COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON PUBLIC HEALTH AND HUMAN SERVICES - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, February 21, 2008 2:20 p.m. - - - PRESENT: COUNCILWOMAN MARIAN B. TASCO, CHAIR COUNCILMAN WILLIAM GREENLEE COUNCILMAN JAMES F. KENNEY COUNCILWOMAN MARIA QUINONES-SANCHEZ COUNCILMAN W. WILSON GOODE, JR. COUNCILWOMAN DONNA REED MILLER COUNCILMAN CURTIS JONES, JR. COUNCILMAN DARRELL CLARKE COUNCILWOMAN JANNIE BLACKWELL RESOLUTION 080139 - Resolution authorizing the Council Committee on Public Health and Human Services to hold hearings to investigate the City funding and operational changes of Philadelphia Safe and Sound and its impact on the delivery of social services in Philadelphia. - - - 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
Good afternoon. I see we are here this afternoon for a very spirited discussion. We welcome you all here this afternoon to the Committee on Public Health and Human Services to discuss Resolution No. 8 080139. We ask the Clerk to please read the resolution.
Resolution 12 authorizing the Council Committee on Public Health and Human Services to hold hearings to investigate the City funding and operational changes of Philadelphia Safe and Sound and its impact on the delivery of social services in Philadelphia.
Thank you very much. This hearing is based on a resolution. Some of our Councilmembers were here this morning for a hearing that lasted from 10:00 until about 15 minutes ago and will return, but let me recognize 3 2/21/08 - PUBLIC HEALTH - RES. 080139 that we have Councilwoman Maria Quinones-Sanchez, Councilman James Kenney, and Councilman Greenlee is here in his seat. As other Councilmembers come, we will recognize them, but also know that the Councilmembers can hear this testimony in their offices, over television and also over the intercom box. We thank you all for coming out this afternoon. We know this is a very serious matter for all of you, and we want you to know that we believe the children are Philadelphia's most impressionable and vulnerable population. Children are a segment of our society to which I have always stressed the importance of providing the best services for their growth and development. In this regard, we must take into careful consideration all decisions that impact their livelihood. To know that one child at any given moment is being neglected, taken for granted or 4 2/21/08 - PUBLIC HEALTH - RES. 080139 simply not challenged is not just troubling to me or the members of this Council, but it is detrimental to this entire City. It is especially disheartening to know that in the wake of unforeseeable economic times, we are left to question whether services, especially geared towards the health, safety and well-being of the City's children and youth, were allocated and managed in the best interest of children. Today, in this context, the Committee on Public Health and Human Services is holding this hearing to investigate City funding and operational changes of Philadelphia Safe and Sound and its impact on the delivery of social services in Philadelphia. Further, we will examine how funding was allocated, reduced or eliminated to various social service providers in the areas of truancy, after-school and parenting programs by Philadelphia Safe and Sound. As the City's principal 5 2/21/08 - PUBLIC HEALTH - RES. 080139 oversight body, it is City Council's duty to investigate the total scope and nature of this issue and to take any action necessary to ensure that City funds which are being used to provide services to our children are being used in a sound operational and fiscally responsible manner. From this perspective, we take our oversight role seriously, and we will always endeavor to make sure that the best interests of our children are protected and efforts to provide for our children are delivered in the most efficient way possible. That is just a brief statement. We're here today to look at the operational aspect of Safe and Sound. We're not here to point fingers or to embarrass anyone. It's really to have a fact-finding discussion about the program as it exists and hopefully, if it is continued, how is the best way to make the services better for all that receive 6 2/21/08 - PUBLIC HEALTH - RES. 080139 services from that program. So to that end, I open the floor for comments from any members of the Council. Let me recognize Councilman Goode, who has joined us this afternoon. The first witness today -- and we're going to take them in panels, and we hope that you all will make your testimony brief. We know all of you run great programs, none like it in the world. We don't want you to tell us that all day. We want you to tell us that in a couple of minutes, how great you are and the services you do provide to the citizens and to the children of the City of Philadelphia, but we hope you will be brief in your testimony. We will call on the agencies first so that we can get a sense from them of what's going on, what will hopefully happen in the future, and then we'll have the providers come forth and make their presentations. 7 2/21/08 - PUBLIC HEALTH - RES.
080139 The Chair calls on Arthur Evans, Acting Commissioner of the Department of Human Services; Richard Gold of the Office of Children, Youth and Families of the Department of Public Welfare. And we see that Donnie Schwarz is here, who is our new Health Commissioner, but you have a more extensive title. )
Would you state your name for the record, please, and proceed with your testimony.
I'm Dr. Arthur C. , Acting Commissioner for the Department of Human Services and Director of the Department of Behavioral Health and Mental Retardation Services, and I am here to present testimony pursuant to 8 2/21/08 - PUBLIC HEALTH - RES. 080139 Resolution 080139, which authorizes this Committee to hold hearings to investigate the City funding and operational changes of Philadelphia Safe and Sound and its impact on the delivery of social services in Philadelphia. On February 1, 2008, Philadelphia Safe and Sound sent letters to providers notifying them of funding reductions effective March 1, 2008. The Administration appreciates this opportunity to provide you with our understanding of the background of this action taken by Safe and Sound. In early 2006, the City Department of Human Services submitted the City's FY08 Needs-Based Budget to the Commonwealth of Pennsylvania's Department of Public Welfare. This proposal included an increase in funding for prevention programming for children and youth by almost $264 million over the FY2007 Needs-Based Budget. In its February 14, 2007 9 2/21/08 - PUBLIC HEALTH - RES. 080139 response to this proposal, the Department of Public Welfare stated, and I quote, "The adjustment is denied based on the request not being supported by data provided nor evidence-based documentation. The Department will only participate in expenditures or activities which are necessary and justifiable for program operation," unquote. This was followed on April 30, 2007 by a revised letter regarding Philadelphia's state allocation for the Needs-Based Budget, which included no 15 dollars for the Violence Prevention Initiative. Then in June 2007, the PICA Board refused to accept the increase in the overall DHS budget that included at this time about $70 million of new spending on prevention services. In response to this, Mayor Street reduced the amount budgeted for prevention services. As Council is aware, throughout 10 2/21/08 - PUBLIC HEALTH - RES. 080139 the spring of last year, the Street Administration and City Council discussed the appropriate amount of support for Philadelphia Safe and Sound, ultimately leading Council to approve the FY2008 DHS budget with $54 million for Philadelphia Safe and Sound programs on June 22, 2007, in keeping with DPW and PICA's direction. This represented a ten percent increase from the FY07 budget, a 59 percent increase over the FY06 budget and a 125 percent increase over the FY05 budget. In July 2007, Mayor Street directed DHS to increase Philadelphia Safe and Sound's budget to $75 million, $21 million more than the amount the City and State approved in its budgets and $21 million more than the City's approved Five-Year Plan. An award letter was sent to Philadelphia Safe and Sound at that time and was followed by an executed City contract on August 6, 2007. On July 3rd, I was directed by Mayor Street to write to DPW Secretary 11 2/21/08 - PUBLIC HEALTH - RES. 080139 Richman to notify her that the City had appealed DPW's rejection of the funding of violence prevention programs. On August 21, 2008 (sic), Secretary Richman responded, and I quote, "DPW does not have and will not approve the use of state funds for reimbursement of these services. Therefore, if the City is proceeding with these expanded or new services, please be aware that there are no allocated state funds for reimbursement of these services," unquote. On August 27, 2007, the FY2008 Target Budget was submitted. 9 million in General Fund dollars for Philadelphia Safe and Sound. During this period, at the direction of the Administration, Safe and Sound sent award letters totalling $18 million for after-school programs and an additional $18 million for Beacon programs and issued a request for proposals from providers for additional after-school 12 2/21/08 - PUBLIC HEALTH - RES. 080139 programming, with an implementation date of September 2007. 8 million for five more Beacon programs.
At the same time, on October 4th, the Administration requested a $34 million transfer ordinance for the Department of Human Services, including an additional $21 million for Safe and Sound. This ordinance was never introduced. On November 29, 2007, the Administration resubmitted the transfer ordinances, including the $21 million for Philadelphia Safe and Sound, and again, the transfer ordinances were not introduced in Council. With it clear that no action was to be taken by Council on transfer ordinances, the City Budget Office did not allow further expenditures for Safe and Sound without a source of funds. As a result, on December 18, 2007, Mayor 13 2/21/08 - PUBLIC HEALTH - RES. 080139 Street directed DHS to send suspension notices to 200 foster care, emergency shelter and other youth services providers indicating that their contracts for FY08 would end on April 30, 2008, two months before the end of the fiscal year, in order to eliminate the $34 million deficit in the DHS budget. On January 7, 2008, the Nutter Administration took office and began to address the need to restore the funding in these programs. At the same time, Philadelphia Safe and Sound indicated that it had already made commitments for $9 million of the additional $21 million that the Administration had sought. Many of the programs above the budgeted $54 million had been newly established. Safe and Sound was directed by DHS to produce a plan to reduce its expenditures for the fiscal year to the budgeted $54 million level. At the same time, the 14 2/21/08 - PUBLIC HEALTH - RES. 080139 Commonwealth notified the Nutter Administration of its intent to audit the finances and programs of Safe and Sound in order to provide clean and reliable information on Safe and Sound's operation during the past two years. This review is scheduled to be completed within the next six weeks. On February 1, 2008, letters were prepared and mailed by Safe and Sound. Members of the Nutter Administration met with City Council, the press and providers to let them know about the intended reductions in excess capacity in order to bring the budget for Safe and Sound back in line with the Council-approved budget. Within days, it became apparent to us that we could not be assured that based on the data that we had from Safe and Sound that children's access to after-school programs would be preserved. Additionally, several members of City Council helped us to understand some of 15 2/21/08 - PUBLIC HEALTH - RES. 080139 the after-school programs, as they served unique populations like language minority children or children from neighborhoods where it wasn't safe to travel even a few blocks from a different program. We also believe that the programmatic cuts made by Safe and Sound did not include what we felt were adequate savings in the administrative expenses. As we could not be assured that children's interests were being adequately protected in the process, we have directed Safe and Sound to stop all cuts to after-school programs, preserving after-school both in general and in Beacon schools. We have also asked that the AVRP program, curfew centers and the FAST programs be preserved. We have discussed this approach with Safe and Sound and believe that with their own economizing this can be done within a budget of $58 million. The excess of $4 million would be made up through eliminating plan spending on new 16 2/21/08 - PUBLIC HEALTH - RES. 080139 prevention activities within DHS per the original budget passed by Council in June of 2007. Continued funding for other Safe and Sound programs will come from savings within Philadelphia Safe and Sound's budget, particularly their administrative costs.
If the Administration is satisfied with Safe and Sound -- if the Administration is satisfied that Safe and Sound has made the reductions and additional funds remain necessary to operate after-school programs and other targeted programs, the Administration will work with Council to locate additional funding to ensure the continuation of these programs. I thank you for this opportunity to testify, and this concludes my testimony, and I'd be pleased to answer any questions that you might have.
Thank you very much. 17 2/21/08 - PUBLIC HEALTH - RES. 080139 Is there anyone else going to testify or they're here for support? Mr. Gold, are you going to testify?
Yes. Good afternoon, Councilwoman Tasco and members of City Council's Committee on Public Health and Human Services. My name is Richard Gold. I'm the Deputy Secretary for the Pennsylvania Department of Public Welfare's Office of Children, Youth and Families. This office is responsible for licensing and supervising all county children and youth agencies, including the Philadelphia Department of Human Services, and allocating and monitoring the state funds for prevention services through the state statutory annual Needs-Based Budget process. I'm here to present testimony on Resolution No. 21 080139, which authorizes this Committee to hold hearings to investigate the City funding and operational changes of Philadelphia Safe and Sound and its impact on the delivery of social services 18 2/21/08 - PUBLIC HEALTH - RES. 080139 in Philadelphia. I am here on behalf of Pennsylvania Department of Public Welfare Secretary Estelle Richman, who could not attend this hearing due to a scheduling conflict and meetings in western Pennsylvania that could not be rescheduled. In conjunction with the Nutter Administration, the Department of Public Welfare agreed to conduct a program evaluation of Philadelphia Safe and Sound. Yesterday, February 20th, I held the initial meeting at Philadelphia Safe and Sound to introduce the Department's contractor, Public Financial Management, which will perform this intensive, comprehensive and expedited program evaluation of the non-profit corporation. The scope of the program evaluation includes, but is not limited to, the following broad categories of review: First, a review of the programmatic and fiscal management of Philadelphia Safe and Sound for the last 19 2/21/08 - PUBLIC HEALTH - RES. 080139 two fiscal years, as well as the current fiscal year. The program evaluation will assess the effectiveness of the current array of programs and services being provided by Safe and Sound. It will document all program and administrative expenditures. Furthermore, the evaluation will establish the actual and expected utilization of the social services and programs and the capacity of each service and program. Second, the comprehensive program evaluation will review Philadelphia Safe and Sound's program procurement process and its management of all of its subcontracts. This will include reviewing all written agreements between Safe and Sound and its subcontracted-provided agencies to ensure that the written agreements clearly establish the delivery of the requested services in the most efficient and effective financial manner. The program review will study Philadelphia Safe and 20 2/21/08 - PUBLIC HEALTH - RES. 080139 Sound's standards and practices for selecting and reimbursing such subcontractors and assure that such practices are in compliance, if not in the letter of the City of Philadelphia's contract reform policies, but in the spirit. DPW will also determine Safe and Sound's capacity to monitor the programmatic and fiscal compliance by its subcontractors. This will include a review of the existence and usage of Safe and Sound's internal financial controls. Last, the program evaluation will establish Philadelphia Safe and Sound's overhead and administrative allocations to determine the reasonableness of such costs in light of today's industry standards. Third, the evaluation will review Philadelphia Safe and Sound's planning and program management procedures and methodologies to determine program and service priorities. This 21 2/21/08 - PUBLIC HEALTH - RES. 080139 will include the review of demographic information about children and youth receiving services through Safe and Sound and compare such information with the Philadelphia Department of Human Services' child abuse, child neglect and juvenile justice indicators and prevalence.
This will ensure that the programs selected by Safe and Sound are in sync with the highest areas of child abuse, child neglect and juvenile crime and that the funds are being used to effectuate the greatest impact for the safety, permanence and well-being of children, youth and families in Philadelphia. In addition, DPW will review the planning, management and decision-making process of Philadelphia Safe and Sound's management and staff and the involvement of its Board of Directors in the agency's policy development, oversight of subcontractors, and fundraising efforts and success. 22 2/21/08 - PUBLIC HEALTH - RES. 080139 Last, the program evaluation shall examine Philadelphia Safe and Sound's program performance evaluation capacity, targeting the agency's performance and the effectiveness of its programs. Thank you very much for the opportunity to testify. This concludes my testimony, and I'm available for any questions.
Thank you very much. Is there anyone else to testify? (No response.)
Dr. Evans, in your testimony on at the top, "During the period, at the direction of the Street Administration, Safe and Sound sent award letters totalling $18 million for after-school programs and an additional $18 million for Beacon programs." Would this be for new Beacon 23 2/21/08 - PUBLIC HEALTH - RES. 080139 programs?
Again, at the bottom, the last paragraph, you talk about DHS, "as a result, on December 18, 2007, Mayor Street directed DHS to send suspension notices to 200 foster care, emergency shelter." Now, these are contracts that the Department of Human Services have with the provider?
So these are not programs that are run by Safe and Sound?
So he was asking you to send suspension notices to programs that are funded by DHS?
The budget had been approved for these services for 2008, right?
Did you have any discussion with him about whether these notices should be sent?
Well, the strategy that the Administration took at the end, in my testimony I talk about the Administration making attempts to acquire the additional dollars for not only the prevention programs that were within Safe and Sound, but there were other things 25 2/21/08 - PUBLIC HEALTH - RES. 080139 that the Administration was trying to pursue through the $34 million transfer ordinance. When that did not happen, it left the Department with a large deficit, $34 million, because this spending had already begun to happen within Philadelphia Safe and Sound. The Administration was then faced with two choices since it did not have the appropriation at that point, and what the Administration -- one solution was to cut programs. The other was to do what the Administration did, which was to essentially suspend the last two months of those contracts, which would bring the agency's budget back into line. No one believed at that point that those programs would not be funded through the end of the year. It was a matter of how they would be funded. And the current Administration came in and relatively quickly began addressing that issue, and the way that the current Administration approached that was to 2/21/08 - PUBLIC HEALTH - RES. 080139 look at where the increase spending was, which was in Philadelphia Safe and Sound's budget. We directed them to reduce their budget, and as a result, that has brought us here today in terms of the decisions that were made about how those reductions should happen.
You weren't there a long period of time, so could you -- maybe you know this answer, maybe you don't. How much of the DHS budget for services for foster care, emergency shelter and other services were diverted to Safe and Sound?
Well, no dollars were actually diverted. Again, the suspension letters essentially were an accounting strategy. The theory is this: If you have $100 million that you're going to spend over a year and -- well, let's make it easy for easy math. Say $12 million, and you're spending a million dollars a month. Essentially what happened was, the Administration 27 2/21/08 - PUBLIC HEALTH - RES. 080139 said, Okay, we don't have $12 million, because two million of that is in prevention. So what we're going to do is to change the contracts so that those providers who have the million 7 contracts would now only have $10 million 8 contracts, which would bring the budget 9 back into line. But no dollars were ever 10 moved from child protection services to 11 prevention services. It was only an 12 accounting strategy.
Let me recognize Councilwoman Donna Reed Miller who has joined us, and the Chair recognizes Councilwoman Maria Sanchez.
Let me understand the sequence of events. What you're saying is when we made a strategic decision to suspend contracts, how were those providers going to cover those two months?
The providers were going -- it was known at the time that the City did not have the money for the 28 2/21/08 - PUBLIC HEALTH - RES. 080139 additional expenditures in prevention and the only way -- there were only two ways that you could pay for those expenditures, either get more money or make cuts elsewhere. The Administration tried to get more money through the transfer ordinance and then appealed that to the State. When that didn't work, essentially what the Administration did was to cut the current contracts, understanding that the next Administration would have to deal with the issue of the last two months of those contracts.
That action then leads us to being legally in non-compliance with providing services to some kids that we're legally responsible for; did it not?
My question is, we did that, understanding 29 2/21/08 - PUBLIC HEALTH - RES. 080139 that we would be in non-compliance legally. That's what I want to know.
What is the contractual process between DHS -- you have to forgive me. I'm really trying to deal with this flu, so I'm a little kind of groggy today. I don't feel good -- with Safe and Sound?
What is the contractual process between DHS and Safe and Sound?
Well, I guess I'm asking the question. They were told they were going to get $21 million. They proceeded to spend the money, but did you have a signed contract with them?
We did have a conformed contract with them. A letter 30 2/21/08 - PUBLIC HEALTH - RES. 080139 was first sent increasing their budget to $75 million and then their contract was amended to $75 million, approximately.
Mr. Gold, now, you're here from the Department of Public Welfare and you're responsible for licensing and supervising all county children and youth agencies, including Department of Human Services and blah, blah, blah. Let me ask you a question now that you're going to do this -- is this going to be an audit?
It is not, Councilwoman. It's more extensive than an audit. It's an entire program evaluation. So it will include both the monetary review as well as the programs.
Would you have done this without this issue being raised about the contract, no contract, the funding and the lack of funding or the request from Mayor Nutter? What is your oversight role here?
Our oversight role 31 2/21/08 - PUBLIC HEALTH - RES. 080139 is twofold. Number one, we oversee the Department of Human Services, and, second, approximately 90 percent of all prevention service funding comes from the state. So in a contract of $50 million, about 90 percent of that is state funds that go to the Department of Human Services and then to a provider. So we have a great interest in making sure that our money is being spent in an appropriate and effective manner.
Have you done an evaluation of this program in the past?
So now we're going to do a comprehensive evaluation and you're going to evaluate all the programs that's being funded by Safe and Sound?
Initially we expect 32 2/21/08 - PUBLIC HEALTH - RES. 080139 to have our initial findings by March 19th. So we're expecting our contractor, Public Financial Management, to be in Safe and Sound by tomorrow with a list of information that they've already prepared and start reviewing the information as soon as possible, recognizing the urgent nature of the problem.
Given the number of programs that are funded by Safe and Sound, how do you plan to interview or evaluate all of those programs by March 19th?
That's the reason, Councilwoman, that we've employed a contractor to do it. They have the staff that's necessary, and the State is going to pay for the evaluation.
DPW in cooperation 33 2/21/08 - PUBLIC HEALTH - RES. 080139 with the City.
I again ask you at what point in this program's operation would you have done an extensive evaluation to see if DPW's money was being well spent?
Whenever money is being taken from placement services for children already in the custody and control of the City of Philadelphia to be spent on prevention services, that raised great concern for the Department.
Especially since right now the Department of Human Services is on its second provisional license.
1997? And this is ten years later, and you haven't 34 2/21/08 - PUBLIC HEALTH - RES. 080139 done any evaluation of the program?
Thank you, Madam Chair. Mr. Gold, the City made an additional request for social service funding; is that correct?
And was it known to the State that that money was for Safe and Sound, part or most of it?
And so the State made a decision not to fund City Council at that level -- fund --
Yes, Councilman. We made that decision in both Fiscal Year '06, '07 and for next year.
And the 35 2/21/08 - PUBLIC HEALTH - RES. 080139 State was aware of the City's actions in terms of moving forward with the contract for Safe and Sound?
So the State was fully aware that the City was intending to spend an additional $21 million, allowed the City to go into contract with Safe and Sound and then consider it to be a crisis later on?
No, Councilman, we did not approve that. If anything, we said that they should not and that they can't use state funds to fund that.
My question was, were you aware of the process as it was taking place?
And so it was not actually a crisis that caused you to do an analysis, because, in essence, it wasn't a crisis. You watched all this unfold, and while it may be the City made 36 2/21/08 - PUBLIC HEALTH - RES. 080139 a decision that you did not agree with, as you said, you have a responsibility as a monitoring entity to be involved in the total process. So it appears to probably some members of the Committee as well as the public that what happened is that the State may be justifying its decision not to give the City more money for social service funding by actually deciding to do this first-time analysis.
So at any point at which you were tracking this process, knowing the City wanted to spend this extra money, knowing the City was going to contract with Safe and Sound for this extra money, you did not intervene at that point and decide that it needed to be reviewed at that point, did you?
That's kind of curious to us. 37 2/21/08 - PUBLIC HEALTH - RES. 080139 Dr. Evans, this is a no-bid contract?
And so through the new procedures, it had to be posted?
No. Well, the City has been contracting with Safe and Sound for several years, actually before I even came to Philadelphia. What happened last year was that that contract, as with many social services contracts, was continued, and as I testified earlier, the last Administration increased that contract by an additional $21 million.
So this no-bid contract was not posted? 38 2/21/08 - PUBLIC HEALTH - RES. 080139
That's correct, and I don't think that at the time it was required to be posted.
So there was no competition or no other providers considered?
At what point did Safe and Sound, if ever, decide they needed more than $54 million?
Safe and Sound didn't make that decision. The Administration decided that it wanted to do more in terms of after-school programs, youth violence programs, and the Administration pursued -- attempted to pursue additional funding that would have gone to Safe and Sound for those activities.
So it was the Administration's decision to change the contract?
Just to clarify what the Councilman was asking, at no point when we issued a letter to our providers that we were going to stop their funding to ten years, which triggered a non-compliance, according to Dr. Evans, at no point was the State involved in that at that point? Because we were in non-compliance.
It triggered extensive discussions with the Department of Human Services beginning in November, late November.
Did the State at any point correspond with the City and say, You're in non-compliance legal? I mean, we were already on 40 2/21/08 - PUBLIC HEALTH - RES. 080139 provisional licensing as it was, so we were already kind of on people's radars.
We have approximately weekly meetings between my office and Human Services, so that it was a topic of conversation between the two governmental bodies almost on a weekly basis.
That the unilateral decision to take money from existing contracts for placement services to start new programs elsewhere was unacceptable.
And that at any point did the State correspond with the City formally and advise them that we were in non-compliance?
Again, due to the frequency of these discussions, it's a work in progress. 41 2/21/08 - PUBLIC HEALTH - RES. 080139
DHS's budget is $870 million, of which the State funds --
Ninety percent of in-home services. It's a different formula for each type of service.
How much of DHS's budget is state budget, pass-through money? How much of DHS's budget is state money?
So you have oversight of $400 million in the department that's on a provisional license. They trigger a legal non-compliance and you resolve it through conversations, and at no point --
The legal non-compliance would really be between Philadelphia DHS and Safe and Sound, not 42 2/21/08 - PUBLIC HEALTH - RES. 080139 Philadelphia and the Department of Human Services.
Our position was, regardless of the letters, funding had to continue in May and June for those services.
At the end of the day, when your evaluation is completed, what are you looking for in terms of outcome?
We have asked the Public Financial Management to give us their recommendations as to the strengths and weaknesses of the agency to make sure that our funds are being spent accordingly. We expect that report to be public information and shared, obviously, 43 2/21/08 - PUBLIC HEALTH - RES. 080139 with the City, as well as the general public.
At the end of the day, when the evaluation of the various programs is completed and programs may be recommended to be suspended, how does an agency appeal that decision?
Our communication would be with the City. We have no 12 contractual relationship with Safe and Sound.
So the evaluation is done and what happens to the evaluation?
We share that with the City and we work with the City to hopefully implement the recommendations of the evaluation.
The program is ten years old and you've never done an evaluation. What do you plan to do in the future?
Councilwoman Tasco, 44 2/21/08 - PUBLIC HEALTH - RES. 080139 Safe and Sound is not a licensed agency that we go -- for foster care agencies and other types of placement agencies, the Office of Children and Youth on an annual basis reviews and inspects that agency according to our regulations. With the programs monitored and operated under Safe and Sound, it's not licensed by the Office of Children, Youth and Families. So our ability to either give a full license or provisional license doesn't exist. Our relationship is with the City's Department of Human Services as to how our funds are being expended and whether or not our funds are properly being spent for the safety, well-being and permanence of the children of Philadelphia.
So why do you do an evaluation and not the Department of Human Services?
That decision was made between the State and the City that we would contract and pay for that 45 2/21/08 - PUBLIC HEALTH - RES. 080139 evaluation.
It seems to me that a more independent audit would be better.
We have a great deal of confidence in the integrity of the Public Financial Management.
I'm not questioning Public Financial Management. I know them. It's just that the jurisdiction of who is doing the evaluation or who is asking for the evaluation seems to be -- might have been better by DHS to do that. Any other questions? Councilwoman Miller.
My question concerns the status of the contracts and award letters of those 46 2/21/08 - PUBLIC HEALTH - RES. 080139 agencies that were originally cut and services restored, and I know that some of the first information that we heard said that those agencies did not have -- like some of the after-school programs did not have an award letter, did not have a contract. Do they have those now or will they be getting them? What's going to happen with that?
They should get them. I know that the Director of Safe and Sound, the CEO, is going to testify later on, and she would know precisely what the status of that is right now.
Because that seemed to be somewhat of a high level of concern and I just didn't want the lack of a contract, the lack of an award letter to spur the not funding of those services again.
The Administration has made a very strong commitment and made it very clear that it is important to maintain the funding for those 47 2/21/08 - PUBLIC HEALTH - RES. 080139 services. So to the degree that providers don't have that in concrete terms, a letter or contract, we will make sure that they do.
All right. Good. And I, too, just had a question about why the State was going to be the evaluator of an agency. I think Safe and Sound is a non-profit, correct?
That's contracted with the City. So I would actually think, too, that the City would be the evaluator and not the State, but however. If you're paying for it, since they say we don't have any money, that's great, as long as it gets done. Okay. Thank you.
I'm going to say this with caution, and my information may not be correct, but the 48 2/21/08 - PUBLIC HEALTH - RES. 080139 Executive Director of Safe and Sound is a former employee of the Department of Welfare?
Anne Shenberger was the Regional Director for the Southeast Regional Office of Children, Youth and Families.
Councilwoman Tasco, I wanted to just make real clear along Councilwoman Sanchez's comments about non-compliance, at no time did the Department not fund mandated services. At no time was there ever intent not to fund those services. And the suspension letter that was drafted was drafted by the City's Law Department. So while it 49 2/21/08 - PUBLIC HEALTH - RES. 080139 may appear from the letter that there was a potential for that to happen, I can tell you that that just could not have happened. A lot of the services were things like residential services where children were in residence, and so there was no realistic threat that those services wouldn't have been funded, certainly not on my watch.
Thank you very much. And my last comment was not to cast any dispersion on Ms. Shenberger. She's a fine lady. It's just that we have to let people know that there's a lot of connections here with this whole situation and probably the lack of oversight goes back to those relationships.
The next panel will be Ms. Anne Shenberger and 50 2/21/08 - PUBLIC HEALTH - RES. 080139 Ernest Jones. (Witnesses approached witness table.)
Good afternoon, Madam Chairwoman. Please forgive my voice. I am fighting a cold.
This hearing was very important, so I struggled out today to be here, and I thank all of you who have been suffering from whatever is going around in the City to come out today to participate in the hearing. I'm not my feisty self because I'm sick. So now, Mr. Jones, would you like to -- are you going to testify first?
I am going to 51 2/21/08 - PUBLIC HEALTH - RES. 080139 testify first, followed by Anne Shenberger.
And let me begin by again saying good afternoon to you, Madam Chairwoman and the other members of City Council who are here today. My name is Ernest Jones and I am the Chairman of the Board of Philadelphia Safe and Sound, which is a volunteer position and it's a position I've held since the year 2000. Seated to my left is Anne Shenberger, President and CEO of Safe and Sound, and Anne was hired in January of 2006. Thank you for the opportunity to appear before you today. A cutback in program funding that has been very troubling for all concerned was the immediate situation that triggered this hearing, but we also know that there are ongoing questions and even misconceptions about Philadelphia Safe and Sound that we are eager to 52 2/21/08 - PUBLIC HEALTH - RES. 080139 answer. Our organization is not perfect. We are open to fair criticism and suggestions for improvements. We know that we must be accountable to our many stakeholders, state and local taxpayers, elected officials, service providers and the children and families who depend on us. We also believe that we have built a strong record of quality performance that deserves to be better known. So we appreciate the opportunity to provide information today to let the sun shine in and ultimately to turn our collective attention to what matters most: The well-being of Philadelphia's children and youth. Because I have been with Safe and Sound almost from the start, I would like to begin with some history about our organization. I believe that is helpful to know where we've come from so we can assess our performance and determine the directions in which we should go. 53 2/21/08 - PUBLIC HEALTH - RES. 080139 Safe and Sound was launched in 1997 with a multi-year Urban Health Initiative grant from the prestigious Robert Wood Johnson Foundation. Philadelphia competed for this grant by responding to Robert Wood Johnson's invitation to cities across the country to explore the possibilities of developing an initiative to create programs and take actions to foster the health, safety and well-being of the City's children. Mayor Rendell's Administration, led by Health Commissioner Estelle Richman, now Secretary of the Department of Public Welfare, and Human Services Commissioner Joan Reeves convened a diverse group of community leaders to develop ideas and plans for the new initiative. The result was a winning proposal, selected as one of only five in the nation, to establish Philadelphia Safe and Sound. The initiative was not established as a separate organization. 54 2/21/08 - PUBLIC HEALTH - RES. 080139 Rather, it was set up under the oversight of Philadelphia City government, and the City was the actual grant recipient. The original intent of Philadelphia Safe and Sound, therefore, was and remains to operate as a partner to local government, applying its independent capabilities and expertise to improve systems and services aimed at strengthening the health and welfare of our City's children. In 2000, Safe and Sound obtained its separate 501(c)(3) non-profit certification from the Internal Revenue Service. At that time, the Board of Directors was formed, and we were fortunate to have a knowledgeable, committed and representative group from both business and the non-profit arena willing and able to set the policies and guide the organization's direction and growth. Nearly half of our current Board members were recruited since Ms. Shenberger became CEO. And if you will indulge me, I'd 55 2/21/08 - PUBLIC HEALTH - RES. 080139 like to read the names of our Board members. They include the Honorable Lillian Harrison Ransom, who is a judge of the Court of Common Pleas; Patricia DeCarlo, who is Executive Director of Norris Square; Michael Karp, who is President of University City Housing; David Allen, who is an Assistant Professor at St.
Joseph's University; John Chin, who is Executive Director of the Philadelphia Chinatown Development Corporation; Walter Clayton, who is President of Garner Holdings Company; Paul DiLorenzo, who has extensive experience with child welfare issues, currently works for the Casey Family Services; Robert Listenbee, who is the Chief of the Juvenile Unit at the Public Defender's Office; Edward McBride from Local 98 of the International Brotherhood of Electrical Workers; Tom McKenna, who works at the University of Pennsylvania; Bernadette Mulligan, who is Director of Community Relations at AmeriChoice of 56 2/21/08 - PUBLIC HEALTH - RES. 080139 Pennsylvania; Jan Shaeffer, who is Executive Director of St. Joseph's Fund for Children; and Michael Pearson, who is the CEO at Union Packing Company; Lorraine Ballard Morrill, who is a News and Community Affairs Director at Clear Channel; Vincent Thompson, a former reporter and someone who worked with Councilman Ramos; and Leonard Caldwell, who is a former CoreStates Executive. We remain interested in adding leaders who will further strengthen our complement and broaden our skills and perspective. Similarly, Safe and Sound has benefited from qualified professional staff. The initial search committee under Mayor Rendell selected Naomi Post Street, an experienced attorney and child advocate, to head Safe and Sound. We all know that this selection created a public cloud and political legacy for Safe and Sound. Nevertheless, under Mrs. Street's leadership, Safe and Sound got off to a 57 2/21/08 - PUBLIC HEALTH - RES. 080139 good start, developing its signature research products, the Children's Report Card and the Children's Budget, conducting a corporate fundraising campaign and collaborating with City government and other agencies to launch valuable programs, including after-school and Beacon centers and the Youth Violence Reduction Partnership. The Robert Wood Johnson Foundation followed its initial four-year grant with another financial commitment, signaling its satisfaction and confidence in the performance of Safe and Sound. Naomi Post Street left Philadelphia Safe and Sound six years ago, in 2002. Today's leadership team headed by Anne Shenberger, a 30-year veteran of child advocacy and social service management with the Pennsylvania Department of Public Welfare, has the experience and skills needed to run a top-notch organization. It is time to recognize a new day at Philadelphia Safe 58 2/21/08 - PUBLIC HEALTH - RES. 080139 and Sound. The Board of Safe and Sound takes its fiduciary responsibilities very seriously. Our numbers are closely reviewed by the City and over the years our auditor, Mitchell and Titus, has issued clean audits, including the most recent one. Those audits are available to the Committee and we'll make those available if you wish to see them. Safe and Sound is continually reviewing its policies and practices to foster responsive and responsible financial management. We understand that the Commonwealth's Department of Public Welfare intends to conduct a new audit and the City Administration will be sending in an assessment team. We welcome both. Our financial affairs are conducted with competence, candor and communication between the Board and staff. We operate in a complex and often uncertain financial atmosphere inherent 59 2/21/08 - PUBLIC HEALTH - RES. 080139 in the public sector budget process. Safe and Sound must adhere to the priorities and processes of each City Administration, balancing them with the capacity of the organization to deliver what is required of us. The $21 million budget addition that brings us here today was one of those difficult and complex situations. It is important to set the record straight as to precisely what transpired, not to blame others or absolve Safe and Sound, but to help you understand the dynamics of the past several months and possibly suggest procedures that could avoid future occurrences.
For over a year now, Safe and Sound has been dealing with the conflicts and consequences brought about by the previous Administration's directive to gear up for a significant expansion of anti-truancy and violence prevention programs in FY08. These priorities were well publicized. Even though the State 60 2/21/08 - PUBLIC HEALTH - RES. 080139 Department of Public Welfare denied the City's request for increased funds to support these services, in August of last year, Safe and Sound was provided with a signed, fully authorized contract for $75 million, incorporating the $21 million increase and, therefore, was obligated to begin fulfilling the requirements of the budget of that contract. In October, when City Council did not act on a transfer ordinance to appropriate the additional dollars, Safe and Sound issued a letter to its providers advising them of the budget situation and suggesting that they evaluate expenditures and possible actions to be taken. Safe and Sound put a hold on filling budgeted positions. Through December, Safe and Sound submitted multiple revised budgets and contingency scenarios to accommodate the actual amount of available funds, the lower amount, but the City Administration did not accept them and instead 61 2/21/08 - PUBLIC HEALTH - RES. 080139 instructed Safe and Sound not to curtail programs or lay off staff. Although Mayor Nutter has now announced his intention to reinstate the programs, Anne will describe in more detail the steps that Safe and Sound took to identify, recommend and implement program and administrative cuts since being informed last month that the additional monies would not be forthcoming. We are well aware that the new Mayor and City Council were put in a very difficult situation, squeezed between raised expectations and insufficient funds. Our community providers, Safe and Sound itself and, most important, the children and families we serve were caught in this squeeze as well. We were motivated only by a desire to expand services for children and youth. Now it is important for us to work together to provide continuity of services and avoid future disruption. 62 2/21/08 - PUBLIC HEALTH - RES. 080139 Safe and Sound's annual budgeting process always has had its share of uncertainties and challenges, but this experience has made us even more cautious and vigilant. While addressing immediate problems, it is also important that we collectively and cooperatively focus on the future for the good of our kids. Beyond the budget, Safe and Sound is eager to work cooperatively with the City government and other community organizations to develop the best possible approaches to meeting the needs of children and families. Safe and Sound has much to offer in the way of research and program development, contract management, program evaluation, a system of provider support and access to national networks. Yet, its role as a support organization to City government is not unique. Departments rely frequently on the good work and assistance of other partner and 63 2/21/08 - PUBLIC HEALTH - RES. 080139 intermediary organizations, such as the Philadelphia Health Management Corporation, PMHCC, the Greater Philadelphia Urban Affairs Coalition and others in the City who add value to the process. It is important for City Council and others to fully understand that Safe and Sound is not given a pot of money to do whatever it wants to with it. In fact, Safe and Sound allocates the money into programs as directed by the Department of Human Services. The vast majority of money is then forwarded to provider organizations. Our job is to provide appropriate oversight, program management, support and evaluation. Put another way, the current situation we find ourselves in is not because there is a Safe and Sound or any other fiscal intermediary. This problem would exist regardless, because the Administration's directives would have been carried out directly by DHS. 64 2/21/08 - PUBLIC HEALTH - RES.
080139 We believe that Safe and Sound has provided value over the years by providing programmatic oversight and support and objectively evaluating the effectiveness of programs. It is our hope and commitment to do everything within our power to make the controversies that have surrounded Safe and Sound become old news so that we can provide even more value. But much more important than the standing of Safe and Sound is the standing of Philadelphia's children. We all should be proud that Philadelphia has built a network of constructive violence prevention and youth development programs that have brought our City national recognition and made a difference in the safety and well-being of children and teens. As we all know, much work remains to be done. So we will be pleased to answer your questions about Safe and Sound to the best of our ability today and provide all of the information you 65 2/21/08 - PUBLIC HEALTH - RES. 080139 seek. Afterwards, I hope that together we can focus on fulfilling our commitments and aspirations for young people and determine how Philadelphia will go forward to provide the highest quality services cost effectively with the least disruption and greatest accountability. Thank you, and now Anne will pick up.
Thank you, Ernie. Good afternoon, Majority Leader and Chairwoman Tasco, Committee members and other members of City Council. I am Anne Shenberger, the President and CEO of Philadelphia Safe and Sound. I thank our Board Chairman, Ernie Jones, and the other members of our Board who are here today and those who weren't able to make it for their presence, support and leadership of our organization today and every day. Following the background 66 2/21/08 - PUBLIC HEALTH - RES. 080139 presented by Ernie, my testimony will explain more specifically what Safe and Sound does and how we do it. I will, of course, focus on the detail of the current budget situation, how we arrived in the predicament of needing to cut back programs and the steps we have taken to meet the lower budget target. Given the events earlier this week, we are happy that Mayor Nutter has stated his intention to restore what we believe are essential programs for children and families. I will also say that we sincerely regret the confusion and the anxiety that's been created over the past several weeks for our providers, parents and children. We know that the problem has generated complaints and calls to Council, as well as to the new Administration. Before getting into the nuts and bolts of our organization, please allow me to tell you briefly about myself and about the members of our staff. 67 2/21/08 - PUBLIC HEALTH - RES. 080139 I am a graduate of Gettysburg College and earned a Master of Social Work degree from Bryn Mawr College. I enjoyed a 30-year career advocating for children and youth and improving services and systems in the fields of juvenile justice and child welfare with the Pennsylvania Department of Public Welfare, leaving as Director of the Southeast Regional Office of Children, Youth and Families in 2006. I was eager and honored to be chosen to lead Safe and Sound because of the important role it plays and its record of quality work and its potential to be even better. Since coming to Safe and Sound, I have focused on developing a talented and dedicated staff to improve financial management and administrative processes, upgrade program services, to make better use of our research capabilities and to engage in effective communication, coordination and collaboration with City government and other partners. The 68 2/21/08 - PUBLIC HEALTH - RES. 080139 members of our staff have the qualifications and the commitment for Safe and Sound to excel. The breadth and depth of skills and experience embedded in our staff team is required by the complexity and diversity of the work that Safe and Sound does and is reflected in the performance that we deliver. Safe and Sound's core activities are program development, project management, contract management and support, research and evaluation, and policy and advocacy. We are, in short, a resource for government, community organizations, citizens, all of those interested in advancing the well-being of Philadelphia's children and youth. Safe and Sound has been in on the ground floor, operating often in collaboration with City government and other non-profits, using local data and national research and knowledge to pinpoint the needs of children and youth and to craft programmatic solutions to 69 2/21/08 - PUBLIC HEALTH - RES. 080139 address them. This is how the Youth Violence Reduction Partnership, the Adolescent Violence Reduction Partnership, the Beacon centers, the Recreation Department's teen centers and the Childcare Facilities Fund were born. We also have served government by staffing child-related initiatives such as the Blue Ribbon Commission on Children's Behavioral Health, and we've managed child and safety-related events such as the Children's Summits. We've also been asked to manage major projects such as working with the former Department of Social Services to develop DSS-CARES, the Division of Social Services Cross Agency Response for Effective Services. That's a mouthful.
But it means an integrated data and case management system that would assist people working across departments with the same families, managing contracts for 14 community-based parent truant officer providers and hiring 400 parent truant 70 2/21/08 - PUBLIC HEALTH - RES. 080139 officers. We've developed the request for proposal and manage the contracts for curfew centers. 5 Safe and Sound's research and 6 evaluation capabilities are especially 7 strong and fill a need for 8 information-driven decision-making and 9 action. We have created a data warehouse 10 called the Centralized Data Repository 11 that pulls together and analyzes data from a variety of sources, including the Police Department, the Department of Human Services, the Census Bureau and the School District. With extensive statistical and mapping capabilities, Safe and Sound helps elected officials, City agencies, educational institutions and non-profit organizations to improve services, achieve policy reforms, communicate more persuasively and secure funding for valuable programs. The slide on the top of shows the types of data that are included in the data warehouse. On the left shows 71 2/21/08 - PUBLIC HEALTH - RES. 080139 the different types of geographic areas that we can analyze from zip codes, to the Empowerment Zone, to City Council districts. The middle column shows the program resources that we have in the database so that we can plot those programs in the geographic areas. And on the right are the person-specific types of information that we have. We publish and disseminate our findings in accessible formats, including research and policy briefs, program evaluations, geo-coded maps. We recently completed a project at the request of the Department of Human Services for Police Commissioner Ramsey and his new crime initiative, and we also have our core products of the annual Children's Report Card, the Community Report Cards and the Children's Budget. We're grateful to City Council for your unanimous vote last year to institutionalize the production of these documents. I want to describe for you in 72 2/21/08 - PUBLIC HEALTH - RES. 080139 some detail the work that Safe and Sound does to manage City-funded programs and to support service providers in the community. This is really the heart and soul of our organization, because it directly touches the lives of so many children and families. It is our mutual concern for these providers and children that is the focus of today's inquiry. All of the programs that Safe and Sound oversees or monitors were initiated to respond to data indicating that children and other community members were at risk of committing violence or being victimized or engaging in unhealthy or unwise behaviors. Our key programs are after-school; Beacon programs; Youth Violence Reduction Partnership; Adolescent Violence Reduction Partnership; the parent truant officers; curfew centers; Families and Schools Together, or the FAST program; Real Everyday Alternative Choices and Help, the REACH program, which is a Saturday 73 2/21/08 - PUBLIC HEALTH - RES. 080139 anti-truancy program. And each of those on the slides of and have a 4 brief description of what the service is, 5 which I won't read. 6 We apply objective criteria 7 when we go about selecting the 8 after-school and Beacon program providers 9 and the locations for the programs. We 10 make these decisions based on a 11 competitive selection process. To determine the location of programs, we identify high-crime neighborhoods within the City. Then we look at the high-crime areas by age, focusing on the under 16 age group, by increases and decreases in 17 Part 1 Major Crime committed by juveniles, and then depending on the focus of the program, we look at the incidence of child abuse and neglect across the City. S. Census data to identify areas where there are large concentrations of youth, and we 74 2/21/08 - PUBLIC HEALTH - RES.
080139 look at community resources that are youth focused to identify high-crime neighborhoods that have large concentrations of youth but few services. So all of this information is synthesized so that we can place our new programs in high-need, low-resource areas. Once the geographic areas are identified, an open RFP process is launched to select new service providers. Staff teams review and score proposals. For those services such as the curfew centers and the Adolescent Violence Reduction Partnership, we also partner with the Department of Human Services, and their staff are included in our proposal review teams. The program elements that we look at are the agency's organizational capacity and the quality of the service program they propose, their ability to engage the community, and the quality and the efficiency of their budgets. The programs are then ranked, with awards 75 2/21/08 - PUBLIC HEALTH - RES. 080139 going to the highest ranked providers. But our work goes beyond simply issuing contracts and monitoring contract compliance. This is most apparent with the after-school initiative, which Safe and Sound began managing in 2001. We are dedicated to serving children and families with best practices, which means we take steps to stay on top of national trends. We set standards to provide regular feedback, and we support activities that will foster the highest quality programs. Recently, we instituted PCAPS, the Provider Contract Attendance, Payment and Performance System, which is a mouthful. This system captures information that enables providers to manage their programs more efficiently and accurately and provides Safe and Sound with accurate financial and programmatic oversight information. We have set regular curricular requirements for after-school programs in the field of literacy and violence 76 2/21/08 - PUBLIC HEALTH - RES. 080139 prevention which foster quality and provide a means for a better evaluation. Providers participate in a comprehensive professional development program which Safe and Sound offers in partnership with the United Way. We know that programs are not useful unless parents can access them, so Safe and Sound has developed an online program finder and a live parent assistance line to support families in searching for quality after-school services. The results of our efforts speak for themselves. Our after-school programs do help keep kids out of the system. As you know, after-school programs were created to address crime during those hours. And our data show that delinquency and arrest rates for participation in the Safe and Sound network of after-school programs in 2006-2007 were lower than the citywide rates for youth. For every additional year of after-school attendance, youth 77 2/21/08 - PUBLIC HEALTH - RES. 080139 are percent less likely to be arrested. Dependent care placement rates are also lower than the citywide rates. For every additional year of after-school attendance, youth were ten percent less likely to enter dependent care placement. Likewise, Safe and Sound gets very high marks from providers and from parents. More than 90 percent of parents surveyed last year expressed satisfaction with the program attended by their children. Eighty one percent of providers thought Safe and Sound was doing a good to excellent job of partnering with their agency to provide quality after-school programs. It's also very important to note that 81 percent of the budget of Safe and Sound goes directly out to community-based providers to run programs for children. Another 14 percent of our funding is used to monitor programs for quality assurance and contract compliance, to provide technical 78 2/21/08 - PUBLIC HEALTH - RES.
080139 assistance to the sites so as to facilitate the delivery of best practices, and developmentally appropriate services, to conduct the research that's needed to evaluate the programs and to produce the Report Cards. So you can see in the pie chart the administrative costs that are attributable to the agency's operation are about five percent. Therefore, over 95 percent of our funding from DHS is allocated for direct services and program support. Financial management of Safe and Sound is a complex enterprise owing to our numerous programs, the large number of contractors, and the high volume of invoices and other financial transactions. In order to assure that both Safe and Sound and our primary funder, the City, have the same understanding of the progress of each year's contracted scope of work and each year's expenditures and revenues, a 79 2/21/08 - PUBLIC HEALTH - RES. 080139 committee was established several years ago. The committee includes executive-level budget staff from the Managing Director's Office, DHS and Safe and Sound, as well as key programmatic staff from DHS and Safe and Sound. It meets monthly to review each line of the City designated Safe and Sound performance report and to assess estimated versus actual expenditures so that the most effective use can be made of the funds allotted. The most recent meeting was held February 12, 2008. This process has enabled both the City and Safe and Sound to be on the same with respect to all of the programs funded under the current contract. In addition to these monthly meetings, Safe and Sound has met weekly with program executives within the City in order to assure that the programmatic direction being taken was based on mutual agreement and partnership. Through this type of 80 2/21/08 - PUBLIC HEALTH - RES. 080139 face-to-face collaboration, the City has provided clarification on its expenditure expectations as well as raised any concerns that would need to be addressed by Safe and Sound financial staff. Over the past two years, Safe and Sound has made a number of improvements in its financial operations to both improve our performance and to be more responsive to the City's needs for both information and accuracy in the financial information we provide. We are continuing to make improvements in this area. Whereas Safe and Sound was launched with primarily foundation funding and early on captured significant federal and corporate, at this point in time our budget is comprised of nearly all funding through DHS. Other resources come from City departments, foundations, businesses and individuals. This allocation is consistent with our role as a support and intermediary for the City. Nevertheless, I have moved to renew and 81 2/21/08 - PUBLIC HEALTH - RES. 080139 step up Safe and Sound's external development efforts to generate more funds to complement and supplement City-sponsored initiatives. We are currently competing for a major federal grant and have our sights set on other targets. We are also interested in collaborating with the City to raise local funds to support the Administration's priorities for safety and youth development. Our overall budget has grown over the past three years from 34 million in Fiscal '06 to 50 million in Fiscal '07 to 75 million that was initially contracted for in Fiscal '08. With the growth in budget amount came a corresponding growth in programming. Our Board Chair has already summarized how the budget problem that prompted this hearing occurred. Simply put, the previous Administration wanted to expand anti-truancy, after-school and other prevention programs and allocated 82 2/21/08 - PUBLIC HEALTH - RES. 080139 funds that were not ultimately available for this purpose. Despite Safe and Sound's multiple efforts to submit lower budgets, we received in August a contract signed by the Budget Office and the Law Department for $75 million containing a scope of work that included the expanded programs.
On the strength of the City's previous funding record, the Administration's urging to proceed apace and the contract provided, Safe and Sound acted to begin implementing the new initiatives, such as contracting with community agencies to hire 400 parent truant officers to work on behalf of the City in partnership with the School District. We were advised by the former Administration that a transfer ordinance 20 would be passed. When that did not happen, we immediately wrote to all providers describing the tenuous funding situation and notifying them that Safe and Sound was assessing internal management actions it might take and 83 2/21/08 - PUBLIC HEALTH - RES. 080139 urging that they do the same. In fact, Safe and Sound put a hold on filling budgeted positions. Since then, we have also laid off employees. 4 million annually. Up until the end of the Street Administration, Safe and Sound submitted revised budgets, but was told not to initiate any program cutbacks. Upon first being notified by Mayor Nutter's Administration on January 23, 2008 that a budget cut of million 15 would be required, Safe and Sound 16 prepared recommendations for a reduced 17 budget to be effective March 1. We 18 undertook this task with extreme care, 19 knowing that any actions in this 20 direction, however necessary, would 21 inflict great pain and hardship on the affected provider agencies, employees and program participants. Expenditure projections were carefully reviewed and a process developed to make program 84 2/21/08 - PUBLIC HEALTH - RES. 080139 reduction recommendations to meet the budget target. All new programs that were funded as part of the expansion effort for after school were proposed for elimination. But because it is so far into the budget year, existing programs also had to be included in the assessment for reduction and elimination. The criteria used to assess programs were as follows: We looked at the utilization of the programs. We looked at the qualitative performance as assessed by the Safe and Sound staff who work with the providers. We looked at the results of the School-Age Childcare Environmental Rating Scale, which is a nationally validated scale used to assess the quality of after-school programs, and looked at the geographic distribution of the programs that might be eliminated. Significant cuts in Safe and Sound's organization and operations were part of the recommended budget cuts. In fact, we made a 30 percent reduction in 85 2/21/08 - PUBLIC HEALTH - RES. 080139 authorized positions. These cuts include research, program management and support, and reduction of administration within the organization. We are well aware that this situation is causing serious disruption for providers, children and families, and Safe and Sound is doing whatever it can to minimize the inevitable hardship. We established a policy of responding to all provider calls within hours and 13 providing guidance and technical 14 assistance to everyone who called. We 15 also worked to assist providers in 16 identifying alternate after-school 17 programs located within a half mile 18 radius of each reduced or eliminated 19 program, and looked into identifying any 20 capacity that might be available in those 21 programs. We contacted the Childcare 22 Information Services office and asked for 23 their assistance in helping families 24 locate programs. We provided subsidy information and applications to all who 86 2/21/08 - PUBLIC HEALTH - RES. 080139 called. We encouraged providers and others to utilize our program finder and live phone assistance line. In addition, we have acted upon suggestions made by Council during my meetings with you over the past several weeks. We are open to any other suggestions that you may have in this regard. As our Chairman said, as troubled as we are by the current situation, we are also focused on the future.
We want to be able to work together to improve systems and programs, to capitalize on the resources, knowledge, talents and commitment that City government, other community partners and Safe and Sound can bring to the table to realize our vision for a safer and healthier childhood for every Philadelphian. Thank you for listening, and we will be happy to respond to your questions.
Thank you 87 2/21/08 - PUBLIC HEALTH - RES. 080139 very much for your testimony. I appreciate it. (Applause.)
You're going to be fine. Thank you. Thank you for your testimony. It certainly gave us a real strong history of Philadelphia Safe and Sound, and I tell you, I do appreciate the Report Cards that we get each year and particularly the way you do them by the zip codes, which is very helpful to us in our councilmanic districts. You may have stated this in your testimony, but, Mr. Jones, according to your testimony, Philadelphia Safe and Sound was started with private foundation dollars in 1997 and became a federal tax-exempt non-profit in 2000. Currently, approximately 98 percent of your budget comes from the City. What is your private funding and your future 88 2/21/08 - PUBLIC HEALTH - RES. 080139 development program, and what happened to the Robert Wood Johnson dollars? Was that for a limited period of time?
It was initially a ten-year period when it started, and it went away. It went up to four years. They gave us another four years at a reduced amount each year until it went away. We actually have conducted two major fundraising campaigns, one about five to six years ago before Anne came, and was able to raise, I think, $2, $3 million. We've just recently developed a new fundraising plan that we're going to -- as Anne indicated, we're going after some federal dollars and other private dollars from foundations. The problem we have encountered is that when we go to anybody and ask them for funding and they see our balance sheet or statement of activities of $75 million or $50 million or $30 million, it is very, very difficult to get them or to 89 2/21/08 - PUBLIC HEALTH - RES. 080139 convince them that they should fund Safe and Sound. So it's been an ongoing problem.
Have you made the case that as the contractual provider with the City, that the money from the City is pretty much a pass-through?
Yes. We have definitely tried that. And I think, again, we have a development personnel, just named the person recently, and I think we'll do a lot better. We just have not focused perhaps enough on the last four, five years on doing that development.