COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, 5/29/01 1:25 p.m. - - - BILL 010261 - Authorizing transfers in appropriations for Fiscal Year 2002 within the General Fund from certain or all City offices, departments, boards, and commissions to the Department of Licenses and Inspections - Demolitions. PRESENT: COUNCIL PRESIDENT ANNA C. VERNA, Chair COUNCILWOMAN JANNIE BLACKWELL, Vice Chair COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN DAVID COHEN COUNCILMAN FRANK J. DICICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN RICHARD T. MARIANO COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN BRIAN J. O'NEILL COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 I N D E X Joyce Wilkerson, Mayor's Chief of Staff . . . Robert Solvibile, L&I Commissioner. . . . . . 62 June Bey, Private Citizen . . . . . . . . . . 138 Judith Robinson, Private Citizen. . . . . . . 146 Gordon Whitman, EPOP. . . . . . . . . . . . . 156 L. Haley, Visitation Parish, Visitation EPOP 156 Hattie Williams, Block Captain. . . . . . . . 156 2600 North 31st Street 3 5/29/01 - WHOLE - BILL 010261 P R O C E E D I N G S
Good afternoon, everyone. This is a public hearing of the Committee of the Whole regarding Bill No. 010261. Would you please read the title of the bill.
Bill No. 010261, an ordinance authorizing transfers in appropriations for Fiscal Year 2002 within the General Fund from certain or all City offices, departments, boards, and commissions to the Department of Licenses and Inspections - Demolitions.
Thank you. I would just like to make a statement before we start our hearings. On April 18th of this year, the Mayor transmitted to Council a proposed ordinance to implement his NTI. After receiving the Mayor's proposal, I issued a statement that I was looking forward to working with the Administration to iron out the details of the NTI plan before Council considered the ordinance authorizing the NTI bond issue. As I noted in that statement, however, the Mayor's announcements lacked any detail as to how the NTI Program would be implemented. And as I have 4 5/29/01 - WHOLE - BILL 010261 repeatedly stated, an issue of this magnitude should not be hastily considered. I wrote to the Mayor on April 24th. That letter noted that the NTI proposal raised a number of questions that needed to be answered before Council could consider an NTI ordinance. However, the letter also included the following statement, which I would like to read: "None of us would like to see the implementation of the NTI delayed by our review of these issues. To ensure that no delay will occur, I intend to have a bill introduced at the next session of Council to transfer $8 million in appropriations to the Department of Licenses and Inspections for demolitions. The intent of the bill is to provide funding for demolition of imminently dangerous buildings from July 1, 2001 through the end of 2001. A hearing will be scheduled on the bill and I would ask that you send a representative to that hearing who can advise City Council as to any changes the Administration believes are necessary in the source and amount of such funding so as not to delay implementation of the NTI while it proceeds through legislative process." 5 5/29/01 - WHOLE - BILL 010261 As promised, a bill was introduced to transfer appropriations to L&I for demolitions during FY 2002. That bill, Bill No. 010261, is the bill before this committee for hearing today. Bill 6 No. 010261 will authorize the transfer of $8 million in the FY 2002 operating budget to the Department of Licenses and Inspections for demolition. The FY 2002 operating budget already includes $2 million for demolition. The appropriation transfer under consideration for today would, therefore, bring L&I's total demolition for the FY 2002 budget to $10 million. As explained in my letter to the Mayor, the purpose of this bill is to provide funding for the demolition of imminently dangerous buildings through the end of this calendar year. Let me be clear about the purpose of today's hearing. It is not to consider the merits of the Mayor's NTI proposal, nor is it the purpose of today's hearings to consider whether Council has acted appropriately in asking that the Administration submit a complete plan with appropriate detail before an ordinance approving the plan is introduced. Rather, the sole purpose of today's hearing is to consider whether there is 6 5/29/01 - WHOLE - BILL 010261 sufficient funding in the FY 2002 operating budget to meet the City's needs to demolish imminently dangerous buildings until such time as the Administration submits and Council approves a final NTI plan. Our first witness will be the Mayor's Chief of Staff Joyce Wilkerson. Miss Wilkerson, please approach the witness table. (Witness comes forward.)
I know that you have submitted written testimony, and a copy of that testimony has been distributed to all members of Council and will be made a part of the record for today's hearing. There is no need for you to read the testimony. However, I would like to go into questioning. In my letter to the Mayor, I asked that he send a representative to the hearing to, and I quote, "advise City Council as to any changes the Administration believes are necessary in the source and amount of such funding so as to not delay implementation of the NTI, specifically demolition, while it proceeds through legislative process." Am I correct to conclude, based upon 7 5/29/01 - WHOLE - BILL 010261 your written testimony, that the Administration does not suggest any change in the source and amount of the funding proposed in Bill No. 010261?
The Administration, as I noted in my testimony, has no objection to the legislation if the amount of funding is generally enough to enable the Administration to undertake demolition at the same rate that we have historically. What I attempted to do in my testimony is to note some of the ancillary impacts that might occur as a result of the timing on other initiatives that would be supported out of NTI. And those really don't, you know, and a lot of those extend beyond simply the source and the amount of the proposed transfer.
But, Miss Wilkerson, prior to this year, it's my understanding that $10 million was appropriated to L&I for demolition, and then I guess in the last several months of that period, there was a $3 million transfer ordinance. This year, I believe we appropriated over $15 million, and as of this date, 996 properties have been demolished. There are still $2,700,000 that remains in this year's budget 8 5/29/01 - WHOLE - BILL 010261 for demolition. I'm informed that approximately 225 to 250 properties could be demolished and that would include the stuccoing of the adjacent properties.
Actually, this year we project that there will be approximately 1250 properties demolished at a total cost of about $17 million. Some of these properties are commercial properties; not all of them are residential properties. Since 1995, the City has been spending in excess of $10 million for demolition.
Well, if you feel that the $10 million is not ample, how much would you suggest that we put into the budget to address the issue between July 1 and the end of December?
I think that $10 million for a six-month period enables the City to pursue the same kind of strategy. I think that there is interest on the part of the Administration in expanding the scope of the demolition activities of the City. Historically, the City has taken an approach to demolition taking down properties on a case-by-case basis frequently in response to calls 9 5/29/01 - WHOLE - BILL 010261 that have been made. The Administration is attempting to be more systemic in how it undertakes demolition, trying to increase the scale of demolition in order --
Well, what plan is presently in place to do that?
The Administration has acknowledged that the traditional approach to demolition has not worked. As you know, the Administration has issued an RFP soliciting bids from project managers who would assist the City and increase in the scale of demolition. It is our hope to begin demolishing roughly triple the number of properties that we've taken down historically in order to try to reclaim some of the property inventory to begin turning around the land that currently simply houses or accommodates abandoned properties in order to begin putting them back into circulation. We've issued an RFP for a project manager. Those initial responses have been evaluated. Last week interviews were conducted to enable the City to put together a strategy that would allow us to take down properties on a larger 10 5/29/01 - WHOLE - BILL 010261 scale. We were hoping to do 2500 properties in the coming year.
But that being said, how would you be able to move forward without the bond issue ever having been --
So you could never do that at this point in time anyway, could you?
No. At this point in time, if there are no additional resources on the table, we would probably pursue the same kind of strategy we have historically.
And how long would it take you to go out for a bond issue?
Our expectation was if we were under the schedule initially proposed by the Administration to be issuing bonds over the course of the summer, most likely in July. If we don't do that, the opportunity would probably arise in January, sometime after the holidays.
Your testimony raises a concern that PHA employees who have been 11 5/29/01 - WHOLE - BILL 010261 performing encapsulation work over the past two years may have to be laid off if there is not a sufficient commitment of resources to fund encapsulation.
Does the transfer proposed in Bill No. 010261 provide a sufficient commitment of resources to ensure that PHA encapsulation staff will not be laid off? And if not, what level of commitment would be necessary?
The legislation, as drafted, I believe, limits the transfer to transfers for demolition activity. So none of the encapsulation work would be fundable. We had proposed, and I state in my testimony, the exact level of encapsulation activity. I thought it was important to note that one of the challenges that the City has is trying to put together implementation strategies. The Housing Authority over the last several years has been particularly successful in assembling teams that go out and address scattered-site properties, address construction problems associated with scattered-site 12 5/29/01 - WHOLE - BILL 010261 properties. It was fortuitous, but I think it would inure to the City's benefit if we can keep that delivery system in place in order to tackle what people view as a real problem. Throughout the City we have, you know, individual properties that if we could only get them back into circulation in a timely way, we could probably avoid much larger costs associated with bringing the properties back into constructive use. And that's why --
During the last few years during the Rendell and then the first of the Clinton administration, we got several big, huge grants from the federal government towards PHA. PHA is a federally funded agency; it's not funded by us. So I don't -- are we going to be giving monies to PHA to encapsulate buildings, or are those buildings going to be encapsulate by the federal funds that they get? And what did they do with all of that 13 5/29/01 - WHOLE - BILL 010261 money that we got during the Clinton administration? I don't see how in any way, shape, or form they could have spent all of those -- I think at one point it was over $400 million to rehab and rebuild some of the infrastructure of PHA. What happened to the money?
To address your first question about what funding would be used, the Administration proposes using some of the NTI bond proceeds in order to fund the encapsulation activity. Although most people don't know it, the Housing Authority currently performs work on behalf of the City pursuant to an intergovernmental cooperation agreement. Demolitions that happen in the City are undertaken by the Housing Authority on a case-by-case basis. The Housing Authority currently performs work at the behest of the City simply because PHA has the construction capacity.
No. The City funds the demolition activity or the rehabilitation activity, whatever it is that the City directs, that is not associated with PHA properties. The City will fund 14 5/29/01 - WHOLE - BILL 010261 that kind of activity. Over the years, the Housing Authority has received hundreds of millions of dollars from the federal government. Some of that money was used to demolish properties. For example, the Raymond Rosen high-rises have been demolished, the King Plaza high-rises have been demolished, Richard Allen has undergone transformation. The Housing Authority also constructed units and so there has been onsite housing constructed at the Raymond Rosen development. Work is currently underway on the replacement housing at Raymond Rosen. Southwark has been demolished and rebuilt. Across the City, there are any number of developments that have happened pursuant to the funding that was made available to the Housing Authority by the federal government. The Housing Authority has also been successful in tackling a lot of the scattered-site problems that, as you know, have plagued the City for very well over a decade. Some of the money that was secured from the federal government has gone on to accomplish that work. But what we're talking about is a cooperative relationship that would enable the City 15 5/29/01 - WHOLE - BILL 010261 to use that part, you know, that part of the whole governmental structure that actually has the capacity to go in and undertake scattered-site work on behalf of the City and residents in the neighborhood.
I still don't understand and I still don't see how the money goes from one side to the other. And I'd like really a further explanation as to -- because PHA's supposed to be federally sustainable and funded, and I don't know whether City funds are going to be directed over to PHA and whether that is a good use of the money that we're getting, when PHA's supposed to already have that money.
The Housing Authority receives money from the federal government to maintain its own inventory, and actually, the legislation has been expanded substantially in recent years, and so you'll see the Housing Authority involved in tax credit transactions. So it's not the same kind of institution; its powers are much broader than they had been. What we're talking about in connection with NTI is using some of the construction capacity 16 5/29/01 - WHOLE - BILL 010261 that the Housing Authority has in order to cause the rehabilitation of properties that are not within the Housing Authority's inventory, and so it would be using bond proceeds in order to do rehabilitation work at the behest of the City on properties that are targeted for encapsulation.
And to the best of my recollection, there is no budget in the ordinance as presented to us, so we wouldn't know how much was for encapsulation, how much was for demolition. We have -- it's not in the ordinance. Let me just ask you, what other transfers of appropriations would you propose in specific sources and amounts to enable the Administration to provide funding for PHA encapsulation activities during the remainder of this calendar year? I ask this question because there is still time for an additional transfer 17 5/29/01 - WHOLE - BILL 010261 ordinance to be enacted prior to Council's summer recess.
The Administration would propose funding encapsulation in the amounts identified both in the program. If you look at the program transmitted as an attachment to the agreement, the service agreement, with the Redevelopment Authority and the City, there is actually a budget that proposes doing, I believe, uh. . .
While you're looking for that, heretofore has PHA employees encapsulated just PHA properties?
I know that the Housing Authority on a limited basis has done non-PHA properties. The Housing Authority has been more actively involved in doing demolition activity at the behest of the City. As you know, the City has on a very limited basis undertaken encapsulation in the past, and I don't believe the Housing Authority was used in any large scale in doing that, although I know they have done some and I can get additional information that would chronicle the extent of their involvement historically. 18 5/29/01 - WHOLE - BILL 010261
Again, if you could tell us about the transfer appropriations and the sources and amounts from July 1 to the end of December, we would certainly be more than happy to have an ordinance prepared and considered before Council recesses.
The President's comments motivated me to think about another issue that's developing: the sinking homes that we're identifying throughout City. What kind of -- what monies do we have --
Point of information. Which president, President Bush or 19 5/29/01 - WHOLE - BILL 010261 President Verna?
Well, today the President of City Council's the one that I'm referring to, the President. (Laughter.)
Thank you for pointing out that, Councilman Kenney. The sinking home issue, are we prepared in the event that we would have to start demolition to any of these properties that are being identified imminently dangerous that might need to be demolished? Where do we stand in the event that that would surface and we'd have to take some action? Would you have enough money to deal with ha?
The City would have $10 million to spend between -- you know, if this is enacted, $10 million to spend between now and July 1st. And that would enable the City to do, you know, some percentage of the demolition of the dangerous properties that we know about. We would begin making those kinds of triage decisions that the City makes all the time, you know, in picking and choosing exactly which of the dangerous 20 5/29/01 - WHOLE - BILL 010261 properties that we take down. You know, we, of course, wouldn't be able to, you know, do anything comprehensive, but there would be resources to tackle those properties that were the most dangerous of the dangerous properties.
You're welcome. Miss Wilkerson, I think I had asked you a question and I thought that you were going to be responding until I recognized Councilman Rizzo. This is on the encapsulation and the PHA employees. How much and from what source would you suggest that we have this ordinance prepared?
The plan proposed demolishing 500 properties a year at an approximate cost of $6 million. A half a year would be approximately --
You don't mean demolishing; you mean encapsulating?
I'm sorry, encapsulating at an approximate cost of $6 million. I would have 21 5/29/01 - WHOLE - BILL 010261 to confer with Mr. Dubow and get back to you on the proposed source.
Fine. Thank you. And would you let us know, please, before the end of the day so that we could have the necessary ordinance prepared?
I'm not quite sure who I should ask these questions because this is not an Administration bill, but I do need to ask some questions with respects to the potential $8 million transfer. I guess more than a year ago, I probably gained more knowledge about demolition and building 22 5/29/01 - WHOLE - BILL 010261 collapses than I would have liked to have known. It seemed like every other day, I was running around to a new location where buildings were falling down initially in my Councilmatic District, and it was not fun, it was not the way that I had wished to be shown on television. But as a result of that, the City aggressively embarked on a demolition strategy and they took down buildings somewhat at a record pace, and I can only speak for my district in particular. And the early response, the people were pretty satisfied with the City's, you know, willingness to come out and get rid of these dangerous buildings. But not too long afterwards, the questions about what's going to happen now continue to come about. And this year, I'm actually running around, trying to figure out how to get those vacant lots that were created as a result of the demolition clean. And my concern is that I really don't have an answer. To be honest with you, people want to know, are we going to have fencing, are we going to have some kind of lot treatment? And I guess if we're going to continue at a pace, I'm assuming that a substantial part of that will happen in my 23 5/29/01 - WHOLE - BILL 010261 district since, for some reason, I seem to have the majority of vacant buildings. If we adopted this 8, $10 million strategy, essentially a status quo strategy, what am I know going to be able to tell residents in the 5th Councilmatic District, actually some of whom are actually here in the audience today, because I'm looking to be very aggressive in getting out in the neighborhoods this summer, and I really would like to have an answer to talk about the continuous flow of vacant lots that happened as a result of this demolition. Can you tell me if this $10 million, or whatever my share of the $10 million would be to talk about those issues or to give people some hope that something's going to happen, particularly in the short-term basis?
I don't think that $10 million represents an opportunity to change in a fundamental way how it is that we do business. The Administration is working to try to identify additional resources that will enable -- that will enable the City to go into neighborhoods and do more than simply demolish properties. 24 5/29/01 - WHOLE - BILL 010261 And that is one of the things that I tried to point out in my testimony, that there are a number of opportunities available across the City -- that are available across the City if the City can position itself to take advantage of them. In a lot ways, the demolition money, the land acquisition money represent pre-development dollars that position the City to qualify for additional resources. I think that will remain the strategy of the City. I think that what becomes more challenging is leveraging the resources that may become available, because we're not able to move as aggressively in securing the dollars.
But it's my understanding that the question is about the cleaning of the lots once there is demolition. Is that what your question was, Councilman?
Well, it's twofold. One is, and unfortunately continues to be, the cleaning of the lots. In some of the parts of my district that I represent, people are frankly tired of that just being the City's strategy. At some point, you have to reuse the lot for a productive 25 5/29/01 - WHOLE - BILL 010261 reuse. And, you know, people, although they're happy to see L&I come out and cut the weeds, but it's an ongoing process. And at some point, it would seem to me from the City's standpoint, the cost associated with sending municipal workers out and cleaning off a vacant lot at some point doesn't make sense on a yearly and sometimes three or four times during the course of the year. I would have liked to have seen that strategy talk about an interim reuse and a long-term reuse. You know, clearly if we're going to talk about doing what we need to do in these communities, I'm just concerned that this $10 million is just a continued status quo approach and I'll be answering the same questions next summer.
Well, I think that's an issue that we're all concerned about and that's the answers that we're trying to seek and don't get answers to.
The Administration. You're talking about the vacant lots in your district? I have --
I have them in mine as I'm sure everybody else does.
How do we -- what is the plan? I keep asking, what is the plan?
Well, Madam Chair, I've asked the questions and gotten to some degree a framework for a plan but I'm not in a position to talk publicly about that because I don't want to build people's expectations up in the communities that we already have.
I think I ought to come down and talk to you then, Darrell.
I welcome an opportunity to talk to you at any point in time. I guess I'm basically just saying that, you know, having experience as both as a Councilperson and as a staff person, I just get tired of getting beat up about vacant lots and not being able to intelligently answer people in these 27 5/29/01 - WHOLE - BILL 010261 communities about what we're going to do about these vacant lots. And at some point, you know, we got to be able to give people an answer, and I thought, you know, maybe this was an opportunity to be in a position to do that, but I'm not hearing that today. I'm hearing that it's going to be another year of the same, and that just really concerns me. Miss Wilkerson, I understand you --
In terms of vacant lots, the Administration provided in this year's fiscal budget, or the coming year's fiscal budget, additional resources to enable it to undertake a comprehensive vacant lot cleaning strategy that will be announced in the coming month. The proposal is to clean every vacant lot in the City, removing those things that have become impediments to communities participating in maintaining their neighborhoods, and so we'll be moving throughout the course of the year through every neighborhood, taking the refrigerators, the huge weed trees, the mattresses off of lots, and we'll be committing to 28 5/29/01 - WHOLE - BILL 010261 maintaining those vacant parcels in a manageable condition moving forward. Later on, the Administration proposes undertaking vacant lot enhancement on a more selected basis to pursue the kinds of strategies that communities have used in New Kensington, for example, that would actually transform some vacant lots and turn them into community resources.
And the money for the cleaning of the lots has been budgeted?
I had one follow-up question and I know other people want to ask a question and I'll come back on the follow-up round. And I don't know who to ask this question of; it's about the $8 million figure, and I was just trying to get a sense of how did we come to an $8 million figure, what analysis was done to determine if that was an appropriate amount or if anybody took into account the area -- 29 5/29/01 - WHOLE - BILL 010261
Well, I don't know if you heard me earlier, but I did say that prior to this present year, we had only appropriated $10 million for the entire year for demolitions, and I believe during the last three months of the year, an additional $3 million was transferred because the million was not ample. 9 This year, we appropriated $15,846,000 10 and 996 properties have been demolished as of this date, and there still remains in the budget for this year $2,700,000. And it is my understanding that approximately 225 to 250 properties could be demolished, and that would also include the stuccoing. So the 800 was -- or the $8 million plus the 2 million that has already been budgeted would give us $10 million to address imminently dangerous properties between July 1 until December or November, whenever Council decides that we're going to address the NTI issue.
So, in other words this $10 million would be utilized in the same manner in which it was used basically --
This year, 30 5/29/01 - WHOLE - BILL 010261 this year.
With a property collapsed, as it was last year, it was essentially a response mode and not a proactive mode to intelligently demolishing properties, 'cause that's pretty much what I saw was, you know, it was situations where you --
I believe in my district, for instance, and I think Miss Wilkerson's very familiar with this, L&I went out to demolish one property, and as a result of that, I think, what, 10 other properties had to be demolished. So there are monies in there that would address such an issue.
And it's only for -- as I said, it's just for the period of time in which we decide that what we're going to do is address the NTI issue.
Okay, no? Okay, I 31 5/29/01 - WHOLE - BILL 010261 would like to ask a question of the Department of Licenses and Inspections, but they're not here.
You're welcome, you're welcome. Are you finished with Miss Wilkerson?
Thank you, Madam President. Miss Wilkerson, since we're at a stalemate here for the NTI and I guess we could, say, if we close the stopgap measure, this 10 32 5/29/01 - WHOLE - BILL 010261 million, is that what we have here, $10 million?
I said that since we seem to be at a stalemate with the NTI Program, this seems to be a stopgap measure and I can safely assume this $8 million you got in here will be added to the 2 that's left over and it makes million 10 for --
No, it's not left over. That was budgeted for the year 2002.
We haven't gotten to 2002 yet. So July 1 would commence the $2 million so that would give us 10 million for FY 2002.
Thank you, thank you. But my question here is, these CDBGs, it seems to me since we've been at this logjam for however long we've been, I'm getting a lot of reports from the community development corporations in my district that money seems to be frozen out, or 33 5/29/01 - WHOLE - BILL 010261 maybe it's their perception that nothing's going on. And I see the next part here, and let me just say, I'm in favor of this NTI Program, let's make no 5 mistake. I'm in favor of moving it, I'm in favor of having hearings, and I'm in favor of hashing it out here in public at this forum. But my question is, if these community development block grant people, the community development corporations, if they feel for whatever reason that they're being blocked out --
I'm sorry. You're going to have to speak into the mic because I don't think the stenographer can hear you and neither can we.
I'll give her a text of it later, but I'm feeling that these community development people are getting blocked out, and then they start harassing us. I mean --
There's a perception out there that none of the programs are being followed through. I have programs like the Women's Community Revitalization Center in Norris 34 5/29/01 - WHOLE - BILL 010261 Square that have been on the books for three to five years, that they thought they were getting this money this fiscal year coming up. Now all of a sudden, it's not happening, and we're getting (indiscernible) from different community development corporations in my office, and maybe the other District Councilpeople -- I don't know, I think I talked to Councilman Clarke a little bit about it. And there's a feeling, and I don't know if it's true, and I need to know from Miss Wilkerson, are they freezing everything until this happens? Is there anything like that going on?
No, we're not freezing programs. I think some of what's happening is our history is catching up with us, that there -- you know, we did the 108 loan as a strategy for funding activity. The 108 loan is eating up more and more of the CDBG grant every year. There have been a lot of acquisitions that have been authorized that we really didn't have the capacity to fund. And I think it's a lot of the past spending that has eaten into the amount of money that would normally be available, you know. And so what you hear from the groups is 35 5/29/01 - WHOLE - BILL 010261 that there's not the acquisition money, and that's normally the first step in the development process, and it's simply because dollars are limited and there are just not enough dollars to cover all of those activities. And I think what you hear a lot from people is that there's not acquisition activity being funded, and that would be accurate. The pipeline of projects is not really increasing. There's still -- you know, there's the need to work down the backlog that's been created over the years.
Councilman, a point of clarification about the 108 loans. Could you give us a more fuller explanation as to how the 108 loans are eating up -- that's the interest payments on the 108 loans?
And where did we make these 108 loans, and which 108 loans are those that are eating up the CDBG funding?
A lot of them are grant 36 5/29/01 - WHOLE - BILL 010261 dollars given to housing projects. I can get you an accounting of how all of the 108 money has been spent. The grant dollars that go into the housing development aren't repaid. You know, there are also 108 loans in connection with economic development; those get repaid.
Can we get that? Because we'd like to find out how that is eating into the projects that Councilman Mariano is talking about and is leaving us short of funding for those projects that were approved five, six years ago.
Well, isn't this an issue that would come up under the OHCD budget?
Yes. It will be a part of the CDBG hearing. If you look at the --
-- the Year 27 application, there is probably in excess of $13 million out of the CDBG budget that's spent 37 5/29/01 - WHOLE - BILL 010261 toward Section 108 repayment. You know, it's money that went to support projects, you know, folk agreed on, but it's dollars that are no longer available currently to fund the kinds of activities people want to see moving forward. It's catching up with us.
And that's precisely my question, Madam President, is exactly what Councilman Ortiz was alluding to. There is -- when there's this perception that this happens, and believe it or not, it's hard for anyone to sit here. I mean, I'm not an expert on this. You know, I have to rely on my staff, I have to rely on your staff, I have to rely on staffs. So when things start catching up on us, it's much like the statement that was in here about the PHA. Are we taking encapsulizing properties that aren't PHA with PHA money? And if so, if we're doing that, you know, once you start taking out of one pocket on the other, you know, then the checkbook's all messed up. That's how works in my house, and that's why I don't do that.
But I think your question has to be addressed at the OHCD budget 38 5/29/01 - WHOLE - BILL 010261 hearings next week.
That's where that belongs. It's not with the NTI. So Mr. Kromer will be in here next week for his budget.
And he'll come here and do the same dog-and-pony show he always does and we don't get any answers and nothing happens and he looks here with his two different color eyes and nothing happens. I mean, come on. I mean, how long we been here? I've been here six years and nothing changes. And then the groups keep coming to us and nothing happens. We have a chance here because I have the Mayor's Chief of Staff to get something on the record, 'cause I want to push this NTI thing along. And if that helps the community development block grants things, so be it, because they're questions that we deal with.
It's hard to go back to Norris Square and explain the (indiscernible) to Carlo --
I understand what you're saying, but one has nothing to do with 39 5/29/01 - WHOLE - BILL 010261 the other. And if it's something that you want to address under OHCD --
And if you feel that the Chief of Staff can help you, then I think you ought to send her a letter.
And I would suggest you do that before next week's hearings.
I most certainly will do that. Thank you. Madam President.
I just -- I mean, there is some connection to the extent that additional funds are put on the table to fund the activity, to fund the demolition, to fund the land acquisition. It creates -- it relieves some of the pressure on the CDBG pipeline.
Okay. Councilman Kenney. Oh, I'm sorry. Councilman Krajewski, did you want to --
I believe the question is, what are the Administration's plans to do with the houses that are encapsulated?
The proposal is to try to get those back into circulation as soon as possible. Some of the money that was proposed under NTI would have provided mortgage money that we don't currently have that has flexibility that's not tied to being a first-time home buyer that's not necessarily linked to income as tightly as the current program.
Well, would this have to do with section properties, turn them over for Section 8 or what?
I'm not really clear on that either. I'll have to wait for another time. I'm sorry. Councilman Kenney?
Thank you, Madam President. Thank you, Councilmember Krajewski. I guess the overriding question -- I recognize the issue that we're talking about today is this $8 million plus the 2 that will be on hand as a result of the 2002 budget starting in July, trying to maintain a level of safety within the community so that L&I could continue, albeit in an old-style way, continuing to try to get out there and take properties before they fall on people and trying to make neighborhoods a little safer. I guess the overall question I have is that considering that this is the Administration's -- one of the keystones of the administration, something that was talked about during the campaign, and to the Mayor's credit, he's moving forward with it and trying to show some vision for the future of the City, in considering the priority that it is for 42 5/29/01 - WHOLE - BILL 010261 the Administration, what's the big secret? Why are we having difficulty getting all these questions answered about not only the framework of the detail but the details: which neighborhood, when, how expansive, relocation, development afterwards, the disposition of properties, fencing, lot cleaning; all of the questions that the Council President's office has asked. Why, considering that this is such a priority for the Administration and for the City, why the hesitancy in giving us the answers we need so we could have moved forward and had this thing passed by June 14th?
Well, the Administration has not been trying to withhold information. Some of what you're --
I'm sorry, let me be clear. I didn't say that the Administration was withholding information. What I asked was, why not -- since specific questions were asked, why was not the information provided? I'm not suggesting that you have all of these answers and you have them in a lock box somewhere and you won't tell anybody. All I'm saying is that considering the 43 5/29/01 - WHOLE - BILL 010261 need for us to pass this and the priority that this administration has for this project, why not the cooperative effort between the time it was sent over here and today to try to find out what these answers are so we can understand it before we commit $250 million in taxpayers' money to this important project?
The Administration has tried to respond to the questions that were asked. What there is not is a property-by-property plan for either demolishing or rehabilitating properties. And I think that the demolish perhaps provides a good example of that. The Administration was asked, what's the plan for demolition? What we provided to City Council was access to the list of all of the demolished properties in the City. We've provided access to a list of all of the vacant properties in the City, and we've tried to provide to City Council what the framework is for making decisions about how that demolition activity will be undertaken, where it is that it will start and the rate at which it will proceed and how it is that we plan on engaging neighborhoods. 44 5/29/01 - WHOLE - BILL 010261 We've shared with City Council that we envision using a project manager to help us fine-tune the kinds of decision-making that needs to happen. For example, does it make sense to go out with four large demolish packages simultaneously or does it perhaps make sense to stagger the large-scale demolition differently? Those are the kind of decisions that aren't made on Day One, they're the kinds of decisions that unfold over time. What we've tried to provide City Council is a framework for how those decisions will be made. The same kind of thing is true to some extents for the rehabilitation. It is virtually impossible on Day One to fold out a multi-year strategy for how it is that you intend to build out neighborhoods in detail, because you never know what kind of opportunities are going to be available. For example, HUD has recently announced the availability of Hope Six money for the Housing Authority. I think in my testimony I talk about something on the order of 50, $60 million that's available. Those are the kinds of opportunities that you don't know about necessarily on Day One. 45 5/29/01 - WHOLE - BILL 010261 They're the kinds of opportunities that the City has to begin to position itself to take advantage of. Right now, down in Washington, we hear talk about tax credits for home ownership programs. Those are the kinds of things nobody was even talking about six months ago. Those are the kinds of opportunities that may be real. It's not possible to lock down with specificity exactly what's going to happen. Some of it turns on the City's ability to take advantage of opportunities and be flexible when opportunities come down the pipeline. What we've tried to do is present a framework for how decisions will get made as opposed to approaching the challenges in neighborhoods by committing on a dollar-by-dollar, block-by-block basis.
Well, just as an aside relative to your example on federal funding. I remember George W. saying he'd leave no child behind, and he just cut $385 billion out of the education budget, losing a Republican senator to the Democratic side. So I don't know if I would be too dependent on Washington at this particular time for 46 5/29/01 - WHOLE - BILL 010261 education or housing money. The two issues you gave as examples to what is in the, quote/unquote, framework of this particular proposal, does any of this information exist memorialized in the body of the ordinance?
If you look at the attachment, there's a service agreement that's proposed between the City and the Redevelopment Authority. And in the binder that transmitted the rest of the package, there's also a program that talks about the various strategies, it talks about policies, underpinning relocation, for example. It includes a financing budget, you know, breaking out hot Administration would propose spending the money. I mean, there is a fair amount of detail in that document in addition to the Power Point presentation that articulates what the framework is for making decisions moving forward.
Does the attachments to the ordinance represent a mandate by the ordinance, or is it what they call in Harrisburg a "may provision," where we "may" do this, but are required, once we pass this particular ordinance 25 with attachments, does that require you to follow 47 5/29/01 - WHOLE - BILL 010261 those attachments?
The Administration has proposed incorporating that as an exhibit if that's the level of comfort that is desired.
Well, I guess we all have the institutional memory and knowledge. You've sat on both sides of this table as a high-ranking person in the Council President's office under Council President Street and now as Chief of Staff to Mayor Street. And I guess from a matter of style in many ways, could you imagine Council President Street simply accepting a framework of information from the administration of Ed Rendell on a project of this size and this scope and of this intensity for the City's future and this importance? And if the Council President at the time, now the Mayor, had requested specific amounts of information from then-Mayor Rendell, do you think that he would have moved this legislation without the prerequisite information that he was demanding?
I think that there's 48 5/29/01 - WHOLE - BILL 010261 actually a lot of detail. Over $150 million out of the $250 million that the Administration would propose to raise through the issuance of bonds goes to fund demolition activity. There is approximately -- I believe it's $30 million that funds encapsulation activities. And while we haven't supplied specific addresses, we have detailed a fairly specific strategy for how it is we're going to target the properties that will be encapsulated. I think that there -- you know, when you start matching the -- you know, the list of properties with the strategy, you end up with a fair amount of predictability in terms of how it is that the money would be spent. Unlike a lot of issues, I think that this really is one of those issues where you can't lock down everything on Day One. And I think that, you know, the flow of development dollars into the City is a good example of that.
Could you give me an example of what those development dollars that flow would be?
For example, you have the Hope Six money coming into the City. You have the Jefferson Square money that is available. 49 5/29/01 - WHOLE - BILL 010261 And then you have the LISC money. LISC is a foundation-funded organization that works all over the country dealing with housing challenges. LISC came to the City. It had managed to secure grant funding from the Nationwide Insurance Company and was looking to do something with homeowner rehab. That is not the kind of opportunity that was created by the City; it's the kind of opportunity that the City has to react to. It's the kind of opportunity that is not traditionally funded out of the CDBG budget because those funds so narrowly crafted.
What would be the City's required contribution to a project like that?
On the LISC Nationwide project, the City's contribution would be $450,000 to raise the fund in excess of 2.5 million -- I think it's $2.5 million.
The challenge is finding the dollars that create the kind of flexibility. One of the things that the Administration is 50 5/29/01 - WHOLE - BILL 010261 committed to is not just doing work in traditional CDBG kinds of neighborhoods. It is always a challenge for the City to come up with dollars that provide flexibility, and I think that is one of the things that the Administration has tried to incorporate into the NTI Program. Not all of the funds are demolition dollars, not all of the funds are essential purpose bonds. Some of the funds are, in fact, taxable funds that create the flexibility to go into neighborhoods that have not traditionally received any kind of City support and undertake those kinds of programs that a lot of people think are essential if we're going to begin tackling the challenges and stabilizing the neighborhoods.
Well, the only suggestion that I would make is, again, as an at-large Councilmember, I'm approaching it from a little bit of a different situation. And that concern about the City as a whole overall, our fiscal situation, the money that we borrow, us being fiduciarily responsible individuals as the board of directors of this company. But the District Councilpeople, they really have a challenge there, and that challenge 51 5/29/01 - WHOLE - BILL 010261 cannot be met, in my opinion, unless all of the information that's available is freely shared and freely understood so that when we finally vote on this, we have a level of comfort that we are taking a real risk with basically ten years' worth of demolition money collapsed into two years. I mean, if don't do it right, there's going to be a lot of hopelessness out of there and a lot of upset.
Well, I mean, on the demolition, perhaps two to three, I guess.
Five-year? Well, we're collapsing ten into five. And the other thing that I think the Administration does understand and what I would like to reiterate today is that once we authorize that $250 million borrowing, we're basically out of it, we're basically out of it. I mean, you can -- we're basically out of it from an institutional standpoint. You can make commitments that we're 52 5/29/01 - WHOLE - BILL 010261 going to, you know, we're going deal with the District Councilpeople and deal with the community people, but once we've given the okay on the money, for all intents and purposes, it's your ball to run with. And I want to make sure before I cast my vote that all those t's are crossed and i's dotted and plan is fleshed out much more than it is today.
Mm-hmm. Just on that last matter, I think that probably has been one of the issues that -- it's one of those issues that merits additional conversation, and I think trying to come up with a forum that will allow, you know, a free-flowing share of information would aid the process. As a matter of fact, I think that a lot of -- this will not be Council's last run at the kinds of decisions that get made. As many of District Councilpeople know, it is virtually impossible to undertake any kind of activity in most districts without coming back to City Council, whether it's property that's come into the City inventory as a result of sheriff's sale, whether it's a condemnation and a disposition that's happening as a result of the urban renewal process. 53 5/29/01 - WHOLE - BILL 010261 The decisions end up coming back to City Council for approval either through resolution or through ordinance. A lot of these projects that happen will happen with the support of CDBG dollars, for example. The CDBG dollars are approved by Council on an annual basis. It's not a onetime kind of program; it's the kind of -- it is an initiative that lays the groundwork for decisions and funding commitments that will be made well into the future. And it's those kinds of decisions and funding commitments that come back to City Council as a matter of course. And there's nothing about NTI that would change that.
Well, finally, you know, I just think it's obvious that, with the exception of a few members of Council, that there's not enough information for us at this point to deal with this. We have the summer with which to work on this with Council President's staff and with our own staffs. And I guess as Sister Mary Amadeus used to say, "A word to the wise is sufficient." And I would hope that we would have enough information to 54 5/29/01 - WHOLE - BILL 010261 come back here in September to move forward together with this. Thank you.
Thank you. The Chair recognizes Councilman Rizzo.
Oh, Madam President I'm fine. I think my question was answered. But while I have the opportunity, Councilman Kenney was referring to George W. Was he referring to the President or the former president?
I was referring to the President, 'cause the former president would not have been so coldhearted; he was a much nicer guy. Thank you.
Thank you, Madam Chair. I just want to go back, Miss Wilkerson, to a question that was asked by Councilwoman Krajewski in relationship to encapsulated properties and Section 8. I actually had a conversation with the Mayor on Thursday, and part of what I'm about to ask I was going to do in the form of a letter and he 55 5/29/01 - WHOLE - BILL 010261 understood that would be coming to his office. And I think Councilman Kenney touched on it as well. For me to be able to deal with the issue of relocation, which basically says that if we take -- and I think this is in the plan. And, again, because there really is no blueprint yet, a finished, final blueprint, I have to assume that in neighborhoods that have some deteriorated, blighted properties that may be boarded up or may be eventually encapsulated, that those would probably become primary places for people to be relocated to. And I don't have a problem with that 'cause I've dealt with, in the six and a half years here, there are two public housing projects that have been imploded in my projects, which required probably a thousand or so relocated families. And more recently with Jefferson Square, as you're well aware of -- and I appreciate support on Jefferson Square -- we have a plan that we worked with for about four years on how we move people from one side of the street to the other side or within a two-block area, and there's a basic relocation plan. Whether that would fall under the same definition as how we would handle Section 8 or not, I don't know, but I 56 5/29/01 - WHOLE - BILL 010261 would have to think it would be something similar to that. So I guess the question is, is there anything that we can put our arms around now and say that when we will be dealing with -- and we know we will be dealing with relocation. I mean, that's obvious, there's just no question about that. How do we deal with that? And I say "we" with all due respect to the at-large Councilpeople. As District Councilpeople, we need to be able to deal with the CDCs, and I'm willing to take on that job because I've done it and it's painstaking and it's a difficult task, but you have to do it. Do we have anything in the plan, in the NTI plan, that would be specific to the Section 8 and/or relocation phase of the NTI Program?
What the plan talks about is providing people with the opportunity to relocate in their neighborhoods to the extent they want to. We have the OHCD people and the RDA people actually pulling together the relocation experience that the City has confronted. Most people, in fact, choose to relocate within their own neighborhoods. When there are housing alternatives available, 57 5/29/01 - WHOLE - BILL 010261 people will frequently will want to stay in their neighborhoods because they have family, they have supports, the kids are in school. What we say --
Which is basically what -- when I say "we," my CDC attempted to do a Jefferson Square. I mean, in the beginning, people thought we were trying to gentrify the and neighborhood I understood that they were sensitive to that and we understood that there were families who have lived there for 50 to 100 years, and every attempt was made to offer them the opportunity, if they chose, to stay within the community. And I think that's good but I don't know if it's been explained enough or has been explained at all.
It's attached as a part of the program that was transmitted to City Council. That is probably the overriding policy that carries across the board. Section 8 has become, I think, a red herring to a large extent. We talked about using Section 8 resources because Section 8 resources enable the City to stretch the dollars that we're 58 5/29/01 - WHOLE - BILL 010261 going to have to put behind relocation. In order to move a tenant family, provide the relocation benefits that are required by federal law probably costs in the neighborhood of $27,000 a household. We can get out from under having to cut a check for $27,000 to a renter family by providing a Section 8 certificate. What Section 8 enables the City to do is leverage the dollars, that, you know currently look enormous down the road are going to be looking very, very limited. I think this administration understands that Section 8 presents challenging issues. We have ongoing dialogues with the federal government about getting a handle on Section 8. We have been -- Carl Green and the people at the Housing Authority have become much more aggressive in going after property owners that abuse the program, going after renters that abuse the Section 8 program. I was in a meeting with Carl Green the other day. He was saying for every family that they're moving into the Section 8 program, they're terminating a family. This is the kind of reaction that you didn't get in the Section 8 program even five or six years ago. You know, so it's a much 59 5/29/01 - WHOLE - BILL 010261 better run program than it was before. There are discussions going on with the federal government about trying to increase the number of Section 8 site-based certificates as a way of getting a handle on some of the Section 8 issues. I think, though, that to characterize relocation as being something that, you know, raises all of these Section 8 problems ignores both the history of how, you know, relocation programs have been handled in the past and also, I think, mischaracterizes how we intend to use the Section 8 program in connection with relocation moving forward.
And with all due respect, I think that gets to the heart of it. It's the problems in the past in how the program has been initiated that raises all of those concerns.
Thank you. Councilman Clarke is next. I believe I did see Mr. Solvibile here from L&I. Do you mind approaching the witness table. 60 5/29/01 - WHOLE - BILL 010261 (Witness comes forward.)
I believe Councilman Clarke would like to ask you a question.
I do have some follow-up questions to the last statements of Miss Wilkerson.
And I guess I just want to make these general statements as I listen to the testimony, Madam Chair. I've been a Councilperson a little more than a year and a half, but I've been here actually longer than a lot of people who are sitting in this room. And the one thing that perplexes me as we continue to talk about the lack of a specific plan as it relates to particular Council District people. During my tenure here, it's always been the concern of Councilmembers and Council staff people that too often, the finished product delivered to us and we were being told that this is what's going to go in this particular neighborhood, this is the plan, this is developer. And over the years, as a result of the increase in Council staff -- I can actually remember when there were only 61 5/29/01 - WHOLE - BILL 010261 like -- each Councilperson had, like two --
One staff person? I came a little later than you so they actually had three staff people by the time I got here. And as the technical staff continue to grow, the level of involvement as it related to Councilpeople in the development process increased, and it actually got to a point where recent administrations, before they determined that development was going to take in the neighborhood, they actually told the developer to go talk to the Councilperson. So it's to a point now where nobody in the does anything in the district without talking to that Councilperson. But as I sit here today and I hear criticism associated with the NTI and the Administration on the Administration not submitting a final plan to these same Councilmembers, I -- frankly speaking, I don't understand that, 'cause I would be somewhat dismayed if I received a final plan without having my involvement and representatives from the 5th Councilmatic District's involvement. And I just don't understand where that's coming from. 62 5/29/01 - WHOLE - BILL 010261 And as it relates to the demolition issue, Bob Solvibile and myself probably talked, what, two three times a week, Bob? If not more.
Maybe more. I think more, Councilman. I think maybe every day. I'm not sure.