974 (P.L. 93-383), as amended, including all understanding and assurances contained therein... RES. 020285 - Approving the annual program statement and budget for the expenditure of the NTI bond proceeds for Fiscal Year 2003. PRESENT: COUNCILWOMAN JANNIE BLACKWELL, Chair COUNCILWOMAN MARIAN B. TASCO, Vice Chair COUNCILMAN DAVID COHEN COUNCILMAN FRANK DICICCO COUNCILMAN JAMES F. KENNEY COUNCILMAN MICHAEL A. NUTTER COUNCILMAN BRIAN J. O'NEILL - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 6/6/02 FINANCE COMMITTEE MEETING I N D E X WITNESSES Debra McCullough, Director of Housing.......... Patricia Smith, NTI Director................... 29 Scott Wilds, Deputy Director of Housing........ 59 3 6/6/02 FINANCE - 020275, 020285
Good morning We will now resume hearings on Bills No. 020275, CDBG, and 020285, the NTI bill. This is from a recessed hearing of two days ago to iron out problems associated with both issues. We will begin the Community Development Block Grant discussion. And we received a letter from the Mayor that we will ask the clerk to read into the record, and then we will ask Pat Smith and Deb McCullough if they would further explain it to members of the committee.
"Dear Ms. Blackwell: I am writing in response to concerns raised regarding the proposed funding for the Housing Association of Delaware. "The Year 28 Consolidated Plan will be revised prior to submission to HUD to reflect an increase in the budget line item reflected on for neighborhood and citywide housing counseling of $135,000 to be awarded to the Housing Association of Delaware Valley and Northwest Counseling Services. With this increase, the Year 28 funding amount for both HADV and Northwest Counseling Services will be $265,000. All the 4 6/6/02 FINANCE - 020275, 020285 counseling contract awards will be added to the text on . "As you know, HADV and Northwest Counseling Services have been designated super agencies for the past several years. In Year 28, counseling services are being provided through a network of neighborhood-based housing counseling agencies, and a super agency designation will no 10 longer apply. Both the budgets and services to be provided by the former super agencies will be reduced from Year 27 level accordingly. "The $135,000 increase in housing counseling funds will be taken from the following budget line items: Settlement grants, $50,000; BSRP Tier 2, $35,000; administration, $50,000. "Thank you for your continuing support for the Community Development Block Grant Program. "Sincerely, Joyce Wilkerson."
Thank you very much. Now we will ask for a kind of layman's explanation of what this means. And would you please reflect to the cut in the whole application, which is was necessitated cuts across the board in 5 6/6/02 FINANCE - 020275, 020285 the first place because I certainly have some that I would have liked restored in my district. Thank you. MS. McCULLOUGH: Good morning. My name is Debra McCullough, and I'm the Director of Housing. As you may recall, our overall cut in CDBG resources was close to $9 million. We had a reduction in the allocation from HUD of $2.3 million and a reduction in program income of approximately $7 million, so that we had to have an overall reduction in resources. The housing counseling budget, specifically the one that -- the line item that's referenced in this letter, had been cut by $647,000. This budget revision that we're discussing now restores $135,000 to that line item, so that the line item for housing counseling will increase in the budget that's presented to HUD. The $135,000 increase that this letter proposes will increase the funding for the Housing Association of Delaware Valley and for Northwest Counseling Services, putting both of them, each of them, at $265,000 for their Year 28 contracts. 6 6/6/02 FINANCE - 020275, 020285 That is a reduction from the level of funding they received in Year 27, when they were the designated super agencies, but we're no longer using that designation, and the services that were being provided as super agencies are being spread out throughout the network of neighbor-based housing agencies. So we're confident that the services are still going to be provided, but they're going to be provided on a neighborhood basis rather than through centrally-located super agencies. So each of these agencies will be funded at $265,000.
Thank you very much. Is there any discussion or are there any questions with regard to this change? Councilman Nutter? (No questions from Councilman Nutter at this time.)
Okay, thank you very much. Therefore -- then we need to submit this as an amendment to the application, do you we? No? 7 6/6/02 FINANCE - 020275, 020285 MS. McCULLOUGH: We don't need to amend the application. The --
Because we haven't reported it out yet, right? MS. McCULLOUGH: Correct. And we will revise the budget -- this document that you're reviewing now, called "the Proposed Consolidated Plan," will be revised following this hearing, to be submitted to HUD as their funding application as the consolidated plan. The revisions that are discussed in this letter will be included in the document that gets submitted to HUD.
Thank you. And will you submit to me for the committee a letter stating that, that in the application, these changes are reflected? MS. McCULLOUGH: Yes.
Thank you. Is there a harm in doing an amendment? I mean, while the letter may suffice, the amendment certainly makes it much clearer. I mean, is there 8 6/6/02 FINANCE - 020275, 020285 some technical or practical problem with an amendment? MS. McCULLOUGH: No. 5
Okay. MS. McCULLOUGH: The budget is not specified in the amendment. The amendment says that Council has reviewed and approved and formed the consolidated plan, so --
Okay. MS. McCULLOUGH: So individual budget line items are not detailed in the ordinance. So while the ordinance could be amended to include this language, it's sort of not there now.
Right. MS. McCULLOUGH: And historically what we've done is what I'm describing now. It's just that there's --
But, I mean, there's no legal, technical, or practical problem with it. MS. McCULLOUGH: No. 23
Thank you very 9 6/6/02 FINANCE - 020275, 020285 much.
Madam Chair. COUNCILWOMAN BLACKWELL -- With regard to your discussion on that issue. Councilman Nutter?
Madam Chair, you may not know the answer to this question, and I understand. This issue, as we all know, was raised by Councilwoman Tasco the other day or, I think, on Tuesday. Do we have any idea of what the Councilwoman's position is related this whole matter?
I was -- okay, I'm sorry. I was possibly asking the Chair a question that she may not have been able to totally answer. I know that you were in conversation with the Councilwoman. I just wondered what her position was on this particular issue since she had raised this issue the other day, and I didn't know 10 6/6/02 FINANCE - 020275, 020285 whether you knew what her position was 'cause she wasn't in the room.
Thank you, Councilman. Let me just say, as all of you know, that we have to submit within 60 days -- we have to submit this to HUD. Obviously, as you all of you realize, we're not the only city that applies for these funds, and we really -- I'm hopeful that we can do our jobs to report this out of this committee so that we don't lose an opportunity to secure these funds for our city. So I'm hopeful that -- that's why we have committee hearings. And, as I've said before, that is why we took three weeks to try to meet with each and every person, to try to deal with every issue of concern, so that on this day, we could have a smooth public process to certainly work out our differences and move the application forward. So I'm just hopeful that my colleagues will consider that and that we can have a fruitful discussion and certainly move forward. I understand we're having another amendment to this application, Councilman Nutter? 11 6/6/02 FINANCE - 020275, 020285 Is there any other discussion on the issue of these funds? (No response.)
As was just stated and for those who have just come into the room -- Councilman Kenney?
I'm sorry to interrupt, but I didn't hear yet from -- since Councilmember Tasco raised the issue, I still haven't -- we haven't had a chance, 'cause I know she's working with staff back there, as to what her final opinion is on it. She's the one who raised it; I just thought maybe we could come back when she comes back in.
The Councilwoman came over to me and said that the -- in spite of the cuts that were restored to these neighborhood agencies and the discussion that housing counseling will now come out of neighborhood centers, as opposed to the way we've done it in the past, and in spite of adding the thousands of dollars more and raising them each, the Housing Association of Delaware Valley and Northwest Counseling Centers to $265,000, they were 12 6/6/02 FINANCE - 020275, 020285 350 but were substantially cut. In spite of restoring these funds, she is not satisfied.
And, certainly, that is her right as a councilperson and a member of this committee. So I think that it is up to the committee to decide whether or not we move on, given the fact that we have to have our application to HUD and given the fact that an effort was made to restore these funds and take from BSRP Tier 2, which is a real, real big consideration for me and for several others, and settlement grants. And the Administration found another pot of money to put here.
So I think it's going to come to our individual decisions at this point.
Thank you. Councilman Nutter, do you have an amendment?
Yes, I do, Madam 13 6/6/02 FINANCE - 020275, 020285 Chair, but I did -- actually on this other issue, I guess I just wanted to inquire as to how the decision was made with regard to the $135,000, how the decision was made to, in essence, delete funding from at least two of the areas in order to help make up the difference. Miss McCullough, can you explain to us how you decided to take the $50,000 out of settlement grants and $35,000 out of Tier 2. Hadn't you just increased the amount for Tier 2? although we -- I think we decreased the amount that you can get -- MS. McCULLOUGH: That is correct. COUNCILMAN NUTTER -- in terms of a cap and go from 15,000 to 7500? MS. McCULLOUGH: Yes.
But you had to increase the overall amount? I think the Tier 2 -- I mean, how did you make these decisions? MS. McCULLOUGH: The settlement grant reduction is based on a best-guess estimate, what the demand for the program will be. And you may recall that we discussed the other day that the demand for the settlement 14 6/6/02 FINANCE - 020275, 020285 grant program has been reduced, in part because of the Title lead paint treatment requirements, and 4 there hasn't been as much interest in participating 5 in that program, and so there's a guess that we'll 6 be able to meet demand with the $500,000 level that 7 remains in the budget. 8 The Tier 2 reduction was based on the 9 fact that the budget for BSRP Tier 2 is 10 $7.3 million, and this is a very small reduction in that budget. And we -- it was less of an impact on that budget, that $7.3 million budget, than it would be on some of the other programs for which funds have been committed in the development programs.
Well, let me just ask the somewhat obvious question. MS. McCULLOUGH: Okay.
Why would we take the $85,000 that's involved out of the two programs as opposed to just making the total $135,000 reduction out of administration? MS. McCULLOUGH: We don't know -- we don't have a place to cut it from the administration. 15 6/6/02 FINANCE - 020275, 020285
I'm sorry, I can't hear you. MS. McCULLOUGH: We don't have any, if you will, fat within the administrative budget from which to take it.
It must be the leanest governmental agency in the tristate area. Let me -- let me just also ask for myself: The total amount that was cut from the two agencies -- I'm sorry, I'm not remembering from the other day. Was that 360? What was that number? MS. McCULLOUGH: In the case of HADV, the funding was reduced from 350 --
Is that 350 going to 190? I do remember that. So that's 160. MS. McCULLOUGH: In the case of HADV, it was also -- I mean -- excuse me. In the case of Northwest Counseling Services, it was reduced from 350 to 205.
Right, okay. So 16 6/6/02 FINANCE - 020275, 020285 the real number is 305? MS. McCULLOUGH: To restore them to the level that they were at last year.
And so let me just ask the question. I mean, I'm sure -- maybe she does, maybe she doesn't, I don't know. You've tried to make some restoration; I think that there's still some concern. I mean, the obvious question is, why didn't you just restore all of the funds? MS. McCULLOUGH: Because the service that the agency is providing being reduced. They're not being asked to serve as the super agencies, so that the range of services that the agencies will be providing is being reduced. In the past, they were asked to carry out special projects for much OHCD, they were asked to do research on particular issues. They're not going to be asked to perform at that level of service in Year 28.
Who's going to provide those services? 17 6/6/02 FINANCE - 020275, 020285 MS. McCULLOUGH: They're being spread out amongst the other -- the network of neighbor-based housing counseling agencies.
Okay. And why did you decide to do that? MS. McCULLOUGH: Because we felt that the neighborhood network was a more appropriate way to get -- to address the issues of the counseling, that the way you really -- the program has really been designed to be neighborhood-based rather than having two central agencies.
Well, why did you set up the two special agencies? MS. McCULLOUGH: That was the decision of the previous administration, that that was something that he wanted to do and had the desire to be able to have two agencies you could call on for special services.
Okay, all right. I just wanted to understand. Thank you.
Councilman, do you ever an amendment that you're going to submit?
Thank you. We have an amendment to Bill 020275. This is an amendment that was submitted also last year. It's a reporting process, more technicality than in any other way a real substantive one. And, Councilman Nutter, will you read certainly how you are changing this form so that the record will indicate? Thank you.
Sure. Thank you, Madam Chair. First, Miss McCullough, you have a copy, right? MS. McCULLOUGH: I don't have a copy of the revised one.
Okay, here you go. Sorry. As the Chair indicated, this is a reporting requirement amendment that has been submitted and approved the last two -- in the last two bills for CDBG applications. I will work with the Chair, and maybe we'll just amend the appropriate section in the Philadelphia Code related to the CDBG application and make this a part of that section, and then the future bills 19 6/6/02 FINANCE - 020275, 020285 hopefully, would just have this particular section, and the reporting requirements automatically a part of them. Quite honestly I apologize for not getting that piece of work done, and we possibly could have avoided this. In any event, Madam Chair, rather than reading the entire amendment, which would bore everyone here to tears, there is actually one section that needs to be deleted from the proposed amendment. This is a complete replication of last year's amendment, changing from Year 27 to Year 28. The office of OHCD and the Director, Debra McCullough, anticipating this, put one of the provisions in the consolidated plan that's in front of us; and, therefore, the underlying section in the first paragraph on the first page in Section e that reads "no later than 90 days after the beginning," that sentence should be deleted from this proposed amendment. So that from "no later than 90 days" down to the end of that sentence, where it reads "Year 28 Consolidated Plan," that one sentence should be deleted from this proposed amendment. 20 6/6/02 FINANCE - 020275, 020285 And, Miss McCullough, you're in agreement with that? MS. McCULLOUGH: Yes.
Okay. MS. McCULLOUGH: The information requested in the amendment is included in the proposed consolidated plan in the appendices beginning on of the appendices.
Okay, thank you. You have also submitted other responsive information in relation to a discussion we had about these reporting requirements. There may have been some either misunderstandings or some clarifications; those have been made. And, again, in a going-forward basis, we will have this in the Philadelphia Code, hopefully, and you've been accommodating in terms of providing information and budgets, and I appreciate that. MS. McCULLOUGH: And the revisions that we discussed will be modified again before we submit --
In the plan. MS. McCULLOUGH: -- the consolidated plan to HUD. 21 6/6/02 FINANCE - 020275, 020285
Miss McCullough, when did you all decide to not have super agencies? Was it this year or last year; when was it? MS. McCULLOUGH: This year -- I mean, the year going -- that we're going into, Year 28.
When did you all administratively decide not to have super agencies. When was -- MS. McCULLOUGH: Last fall.
Last fall. MS. McCULLOUGH: Before issuing the requests for proposals for housing counseling services.
Now, when did the scoring take place? MS. McCULLOUGH: The scoring in response to the request for proposes?
Right. MS. McCULLOUGH: In March, when the 22 6/6/02 FINANCE - 020275, 020285 proposals were submitted.
So the decision to not have super agencies was decided last year. So did -- yesterday, you gave me some material on the two agencies that we are discussing, and in the material, you outlined some of the concerns raised, or their scoring. That did not have anything to do with their determination as to whether or not they were super agencies right? MS. McCULLOUGH: No. 14
So why did we get that material? MS. McCULLOUGH: That was to -- that was in response to the question about how housing counseling agencies were selected. And they were selected based on responses to the requests for proposals. And so, there were -- as a part of the request-for-proposal process, everyone entered that at the same -- if you will, at a level field, because they were not going to -- we were not going to award contracts based on super agencies. 23 6/6/02 FINANCE - 020275, 020285 So everyone just started at the same point.
But we didn't need to know about their scoring. If you decided that you were not going to have super agencies, that was the answer to the question, that you weren't going to have super agencies. We didn't ask you whether or not you decided to not have super agencies based on their performance. MS. McCULLOUGH: Okay.
All right, so we didn't need that information, which further causes me some concern about what has been happening to these two agencies in your department. Could you answer me one question? Why wasn't the Northwest Counseling and the task force did not have funds to provide the predatory lending counseling? And why wasn't the hotline funded? since it had been in operation. MS. McCULLOUGH: The anti-predatory hotline is being funded, but it's being funded through Community Legal Services.
Why did you take it away from Northwest Counseling? 24 6/6/02 FINANCE - 020275, 020285 MS. McCULLOUGH: Because there were concerns about the performance of the agency --
Who had concerns about it? MS. McCULLOUGH: OHCD and -- OHCD did, we did.
Based on what? MS. McCULLOUGH: Based on our response -- on the proposal that we submitted and on the review of the hotline.
Okay. If these two agencies had not been super agencies from Year to now, what level of funding would they have 15 achieved? Just hypothetically, as you fund all of 16 the agencies through the years and probably have 17 given increases, what level would they be at now? 18 MS. McCULLOUGH: I can't say exactly 19 but they would be closer to what their Year 20 level was before being super agencies, and they 21 probably would have had some increases during that time. So that's why I think the level that's proposed now is an appropriate -- the revised, the amended level that's being proposed now is an 25 6/6/02 FINANCE - 020275, 020285 appropriate one because that's closer to where they would be if they had just stayed at the level they were at prior to being a super agencies but received some increases.
Do you suppose that Northwest Counseling Services would have had a greater increase than 1 percent? MS. McCULLOUGH: A greater increase?
From Year 20, which they got $203,000, to Year 28, which they've gotten $205,000, an increase of $2,000. MS. McCULLOUGH: Yes, they may have had a higher increase, but now they're being proposed at -- to be up to 265.
Well, what was the thinking, though, initially to give them only a 1 percent increase over the Year budget as 19 opposed to the Year 28 budget? 20 MS. McCULLOUGH: It was a part of that proposal review process in which a whole range of housing counseling agencies were being funded.
Well, was there any consideration given to the fact that you're taking an agency from $355,000 to $200,000, the 6/6/02 FINANCE - 020275, 020285 impact it would have on the agency to take a drastic cut like that? Was any consideration or sensitivity given to those employees who work at that agency or the survival of the agency? MS. McCULLOUGH: Well, the belief was that the agency would survive; I think there was an expectation that there may -- that they would have had to reduce staff.
And was there any sensitivity on -- was there any sensitivity to try and gradually cut back their allocations as opposed to such a drastic cut? MS. McCULLOUGH: Well, no, because what was recommended was the 205 level.
But it seems to me that if you were trying to take them to the level of where they would have been in Year 2000, with some increases over the seven years, it would have been greater than percent. MS. McCULLOUGH: Yes.
All right. Madam Chair, I request a five-minute recess to confer with Miss McCullough in the back.
Or three minutes, 27 6/6/02 FINANCE - 020275, 020285 however long it takes.
All right, we'll take a three-minute recess because we have to do City Council, a three minute recess. (Break taken.) (Proceedings resume.) - - -
The committee hearing is resumed. Is there further discussion with regard to -- we have had much discussion, Councilman Nutter introduced a resolution. We have one resolution to the CDBG application that we're happy to hear. There has been another proposed amendment submitted. Is there any other discussion with regard to the CDBG application? If not, we will move to NTI. (No response.)
Thank you very much. We will now entertain discussion with regard to Bill No. 020285. We believe that this -- everyone received -- we will pass out again a 28 6/6/02 FINANCE - 020275, 020285 proposed amendment dealing with the Targeted Basic System Repair Program, about which there has been much discussion. This amendment allocates $2 million to support the Basic Systems Repair Program, and we believe it was discussed and supported by all members of City Council. Is there any decision about the Targeted Basic Systems Repair Program proposed amendment?
Just a quick question on this item, and then I have --
Thank you, Madam Chair. Just a quick questions on this item as it's coming to us, and then I have some other questions related NTI. So this is a proposed amendment to the NTI Program statement and budget?
This adds $2 million because there was so -- there was a unanimity of desire to include more money in the 29 6/6/02 FINANCE - 020275, 020285 Basic Systems Repair Program.
I'm certainly glad to hear that. Madam Chair, does that change the overall budget for Year 1 for NTI? And where actually is this amendment being made?
It would included in the program statement and budget under the housing investment and neighborhood preservation section of that. We would just add it to the back of that section. And, yes, it will increase the total amount to --
So between the two -- I mean, I understand on BSRP and PhiLoan, and there might be a couple of others where NTI funds are being used to, in essence, supplement 30 6/6/02 FINANCE - 020275, 020285 funds that have traditionally been used from CDBG.
What is the total amount -- you would think I would know this; we've been talking about the CDBG plan for a while. What's the total BSRP amount now, or what would it be proposed to be? And, Miss McCullough, tell me what you're on in the big book. MS. McCULLOUGH: , Section B.
Emergency repairs preservation and weatherization. MS. McCULLOUGH: Correct.
So presently, Tier 2 is expected to get $7.3 million? MS. McCULLOUGH: Yes. As currently envisioned, $7.3 million of CDBG, and now this amendment adds an additional 2 million of NTI bond proceeds.
All right. And this may be the silly question for the day. This is the increase to BSRP that we have been talking about you? I mean, you had testified earlier that BSRP Tier 2 is being increased. This is the 31 6/6/02 FINANCE - 020275, 020285 increase? Or had there been an increase in CDBG funds? MS. McCULLOUGH: There was a modest increase last year --
Okay. MS. McCULLOUGH: -- up to the 7.3 million in CDBG.
So that was the first increase. MS. McCULLOUGH: Correct.
Okay. And now you're going $2 million. MS. McCULLOUGH: Correct.
Okay. So, Miss Smith, you're saying that on of the Program Statement and Budget, under Housing and Neighborhood Preservation, we've got: Vacant property stabilization, 2.5 million; acquisition of stabilized properties, 2.5 million. You're saying in that line item somewhere --
We will add another 32 6/6/02 FINANCE - 020275, 020285 $2 million. I apologize.
As I testified at the opening of the hearings, as a result of conversations and briefings with various members of City Council and community organizations, we thought it would be appropriate to use additional monies for the Targeted Basic System Repair Program primarily for two reasons: One, the Basic System Repair Program that's funded with Community Development Block Grant dollars is targeted based on a -- at a lower income means. There was concern that there are individuals who are in need of repair to basic systems whose incomes were over and above that very low-income limit. The intent here is to make these types of resources accessible to individuals whose incomes are up to 80 percent is still basically a grant. But we also want to craft programs and 33 6/6/02 FINANCE - 020275, 020285 make available resources that also leverage other funds, particularly loan funds. There are a number of intermediary organizations who are looking at proposals and projects that do grant and loan programs in neighborhoods to support existing owner-occupants.
What's the impact of the -- and, again, I support the additional $2 million. But now looking at of the program statement, the Five-Year Plan, where does the $2 million come from? What year is $2 million being taken from?
Well, I would just -- in revising the projected budget -- because that -- the Five-Year Plan is a projected budget 'cause each year we approve, I would just take it out of the last year, you know, just reduce that by 2 million so that it lines up.
I mean, I understand, and I figured that's what you probably do. But you've got basically four categories of NTI activity. Which one do you take it --
It would still be a part of the neighborhood preservation category, the housing 34 6/6/02 FINANCE - 020275, 020285 investment in neighborhood --
Okay, all righty. Can you give me an update? You and I had made arrangements to get together yesterday morning to talk about retaining walls and a program that we might try to put together. Out of Tuesday's conversation -- I think Tuesday afternoon -- we had agreed that we would get together yesterday.
That did not happen. I did get the message in the morning, and I had called back to see if we could reschedule.
I was trying to work through -- I had to work through the Chief of Staff's Office. I think we were trying to find times. I thought that you would be available in the morning, but I was mistaken. I believe they tried to reach you to let you know. She did have -- was not able to be available for another 35 6/6/02 FINANCE - 020275, 020285 reason. What -- in talking with the Chief of Staff, we would very much like to look at the issues that have been raised around the infrastructure and how might we in the City can report resources in a way that addresses some of the concerns, including particularly the retaining wall issues that are dangerous. We just could not squeeze it in yesterday. On behalf of her office, again, I apologize that we had to cancel that meeting. We're still committed to working with your office about structuring a demonstration project to figure out what is the appropriate level of funding to fund it. We would like that demonstration project to look at issues like new technologies and other ways to reduce the costs particularly around the repair of retaining walls.
Okay. Well, do you think you'll have some time over the course of the next week?
Yes. I'm available and I'm working with her office to get some additional time. 36 6/6/02 FINANCE - 020275, 020285
I also referred, Councilman, the specific issue -- I spoke with the Managing Director around one specific issue with respect to the Review Board, and she's going to have someone in her office to look into that.
I just wanted you to know that I did refer that to the Managing Director's Office.
Okay, I appreciate that. All right, so you're going to look to try to schedule some time for us to get together over the course of the next week.
You do understand the seriousness of this particular issue --
The research indicates from the Streets Department that there are an estimated 90 walls throughout the City that have serious repair needs. Eighty percent of them, though, 72 of the 90, are situated in the 4th, 8th and 9th Districts. All other districts in the City do have some number, but they are relatively small. I mean, this is a very critical and serious issue for me and for my constituents. I cannot speak for other Councilmembers, but other members have indicated the same. And as I've said before, a serious proposal on how we would address this particular problem would be very helpful in terms of actually moving forward on the NTI proposal.
I have said that before. I'm not trying to be subtle or vague about it, and I'm hoping that there is a certain clarity about where I am on that and how I hold that in the context of the overall position that I would take with regard to the NTI Program.
It is at that level 38 6/6/02 FINANCE - 020275, 020285 of seriousness.
I appreciate that and I do understand that. I think, as you mentioned, it's -- one of the things is the scale of the problem.
As you say, it's significant. And that issue alone can, you know, require a significant amount of resources, even beyond what was budgeted for the housing and preservation activities.
So we very much are committed to addressing that issue, to figure out how we might could do it in a cost-effective way. Yes, we are committed to that.
I understand and I can appreciate that, and we're not going to spend our entire budget dealing with retaining walls. On the other hand, as they say, "A journey of a thousand miles begins with one step."
We have to take a 39 6/6/02 FINANCE - 020275, 020285 step.
The second is, what, if any, discussion has there been? and is there any adjustment in the view of the Administration with regard to kind of on the other side of the street, or the other side of this issue, which is the curb and sidewalk discussion?
Retaining walls are, obviously, in the back; curb and sidewalk out in the front. Where are we on that discussion?
Again, we're looking at it. To be frank, Councilman Nutter, to look at the three issues, as you said, the infrastructure issues --
-- represents a significant cost to be able to address that in a way. Needless to say, there are 90 or so dangerous retaining walls. Probably the number of curbs and sidewalks which may need a repair is probably a significant number. And so the challenge that is presented 40 6/6/02 FINANCE - 020275, 020285 to the Administration is, how do we -- how do we meet these vast needs of a older American city --
-- at a time when resources are constrained, when it's becoming increasingly difficult to look to the federal government for the appropriate amount of support. I mean, we're here trying to make adjustments in our Community Development Block Grant because last year, Congress cut those resources. And even though the City has been very active with a variety of organizations to find -- you know, to work with at the federal level for resources.
We, you know, are reaching out to other older American cities to talk about this issue of infrastructure. You know, can we, you know, look at -- one of the things that I would like to explore is looking at resources in non-traditional federal departments or at the state level that can help support a program.
But the cost and how we do that and where the resources come from is the challenge that we're presented with.
Miss Smith, let me at least offer to you at least a part of the way that I think and try to attack these kinds of problems. If we try to figure out how to solve the big problems in their totality, we will be overwhelmed by the magnitude of the problem, and we will study it and we will think about it, but ultimately, we will do nothing. Many streets throughout the City need to be resurfaced. The reality is, we don't resurface all of the streets every year. We set aside a set amount of money that's for resurfacing, and we resurface the amount of streets that that 42 6/6/02 FINANCE - 020275, 020285 will take care of. And, then, unfortunately, we are all left to then deliver the message, "I cannot do your street this year; it's on next year's schedule. It doesn't mean we don't care about you, it doesn't mean we're not going to get there. We just don't resurface all the streets every year because we can't afford it." We're not going to fix all of the retaining walls at one time. We're not -- everybody's not going to get new public infrastructure, curbs, and sidewalks. But that doesn't mean that we shouldn't do something and dedicate a set amount of resources. We have X-amount of dollars that we're going to dedicate to X or Y or Z. When that money runs out, that's the ends of it for that year, and we have to live within those constraints and within those budgets. And, yes, there are other cities across America that are old, with aging infrastructure that do these kinds of things, and everybody doesn't get what they want every year. That's the reality of life. So all I'm asking is that we expand our 43 6/6/02 FINANCE - 020275, 020285 thinking on this and not get totally mired in the "It's so overwhelming, we can't do anything about it because we might not be able to solve everybody's problem and do something." That's all I'm asking.
With regard to the responses that we received yesterday --
Oh, I also just wanted to make sure I distributed two letters that went directly -- Councilwoman Blackwell, that went directly to Rick Sauer in response to a question raised. And then we also officially responded to a question that went to -- that Councilman Rizzo raised in correspondence. These letters were delivered to them yesterday, and these are just copies of the letters.
Okay. I saw the letter to Mr. Sauer; I did not see the letter to Councilman Rizzo.
I will read that shortly. 44 6/6/02 FINANCE - 020275, 020285 We received a package of responses through the Chair yesterday to questions that have been raised over the past few days. I just have a couple questions about those responses. Number 4 has to do with the debt service schedule for the first series of bonds as well as the projected debt service payment and draw-down schedule for FY '03. What was the amount of debt service set aside for FY '03 in the City's operating budget?
Am I reading this debt service schedule correctly that the debt service payment on June 30, 2003, which is the last day of the next fiscal year, is $10,938,306?
Then why did we set aside $20 million in debt service in the City's budget?
I believe at the time when they were putting together the budget, which actually, as you know, preceded the final authorization for the NTI bonds, they just based it 45 6/6/02 FINANCE - 020275, 020285 on the projection, you know, if everything was issued at one time.
Well, we always knew that we weren't going to issue all of the bonds at one time 'cause you can't spend it in three years, right? We always knew that, right?
What happens to the $10 million that will be in the debt service line item for NTI and you're only going to spend 10 and you have 10 left over. What happens to that?
As it occurs -- as it occurred last year, when we -- as it occurred last year, when they had also, I believe, budgeted for Fiscal Year '02 money to carry debt service in the event the bonds were issued, any reprogramming of it that would be submitted to Council was a part of an appropriation transfer ordinance. We -- within the Administration, we've been looking at the issues of costs, as I explained earlier, around wrap-up insurance and the related activities to NTI like lot-cleaning and -- not 46 6/6/02 FINANCE - 020275, 020285 lot-cleaning but lot enhancement. But we have not made, you know, really specifically reprogrammed or said we will use the dollars otherwise. But as you know, any change in that appropriation will be -- we would put together a budget, and it would be reviewed by Council.
Well, let me just make sure I'm understanding, though. I mean, in essence, there is $10 million extra in the debt service line item in the City's FY '03 budget, correct?
That is correct. And let me just -- there's one additional thing I just want to mention. We've always contemplated, as a part of FY 2003, seeking volume cap allocation and resources to fund approximately another $15 million to support particularly the land assembly activity and to fund things like the expanded HRP Program and the Philoan Program. Based on those projections, we anticipate we'll probably need -- if we get the State authorization to issue that type of bond, we project that we would need another about 1.25 million, depending upon where interest rates 47 6/6/02 FINANCE - 020275, 020285 are.
To service that debt. That would be like a third series, so to speak, but we haven't issued that series. In fact, we would be seeking allocation over the summer if we can get it. And then with the rest of it, it is the difference, there is a difference between what was budgeted in the budget and what we actually --
Do you expect the next offering -- what was the -- we received $143 million in proceeds, is that correct, from the offering?
What was the actual financing amount? We received $143 million in proceeds, correct?
Yeah, it was approximately 48 6/6/02 FINANCE - 020275, 020285 --
Okay. Are you anticipating the next offering -- I mean, we've talked about this now in the context of $295 million up from the 250 because of --
Well, we won't claim any credit for that, but that was the difference between doing something back in the spring and doing something this year.
No, I think it was particularly -- we had been working very closely with Fannie Mae who, as you know, is a major player in purchasing a bond --
And as a result of our work and relationships development with Fannie Mae, they came in, brought a sizeable portion of the issue, and brought it in such a way that it -- that basis 49 6/6/02 FINANCE - 020275, 020285 points below what would have been, you know, prevailing in the market.
Well, I understand. But the 295 figure, that discussion started last year when interest rates moved from the spring through the summer and into the fall because last spring, this was $250 million, and in the fall, it became 295, when it was crystal-clear that interest rates had moved such that $20 million in debt service would clearly support about the 295, close to $300 million.
We don't have to have an interest-rate argument. My question is: Are you anticipating the next offering to basically be the balance of 145 or 150?
No, we are not. The next offering that we are anticipating that we would like to seek is about 15 million, I would say, in private-activity bonds -- 50 6/6/02 FINANCE - 020275, 020285
The third offering would be -- again, it would depend. For example, depending on the rate of expenditures for governmental purpose bonds, we may go out for more governmental purpose bonds. If we need more money for acquisition activities, depending on the rate of expenditure, we would go for that. And we have to be, as you know, sensitive --
-- both types of financing have time limits. So we want to go where we sufficiently expect.
I understand. Let me ask you this question: Question No. 6, please include the neighborhoods north of 51 6/6/02 FINANCE - 020275, 020285 Market Street that would be affected by demolition activities. The response is, the Planning Commission will include the neighborhoods of Haddington, Carroll Park, and portions of Overbrook in the list of NTI-candidate planning areas.
Now, does that mean that they're going to be added to the list of 11 communities in 3 commercial corridors? 12
We have -- we didn't put it 16 in the form of an amendment, I have to admit. 17
We have the backup paper. 20 It's been a kind of tight timeline here. I'm 21 sorry. 22
I understand. 23 Was that list in the front of all of 24 these maps? 25
The overarching list, I 52 6/6/02 FINANCE - 020275, 020285 believe, is in the front of the attachment. But I just -- the papers that I handed to you restated it so it's in that.
Okay. So you're saying on this -- they're now added to this list here?
Would you mind having that as an amendment? What is that?
Yeah, it's an attachment. We will have to re-, you know, work the book to make sure that we get all the paper in.
Right. So you wouldn't mind if we -- 53 6/6/02 FINANCE - 020275, 020285
I understand you're doing your best. The answer to number 15, the encapsulations, can you tell me, were these all of the encapsulations from FY '02?
Yes. These were things that the City has been, through the Department of Licenses and Inspections -- has just sort of, like, was doing on a case-by-case basis. And those were the ones that were done in FY '02.
Do you have any idea -- I mean, some of these things make mention of where came from: They were on the Mayor's tour or they came from State Representatives or something. I mean, this is all over the place. I 54 6/6/02 FINANCE - 020275, 020285 mean, do you have any idea why this -- why the encapsulations are so scattered all over the place?
I think, again, it was, you know, looking at the issue of where you found a particular property that neighbors were particularly concerned about and --
Excuse me, if I may. To my colleagues, we're having a problem with some of our guests who cannot stay. We have managed -- and, Councilwoman Tasco, I particularly would like you to have you hear this, I ask members to hear this. This will determine whether or not we can report these bills out or whether or not we have to recess and come back. So I ask you to particularly listen to this. If the committee is willing for us to work out where the money comes from, Councilwoman, especially Councilwoman Tasco, we're prepared to try to include the monies that you allowed for. And then we can -- because we really have a time problem; we've got to go into session 'cause we're going to lose some of the guests who are being 55 6/6/02 FINANCE - 020275, 020285 honored today. If the committee is willing to do that, we can move forward, report the bills out, and then go on to Council.
Well, let's submit it now. If we're willing to do that; otherwise --
I don't think Councilman Nutter -- I can't speak for Councilman Nutter. I think we should recess, have Council, and come back and finish the discussion. I'm not sure whether he's finished or not and I have an amendment.
Then I will take this offer off the table then. If we can't do it that way, then this committee will be -- this hearing will be in recess until immediately following the City Council session. There is no offer on the table from me. Thank you. 56 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING - - - (Stated meeting convenes, then adjourns.) (Finance Committee meeting reconvenes.) - - -
Thank you. The Finance Committee is now called back into session. (Council President Verna strikes gavel.)
Thank you very much. Our hearing is resumed with regard to Community Development Block Grant bill No. 020275 and the NTI Bill 020285. There has been much discussion with regard to amendments. We believe that we are prepared to submit amendments with regard to the Community Development Block Grant hearing. And the Chair now calls on Councilman Nutter for the purpose of introducing an amendment 57 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING to this application.
Thank you, Madam Chair. Madam Chair, there is one amendment that incorporates two elements. The first is the amendment that we discussed earlier in the hearing that is related to the reporting requirements. We've heard testimony from Miss McCullough on that particular issue.
Councilman, has not this been circulated as well to all committee members?
It has, Madam Chair, but I need to put on the record that the amendment that I circulated earlier now has had material added to it. So there is only one amendment. Councilwoman Tasco has incorporated her proposed amendment that we discussed earlier into the earlier amendment that I have put forward and that the Administration has seen. I do not know if the Administration witnesses have seen what is now a combined amendment. So there is only one amendment, but new 58 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING language has been added to the earlier amendment. I know that sounds very confusing, but I know Councilmembers know what we're saying.
Councilman Nutter, have Councilmembers seen the amendment? I don't have a copy of it.
All the committee members have a copy of the amendment in front of them.
There's a point of order on the floor. Councilwoman Tasco?
My amendment was circulated earlier to the committee and to the Administration. We just incorporated it into the one amendment. So it's -- they have seen it.
We will now ask Miss Pat Smith or Scott Wilds, is there any discussion with regard to this amendment? And what do you assume the Administration's position is on this issue? 59 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING
Good morning. Scott Wilds, Deputy Director of Housing. This is the first time we've seen the combined language. However, we do need to get the block grant bill out today, and that is our first concern.
Point of clarification. So that we are clear, my amendment was circulated and given to the Administration prior to the recess. Councilman Nutter read his amendment prior to the recess. The only thing that has happened -- nothing has changed materially except that they were combined into one amendment.
Right. It's in the first paragraph at the start of Section -- 60 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING
Right, in the first paragraph, that language was given to you prior to the recess.
Madam Chair, if it's okay with you, Chairwoman Blackwell, the first order of business is the new amendment, and the only amendment is the document that reads at the top "Amendments to Bill No. 020275 Offered by Councilman Nutter and Councilwoman Tasco" and dated June 6, 2002. That is the amendment that is before us. Let me also put into the record that the intent of Councilwoman Tasco's portion of this amendment is that the line item for the Northwest Counseling Services and the Delaware Valley -- the Housing Association of Delaware Valley Counseling Service shall include $300,000 for each of the two organizations named, in addition to funding under that line item for other organizations, as shown in the Year 28 Consolidated Plan. That is the intention of that portion of the amendment, and we want to make that clear as to the legislative intent of the Councilmember 61 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING offering the amendment, and the action of the committee would then confirm what the legislative intent was. I wanted to add that to the record.
Is there any discussion from the Administration? Or would you like to dialogue with either Councilperson with regard to this amendment?
Is the Administration prepared to accept this amendment as submitted? I know there's been no time.
Our preference would remain not to change the funding amounts; however, we do recognize the import of getting the bill moved today.
Thank you, Madam 62 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING Chair. Good morning.
This morning we will be taking up a number of issues and amendments. And there is, obviously, some financial impact on what is being proposed by way of these amendments. In your opinion, does this influence, or will this influence, any of the other projects that are in the NTI Program going forward? For instance, Jefferson Square, as an example, which is in my district; do you see any adverse effect to that project as a result of some of the action we're proposing to take this morning?
I would not, Councilman, in that the resource being used for this additional counseling is an administrative cost.
Thank you. 63 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING
Yes. And this is directed either at the sponsor, Councilwoman Tasco, or the witnesses. Just -- I know that these awards of $300,000 in the amendment are more than what was being awarded in the original bill and less than these organizations got last year, the year we're currently in. But can you tell me, what is it coming down from, the 300,000? What --
I believe, Councilman, they were 350 or 355. The Administration originally offered today that they be at 265.
Thank you. Are there further questions? (No further questions.)
The Chair then will entertain Councilman Nutter -- well, I think, 64 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING then, that will conclude our public hearing. - - - 65 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING
We will now enter a stated meeting for Bill No. 020275, and the Chair recognizes Councilman Nutter for the purpose of an amendment.
Thank you, Madam Chair. Madam Chair, I move that the amendment, as circulated, which is dated June 6, 2002, offered by Councilwoman Tasco and myself, be adopted. (Duly seconded.)
It is moved and seconded that the amendment to Bill No. 020275 be adopted. All in favor? Opposed? The ayes have it and so the amendment has been adopted. The Chair recognizes Councilman O'Neill for purposes of reporting out Bill No. 200 [sic] with a suspension of the rules, as amended, to be considered on today's calendar.
Same one we've 66 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING been discussing, 020275.
Okay, I'm sorry. I misheard you; I thought you said "200."
I want to indicate it is now more than ten minutes after the President declared a five-minute recess.
Okay, and every time we mention that, it takes longer. Madam Chair, I move that Bill No. 15 020275 be reported out of this committee, as amended, with a favorable recommendation and a recommendation that the rules of Council be suspended so as to allow for first reading at our next session. (Duly seconded.)
All in favor? Those opposed? Therefore, Bill 020275, as amended, is reported out of this committee with a favorable recommendation, as amended, and a recommendation 67 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING that it be heard in our session of Council that we will resume shortly. With regard to Bill No. 020285, which is commonly called "the NTI bill," the hearing will be -- the committee hearing to discuss this further will be heard on Monday, June 10th, at a.m. We 8 will consider NTI -- the NTI -- we will consider 9 the NTI resolution on Monday, June 10th, at 11 a.m. 10 The Community Development Block Grant 11 application has been reported out of Finance Committee, but the -- one moment, please. (Councilman Nutter and chair Councilwoman Blackwell confer off the record.)
Councilman Nutter would like to make a statement, then we will conclude this hearing and meeting with CDBG and resume the public hearing on NTI on Monday, the 10th, at 11. Councilman Nutter?
Thank you, Madam Chair. Upon the advice of my good friend behind me, Miss Mason, I will be short. Madam Chair, I appreciate you trying to 68 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING find a date to resume hearings about NTI. I just need to mention two things. One, at the moment, I have no idea what I might be doing on Monday at o'clock, although 6 I might find myself in this room. But secondly, 7 and more importantly, there was previous testimony, 8 and I think Miss Smith, who is at the witness 9 table, would confirm that earlier in the hearing 10 today, there was discussion about a follow-up to 11 the meeting that was cancelled yesterday to have more discussion about some of the elements that I've raised with regard to NTI. My only concern about resuming on Monday -- and I recognize the importance of trying to move through this process -- is whether or not Miss Smith and other members of the Administration, including the Chief of Staff, would be able to meet in a timely fashion in order for us to have the kind of discussion that we need to have and any proposed amendments that may need to be put together prior to Monday at 11 a.m. So I'm only raising the question as to whether or not that is adequate time, quite honestly, for the Administration to respond to the 69 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING issues that have been raised since we've not had a fill and detailed discussion about these issues. I don't want to be in a position where we, as the Chair has indicated, where we need to move, we convene a hearing, we haven't had a discussion, and we're not be able to move forward on the particular issues because we have no idea of what the resolution might be. That's the only reason I'm raising that question.
Thank you. Miss Smith, will you be available to meet? As always, I certainly will be available myself to certainly address the concerns of Councilman Nutter before Monday at 11.
I'm available to meet, Councilwoman Blackwell. We do need to work through the Chief of Staff's Office, and I am not aware of her calendar. She's aware of the importance of this situation, but I just really can't commit with respect to her time; I just have no idea.
Madam Chair, would it possibly be better at the moment to either seek a slightly later date? I understand we need to get through next week in order to allow for that time. 70 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING Or if we're not able to do something by Monday, obviously, if the Chair comes to the hearing on that Monday at a.m. and recesses to another date 5 and time, we can conduct it that way. 6
I believe that 7 if that problem is an issue, that we will come to 8 the hearing and then delay it by a matter of hours 9 or a day. 10 And let me state that there was more, I 11 believe, than three weeks' time from the time we advertised the bill until we held public hearings to allow for us to meet with each and every Councilperson, and we tried to make ourselves available, tried to schedule times with each District Councilperson, and a time for those at-large so that we could discuss specific addresses and issues pertinent to each Councilmatic District. So for those who say it looks like we're rushed because of our deadline, we did try to do this certainly in a fashion that would permit all inclusion. However, it is the right of each Councilperson to ask any questions or to address any issues on the floor as he or she so desires, 71 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING and we respect their right to do that.
Madam Chair, I do appreciate that, and those opportunities certainly were proposed. It is, though, the common situation in the legislative process that issues do arise at a particular point in time once you're in the hearing process, and I would respectfully say, at least to the Administration people, the items that we are talking about are not new items; those items are probably a good nine to ten years old, and this discussion did not just start recently, whether it was subsequent to the introduction of this particular resolution. Many of these issues are of a long-standing nature, have been discussed in many, many meetings prior to these hearings even started. The unfortunate reality is that no proposal has been put forward to address these issues up to and including this morning.
Well, we will say that NTI isn't that old; NTI is a whole newer process and a framework through which we can consider these issues, and we are more than happy 72 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING to do so.
So if it is okay, Madam President, we -- again, the CDBG bill 6 has been reported out, and the NTI will be heard again on Monday, at 11. Thank you all for your patience. Madam President, the public hearing and public meeting for today of the Finance Committee are concluded. Thank you.
Thank you. We will now resume our Council session. Before doing so, we have recognized this morning several people, but I am absolutely delighted to recognize one of our own. I am pleased to announce that out of a pool of over 500 applicants, our colleague Councilwoman Marian Tasco is one of eight women who were selected as recipients of the 2002 Good Housekeeping Magazine Awards for Women in Government. (Applause.)
Nominated by ACORN, Councilwoman Tasco was selected for her 73 6/6/02 FINANCE COMMITTEE - PUBLIC MEETING efforts to lead the fight against predatory lending in Philadelphia and for her role in making the issue of predatory lending a major national public policy matter. This award is being given by Good Housekeeping Magazine, in conjunction with the Center for American Women in Politics. The winners were selected by a panel led by former United States representatives Geraldine Ferraro and Tillie Fowler. Councilwoman, we're extremely, extremely proud of you. Congratulations. (Applause.) - - - 74 CERTIFICATE I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia's meeting of the Committee on Finance of Thursday, June 6, 2002, are contained fully and accurately in the stenographic notes taken by me, and that this is a true and correct transcript of same. RE: Ordinance No. 020275, 020285 _______________________________, Josephine Cardillo Registered Professional Reporter and 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.)