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Minutes

Committee Hearing, January 29, 1998

Philadelphia City Council Committee HearingsJan 29, 1998

People mentioned

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Organizations mentioned

Councilman Cohen

Well, because it seems to me that it's a direct violation of federal laws that exist. It seems to me that you're trying to get permission to exempt certain neighborhoods and to inundate other neighborhoods.

Mr. Kromer

Well, as I pointed out --

Councilman Cohen

Just as many neighborhoods have fought for years against having too much of any kind of housing in their area, but a sort of representative distribution of housing of all kinds, whether it's for homeless, whether it's for people who need special services, it seems to me this flies directly in the face not only of law but of every traditional forward-thinking program seeking to develop diverse neighborhoods with cross sections of population. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 112 Law and Government/Licenses and Inspections

Mr. Kromer

I think you could really achieve the opposite effect and achieve greater housing choice and greater dispersion of subsidized housing through the approach that I outlined. And I think we can use the community development block grant, which Council can influence as a tool for doing that. We can call the shots.

Councilman Cohen

All right. I don't -- I see I have --

Mr. Kromer

Just one other point regarding one of your earlier comments. Brentwood is one venture. Again, I've been around for six years, and I don't know of a rental development financed through the CDBG program which has been a subject of controversy or complaints about landlord negligence or bad tenants. And there's a reason for that. These developments are carefully underwritten and they're carefully monitored, not only by us but by the state and federal authorities. And they're much more reliable because of that.

Councilman Cohen

My last comment LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 113 Law and Government/Licenses and Inspections before I recognize the other Council members. Has there been anything recently that prevented the making available of services to homeless people who had come from the shelters into Section 8 housing?

Mr. Kromer

Not that I know of, and that's why we have a big opportunity here.

Councilman Cohen

Well, why should we believe that the City that, as far as I know, abdicated its responsibility in providing those services, even though, as I understand it, it had gotten funds for the offering of those services? Why should we believe now that the City would provide these services when it has had the opportunity all along and never has done it?

Mr. Kromer

The opportunity really is to get together the City agencies and PHA to make sure that this -- that the issue of service delivery does get addressed effectively. But the City --

Councilman Cohen

But nothing's ever stopped the City from doing that before.

Mr. Kromer

In prior years, some of the funding that the City anticipated was federal LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 114 Law and Government/Licenses and Inspections McKinney money, and the City was subsequently told by HUD, after repeated attempts to change HUD policy, that McKinney money could not be used for supportive services. All of the funding that the City has received for supportive services and case management has been used for that purpose. Clearly, it's not enough; and very clearly, the coordination between agencies is not sufficient to use the existing resources effectively. We need more.

Councilman Cohen

Councilman Nutter.

Councilman Nutter

Thank you. Good afternoon Mr. Kromer. I'm just going to ask a couple preliminary questions. Prior to your taking on this current assignment, both articulating the Mayor's policy with regard to Section 8 -- or I assume you were a participant in the December 10th meeting or group.

Councilman Nutter

What has been, in your tenure as housing director, your contact or experience with the Section 8 program?

Mr. Kromer

I was acting director of LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 115 Law and Government/Licenses and Inspections the Philadelphia Housing Authority for four months during 1993. And in both that capacity and in my role at OHCD, the issue of tier-one applicants, how to use Section 8 rental assistance and supportive services for formerly homeless people and others was a recurring issue. And concern about that issue really was the basis for a lot of my recommendations, some of which were adopted here.

Councilman Nutter

During your tenure, I guess, you were considered interim executive director.

Mr. Kromer

That's right.

Councilman Nutter

Or acting executive director?

Mr. Kromer

That's right.

Councilman Nutter

During your tenure, did you advocate for a change in the homeless preference policy?

Mr. Kromer

No, but I led group to HUD headquarters, which included tenant council leaders and City agency staff, and some elected officials to meet with senior HUD people to talk about the need for much more local flexibility and LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 116 Law and Government/Licenses and Inspections local discretion with respect to all aspect of the cram.

Councilman Nutter

Okay. I've read through the Mayor's report and I've read through your testimony. I also read your August 27, 1997 memo to the Mayor regarding Section 8 housing issues. I read your September 23, 1997 memo to the Mayor regarding Section 8 housing issues. And many of your recommendations and suggestions from the August and September memos have made it into the now January policy. Some of them did not. But for those that did, I guess I'm a little perplexed as to why there was no ability to discuss what was, in my view, the formulation of a plan or policy as far back as August, why you couldn't discuss that here in Council back in November or in December, when there were City Council hearings, during the policy hearings.

Mr. Kromer

The representatives to testify and asked the Housing Authority not to testify until this policy paper was ready.

Councilman Nutter

Well, what happened, I guess, between August and either LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 117 Law and Government/Licenses and Inspections November or December or now January that's any different really from what you had in August?

Mr. Kromer

I think there was a lot of discussion and drafting and redrafting.

Councilman Nutter

I mean you basically have, for the most part, now a couple additional bells and whistles and a million dollars in social services to be provided. I mean, you basically have the frame work of what the policy articulated today back in the summer.

Mr. Kromer

Well, the difference is that --

Councilman Nutter

I don't see a lot of change.

Mr. Kromer

Those are my recommendations. This is the Mayor's policy. And what happened during the ensuing months was a lot of discussion and some writing and rewriting influenced by the Council hearings. Two of my staff people were at the hearings and recorded everything that occurred here. And they certainly, as I've tried to indicate, influenced the drafting of the final policy.

Councilman Nutter

All right. Well, LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 118 Law and Government/Licenses and Inspections let's talk about your testimony. The testimony I have at least is that the pages are not numbered, so I've numbered them myself. On , your statement is that the citizens of Philadelphia deserve the best possible access to decent affordable housing. Specifically in the bullet points, you say the broadest possible choice of housing types and neighborhood locations. Now, is that in any way, shape or form in conflict with the proposal to have more project-based Section 8 units?

Mr. Kromer

Not necessarily. It depends on how important that issue of housing choice is to us. If that's the number-one issue, then --

Councilman Nutter

Well, how important do you think that is?

Mr. Kromer

I think it's extremely important, but I don't think it's the only issue. The other issue is the quality issue and the management issue.

Councilman Nutter

Well, later on, in the same page, your testimony says that the LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 119 Law and Government/Licenses and Inspections Section 8 program in its current form doesn't provide unlimited choice of housing types and neighborhood locations, although my analysis of data provided by PHA indicates that there are Section 8 certificates, vouchers or project-based units in every zip code in the City, except at the Philadelphia Naval Base. You go on to say that some neighborhoods have many rental units under Section 11 8 contract while other neighborhoods have none. Nor does the Section 8 necessarily program provide the highest quality, best managed housing available. Section 8 doesn't provide any housing; is that true?

Mr. Kromer

I would I think it's an issue of semantics. It's a housing program.

Councilman Nutter

It provides money for housing.

Mr. Kromer

It's a housing program.

Councilman Nutter

It provides money for housing.

Councilman Nutter

It doesn't provide LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 120 Law and Government/Licenses and Inspections housing; is that correct?

Mr. Kromer

That's the more accurate way of stating it.

Councilman Nutter

And the same statement, with all due respect, might actually be said about PHA in general, couldn't it? That PHA doesn't necessarily provide the highest quality, best managed housing available. Isn't that true?

Mr. Kromer

I don't think so. The Housing Authority is the owner and operator of thousands of housing units. I call that providing housing.

Councilman Nutter

Well, do you think PHA provides the highest quality, best managed housing available in this the City?

Mr. Kromer

No. And I think that's part of the change in HUD policy that Mr. Pernell referred to, which, I think, is in part a change from the public housing sites to Section 8 certificate assistance.

Councilman Nutter

Well, let me ask you this question: Do you think that the Brentwood Apartments over on Parkside Avenue is typical or atypical of the average Section 8 LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 121 Law and Government/Licenses and Inspections property in the City?

Mr. Kromer

I think it's atypical of the average Section 8 housing in the City, but I think it's typical of the average site-based Section 8 property. Great location, excellent management, linked to support services.

Councilman Nutter

And in the same testimony, you said that while it's okay to have of the 44 units in the Brentwood in the Section 11 8 program in the building, you think that it is 12 not appropriate to have 20 of, I guess, 13 potentially 44 units on a street. Why do you 14 think that? 15

Mr. Kromer

On that particular street, 16 and I'm using that to illustrate the point that 17 there can differences of opinion on what 18 constitutes excessive clustering or consolidation 19 of units. 20 You might feel that three Section 8 units per block was the maximum. Someone else might maintain that 50 or 20 or more units is appropriate. We have to exercise good judgment, do some neighborhood planning; and, again, make some coordinated decisions. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 122 Law and Government/Licenses and Inspections

Councilman Nutter

Okay. Lastly in this area, and I'm sure others have questions. In your testimony, you said on , other Section 5 8 units in less attractive locations are placed under contract to absentee owners represented by rental agents who have no commitment or capability to assist residents in need of supportive services. What is your estimate of the number of less attractive locations placed under contract to absentee owners represented by rental agents who have no commitment or capability to assist residents in need of supportive services? How many of the 11,000 units qualify for that designation?

Councilman Ortiz

You should be able to provide a list to us.

Mr. Kromer

I'd be glad to do that. I don't know the exact number. But with the Housing Authority's help, I'd be glad to provide that. The point is, they exist. And they are a lesser quality unit, not because they are in violation of HUD regulations. The HUD regulations, as has been pointed out, don't call LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 123 Law and Government/Licenses and Inspections for supportive services. They're not in violation of HUD, but they're not the same quality housing unit as the site-based certificate units that we've supported through the community development block grant program.

Councilman Nutter

No, I mean. . . we've had situations around here where -- I mean you guys, you know, you want it both ways. Because when bad things happen, your explanation is, Well, only a few and don't characterize it all as bad. Now you're putting in the public record that there are some less attractive locations under contract to absentee owners represented by rental agents who have no commitment or capability to assist residents in need of supportive service. Now, it sounds like it's a bad place to live, whether you have supportive services or not. All I'm asking is: How many are there? And that statement in your testimony might lead someone less informed to think that that is that is the majority of the case. Well, what I want to know is: How many LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 124 Law and Government/Licenses and Inspections are we talking about? And, again, put the social services aside. How did these units get under contract to absentee owners represented by rental agents in the first place?

Mr. Kromer

I don't know that there's any violation of HUD regulations in entering into a contract with an owner who's represented by a rental agent.

Councilman Nutter

Who's the contract with?

Mr. Kromer

The owner.

Councilman Nutter

With the rental agent or with the owner?

Mr. Kromer

With the owner, but in a property managed by a rental agent for an absentee owner.

Councilman Nutter

Okay.

Councilwoman Verna

I'm sorry, so that I fully understand, and I don't mean to interrupt here, does anybody inspect the property before the Section 8 is issued?

Councilman Nutter

Yes, PHA does.

Mr. Kromer

Yes, yes.

Councilwoman Verna

And they make LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 125 Law and Government/Licenses and Inspections certain that all codes are in compliance at the time.

Councilman Nutter

I assume that that's what an inspection would be.

Mr. Kromer

The housing quality standards are complied with, that's right.

Councilman Nutter

And they are supposed to be impact inspected once a year?

Mr. Kromer

That's right, and sometimes more frequently.

Councilman Nutter

Okay.

Mr. Kromer

But my point is -- and is made later in the testimony -- it's not just the house, it's not just the housing unit.

Councilman Nutter

Okay, I'll yield for the moment.

Councilwoman Verna

I'm sorry. Did I understand that they're inspected on an annual basis?

Councilman Nutter

That's the regulation.

Mr. Kromer

That's my understanding, yes. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 126 Law and Government/Licenses and Inspections

Councilwoman Verna

And how many inspectors did I understand we have?

Councilman Nutter

I think the general view is there are 11,000 units, there are 6 inspectors, so I guess that gives us 1,000 to 1. 7 But I think -- and I don't know if I 8 raised this issue at a previous hearing. My 9 understanding is that on the City side, there are 10 55,000 rental unit licenses in the City. This has 11 nothing to do with Section 8 or PHA. There are 55 inspectors, it's the same ratio, 1,000 to 1? Is that correct Mr. Kromer?

Mr. Kromer

I don't know.

Councilman Nutter

Okay, it is. Thanks. Thank you, you Mr. Chair.

Councilman Cohen

Councilwoman Blackwell.

Councilwoman Blackwell

Thank you, Mr. Chair. Mr. Kromer, in your statement, on 3, at the bottom, and I quote. You say ending the policy of restricting access to the Section 8 program exclusively to tier-one so that PHA Board LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 127 Law and Government/Licenses and Inspections can admit tier-one applicants based on the need on and on the availability of supportive services and case management for these residents. So I assume, number one, that we'll admit both tiers, but when you say the availability of supportive services in case management, what does that mean? And where will that come from since we have a dearth of that service available now?

Mr. Kromer

I think that the decision about the proper mix has to be made by the City agencies and the Housing Authority to the extent that City Council's going to be involved, and this is going to be an operating budget issue. I think there are two extremes with regard to admissions. Number one, you could take the position that the need to get people out of shelters is so important that the applications, the admissions should all be tier-one. Forget about the service support, get them out of the shelters into the neighborhoods. The other extreme is, in my view, no 24 tier-one applicant should be admitted to the Section 8 program unless we know exactly what LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 128 Law and Government/Licenses and Inspections services are needed and we know exactly the services in case management are being provided. Now, I think both of the extremes are unrealistic, and we've got to find the right middle ground so that we've doing as much as possible to get people out of shelters, to get the tier-one applicants into the Section 8 system. And I don't know magic number is in terms of the mix between tier-one and tier-two, and to make sure that all of those tier-one admissions are getting as much support as they can through the existing resources we have available.

Councilwoman Blackwell

Well, these supportive services would come from where, from our side or PHA's side?

Mr. Kromer

In part, from our side. And some of our resources have been underused during some periods. But mostly from the PHA side, through the million dollar funding that's proposed.

Councilwoman Blackwell

I know from experience that we do have problems with communication in the area of supportive services. And that alone could make a big difference between LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 129 Law and Government/Licenses and Inspections people who have problems moving into transitional and Section 8 programs and people who don't. We need the supportive services. And that's a really very important issue that we need to track and make sure that applicants have. My other question is: On the Mayor's report, he says -- he says on of his report two things: Number one, he lists five points on that page. And the first point he says, quote, the PHA Board of Directors should act to eliminate the existing preference system which gives Section 13 8 certificate priority to a limited class of applicants, in parentheses, primarily homeless people. Now, I don't know what he means by that. If in fact we are able to consider tier-one and tier-two people. What does that mean?

Mr. Kromer

I think this means tier-one people, tier-one applicants.

Councilwoman Blackwell

So, in fact, he doesn't mean that he wants to eliminate a per-year statement. It just says it here, or how do I --

Mr. Kromer

Later on in that LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 130 Law and Government/Licenses and Inspections paragraph, it says to leave it to the Board to determine, with the advice of staff and City agencies, the appropriate mix of tier-one and other certificates. That's what that bottom line means.

Councilwoman Blackwell

And is that a decision that we can make without input from HUD? Wouldn't we have to request a waiver?

Mr. Kromer

That would require a change. That's the one recommendation that requires a change in legislation, yes.

Councilwoman Blackwell

It's really, really difficult to determine where we are when we don't say --

Mr. Kromer

Oh, I'm sorry I was thinking of something else. No, this would not require a change in legislation. The Board can vote to end the tier-one preference. However, that change in admissions policy would have to be taken to HUD, and HUD would have to sign off on it.

Councilwoman Blackwell

I think it's very, very difficult that some statements are made in this report that are the Mayor's LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 131 Law and Government/Licenses and Inspections recommendations that he says the PHA Board, whoever that constitutes -- I mean, we're between an acting director whom I support and a reportedly new director. So we don't know what the Mayor's saying, what authority the PHA Board has, and what is absolutely up to HUD and to the Congress. And none of this is made clear so that we don't really know where we are or what authority he takes. And after waiting all this time for his statement -- (Interruption.)

Councilwoman Blackwell

After waiting for a statement from the City on Section 8 is really disappointing because it's not clear. His fourth point says the PHA Board should require mandatory termination from the Section 8 program of tenants and landlords who violate any of the U.S. Department of Housing & Urban Development tenant and landlord regulations. Well, we already have rules for that. So is he saying that -- how can he simply say that this should be terminated when all of this isn't a local decision either? LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 132 Law and Government/Licenses and Inspections It's very, very disappointing, I find, and very, very frustrating when you have to deal with these clients every day, to read something that leaves us with more questions than we started out with before we began the whole issue of talking about Section 8. And I am very disappointed and very frustrated when we threaten to cancel and terminate and end when it's not even clear what that means and under what authority. It's very, very disappointing. I find the report disappointingly unclear. And all of the issues -- I think that -- and from the beginning, I think that just having a discussion, since Section 8 is a subsidy, puts it in jeopardy because we do not want them to think in Washington that the need does not exist. We need the money need the subsidies. But at least in this City, we have to have the discussions. Ought to believe to be able to be clear on what we're saying so that everybody understands that. And that has not happened with this report. Thank you Mr. Chair. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 133 Law and Government/Licenses and Inspections

Mr. Kromer

If I can just respond, the Mayor's perspective is that these issues of housing for very low income people in particular and the link to services, which is so complicated, makes it all the more important that the City and the Housing Authority pull together to address these issues. With respect to the first bullet, the decision is a PHA Board decision. The Board consists of five members, and I don't know of any changes in the Board that is contemplated. They could pass a resolution to authorize this change and request HUD approval -- local HUD approval for the change in admissions policy.

Councilwoman Blackwell

But the Mayor's the Chairman of the Board. We all know that they should work closer together, that's absolutely obvious. There's no invisible board. We have three members. We have the Mayor, the President of City Council and the Head of PHA. Where's the mystery there? I don't know understand why we waited all this time to get this. And I still think that LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 134 Law and Government/Licenses and Inspections it is absolutely ridiculous that we still don't know where we stand. And we have point, point, point that really don't explain anything.

Councilman Cohen

I think Councilwoman Blackwell's concerns are shared by many members of this Committee.

Councilwoman Blackwell

Thank you.

Councilman Cohen

As well as the concerns expressed by Councilman Nutter before. Councilman Ortiz.

Councilman Ortiz

Yes, thank you, Mr. Chairman. I think I'm sounding like Don Corleone right here.

Councilman Nutter

They're getting ready to make you an offer you can't refuse.

Councilman Ortiz

You're very, very, very misleading. I mean, that statement that Michael was talking about is a very misleading statement about other sections, less attractive locations. You give the impression within it that landlords are abusing their situation. I'm telling you what I get from the sentence. You can shake your head and say no, but that's what the misleading statement is about. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 135 Law and Government/Licenses and Inspections And then it says "in need of supportive services." Landlords are not supposed to provide supportive services landlords; they're supposed to provide housing, a home.

Councilwoman Verna

Decent housing.

Mr. Kromer

That's my point.

Councilman Ortiz

A decent home. The supportive services are supposed to be provided by the City. If the supportive services are not there, it's because the City has not able to coordinate with PHA to put that together. That does not need a lot of money. It's just a situation of sitting down and coordinating those services.

Councilman Cohen

And if we collect the taxes and the water bills, we have enough money.

Councilman Ortiz

And if the City paid attention to the situation that Councilwoman Verna brought up, because that's not PHA's role either, okay?

Mr. Kromer

Absolutely. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 136 Law and Government/Licenses and Inspections

Councilman Ortiz

That's not PHA'S role. The gas and the water and the property tax, that's the City's role. So PHA should not be blamed here for things that the City is falling down on. And the landlords should not be blamed. And in this sentence, this gives the impression that landlords somehow are falling down because they're not providing supportive services. And, you know, so it is a misleading statement.

Mr. Kromer

Okay, well, I'm here to clear that up. And let me be clear. Tenant-based certificates, some of which lead to rental housing that has no 16 supportive services associated with it and not is not required to, you're absolutely right, is inferior to site-based supported housing with services if you are a tier-one individual or household in need of services. Having the service support is superior to not having the services.

Councilman Ortiz

Are you proposing to eliminate the tier-one preference?

Councilman Cohen

But isn't it true LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 137 Law and Government/Licenses and Inspections there's nothing to stop the City from providing these services? Why are you saying that all the City has to do is to meet certain requirements that may have been set at a national level, and which may be inferior to what we all know is needed? Why is that an excuse? I think you're running away from problem, and that's what makes us distrust this. We think -- let me put in my own point. I think the whole purpose of this statement was to try to adopt an approach towards clusterization. Hide it, don't tell anybody that's what you want, come up with a good example that you can argue maybe is not clusterization. But once we get this policy, for example -- well, I don't want to go into questioning, I don't want to interrupt but I'm saying you're being so unclear. The Mayor's statement is so unclear.

Councilman Ortiz

And the thing is, if you're a poor person in the City, why should you have to live in a site-based project in order to get City services? I don't understand that. I just do not understand that. Michael says that we're making LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 138 Law and Government/Licenses and Inspections differentiations here. There are renters, and L&I doesn't -- we don't make the position of those renters and L&I inspectors, but PHA has the same amount of ratio vis-a-vis its Section 8. But we make a point of that. Other than PHA's support to be falling down on his job because it has the same ratio of inspectors to renters as the City does. And somehow I cannot help that is the identity of the population that's involved that makes us create those distinctions, all right? So if you were not able to provide social services to see people in Richard Allen, when they were all clustered together, what confidence is there that you're going to be providing social services to people in site-based projects?

Mr. Kromer

Services for residents of Richard Allen is a PHA responsibility, as it is for all public housing sites. Now, no distinction is being made with respect to the need for those tenant-based certificate holders to get access to good services, just as people who live in units LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 139 Law and Government/Licenses and Inspections supported by site-based certificates do. The need is there and it needs to be addressed.

Councilman Ortiz

Mr. Kromer, we have a troubled housing agency. And now you're proposing to take administrative fees that go to the operating budget and management of those agencies to provide services that the City should be providing in the first place. And then that agency will have some more problems created because the City is taking these monies out of its budget.

Mr. Kromer

The Mayor's view is that we're all in this together. We are all in this together, the citizens of Philadelphia and --

Councilman Ortiz

But you do not take away money from an agency that is troubled, especially administrative monies, just in order to satisfy a problem that you should be able to be resolving from the City side. Because all you're doing is putting that agency into a deeper hole.

Mr. Kromer

The Mayor's position is that we all need to --

Councilman Ortiz

The Mayor's position is wrong. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 140 Law and Government/Licenses and Inspections

Mr. Kromer

-- share the responsibility for addressing this issue.

Councilman Ortiz

The poor people have shared the responsibility. What responsibility are you thinking about?

Mr. Kromer

I have a copy of the operating budget for the Section 8 program that I'd like to share with you.

Councilman Nutter

While you're handing that out, Mr. Kromer, let me say, as I'm listening to this exchange, I hear you continue to say that the Mayor believes that it is a shared responsibility. We didn't share in the development of Mayor's plan. We got it this morning. As Council Cohen has articulated a couple times, it was given to the news media yesterday at a press conference. I didn't have the privilege of being at the December 10th meeting. We've had no input, no dialogue, no 22 discussion, zero. But now here today, under questioning, you say that we're all supposed to work together.

Mr. Kromer

The shared responsibility LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 141 Law and Government/Licenses and Inspections that I'm --

Councilman Nutter

The plan is the plan.

Mr. Kromer

The shared responsibility that I'm speaking of is between the City agencies which are headed by the Mayor and the Philadelphia Housing Authority, of which the Mayor is the Chair.

Councilman Nutter

Which are funded by City Council who are all coming over here for their budgets in the next month and a half. Did you forget that part?

Mr. Kromer

No. As I've indicated previously, this is a critical part of the operating budget.

Councilman Nutter

Well, then it's a critical part of having dialogue and discussion between the Administration and City Council if you think that this is a serious and important policy that requires City departments to do anything new or different or utilize the resources that we collectively share, then we should participate in the development of the policy. That's the point.

Mr. Kromer

As I said in response to LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 142 Law and Government/Licenses and Inspections your earlier question, the Mayor's position is when the policy is ready, the policy should be submitted to Council, and that is what has occurred.

Councilman Cohen

Well, the Mayor's position really is, isn't it, that he only needs one vote in City Council, and none of the members here are in a position to cast that vote. But if the Mayor began to recognize that Council consisted of members and that all 12 of them are entitled to be part of the group that 13 were informed and participated in helping make 14 City policy, some of these problems would be 15 avoided. 16

Mr. Kromer

I would not be here if the 17 Mayor did not have that concern.

Councilman Ortiz

I just do not understand how you take money away from an agency that just achieves the basic level, the basic level, it's become a C student as such, all right? It just received a 60 percent rating from HUD, and now you are taking away operating monies. And you say that is supposed to be shared LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 143 Law and Government/Licenses and Inspections responsibility. To me, it seems like you're cutting out and excising and performing an operation. And the operation of 120,000 tenants that depend on PHA for its living.

Councilman Ortiz

That's 120,000 tenants.

Mr. Kromer

, net income, $1,520,000. --

Councilman Ortiz

Sir, I had the testimony of Fred Pernell that said, You take that money out and you're going to cause problems. Don't give me numbers.

Mr. Kromer

I have some more information that has a bearing on that.

Councilman Ortiz

Don't give me numbers. It's going to cause problems.

Mr. Kromer

I'm responding to your concern. The line below that, operating reserve, nearly $2.6 million for a $7 million program. That's a substantial operating reserve. There is no HUD standard that requires a specific level of LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 144 Law and Government/Licenses and Inspections operating reserve for a Section 8 program.

Councilman Ortiz

Mr. Kromer --

Mr. Kromer

This is a major operating reserve. Let me give you one more piece of information that I think is relevant. Of the net income --

Councilman Ortiz

Mr. Kromer --

Mr. Kromer

If I could just finish. Nearly $600,000 was spent on non-routine items, including $400,000 for office renovation at 30th and Market. Other City agencies with which we have coordinated relationships --

Councilman Ortiz

So the money you're going to use is office renovation money?

Mr. Kromer

We might have been able to do it for free; I don't know. Because we haven't had this kind of collaboration before. And we need to do that.

Councilman Ortiz

Mr. Kromer, you're going to eliminate the tier-one preference. What is that? Explain it for the record. And how many people does that -- does that mean, the number of folks?

Mr. Kromer

The tier-one preference, LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 145 Law and Government/Licenses and Inspections as described in the paper, on , includes homeless people referred to -- through the City's shelter system, victims of domestic violence, victims of fire and natural disaster, and/or people displaced by government action.

Councilman Ortiz

Last year, there were 1,289 individuals placed through that system. The City spends $11 a day to house a person in City shelter. You're going to eliminate -- let's say that probably you don't have a raise in that, the number doesn't go beyond 1289 to 2,000, maybe 2500, that you maintain the same amount of folks. That costs the City usually around $5 million to house those individuals in shelters that were then passed over to the federal HUD monies. The Mayor gave a speech the other day,. He didn't mention that he was putting $5 million in there for homeless. Neither did he put it into his five-year plan as to how the homeless are going to be taken care of through the shelter system and through the City system, by eliminating the Section 8 preference. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 146 Law and Government/Licenses and Inspections And that has been estimated by TAG and other folks and John White here who has estimated it to be $35 million. Where is the money going to come from for the City to be able to provide those shelters? The Mayor didn't mention it, it's not in the budget, it's not in the five-year plan.

Councilman Cohen

Well, does it mean the City's turning its back totally on the homeless?

Mr. Kromer

Clearly, because of the limitations on our resources, which are going to continue to be serious limitations, there's going to have to be a combination. And that combination is --

Councilman Ortiz

That's part of the shared pain.

Mr. Kromer

That's right, to be frank.

Councilman Ortiz

That's part of the shared pain, so the poor are going to have to share a lot more pain.

Mr. Kromer

Government agencies are creating sensible approaches.

Councilman Ortiz

That right now we LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 147 Law and Government/Licenses and Inspections have homeless and poor people that are being taken care of through federal funds. You're eliminating that preference. I want to know where these people are going to go to and what the City's going to be able to provide for them. And you say that you don't have a plan for them because the Mayor does not include it in this year's budget, and it is not included in the five-year plan. Where are those people going to go?

Mr. Kromer

There's going to have to continue to be a combination. And that combination is going to have to consist of --

Councilman Ortiz

You don't have an answer, do you?

Mr. Kromer

I have a policy, and this is a policy that I --

Councilman Ortiz

A policy is not an answer. You don't have an answer as to where those homeless people are going to go. You're saying that you're going to eliminate the preference from the Section 8 program.

Mr. Kromer

No, I'm responding to your question. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 148 Law and Government/Licenses and Inspections

Councilman Ortiz

Go ahead.

Mr. Kromer

The solution has to be and has to continue to be a combination of the City's shelter system --

Councilman Ortiz

Where's the money coming from?

Mr. Kromer

Rental assistance.

Councilman Ortiz

Where's the money come from for the City?

Mr. Kromer

And transitional housing.

Councilman Ortiz

Where is the -- it was not in the budget, it was not in the budget. It was not in five-year plan. Don't run games. Where is the money coming from?

Mr. Kromer

Some of the money is coming from the City's operating budget, some of it, I said, some of the funding for the traditional piece is coming from the City's community development block grant program. And what's being proposed here is that some of the funding come from Philadelphia Housing Authority.

Councilman Ortiz

You undermine an LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 149 Law and Government/Licenses and Inspections institution that is getting its act together, finally getting its act together, is going to go through transition because it's going to have a new executive director, and you're undermining the operation of that agency.

Mr. Kromer

I don't have any evidence that this would undermine the Housing Authority in any way, nor would any of this be implemented prior to the arrival of the new executive director.

Councilman Ortiz

I think the acting executive director of PHA contradicts you and disagrees with you on that. And they are running the program. And they are intimately involved in running the program and the agency. You haven't been.

Mr. Kromer

Well, let me say something that I think is relevant. As our community development block grand has declined, our salaries have declined. I am the only city official that recommended to the Compensation Committee no 23 salary increase. I'm the only person in this room 24 that took a voluntary ten-percent pay cut. We need to see some belt-tightening in LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 150 Law and Government/Licenses and Inspections era in which federal resources are shrinking. We've got to face that reality. And this is a proposal for using an existing resource to address that critical reality.

Councilman Ortiz

And, again, it's a proposal that within the guise of -- because some of the things in this thing are all right, very good, and I agree with them. But under the guise of site and eliminating the cap, in terms of the percent, 13 and I think APM's project project, which is 14 mentioned, is a very good. It is very good 15 because it is mixed, and it is 15 percent.

Mr. Kromer

It's an example of clusterization.

Councilman Ortiz

No, it's not clusterization. It is a very good mix of folks, a very good mix, all right, 15 percent, and you have different incomes. That is not clusterization.

Councilman Ortiz

However, under the guise of site placement and so on, you're asking to almost to lift the cap, and you will have LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 151 Law and Government/Licenses and Inspections clusterization.

Mr. Kromer

When I say "site-based," if you're thinking APM, we're on the same wave length.

Councilman Ortiz

Then why the need to lift the cap?

Mr. Kromer

To give the Housing Authority Board discretion to make a decision about --

Councilman Ortiz

What would be the criteria?

Mr. Kromer

I think -- this is a policy. Again, this is not a detailed program. We've got a lot of issues that need to be addressed. But the point of this policy statement is that they have to be confronted now. An extreme policy of a completely open-ended system --

Councilman Ortiz

In the beginning of your statement, the Mayor's system, you say that the program is running well, that only a few things are wrong with it. Okay? And then you decide that you have to gut the program in order to satisfy some other LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 152 Law and Government/Licenses and Inspections agendas.

Mr. Kromer

The Section 8 program serves as an important housing resource. The program should be subject to regular critique and analysis with the goal of continued improvement. Continued improvement is what we're talking about.

Councilman Cohen

To follow up on what Councilman Ortiz is saying about lifting that 10 percent cap, isn't it true that the legislative 11 initiative that the City has undertaken and which 12 is described on of the report, that that, 13 if carried out, would give the City the right to 14 totally eliminate that cap and go as far as a 15 hundred percent in the direction of site certificates?

Mr. Kromer

Yes, the Housing Authority but not the City, but that's correct. The Housing Authority Board.

Councilman Cohen

Now, you say also on of that basic report, you say that Section 22 8 -- site-based Section 8 units are subject to higher standards of performance in property management, tenant supportive services, and case management. LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 153 Law and Government/Licenses and Inspections Now, what's to stop the City, if it ever had wanted or shown any real interest in this problem, from inserting the same language that exists currently in site certificate requirements, inserting that in the PHA rental assistance contract with landlords? There's nothing to stop the City from having done it.

Mr. Kromer

I think the HUD regulations prevent over the Housing Authority from exercising that degree of oversight over property management and support services, which is part of what I'm talking at. The site-based developments, nearly all of them --

Councilman Cohen

But the City could have suggested to the Board that they do that without putting the expensive supportive services on PHA, which has been terribly strapped for its own costs. In providing more access to information, are you suggesting that individuals be able to easily identify specific properties in their neighborhood that are section units? I'm concerned about the harassment a number of them LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 154 Law and Government/Licenses and Inspections have been subject to. And if anybody can call a number and identify a property, I think we're opening the door wide to intensify harassment and acts of terrorism.

Mr. Kromer

I agree with you that that should not be pursued. What is proposed is a published report that has some information about the dispersion of Section 8 units but in terms of census tracks, rather than addresses.

Councilman Cohen

Councilman Nutter.

Councilman Nutter

Thank you. Mr. Kromer, a couple more questions about either your testimony or the plan or a previous memos by yourself on this issue. You and Council Ortiz engaged in a great discussion about social service support programs, and if I missed this, you'll tell me that I missed it, but you might be kind enough to explain it again. On , you talk about providing more funding, $1 million in Section 8 administrative fees made available from HUD for supportive services in case management. What are LAW AND GOVERNMENT/LICENSES AND INSPECTIONS 155 Law and Government/Licenses and Inspections the administrative fees used for now?

Mr. Kromer

I don't know. My understanding is that they go to the general fund. But it is clear from this statement that $400,000 worth was used on office (unintelligible) and furnishing.

Councilman Nutter

I'm sorry, the general fund --

Mr. Kromer

I'm sorry, PHA's general fund, and are not set aside as such.

Councilman Nutter

Okay. And your exchange with the Councilman was that some of it was used for what?