Committee Hearing, November 14, 2006

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON FINANCE - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, November 14, 2006 3:25 p.m. - - - PRESENT: COUNCILWOMAN JANNIE BLACKWELL, CHAIR COUNCILMAN FRANK DiCICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILWOMAN MARIAN B. TASCO COUNCILMAN JUAN RAMOS BILL 060005, An ordinance amending Section 4.09 of the Restated General Water and Wastewater Revenue Bond Ordinance of 1989... - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2

Good afternoon. Thank you all for your patience and for being here. A quorum being present, the Committee on Finance with regard to Bill 7 No. 060005 is called to order. We have a quorum. To my left, Councilman W. Wilson Goode, Jr. To his left, Councilwoman Marian Tasco. To my right, Councilman Frank DiCicco. We thank you all for being here and we thank the staffs from other members of Council who are here as well. We'll ask the Clerk to read the title of the bill.

Bill 060005, an ordinance amending Section 4.09 of the Restated General Water and Wastewater Revenue Bond Ordinance of 1989 to authorize the Director of Finance to use funds currently held in the Debt Reserve Account established and maintained under the said General Ordinance to purchase appropriate surety bonds or insurance 3 11/14/06 - FINANCE - BILL 060005 policies for deposit in the said Debt Reserve Account in lieu of current deposits; further, directing the Director of Finance to transfer all excess funds remaining in the said Debt Reserve Account after purchase of the said surety bonds or insurance policies to the Water and Wastewater Revenue Fund; and further, amending Section 4.12 of the said Restated General Water and Wastewater Revenue Bond Ordinance of 1989, entitled "Residual Fund," to establish a new subaccount into which shall be deposited all residual water and wastewater operating revenues resulting from the transfer of funds from the Debt Reserve Account to the Revenue Fund and thereafter to the Residual Fund, the entire balance of the said new Residual Fund subaccount to be used to finance water-related infrastructure projects.

Thank you very much. We also have Councilwoman Blondell Reynolds Brown, also a member of 4 11/14/06 - FINANCE - BILL 060005 this Committee, who has joined us. We would now like to begin our testimony and ask our Stephanie Naidoff, the Commerce Director, City of Philadelphia, to join us and with whomever she might bring. Also, Vince Jannetti, Finance Director, City of Philadelphia. We also have Bernard Brunwasser, Water Commissioner. I also see our head of NTI.

Eva Gladstein.

Yes, Eva Gladstein, head of NTI, and Kevin Hanna, Secretary of Neighborhood Preservation, Office of Housing and Community Development. And if I missed someone, I'll ask you, Madam Commerce Director, to introduce them to our record. Thank you for your patience and begin your testimony.

Thank you very much. Good afternoon, Councilwoman Blackwell and members of the Finance Committee. My name is Stephanie Naidoff 5 11/14/06 - FINANCE - BILL 060005 and I am the City Representative and Director of Commerce for the City of Philadelphia. I am here today to present testimony in support of the release of approximately $130 million from existing Water and Wastewater Revenue Bond proceeds for the Mayor's New River City initiative. Joining me today are Vince Jannetti, Acting Director of Finance; Bernie Brunwasser, Commissioner of the Water Department; Kevin Hanna, Secretary of Housing; and Eva Gladstein, Director of Neighborhood Transformation. Bill No. 060005 will authorize the Director of Finance to use funds currently held in the Debt Reserve Account to purchase a surety bond or insurance policy for deposit into the Debt Reserve Account to replace certain bond proceeds held in that account. The Debt Reserve Account currently has approximately $177 million. The ordinance will allow for the liquidation of $125 million of this amount for the 6 11/14/06 - FINANCE - BILL 060005 purpose of financing certain water-related infrastructure projects, plus the amount needed to pay for the costs associated with the surety bond or insurance policy. It is estimated that these transaction costs will be approximately $5 million. We are proposing to access the $125 million within the guidelines of the original Bond Ordinance to implement the New River City initiative. In other words, all investments made with these funds will meet eligibility guidelines for capital expenditures to the water and sewer system as approved by Bond Counsel. The release of a portion of the funding currently in the Debt Service Reserve creates a unique opportunity for the City to positively affect the quality of life for our residents and spur public and private development by leveraging state, federal and private funds for new developments in neighborhoods in the midst of revitalization. In addition to 7 11/14/06 - FINANCE - BILL 060005 encouraging waterfront development with public access through infrastructure easements, this funding initiative will help the City demonstrate the impact and future potential of its 2006 storm water regulations to better address storm water management in an urban environment. The new regulations, combined with development and redevelopment projects, can result in overall improvements to the City's precious water resources. The regulations require designs that provide infiltration or retention of the first one inch of rainfall, and control of storm water runoff pollution through low impact development practices, while at the same time alleviating flooding to neighborhoods during particularly intense rainstorms. This exciting initiative will redefine and reconnect the City's waterfronts with adjacent neighborhoods in a way that can simultaneously promote smart development while solving some of 8 11/14/06 - FINANCE - BILL 060005 the City's most fundamental planning challenges. In 2004, Mayor Street announced his visionary New River City initiative, the Administration's pledge of public investment in planning, site assemblage and infrastructure in a comprehensive manner to stimulate widespread investment in the City's waterfront. In step with the Economic Development Blueprint, this effort will carry out the implementation of master plans for the Navy Yard, the North Delaware River, the Schuylkill River and, most recently, the Central Waterfront. It will also leverage the City's successful Neighborhood Transformation Initiative when opportunities are identified to use publicly owned land for multi-block storm water management systems. It is already evident that the Mayor's initiative has sparked enthusiasm in the developer community resulting in their commitment to build and grow our 9 11/14/06 - FINANCE - BILL 060005 economy.

We are already witnessing new residential and commercial developments along the 38 miles of Philadelphia's Delaware and Schuylkill Rivers. This unprecedented level of development will reposition hundreds of acres of waterfront property for exciting new mixed-use development and, in doing so, create new tax and rate-payer bases in these areas. But this initiative is not just about rebuilding our waterfronts. It is about revitalizing our neighborhoods as well. Publicly subsidized affordable housing projects, City parking lots, recreation and other City-owned facilities that are located in areas that require improved storm water management or other water infrastructure are also included in this initiative. The funds will be used for design and construction of new water, wastewater and storm water infrastructure for the public good. All improvements will be located in public streets or rights-of-way where 10 11/14/06 - FINANCE - BILL 060005 the City will own the infrastructure. The benefits that the citizens of Philadelphia will reap from this initiative are substantial. We will redefine the City's relationship with its waterfronts as private developments and public open spaces are positioned to take full advantage of this untapped water amenity. This plan, in essence, will transform burdensome liabilities into productive, valuable assets. Blighted industrial sites along the river's edge will soon be transformed into new vibrant neighborhoods, and they will require new water systems and streets. Since residential water demand is significantly different than that of industrial demand, the City will install systems tailored to residential consumers in the newly created public rights-of-way. From these public mains, private developers will connect their own infrastructure. The installation of these new main systems will require 11 11/14/06 - FINANCE - BILL 060005 private developers to delineate and maintain corresponding rights-of-way for secondary use for public access. Central among public amenities created will be new trails along our rivers, allowing residents the opportunity to enjoy the riverfront in ways not currently possible. This strategic public investment will result in new neighborhoods with new water and storm water infrastructure, new public streets, and public access to the river in the form of river's edge trails that will be maintained by the developer. Building on the extraordinary efforts of the Schuylkill River Development Corporation and the Delaware River City Corporation, our goal is to create contiguous pathways around Philadelphia along the Delaware and Schuylkill Rivers. Furthermore, larger City-owned parcels with outdated sewer and water infrastructure will be upgraded and marketed for housing projects or 12 11/14/06 - FINANCE - BILL 060005 repositioned for a combination of development of green spaces and storm water retention structures that will serve as permanent public amenities. In some cases, we may be able to install storage systems beneath the surface while integrating the landscape above, thereby maximizing the benefit to the public. Consistent with the Economic Development Blueprint, we have identified four broad categories of projects to be funded through the New River City initiative. Those categories are Residential and Commercial Development, Navy Yard Infrastructure Modernization, Public Infrastructure Improvements and the Green City Strategy. A selection process for projects has been established in which the Commerce Department will coordinate the review of all eligible proposals by a committee comprised of the Office of Housing and Community Development, the City Planning Commission, the Managing Director's 13 11/14/06 - FINANCE - BILL 060005 Office, the Water Department and the Office of Neighborhood Transformation. A report with a summary status of all projects funded under the New River City initiative will be provided to City Council annually by the Commerce Department.

The Residential and Commercial Development component of New River City funding will create and preserve public access to the waterfronts by linking public assistance with the design and construction of water and sewer infrastructure for private, commercial and residential redevelopments, with the establishment of a riverfront right-of-way design and a commitment to the creation and maintenance of public open spaces and waterfront access. The City's efforts to implement a master plan for the North Delaware Greenway is a prime example of the coordination between public and private development. Earlier this year, that 14 11/14/06 - FINANCE - BILL 060005 master plan was completed and has since been adopted by the City Planning Commission. It includes an implementation strategy for the eight-mile, publicly accessible riverfront greenway corridor, river road and trail system extending from Bridesburg to Glen Foerd. The Delaware River City Corporation was created earlier this year to oversee the implementation of the plan. In addition to the tremendous recreational redevelopment planned there, the North Delaware is experiencing a significant transformation with the residential and mixed-use development proposed for vacant and underutilized industrial sites. By working with the private developers, the New River City funds will play a key role in bringing redevelopment plans like the North Delaware greenway and trail to fruition. To date, several private developers have purchased large, vacant formerly industrial parcels, 15 11/14/06 - FINANCE - BILL 060005 totalling over 200 acres along the North Delaware and have planned these new developments that will bring over 3,000 units of housing, as well as some retail to these communities. For example, in Bridesburg, there are plans for a new 600-unit residential development on currently vacant industrial land. None of the vacant industrial sites identified for mixed-use development have adequate water and sewer infrastructure for residential development. These new developments will expand the tax base and bring new residents to the City. All of these developments will incorporate portions of their sites to be included in the trails, roads and greenway consistent with the approved master plan. We believe that the success in implementing the North Delaware plan can be replicated on the Central Delaware Waterfront and on the Schuylkill. Funding for the Navy Yard Infrastructure Modernization Program will 16 11/14/06 - FINANCE - BILL 060005 be directed by the Philadelphia Industrial Development Corporation's Navy Yard Master Plan. The plan recognizes the need to replace antiquated water, drainage and sewer systems to allow us to reposition 500 acres at the Navy Yard for mixed-use redevelopment. The Infrastructure Modernization Program upgrades the water and sewer infrastructure at the Navy Yard to ensure safe and efficient water delivery and drainage in anticipation of a total build-out of more than 10 million square feet, leveraging $2 billion in private investment. The Public Infrastructure Improvement category will provide for the installation and underground storm water or sewage detention facilities that significantly reduce the occurrence of overflows of untreated wastewater into the City's rivers. The funding of these projects will result in the protection of public waterfront investments and the 17 11/14/06 - FINANCE - BILL 060005 assurance that the City's river resources are preserved as a public and aesthetic amenity that can leverage private development opportunities. The funding will also serve to alleviate significant flooding that has occurred in a variety of City neighborhoods as a result of storm water volumes generated by extreme rainstorms that overburden the City's sewer system. Public infrastructure projects will be selected based on timing of construction and positive impact on communities.

Under this category, the City would look to install new storage basins to divert and detain excess storm water in order to alleviate overflow problems that plague areas along the waterfront. The Green City Strategy will fund new or upgraded water and sewer infrastructure and storm water management features in neighborhoods on publicly owned parcels, publicly subsidized housing and City-owned facilities to 18 11/14/06 - FINANCE - BILL 060005 provide the maximum benefit to the City's sewer infrastructure. These projects need not be located along the riverfronts, but must be designated to manage the storm water runoff from adjacent areas in addition to the runoff generated by the site itself. In 2003, the City of Philadelphia and the Pennsylvania Horticultural Society's Philadelphia Green Program entered into a partnership to create the Green City Strategy. Funded by the City and implemented by PHS, this initiative has made it possible for the City to begin to gain control over vast quantities of vacant land and transform neighborhood eyesores into assets. The City now has the equivalent of more than 6,000 row home parcels under management, some in the hands of neighborhood-based community land caretakers and other parcels hosting grass, trees and wooden fencing that are maintained by PHS. GreenPlan Philadelphia, the City's open space 19 11/14/06 - FINANCE - BILL 060005 planning process launched earlier this year, will continue to move the City forward in its understanding, development and management of vacant land and other open space within our communities. All funding provided through the New River City initiative will be used in a way that is consistent with the Water Department's Bond Covenants. Some of the criteria that will determine which projects receive funding are the maximum volume of storm water removed from the City's sewer system, flood relief to the community, impact at the river outfall, and the ability to permanently incorporate parcels designated for storm water management into the City's land inventory, as such projects effectively become an extension of the City's infrastructure. Building upon these activities, the Green City Strategy component of New River City will work throughout Philadelphia neighborhoods to support 20 11/14/06 - FINANCE - BILL 060005 water infrastructure needs of affordable housing and mixed-use developments. It will also be available for investment in storm water management systems using vacant parcels in flood-prone areas and other publicly owned land such as playing fields and neighborhood parks. Eligible projects will mitigate storm water runoff impacts on waterways, increase their storm water management potential through a combination of best practices, while improving the appearance of vacant lots and other publicly held open spaces. Locations will be determined in consultation with the Water Department. We anticipate that this work will serve the City both by improving our water infrastructure and by supporting community development, as demonstrated by a recent study by Dr. Susan Wachter and Kevin Gillen of the Wharton School of the University of Pennsylvania. This study corroborates a 2005 study finding that the City's Green City Strategy created 21 11/14/06 - FINANCE - BILL 060005 significant economic values. While proximity to a vacant lot can reduce the value of an adjacent home by percent, 5 adjacency to a vacant lot that has been 6 cleaned and greened can increase adjacent 7 property values by as much as 17 percent. 8 The storm water management projects 9 incorporated into the stabilization 10 process of vacant lots will provide even 11 greater environmental and economic 12 benefits to the community. 13 At this time, we would like to 14 propose an amendment to the ordinance to 15 include an Economic Opportunity Plan to 16 ensure that all segments of our community 17 can benefit through the construction of 18 this water infrastructure.

The EOP has 19 been drafted similarly to that of Bill 20 No. 060692, the Philadelphia Authority for Industrial Development Revenue Bonds for the City of Philadelphia's Cultural and Commercial Corridors Program EOP, which we discussed at a hearing of this Committee on October 17, 2006. 22 11/14/06 - FINANCE - BILL 060005 In summary, the New River City initiative provides the opportunity to meet two important objectives: First, helping the City comply with new water regulations by making capital infrastructure upgrades to our water system, and, second, spurring new development in otherwise blighted areas, to grow our economy and to enable the City to once again enjoy its rivers in a clean and safe manner. Thank you for the opportunity to testify on this important matter. My colleagues and I are happy to answer any questions that you may have at this time. Thank you.

Thank you, Madam Director. The Chair notes that Councilman Juan Ramos is also here and a member of this Committee. And so we are very happy to have our colleagues present, all those who are on this Committee. Could someone explain the 23 11/14/06 - FINANCE - BILL 060005 participation requirements contained in the proposed Economic Opportunity Plan and overall give us an overview of this document.

Ms. Gladstein will do that.

Thank you, Ms. Gladstein.

Good afternoon. For the record, Eva Gladstein, Director of Neighborhood Transformation. In essence, this Economic Opportunity Plan has the same requirements as those that were included in the City's Cultural and Commercial Corridors Bond issued through PAID. It requires 60 percent participation of Philadelphia residents in terms of workforce hours, 43 percent participation of minorities and seven percent participation of women in terms of workforce hours. In terms of vendors who would be selected, the requirement is 35 percent participation of minority 24 11/14/06 - FINANCE - BILL 060005 business entities, 12 percent participation for women business entities and two percent participation by disabled business entities.

Thank you very much. I'll hold my questions. Questions from members of the Committee?

Thank you, Madam Chair.

Certainly. Councilwoman Brown.

Good afternoon. Councilwoman Tasco and I are here listening with interest, as we always do when it comes to the articulation of numbers. Is there anywhere in this document language that speaks to compliance for type of measures you will put in place to ensure that these goals are met? And if they're not met, what type of inner steps do you implement to get you to these goals?

Again, similar 25 11/14/06 - FINANCE - BILL 060005 to the previous Economic Opportunity Plan, MBEC will be providing monitoring on the best effort -- to ensure that best efforts are made in the selection of contractors and vendors. That's, if you have the document in front of you, on . In addition, there will be an oversight committee, which is referenced on , again, with a similar composition to one from the previous plan, which will include the participation of City Council. And in general, our language is to try to use persuasion and negotiation to the best of our ability.

Point of information, Councilman Goode.

Ms. Gladstein, you keep referencing the other plan, and it looks similar, but do you have a copy of the other plan with you?

I apologize. I do not have it with me. I can make it 11/14/06 - FINANCE - BILL 060005 available to you tomorrow.

Just a quick follow-up. Does the other plan actually reference MBEC-certified companies?

Yes.

It did? I have some other questions, but I'll ask them later.

I actually lost my train of thought. You can continue.

MBEC is essentially pulling from the same database that it always has, so why would you expect to be able to expand participation just based upon the MBEC database?

We are incorporating -- we have been working with relevant departments to incorporate in their bidding documents, which will be managed through the City's Procurement Office, these requirements, which is similar to how we've managed NTI 27 11/14/06 - FINANCE - BILL 060005 demolition contracts. We've also looked at how contracts are sized to help ensure minority participation. We've also added an additional compliance monitoring in the form of contracting with an outside agency, which has been GPUAC, Greater Philadelphia Urban Affairs Coalition, to look at the utilization of workforce, not just firms or contracts.

Not just the what? The last part of your testimony was what, not just the?

I'm sorry. To look at workforce utilization. So we have two issues here, one which Councilman Goode was asking about, which is the number of firms that are on the MBEC-certified list, and the second issue is actual workforce hours, who is employed to do the work.

Is it a fair statement that the overwhelming majority of disadvantaged businesses are not MBEC 28 11/14/06 - FINANCE - BILL 060005 certified?

I can't speak to that. I'm sorry.

Is there anyone that can speak to that? (No response.)

I'm not sure that -- and I didn't catch it in the last document when we approved the other bond. I'm not sure that we should approve anything going forward that limits the pool of disadvantaged businesses just to MBEC certified. The overwhelming majority of qualified disadvantaged businesses in the City are not MBEC certified. I'm not sure that makes a difference. They may be certified in other cities, in other states. They may have federal certifications, and we are not pulling from a large enough pool of disadvantaged businesses and that's why we're ending up with the same results. So if we're only dealing with a pool of MBEC-certified businesses, I have a 29 11/14/06 - FINANCE - BILL 060005 problem with that.

Councilman, Vince Jannetti, Acting Finance Director. I'm going to ask for a representative of the Minority Business Enterprise Council to come over and respond, if I could.

I'm sorry. I missed your comment.

I'm going to ask that someone from the Minority Business Enterprise Council come and join us and answer your concerns.

Thank you.

As a part of this hearing?

I'm going to try, yes.

Thank you. Another question. There will be comments made with regard to this New River City initiative that it should not be public dollars going into what are essentially private ventures. It's not my line of 30 11/14/06 - FINANCE - BILL 060005 thinking, but the question I do have -- I do believe this is a good public investment and is an economic investment, and I do see it that way. That's why I'm generally in favor of this bill, but how do we know whether this public investment is just part of a larger pool of public investment? In other words, is there any limitations to how much more money will be poured into projects beyond this? To some people, there's a thought that no public money should be going to this, and I would disagree handily, but how do we guarantee that this doesn't become a bad public investment by other public dollars being overly invested when we've already committed?

For the record, my name is Kevin Hanna. I serve as Secretary of Housing. Relative to the developments that are contemplated up and down the North Delaware, the type of investments 31 11/14/06 - FINANCE - BILL 060005 that we're looking at in or along that area are public investments, yes, that will leverage private dollars, yes, but they're investments that need to be made anyway if we were to see any type of development there, whether it's commercial or residential. I can't give you a specific multiplier factor, but I can say with a pretty good deal of certainty that these public dollars, which for this particular portion of the 125 here, we're talking about 40 million, these 40 million, as spread out however they're decided to be spread out, will be leveraged by hundreds of millions of private dollars just along the North Delaware. My guess is that the folks from PIDC can give you the same kinds of assurances relative to the Naval Yard, but as far as the 40 million for the North Delaware are concerned, these dollars will make it possible for, again, an unknown factor of additional dollars to be invested along the same area of the 32 11/14/06 - FINANCE - BILL 060005 North Delaware.

But is there any formula or cap to how much public investment is going to go into these projects? I would suggest that I'm fine with investing in water infrastructure in these projects. I'm fine with other public investment, but the question is, there's no way to tell from this how much public investment we're actually making, and if we are investing and the way we're investing using this particular financing mechanism, which can be perceived as being paid back by the rate-payers, it's not just a matter of us taking money from the rate-payers, but are we also asking them for other pools of money?

We do have a pay-back analysis, and maybe Mr. Jannetti can speak to that.

In the end, is there some ratio of public to private funds or some cap on public participation in these projects? 33 11/14/06 - FINANCE - BILL 060005

Or some formula. COMMISSIONER BRUNWASSER: My name is Bernard Brunwasser, Water Commissioner. We have looked at a pay-back for the public money that would potentially be part of the development of these sites, and the pay-back is on the order roughly of years where our 12 investment -- where we at least break 13 even on investment. We don't typically 14 look at these as a business does because 15 we're not a business per se. 16

It's a public 17 investment to stimulate new communities 18 and new development, and in many other 19 ways, as you know, we have mechanisms and 20 tools that we use. The proof of the 21 pudding is that there is incredible 22 development going on all along the 23 riverfront in just the few short years 24 since the Mayor has announced the New 25 River City initiative, and we believe 34 11/14/06 - FINANCE - BILL 060005 that the leveraging effect of the public investment is going to be a tremendous end result and great economic vitality for the City.

Let me take one more shot at this before allowing Councilwoman Tasco. Let's say that I agree, as I do, that investing tens of millions of dollars or hundreds of millions of dollars in water infrastructure is a unique and dynamic way of public participation in these economic development projects. My question is, is there any guarantee that we're not pouring hundreds of millions of dollars of public money in those projects on top of this?

In addition to this 125?

Yes.

I don't know that we can guarantee that there won't be any additional dollars, because it occurs to me that the developers could go to the 35 11/14/06 - FINANCE - BILL 060005 state for additional dollars.

Local public dollars.

Local public?

And I'm not suggesting that there shouldn't be any other local public dollars that go in, but is there some cap beyond this or some formula that suggests that we're not going to exceed public participation much beyond this?

The answer to the specific question of whether there's a cap or a formula, no, there is not a cap nor a formula. But I can say, again, with a good deal of certainty that there is no more additional private -- I'm sorry; public local dollars contemplated aside from the money that we're talking about here. Now, that's not to include the tax abatement. That goes to any and all new development. But as far as additional local public funds go, to my knowledge -- and my colleagues can chime 36 11/14/06 - FINANCE - BILL 060005 in here -- to my knowledge, I don't know of any additional contemplated at this point.

Okay. Thank you.

Councilman DiCicco was next, unless this is a follow-up on the same issue. Councilwoman Tasco is happy to yield.

Councilwoman, if I might, actually something was just brought to my attention. I was thinking along the lines of North Delaware. As part of the Green City Strategy, there will be subsidized housing. Subsidized housing could be a potential benefactor of these dollars. So from that standpoint, yes, there could be some more local dollars when it comes to subsidized housing. Again, my answer was based on thinking specifically about the North Delaware. I'm sorry. Councilman DiCicco. 37 11/14/06 - FINANCE - BILL 060005 COUNCILMAN DiCICCO: I'm going to yield to --

I just want to piggyback on the Councilman's question. I think the question is, if you look at a developer who comes to you to seek funds, some of the water funds, do you look at what other public subsidy they're receiving, tax abatement, maybe they're in a Keystone Opportunity area or some other public investment? I think what the Councilman is saying is, how much do you give? Is there a cap on how much you invest in a project? What's the ratio of public dollars to private investment? And will that be taken into account, or you haven't thought about it? You said you were talking about developers. Are those developers that you're talking to, has there been any analysis of how much they are receiving in terms of public subsidy or maybe some loan from the City or some other public investment? 38 11/14/06 - FINANCE - BILL 060005

The projects that will be eligible for investment from these funds have not been identified specifically, and we will continue to have conversations with developers who are planning these projects. In doing that, we have a whole list of items that we will be looking at, and one of the big ones is how much are we leveraging, how much is our public investment going to leverage in terms of the private investment. But we're also looking at the ability to leverage other dollars in the process, federal and state dollars particularly.

I was reading the op-ed piece prepared by Councilwoman Krajewski where she talks about the wonderful development in her area, which seems to be moving along already. Do you backtrack now and go in to provide subsidies or some support to those developers who have already started their project? 39 11/14/06 - FINANCE - BILL 060005

I've not read Councilwoman Krajewski's op-ed, but the projects, again, that are being contemplated for use of these funds are right now, by and large, vast vacant lots. There's no work, no dirt, so to speak, being moved on these developments at all. Again, not having read her op-ed, I'm not quite sure what development she's referring to, but the development we're talking to has not started, has not occurred yet. In fact, if you were to drive by it today, you wouldn't know what kinds of things are contemplated for them if you didn't have somebody to kind of point it out to you.

So the interested parties have come to you to say that they're interested in developing on the waterfront. They haven't submitted plans or made any requests, it's just an area of interest?

No. They've come 40 11/14/06 - FINANCE - BILL 060005 to us and indicated not just an interest in an area, they've gone in, they've purchased, again, large swafts of land. They've shown us their plans. They've indicated to us in what I would have to characterize as approximate numbers the cost of developing these lands from, again, from nothing, vacant land to developing upwards of 1,600 units of housing. They've come to us and they've requested assistance in helping to put in place the infrastructure needed to support 1,600 units of housing. We've indicated to them that we would consider that request if and when -- or those requests if and when this particular piece of legislation was passed, but we could not make any commitments now relative to what they were doing. They've indicated to us kind of a "but for," but for some help with this infrastructure, then the odds are greatly reduced that these developments that 41 11/14/06 - FINANCE - BILL 060005 they're looking at will actually get done. And, in fact, there may be scheduled to testify a couple of those developers, and they can speak more specifically to their specific deals, but for the most part, they've come to us, shown us their plans, given us an estimate of the cost and said to us basically, Can you help us out.

I think it's important to note, too, they will be required to have both site control and financing plans in place. As Mr. Hanna indicated, they will have moved along the development process even if they haven't started the actual building of the site. The important thing for us is to make sure the project is well enough along and real and likely to produce the kinds of results that we're looking for in order for us to feel that we want to go ahead and invest these public dollars.

We talked about several portions of the riverfront. 42 11/14/06 - FINANCE - BILL 060005 You talk about New River City. You talk about Central City. Is there a coordination with all of these different groups along the river or is there an overall planning aspect, a coordination of what's happening with the north, the middle and the south?

The coordination occurs through our Planning Commission staff, and they were the prime movers on the North Delaware plan. They are intimately involved in the Central Waterfront plan, and I believe that even though PIDC did both Navy Yard master plan, there was good coordination with the City Administration on that as well.

But are the groups talking to each other so that you don't have a hodgepodge of different development along the riverfront? Where is New River City? Is that up in the Northeast?

Well, New River City is the Mayor's initiative that 43 11/14/06 - FINANCE - BILL 060005 describes the 38 miles of waterfront around Philadelphia, and the portions of it that we are looking at for master planning that we have engaged in master planning for, the North Delaware, the Central Waterfront, the Navy Yard and there's been, of course, a lot of planning on the Schuylkill as well.

And all of those pieces, who is coordinating the activities and planning and implementation --

Councilwoman --

-- of all of those components? COUNCILMAN DiCICCO: Point of information, if I can interrupt.

Certainly. Point of information, Councilman. COUNCILMAN DiCICCO: I see the new Planning Commission is about ready to jump out of her seat, and I think she might be able to shed some light on this, 44 11/14/06 - FINANCE - BILL 060005 if it's okay with the Chair.

Certainly.

I really thank you for asking that question.

Please identify yourself for our record.

My name is Janice Woodcock. I'm the Executive Director of the City Planning Commission. And indeed the Planning Commission has been involved in the North Delaware and we have a member of our staff on the Design Review Board for the Navy Yard, which are minor efforts in compared to the new Central Waterfront planning effort that we have begun as a result of the Executive Order signed on October 12th. As part of that, we were out and we are engaging the community in a lot of different ways through the advisory group, which is a 45-member group of folks from community groups in 45 11/14/06 - FINANCE - BILL 060005 the improvement districts and other departments in government. So when we get done with our year-long process, we not only want to have in place the communication, but tools to implement the plan that have a lot of different layers to them, one of which would be the funding mechanisms put in place by this bill.

But if I can add something to that, Councilwoman. It seems to me that each of these planning efforts, in order to be effective and to be applicable to the particular needs of the community, need to have the individuals, the organizations in that community integrally involved in it. What our planning staff does and what others of us do as we work together in the Administration with each of these plans is to provide some oversight so that the plans that are being developed are -- that we're mindful of the way they match and relate to one another. 46 11/14/06 - FINANCE - BILL 060005 But I think if I understood your question, to think of it in terms of one whole planning effort would be not as respectful of the individual needs of these community groups that are involved in each of these planning efforts.

I have one more question.

Certainly, Councilwoman.

Ms. Gladstein, when you talk about the green space, what does that mean -- let me see how I'm going to phrase this. Because it was my understanding that we were cleaning and greening under NTI.

That's correct.

So now how do the dollars from this program get into that?

In some of those same -- first of all, we're cleaning and greening. I think the testimony said we have the equivalent of 47 11/14/06 - FINANCE - BILL 060005 over 6,000 row home parcels under control. As you know, there's much more vacant land in the City than just those 6,000 parcels. We will be working with the City's Water Department to identify areas which are prone to flooding or have other storm water management needs, where there are large vacant lots and where we can use them for permanent open space. And on those lots, we will be able to do treatments that help increase our ability to manage storm water, and those treatments, in some cases, may look like the stabilized lots you see in other communities in terms of they'll have topography that will help catch and collect water and that will be otherwise improved. They'll have grass and trees. So that's sort of one set of potential projects. And, again, we have to work with Water to make sure that we're doing our best to maximize assistance to the City's water and sewer infrastructure with that. 48 11/14/06 - FINANCE - BILL 060005 There may be other instances where in order to man the storm water the Water Department may need to put a basin or some other filtration system underneath some land. If it's City-owned land, then there would be improvement to that land after that system had been put in place.

Thank you.

Thank you, Councilwoman. Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam Chair, and good afternoon, everyone. I believe my question would probably -- it would be better answered by the Water Commissioner, as someone who has supported development throughout the City. In particular, the waterfront has been part of the Mayor's Executive Order that the Planning Commission just referenced. Much of the testimony that was presented by Ms. Naidoff speaks primarily to new initiatives, new 49 11/14/06 - FINANCE - BILL 060005 development on what is currently vacant land or blighted buildings that may eventually be torn down and turned into something more useful. Commissioner, you're aware there's been considerable amount of concern for basement flooding throughout my district along the river, but in particular South Philadelphia. And everyone in South Philadelphia has their own opinion as to why that's happening, from the infamous flood gate that is being closed off so that the stadiums don't flood and that's why the basements in South Philadelphia are flooding, but they're very ingenious in my neighborhood. You ever hear that one, folks? COMMISSIONER BRUNWASSER: No. 21 COUNCILMAN DiCICCO: I'm going to give it to you real quick, a little levity. South Philadelphia in the last couple of years, in the summertime in 50 11/14/06 - FINANCE - BILL 060005 particular, many basements are flooding in homes that have never experienced flooding in 30, 40 years. At these public meetings, everyone is blaming and pointing fingers as to why it's happening. Too much development is one of the issues. Someone stood up at a meeting and claimed that the reason the basements in South Philadelphia are flooding, because there's this huge water main that heads south towards the Navy Yard, but there's a gate lock on it, a gate that would go up and down, and the reason it's closed is because the City doesn't want the stadiums to flood out; therefore, all that water that would normally be going into the river through the stadiums is backing up into their homes in South Philadelphia. And there are literally thousands of people in South Philadelphia who actually believe that someone goes down there and shuts this gate on the water main. So much for being a District Councilperson. 51 11/14/06 - FINANCE - BILL 060005 But in any event, new construction, new development systems would be put in place that would help spur that development. What, if any, consideration is being given to the feeder systems, if you will, from the adjacent neighborhoods in close proximity to the Delaware Avenue/Columbus corridor and how would that have an impact on reducing the potential for some of the flooding that may occur? Again, understanding that there are those who believe that the development is the reason for that. It takes us a while -- and, by the way, Commissioner, your team has been out there at a couple of my community meetings and they have done an excellent job on trying to explain the phenomenon of the extra rainfalls and what-have-you, but there are those who believe that this development is the cause of it. They fail to remember that there were once factories where there is now empty land, there was no impervious 52 11/14/06 - FINANCE - BILL 060005 soil, thousands of people worked in those factories, toilets were flushed, things were happening all the time. But we need to get some answers, and we're trying to do that. Is there any consideration, will there be any consideration for the systems that will be feeding into the Delaware Avenue corridor or Columbus Boulevard corridor and those new systems going forward that would alleviate the potential for the back-up, if you will, of storm water runoff? And I'm not asking you to say something that will be put in stone, because I know -- no pun intended -- it's rather fluid, all this stuff, because of the way things are happening, but has there been any consideration given to that? COMMISSIONER BRUNWASSER: Yes.

Councilman, I know you're aware that since June of 2005, the Water Department has been studying -- began a comprehensive study of all of the areas 53 11/14/06 - FINANCE - BILL 060005 that are chronically plagued with basement flooding in the City. Many of them are in South Philadelphia, and South Philadelphia has a number of unique challenges when it comes to correcting problems. What we have seen in our study so far is, yes, there are things that we will be able to do to alleviate this flooding in many parts of your district and the districts near you, Northern Liberties and Washington West, Washington Square West, and we are beginning to put the plans in motion where we will begin to design solutions to these problems. The single best thing that we've already done is to adopt new storm water regulations, which went into effect on January 1st of this year. That has allowed us to be able to say that any new development from January 1st on will actually result in a reduction of storm water flow into the system, because any sizable parcel has to capture the first 54 11/14/06 - FINANCE - BILL 060005 inch of rain, either detain it or keep it out of our system until after the storm has passed and then it can be released into our system and then go through wastewater treatment. So we've already alleviated more than a square mile of runoff because of all the construction being done in Philadelphia, at least the planned construction. So that's helping a great deal. There are places where the solution will be storage of some sort, usually an underground tank, and we have some ideas in certain areas. We have a tank on the drawing board, and it's very far along in one location in the City, and we have another one we know we'll have to put in in a different location. And one of the solutions to one part of South Philadelphia may also be a tank, and this would have to go under public park land. That's a good example of where the Department -- the bulk of the 55 11/14/06 - FINANCE - BILL 060005 cost and the desire is to improve the storm water infrastructure for the benefit of the neighborhood, and at the same time, for the disruption of the digging and the installation of a tank, we can have a relatively nice amenity at the end of the day. We always will leave a site much nicer than the way we found it. So that's another potential funding project for this River City fund. There may be some areas of the City, as Eva said, where we have to address a storm water overflow problem or old infrastructure that we have that needs to be updated, and in acquiring or putting into place new infrastructure or just improving the infrastructure, we would look to leave that a much nicer place than what it is today. And so it's all part of our -- it's a logical outgrowth of our capital program. COUNCILMAN DiCICCO: But I guess more specifically, monies from this 56 11/14/06 - FINANCE - BILL 060005 fund could be used for those purposes as well; is that safe to say? Is that accurate?

Yes. COMMISSIONER BRUNWASSER: I believe so, yes. COUNCILMAN DiCICCO: That's probably the way I should have asked it in the first place. I want to make sure that there is some -- COMMISSIONER BRUNWASSER: Right. It's actually an opportunity -- you know, what's happening is, there is an enormous amount of development on the books right now and we've been in a process, and I know developers always come to folks for assistance in getting through the process. It's now a more strenuous process because of the storm water regulations, but this will help us in the long run. I see in ten years, five to ten years, there will be some marked improvements in flooding. I mean, there will be less and less flooding in 57 11/14/06 - FINANCE - BILL 060005 the City, and perhaps in 15, years, virtually none. I should mention over the past two years, there have been an inordinate number of very intense storms, and that has made some basements flood that had not flooded in many years. It's just the intensity of the storm. We've seen about half a dozen major, major storms in the last two years. And we go back about 12 years in our rain gauge records. We 13 record the intensity of storms, and five 14 or six of the biggest have just been in 15 the last two years. 16 COUNCILMAN DiCICCO: Thank you. And one other question, and it may be in this testimony. I may have missed it. Is there any potential for financial incentives to encourage more green buildings? The LEEDs, I believe they're called LEED buildings, I know there are some state funds that are available, that are made available. Could any of this money from this fund be used towards 58 11/14/06 - FINANCE - BILL 060005 incentivizing or adding on to those incentives that may already be available to developers?

I'm not aware -- I'm not familiar with all of the criteria to go into the LEEDs designation, but I know there are something like 38 criteria for it. COUNCILMAN DiCICCO: I'm not familiar with them either.

And I think some of them would -- I can't imagine that some of them won't be met by storm water management under the projects that will come within those criteria under our program. COUNCILMAN DiCICCO: Thank you. COMMISSIONER BRUNWASSER: It may be that we might not be able to pay for them with this money, which is specifically capital in nature, but I did want to let you know that we are looking at going to a parcel-based system for all of our large parcels in Philadelphia 59 11/14/06 - FINANCE - BILL 060005 based on their size and impervious cover. With such a system, we intend to give commercial and industrial properties incentives in building the types of storm water retention that we would like to see and give them credit on their service charge basically for storm water. COUNCILMAN DiCICCO: That's what I was looking for. Thank you. I appreciate your testimony. Thank you.

Thank you very much. Are there further questions?

Councilwoman, may I just mention that the Director of MBEC has arrived and is available to answer some questions if there are still some questions on that. Would you like her to come up?

Yes.

Good afternoon, panel. My name is Carolyn Nichols. I'm the Director of MBEC. Good afternoon. 60 11/14/06 - FINANCE - BILL 060005

Good afternoon, Ms. Nichols. My general question was, how can we actually look at higher participation goals with disadvantaged businesses if we're requiring through the legislation that we're only pulling from the same pool of MBEC-certified firms? I'm not sure how, if we're pulling from the same pool of only MBEC-certified firms, how we actually can expect higher participation.

Understood, Councilman. We are pulling beyond just the MBEC-certified firms. MBEC does reciprocally recognize certification from other governmental entities from states around the country, including the State of Pennsylvania. So that kind of broadens the available --

Ms. Nichols, I'm referring to the legislation that says only MBEC-certified firms.

Yeah, but the reciprocal certification would confer 61 11/14/06 - FINANCE - BILL 060005 MBEC certification on the reciprocal certified firm. We would be recognizing that certification, would give them MBEC certification. And the other thing I wanted to mention is, I believe --

So it's still only MBEC-certified firms?

Yes, but the MBEC-certified firms would include reciprocal certification for other certifications given by other governmental entities. So, in other words, if a firm is certified by the State of Pennsylvania, it comes to MBEC, we recognize the certification. It is MBEC certification, but we're able to pull from a greater area.

Let me ask you a question. How many African-American-owned firms are there in the City of Philadelphia?

I believe it's about 9,500 MBEC -- excuse me; 9,500 62 11/14/06 - FINANCE - BILL 060005 African-American-owned businesses in the City of Philadelphia.

How many --

That's what the 2004 U.S. census recognized.

How many Asian-American?

The Asian-American numbers I don't remember off the top of my head. I just looked at it recently.

How many Hispanic?

Hispanic, I think it's in the neighborhood of 2,000 to 3,000, something like that, within those firms.

How many native American?

I would have to look that up. I don't remember off the top of my head.

How many women-owned businesses? 63 11/14/06 - FINANCE - BILL 060005

Well, that I would have to correlate as well. I have that data in my office. I didn't bring it with me. I don't have it memorized off the top of my head.

Just roughly, how many women-owned businesses in the City of Philadelphia?

I would have to go back and get that for you, Councilman. I don't want to guess.

How many disabled-owned businesses in the City of Philadelphia?

We would have to provide that. Again, I don't have that off the top of my head.

How many total disadvantaged businesses in the City of Philadelphia? If you add African-American, Asian, Hispanic, native American, women, disabled, about how many disadvantaged businesses are there in the City of Philadelphia? 64 11/14/06 - FINANCE - BILL 060005

I would estimate somewhere in the range of 15,000 off the numbers that I can recall, but, again, I would have to get that specific information to you.

How many firms are certified by MBEC?

Approximately 1,300.

So it's less than ten percent?

Yes.

The prosecution rests.

Any follow-up questions or comments? I guess that did speak for itself. Are there further questions? (No response.)

Further questions? (No response.)

All right. 65 11/14/06 - FINANCE - BILL 060005

If there are no 3 questions, may I just also ask -- I forgot to say this as part of my testimony. We'd like to ask for a suspension of the rules.

Thank you. Great. Thank you very much.

Thank you.

Sarah Thorp, Delaware River City Corporation. Blaine Bonham, are you here? Blaine, are you here?

Yes.

Thank you. Maitreyi Roy? Did I pronounce that properly? Those three individuals are next. Thank you very much. Welcome. Please identify yourself for the record, begin your testimony. Could we have a Clerk to pick up testimony. Thank you. Thank you very much. Feel free 66 11/14/06 - FINANCE - BILL 060005 to identify yourself for the record and begin your testimony.

Good afternoon, Councilwoman Blackwell and other members of the Committee. I've already submitted my written testimony. I think you should have copies.

Thank you. Yes, you have. Thank you.

I'm Sarah Thorp, the Executive Director of the Delaware River City Corporation.

And I'm Blaine Bonham, Executive Vice-President of the Pennsylvania Horticultural Society.

Thanks.

In the interest of being brief, I'm going to skip over the first part of the testimony, which is a background of the Delaware River City Corporation. It's a very new non-profit established within the last couple of years. Although the efforts on the North 67 11/14/06 - FINANCE - BILL 060005 Delaware, to answer your questions about what's going on on the North Delaware, the efforts on the North Delaware have been in the works since around 1999 with former Congressman Bob Borski, who is the Chairman of our Board of Directors and regrets that he couldn't be here today to testify. So I'm testifying on his behalf and on the behalf of the rest of the Board. We recently, in 2005, completed a master plan for a greenway. It's entitled the North Delaware Riverfront Greenway Master Plan and Cost Benefit Analysis, and in this plan, it outlines specific guidelines for implementing a greenway along eight miles of riverfront, stretching from Allegheny Avenue north to approximately the Glen Foerd area, the Bucks County line. It goes a little farther south than that for the greenway. But in this Greenway Plan, there's a cost benefit analysis of different recommendations, and the recommendation 68 11/14/06 - FINANCE - BILL 060005 has been made to establish a non-profit, which we have done, and go forward with acquiring parcels of land to implement the greenway and construct different parts of the greenway. It's a greenway trail that's pedestrian and bike friendly. It's also a river road that can be used for vehicular traffic. And in addition to those projects, we've also been working with developers. There are four different -- well, three different developers and four different large industrial parcels on the North Delaware that are proposed for redevelopment at this time. So the non-profit has been working with those developers and looking at their plans to ensure that they are in keeping with the master plan for the greenway, which all of them are varied in keeping with the plan. They're willing to work with us. They're excited about the plan. And basically these developments are happening on the North Delaware because 69 11/14/06 - FINANCE - BILL 060005 of the plan. Not necessarily totally because of the plan, but because of the plan that we've done, and the greenway can't exist without having new uses come to the river. As you know, we've kind of destroyed our river in the past 200 years and we're in a unique opportunity here in Philadelphia in this time and place right now to restore residents to get to the river where they couldn't before. We've had industries present along the river for 200 years that are now gone. We've also put I-95 right through some residential neighborhoods, and that has cut off people's access to the river. So this plan and the new developments that are proposed for the North Delaware is going to restore Philadelphians their public access to the riverfront in that area of Philadelphia. We do have state and federal funding already allocated for design and construction for parts of the trail. So 70 11/14/06 - FINANCE - BILL 060005 it's not just a dream. It's actually happening, and we're really excited about that. The different developments that we have up there, as was mentioned in Ms. Naidoff's presentation or testimony, is about 700 units for the Westrum Development. We have about 600 units for the Dodge Steel site and another 600 plus 1,700 for Transactional Property Solutions, which is farther north. So as you can see, it's a large number of residential units that are proposed for these former industrial sites. And it's very important for these developers to get the infrastructure into these sites. Because they were former industrial sites and large vacant parcels, the developers have done a lot of environmental remediation and need the assistance of the City to do the infrastructure that is going to support these new developments.

In order for our trail to be a 71 11/14/06 - FINANCE - BILL 060005 success, we have to have a mixture of recreational, residential and commercial uses. The Greenway addresses all of these needs, and the New River City initiative can be one of the financial tools used to implement our plan. The funds are needed to facilitate new development of the trails by providing the necessary modern infrastructure for the mixed-use redevelopment, and the relationships between the proposed trails and parks and also the developments is a symbiotic relationship. Neither one can be completed without the other. Therefore, we need an intense partnership among the stakeholders of the process, including the existing neighborhoods, the developers and the City of Philadelphia. Philadelphians really have always had these strong ties to the Delaware River and they need to have public access to the river returned to them. We're at a unique time and place, 72 11/14/06 - FINANCE - BILL 060005 like I said, in the history of Philadelphia to make that happen, and it is the mission of the Delaware River City Corporation to implement these positive changes. So our long-held vision is taking shape, and we're very excited about this initiative and very much in support of it.

Thank you very much. Any questions? (No response.)

Mr. Blaine Bonham.

Chairman Blackwell, members of the Committee, Pennsylvania Horticultural Society is pleased to testify and provide information about the work that the New River City initiative proposes to do, and our testimony is focused on the landscape restoration and greening improvements that this initiative can bring to the 73 11/14/06 - FINANCE - BILL 060005 neighborhoods. Most of you know that since 2000, since Mayor Street took office, and as part of the Green City Strategy that you heard Eva Gladstein talk about, we've been working with NTI, with communities across the City, and you heard the statistics, equivalent 6,000 vacant lots, residential vacant lots, on the Clean and Green Program, and it has resulted in dramatic transformations in some neighborhoods, with a new sense of what the potential is to redevelop the neighborhoods and, as importantly, as incentive for people to stay in those neighborhoods and make them part of very strong communities. In 2003, as an outgrowth of this vacant land management work, in partnership with the Philadelphia Water Department, PHS received a grant from the Pennsylvania Department of Environmental Protection to create a pilot program to determine how vacant land can be used to 74 11/14/06 - FINANCE - BILL 060005 retain water during excessive rain events. And I refer you in this testimony -- there are boards over there that describe it, but also in the back of this testimony are a couple of pull-out pages that have visuals of the projects that have been undertaken. So five sites have been created to demonstrate various techniques of gradings to support efficient systems of storm water management. " And in this approach, which is very innovative, it seeks to detain, filter and infiltrate runoff by mimicking the natural processes. And in locations where these parcels can become permanent open space -- and that is one of the key aspects of the Green City Strategy investment with this -- not only 75 11/14/06 - FINANCE - BILL 060005 can these vacant lots ameliorate an environmental issue like storm water management, but they also can be new permanent open spaces for people and residents to recreate, to enjoy and to improve the quality of life in those neighborhoods. Our evaluation of this project, in cooperation with Temple University, shows that these spaces serve as natural sponges, and the grass and the trees absorb the water. And unlike pipes and storage tanks, which will still be necessary, but yet this approach adds to the benefit of cleaning the air, improving the aesthetics and serve as a habitat for wildlife and a place for humans to be. So in recent years, the Philadelphia Water Department has designed and implemented some storm water management interventions at local parks, streetscapes and public facilities to showcase a variety of innovative 76 11/14/06 - FINANCE - BILL 060005 techniques and technologies to reduce the impact of storm water on an overburdened system in the City. And we were working with the Department of Recreation, the Streets Department and the Philadelphia Housing Authority to implement some of these projects, and some of these include neighborhood park improvements currently being designed in Clark Park in West Philadelphia and Jefferson Square in South Philadelphia that include pervious materials for walkways, additional shade tree plantings and detention basins that will hold the water for hours and 16 slowly have it infiltrate into the 17 ground. And it's a relatively low impact 18 and low cost retrofit of these parks. 19 Another is that most City 20 facilities, as we know, like schools and 21 recreation centers and parking lots are 22 just paved over solidly and they heavily 23 burden the existing storm water systems 24 with the sheets of runoff.

So, for instance, as part of a recent capital 77 11/14/06 - FINANCE - BILL 060005 improvement project, the Mill Creek Recreation Center, a pervious basketball court was installed by the Philadelphia Water Department and the Department of Recreation, mitigating the storm water flow by introducing porous paving materials, which still allows the basketballs to bounce as high as they did before even with solid materials. Another is that streetscape improvements that integrate storm water management for our key neighborhood corridors and thoroughfares should be considered on a City-wide scale to mitigate storm water runoff. Expanded tree pits is one solution, like the system recently installed at a streetscape project at the West Mill Creek Recreation Center, which was designed to capture more runoff from the sidewalk. And these should be integrated in new capital improvement projects. Medians such as the green triangles at Baltimore Avenue and Ogontz Avenue not 78 11/14/06 - FINANCE - BILL 060005 only capture runoff, but they serve as welcoming landscapes to our communities. And you have photographs of those in the back of the testimony. And, last, restoring the City's tree cover will contribute significantly to reducing storm water management by capturing rainwater, reducing runoff and promoting evaporation. Expanded tree plantings should be integrated into all commercial and housing developments and be required so that the environmental benefits can greatly benefit the life and health of new communities. You heard in Eva Gladstein's testimony the statistics that the University of Pennsylvania put out that documented the rise in property values from this kind of investment, so there is that added incentive. Greening is no 22 longer considered just a fluff amenity, but it's really part and parcel of a comprehensive redevelopment of communities and here a solution to 79 11/14/06 - FINANCE - BILL 060005 environmental issues. So the storm water projects incorporated into the stabilization process of vacant lots will provide even greater environmental and economic benefits to the community. And with the GreenPlan Philadelphia, we have an opportunity to combine the retrofit of vacant land for community use with the amelioration of storm water management. Thank you.

Thank you, Mr. Bonham. You have many years experience in this field and you're very good at it. Thank you for your work. Are there questions from members of the Committee? (No response.)

Thank you very much. Is Maitreyi Roy, Director of Philadelphia Green --

I substituted for her because she's running a GreenPlan 80 11/14/06 - FINANCE - BILL 060005 Philadelphia process.

Wonderful. Gerald Sweeney, Chairman, Schyulkill River Development Corporation. Joe Syrnick, Executive Officer, Schuylkill River Development Corporation. Thank you. Welcome and thank you for your patience. It's hard to see Joe Syrnick and not say Streets Department. Welcome. Please identify yourself for the record and begin your testimony. Welcome.

Good afternoon, Madam Chairperson and members of City Council's Finance Committee. My name is Joe Syrnick and I'm the CEO of the Schuylkill River Development Corporation. I'm joined today by colleagues Karen Smith, who is one of our SRDC volunteers, and Kirsty Halliday, who is a Director of Environmental Programs for SCA Corporation. Gerry Sweeney, our Chairperson, was here today, but he got 81 11/14/06 - FINANCE - BILL 060005 jammed for time and had to leave, so he has asked me to present his testimony.

Thank you.

If Mr. Sweeney were here, he would say that he was coming today to testify in favor of Bill 9 060005, which would provide funding for the New River City initiative. The Schuylkill River Development Corporation is a partnership between private, public and institutional partners, stakeholders, who together make Philadelphia a better place to live, work and play. SRDC and its predecessor, the Schuylkill River Development Council, have been working to revitalize the Tidal Schuylkill River since 1992. It's a slow process, but, finally, things are beginning to gel. The trail is built and is heavily used, 14,000 users per week. The landscaping is finally being established. Public programming and river cruises have been very popular this 82 11/14/06 - FINANCE - BILL 060005 past summer. But why is this revitalization effort important? Is there really any lasting benefit to be garnered from improving the City's waterfronts? Well, other cities seem to think so, and let me tell you why. On Tuesday, October 24th, three weeks ago, there was a front article in the Inquirer about a very similar trail initiative in New York City. The article talks about what New York is doing to improve its public waterfront, including constructing a 32-mile trail around the island of Manhattan, of it along the waterfront. 17 The article describes physical 18 improvements, but it really speaks about 19 an attitude as to how that city and its 20 decision-makers feel about the city's future. The article simply oozes with civic pride as it outlines the positive impacts that the river trail has created. As I read this article, I couldn't help but wish they were talking 83 11/14/06 - FINANCE - BILL 060005 about Philadelphia. Ladies and gentlemen, Philadelphia has that same potential. It has two wonderful rivers with great possibilities and has people who want these kind of amenities which improve the quality of life. And we say this with some confidence because of our experience with the Schuylkill trail. Constructed approximately three years ago by the City and recently landscaped by the Corps of Engineers and Schuylkill River Development Corporation, the trail is attracting 14,000 users per week for a variety of recreational activity and public programming. This past summer, we initiated kayak and river cruises. In fact, the last regularly scheduled river cruise was two weeks ago Sunday when 72 people cruised to historic Bartram's Gardens just as the Eagles game was starting. It was a glorious day and they had a great time. Most people were Philadelphians, but some were visitors. But all left with a good feeling about 84 11/14/06 - FINANCE - BILL 060005 Philadelphia. So what's the plan here in Philadelphia regarding our waterfront? Well, in 2003, SRDC developed a master plan which outlined a vision for the Tidal Schuylkill. It included trail work, bridges, boating activities and reconnecting communities to the river. We've been implementing this plan and have received great cooperation from the federal, state and city governments, including this Council, and from the private sector. The improvements are spawning private developments like the Edgewater Apartments, Cira Center and South Bridge Condominiums, developments which will provide employment and tax ratables in perpetuity. And these new office workers and their residents, they'll use this river and the river trail and the docks just as the existing workers and residents do. In fact, many may have moved here because of these amenities. 85 11/14/06 - FINANCE - BILL 060005 I'd like now to introduce Kirsty Halliday from SCA America, an international company that recently moved to Philadelphia.

Good afternoon, Madam Chairperson and members of the Finance Committee. My name is Kirsty Halliday, Director of Environmental Programs for SCA Americas. SCA is a Swedish manufacturer of paper products with annual worldwide turnover of 13 billion U.S. dollars. The headquarters for Americas' business is now located on the Schuylkill banks in the Cira Center. From here we are responsible for over 2 billion U.S. dollars of SCA's business in the Americas, stretching from Canada to Chile. Our company moved to Philadelphia less than a year ago from Eddystone, Delaware County. We made the decision to move here following a thorough year-long review of options in the region. Our decision was influenced 86 11/14/06 - FINANCE - BILL 060005 by a number of factors, but high on that list was our desire to be a part of a vibrant world-class city. From our new headquarters in the Cira Center, we are close to Center City, with direct access to Philadelphia and Newark Airports, the cities of New York and Washington and the Philadelphia suburbs. One of the first groups from the City to approach us as we considered our options was the SRDC. Joe Syrnick and Louise Turan came out to Eddystone and laid out for us their wonderful plans for the Schuylkill banks. All of the work underway by the City, the SRDC and their partners helped sway our decision in favor of the City. Since the move, we have become more deeply involved in helping SRDC realize its plans for Schuylkill banks. We sponsored the boat rides that were so successful this summer. Our employees have become actively involved in a number of projects along the Schuylkill River 87 11/14/06 - FINANCE - BILL 060005 and regularly use the park for exercise and enjoyment. One of our greatest concerns when we moved to the City from Delaware County was that we would lose some of our people. In fact, we do not believe we have lost a single employee because of the move. On the contrary, our employees and we as a company are thrilled with our new location and the benefits the City has to offer. I assure you the Schuylkill trail helped bring us to Philadelphia. If more amenities of this type are built, we are convinced an increasing number of companies will choose this great City as their home. Thank you.

Thank you very much. Excuse my distractions.

Madam Chairperson, I'd like to introduce, if I may, Karen Smith, who is one of our volunteers on the trail, who can talk 88 11/14/06 - FINANCE - BILL 060005 about her experiences meeting and greeting trail-users.

Thank you very much, Mr. Syrnick.

Good afternoon, Madam Chairperson and the Finance Committee. My name is Karen Smith, and my responsibility as a volunteer at the Schuylkill Bank Center is to be an information resource person for trail-users. We provide maps for cyclists so that they can travel safely from Philadelphia to Valley Forge and beyond. We also provide them with Regional Rail stops if they get too tired and cannot make it back to the City. For river-users, we actually offered a concert series this summer, which attracted a lot of boat activity along the river, and we had at least one or two, from July, August and September, we had at least one or two boats dock at our Walnut Street dock, and they went to shopping and to have dinner in the City, 89 11/14/06 - FINANCE - BILL 060005 which because of our center on the dock they felt comfortable leaving their boats at the dock. We also have a mother and daughter team that started training to run and they're running this Sunday in the Philadelphia Marathon. Since the center opened in May, there were frequent users -- I should say every weekend they were out there running, and they look good. I saw them three weeks ago, and they're fit and they're confident that they'll finish the race on Sunday. We also had a popular Bartram's Garden tour, which gave a lot of children an opportunity to take a boat ride and have a picnic lunch at one of the most beautiful historical botanical gardens I think in the country. We also offered kayak tours, which were popular, and we had only two people turn over their boats, their kayaks this summer. One was intentionally and one was not. We also had two other favorites 90 11/14/06 - FINANCE - BILL 060005 among trail-users. We had a PetFest in August. We attracted 200 pets and their owners, and we actually had about 5 children parade. They dressed up their 6 pets and they paraded them around the 7 Schuylkill Bank Center for a four-hour 8 time frame, which was -- it was actually 9 fun to see. And Labor Day weekend we had 10 some American Revolutionary reenactors 11 camp out on the Schuylkill banks, along 12 with Boy Scouts. And I actually stressed 13 that they give them a lesson in accurate 14 mapping, and they seemed to enjoy that. 15 They also had breakfast with them in the morning and, to our surprise, actually packed up. They set up their tents and packed up their tents within an hour time frame. So that they seemed to really enjoy that. Thank you.

Thank you very much. Councilwoman Reynolds Brown.

I thank 91 11/14/06 - FINANCE - BILL 060005 all of you for your testimony, and I'm very familiar with the trail having used it myself. And this question is totally unrelated to the purpose for this hearing. You mentioned a number of users. What about kids and children, Philadelphia public schools, parochial schools in the area? Any organized partnerships with the local School District for use of the trail?

There's no 14 organized trail use relationship right now with the use of the trail, although, frankly, we would love for there to be something like that. We did have a program this summer for children riding the boat. This was actually a program that was sponsored by PNC Bank. We had 200 kids, mostly from West Philadelphia but some from other parts of the City, who were able to take the boat ride, go to Bartram's Gardens, learn about ecology, learn about the river. That was 92 11/14/06 - FINANCE - BILL 060005 a very successful program that we would certainly do again next year. But we'd be very open to any ideas that you have about relationships about getting people down in an organized way on the trail, because this trail has so much potential for recreation and environment that it's just crying out to be better used, and we'd be very open to that.

Okay. Anticipate follow-up from my office then.

Okay.

Thank you very much. Thank you, Madam Chair.

Thank you, Councilwoman. Any further questions? (No response.)

Thanks. Next we will hear from Phil Bertocci, Community Legal Services. Following CLS will be Fred Felder, Union 93 11/14/06 - FINANCE - BILL 060005 Hill. Following Mr. Felder will be Michael Johns, Philadelphia Housing Authority. Thank you very much. Good afternoon. Welcome. Thank you for your patience.

Good afternoon, Chairwoman Blackwell and remaining member of the Finance Committee. My name is Philip Bertocci. I'm the supervising attorney of the Energy Unit at Community Legal Services. The Energy Unit provides advice and counsel to low-income Philadelphians free who are having problems with utility service, gas, electric and water. Utility service is a particular concern for Community Legal Services because many of our clients pay up to 20 to 30 percent of their income per month for their utility service, and we, therefore, have a very special interest, virgin interest, in maintaining utility rates as low as possible in the City. 94 11/14/06 - FINANCE - BILL 060005 Community Legal Services has served as the public advocate for the last two -- well, more than the last two, but I have served as the lead counsel as public advocate for residential customers in the last two water rate cases that the Water Department has brought, and it is in that capacity that I've become familiar with the effect upon the decisions that are made in this room upon the rates which customers end up having to pay. At this particular time, we're in a period of rapidly increasing rates in a number of different areas you're aware of. Electric and gas rates are increasing significantly in the last few years. The Water Department recently completed a rate case in which rates increased by percent, from $42 monthly 22 in June of 2004 on the average to 53 23 monthly in July 2007. That's a big 24 increase, larger than low-income people's 25 income increases in that period of time. 95 11/14/06 - FINANCE - BILL 060005 In contrast to the testimony you've heard today, which I know economic development is wonderful and the improvements of the waterfronts is very attractive and makes our City a more attractive place to live, I nevertheless find Bill No. 060005 alarming, because it proposes to impose the costs of these economic development projects, and nobody is just presenting them as anything except economic development projects. But these costs are going to be imposed upon residential water customers by a financing system which recovers those costs through present and future water sewer rates. These are costs of economic development which normally would be paid by private developers and through taxes from the General Fund, from the state or from the federal government. Utility service, particularly water sewer service, is a fundamental necessity of life, especially in a city like Philadelphia with a large number of 96 11/14/06 - FINANCE - BILL 060005 low-income residents. Water sewer rates should not include the cost of economic development programs. You only have to look at the bill that has been presented, Exhibit A, and listen to the testimony that we've heard today of the degree to which really what is driving the selection, what will drive the use of the 125 million that is going to be taken from the Debt Reserve Fund, whether it's going to drive the use of that money is really -- it's the benefits in terms of potential economic development for the City, not the cost benefits of water customers, who will be paying for this 125 million in economic development funds. In a way, we speak of these funds as publicly funded, but I beg to differ. These are not publicly funded. These are funded by Water Department customers. Taxes are publicly funded.

I gave you some testimony that had been prepared before I came here in 97 11/14/06 - FINANCE - BILL 060005 written form, and because of the hour, I'm not going to go through all of it in detail, which would involve repeating some of the things that have been said today, but I want to point out to you that when it comes to the selection of these projects, for instance, it's not the Water Department that is choosing the projects according to the priorities that they have for meeting their responsibilities, federal, state responsibilities, in the environmental area, but rather these projects are being chosen by essentially a selection committee in which the Water Department is one of only six voices on what project to choose and how this work should go forward. And so that also emphasizes the degree to which -- although Water Department customers are ultimately financing this, that the choice is it's not even the Water Department that's deciding what makes the most sense in terms of meeting the very fundamental 98 11/14/06 - FINANCE - BILL 060005 responsibilities that they have, which are both to provide pure water but also to deal with disposing of storm water and sewer in ways which do not damage the environment. Let's get down to the details of exactly how does this bill impact water customers. The proposal is to use the Water Department's Debt Reserve Account for economic development, and in so doing -- we're talking about 125 million out of 170 million in this Debt Reserve Account, but in so doing, what is happening is that Water Department customers are being deprived of a critical Debt Service resource. Where this 125 million came from is in the following way: Over time the Water Department has borrowed more than $2 billion long term, which is financed by municipal bonds. The one-month payment of principal and interest from each of those borrowings goes into the Debt Reserve Fund. That's part of the 99 11/14/06 - FINANCE - BILL 060005 security that bondholders require in order to lend money at the particular rate of interest that they're lending money. This money then sits in the Debt Reserve Fund and it gains interest. The City takes -- and the City gets about $5 million a year of that interest that goes into the General Fund. That's the way in which the water customers subsidize the General Fund. What the bill proposes to do is to take that $125 million that is sitting on the Debt Reserve Fund -- now, the customers through rates are already paying the interest and principal on the borrowings which the 125 million represents, as well as the rest of the $2 billion. What the City proposes to do is to substitute a bond or an insurance policy for the 125 million so that it can take the 125 million and put it into these economic development projects. The 100 11/14/06 - FINANCE - BILL 060005 bondholders are supposed to be comfortable with the substitution of the insurance policy or the surety bond for the 125 million, and although I have something to say in my testimony about that, I think that's a matter for bond counsel to -- and I think City Council should really get bond counsel advice as to whether or not this is really a satisfactory substitution. But that's not my prime issue. My prime issue is, okay, so the $125 million now has been taken out. What happens next? Well, first of all, that means that the $125 million is not there to pay for Water Department projects, capital projects which have been approved already by City Council and which some of which have been accomplished and some of which are in the works. That 125 million is no longer there. It's going to have to be made up by somebody. It can't be made up by an insurance policy or surety bonds, so it's going to have to be made 101 11/14/06 - FINANCE - BILL 060005 up by customers. It could be that that -- and that is the rub. So what we're going to see is over the next to 30 years, we're going 6 to see customers having to pay another 7 $125 million through rates.

Essentially 8 what this will be accomplishing is, it's 9 the most regressive kind of tax you can 10 have, a tax on a basic necessity of life 11 to fund economic development in the City. 12 This is not good public policy. 13 Now, there are other minor 14 things about this proposal which also are 15 other ways in which from the point of 16 view of residential customers this is not 17 a good idea. Not only are you taking the 18 125 million, but you're also causing 19 customers to pay an extra $5 million for 20 the surety bond or the insurance policy. That doesn't seem quite fair. And in addition, what's happening is that in the past, customers have been able -- if there's extra interest above the 5 million from the 102 11/14/06 - FINANCE - BILL 060005 Debt Reserve Fund, that money has flowed into the Revenue Fund for the Water Department and could be used to defer Water Department costs which otherwise would have to be recovered through rates. Well, if you pay down the Debt Reserve Fund by $125 million, that's certainly not going to be any surplus in the future. Now, this is a bad bill for water customers obviously, and I think it's even worse when one considers what might be. At the present time, we have this $2 billion in long-term debt. About 35 percent of the customers' bill each month goes to debt service, and in this situation, you could say, Well, why isn't this -- why don't we substitute the 5 million and use this money, this 125 million, immediately for things which are within the ambit of the Water Department itself? That would avoid a bond issuance of 125 million and would save customers about $240 million over 30 years, 103 11/14/06 - FINANCE - BILL 060005 roughly. So that, again, from the point of view of who is being asked to pay for this plan, leaving aside the questions of the merits of the plan itself, but just the funding mechanism is flawed from a public policy point of view. Thank you very much. I'm ready to answer any questions you might have.

Thank you. Are there any questions? (No response.)

Thank you very much. Fred Felder, Union Hill. Welcome.

Thank you, Madam Chairperson.

Thank you for what you're doing in Mantua.

Thank you. My name is Fred Felder. On behalf of the Union Hill development team, I would like 104 11/14/06 - FINANCE - BILL 060005 to thank Council for its commitments you have made to the revitalization of the Philadelphia neighborhoods. Thank you for the opportunity to provide testimony on behalf of the New River City initiative. Union Hill is an affordable homeowners housing initiative designed to provide a minimum of 52 units of high-quality homes for ownership to the low and moderate-income residents of the Mantua neighborhood in West Philadelphia. It is approximately a $14 million project. As you all know, Mantua is like some other neighborhoods in Philadelphia then experiencing deteriorating housing stock as more properties become vacant and abandoned. This increase in the vacancy threatens the safety and the condition of the area. Thus, to restore the area and stabilize the existing occupied properties, our Union Hill Home Project will convert vacant, abandoned 105 11/14/06 - FINANCE - BILL 060005 properties into new homeownership units, available vacant land and abandoned properties within the project site while providing resources to existing homeowners for facade improvement provided by -- thereby resorting into continuous site plan to fulfill the construction over the three-square-block area treatments to all properties within the block face. This infill site plan models the instrumental in providing suburban feeling and reusing suburban land and making urban communities more competitive. Issues related to the water infrastructure, street closing and storm water management that factors into a large-scale development can cripple the affordable housing projects where our resources are limited. Specifically, the new storm water management regulation will cost a Union Hill project approximately $500,000 to accommodate all of its requirements. This is $500,000 106 11/14/06 - FINANCE - BILL 060005 more than was anticipated at the time of funding submissions. We're working with the Office of Housing and Community Development to address this gap. Site preparation and infrastructure costs like this creates a significant obstacle to the developer to keep home sales affordable to those most needed. On behalf of the homeowners housing and vital to the health in the community, the initiative like the New River City funding are important to support the revitalization of our community in keeping the projects affordable to low and moderate home buyers, for every dollar helps, and we ask for your support. Thank you, Councilwoman.

Thank you very much, Mr. Felder, and I'm sure they will tell you that in a meeting on Friday, we spent a lot of time talking about Union Hill and about new water rate 107 11/14/06 - FINANCE - BILL 060005 issues and how it would affect this project. We've come a long way in Mantua with your help, and the project you're doing is in the middle of it all. We can't afford to have you with your investment, with that of PHA, we can't afford to lose out now at this stage of the game. So we made that appeal, and we're again requesting that all that you need done be done in the timely fashion you need it in so that we may move forward. Thank you very much.

Thank you.

Thank you. Thank you, Mr. Johns. I won't call you Wayne. Michael Johns, Philadelphia Housing Authority. Please give us your title, too.

Michael Johns. I'm the General Manager for Program Development and Design for the Philadelphia Housing Authority. 108 11/14/06 - FINANCE - BILL 060005

Thank you.

Good afternoon, Chairwoman. Under the leadership of our Executive Director, Carl Greene, over the past nine years, the Philadelphia Housing Authority has helped to dramatically transform the City's neighborhoods in a positive way, and in doing so, PHA has become a national model for excellence in property management and in the development of affordable housing. PHA has been able to develop critical mass, which is crucial to the long-term success of any renewal project and which includes in almost all cases construction of new public streets and infrastructure and/or the replacement of old and dilapidated underground public infrastructure. We have been able to do this by leveraging public housing funds with other sources of private and public funds. However, as HUD reduces funding for public housing, PHA will be unable to 109 11/14/06 - FINANCE - BILL 060005 continue its work in redefining public sector affordable housing and neighborhood transformation unless PHA or its affiliates is eligible to use the new City bond proceeds. There are several projects in the pipeline that PHA believes would be eligible for funding under this program. They include a Warnock Street project, which is about 50 units of affordable housing; Marshall Shepherd Village, which is an additional 55 units of affordable housing; Paschall Apartments, which will be 116 units of affordable housing; Abbottsford Homes, an additional 110 units of affordable housing; Liddonfield Homes, which will be 200 to 400 units of affordable housing, along with possibly market-rate housing; and a community center in Mill Creek and a park. Each of these projects contains a component of construction that is related to public infrastructure improvements. They will not be possible and they will not move 110 11/14/06 - FINANCE - BILL 060005 forward unless we have the availability to use these proceeds. We support this effort and we look forward to having the opportunity to use these proceeds. Thank you.

Thank you very much, and we have been told about the inclusion of PHA. As you know, I speak specifically for Marshall Shepherd, for the Lucien E. Blackwell Community Center and for the other aspects of Mill Creek and the park. And our Mill Creek Center, that's my first development priority. So we thank you. We agree. When rules change and when we -- we certainly support the concept of storm water, wastewater and what we're doing, but we certainly need this support in order to finish projects we're involved in. And we thank you for all the work you do, Mr. Johns.

Thank you.

Thank you. Thank Mr. Greene as well. 111 11/14/06 - FINANCE - BILL 060005 Any questions? (No response.)

Thank you very much. Uriel Rendon, Public Affairs, Association of Puerto Ricans En Marcha. Next is Sarah Thompson, Delaware River City Corporation. Are you here? (No response.)

Is Ms. Thompson here? (No response.)

If not, Pat Starr. Patrick, you'll be next after Uriel Rendon. Nice to see you again, Patrick. Good afternoon and welcome.

Good afternoon, Councilwoman Blackwell, Councilman Ramos. My name is Uriel Rendon. I'm here with David Santano. I'm the Vice-President of External Affairs. David is a community organizer. On behalf of Nilda Ruiz, President and CEO, and Rose Gray, VP of 112 11/14/06 - FINANCE - BILL 060005 Development, we want to thank you for providing us the opportunity to speak to you to support the New River City initiative bill, 060005. Over the past years, APM, or 7 Asociacion Puertorriquenos En Marcha, 8 with the support of Council and various 9 city, state and federal agencies that 10 support community development, together 11 have changed the face of North 12 Philadelphia by providing initiatives and 13 subsidies allowing for the development of 14 affordable rental, homeownership and 15 opportunities in commercial ventures. 16 Today we see the legacy of these 16 years of collaboration with 210 units of affordable rentals, 125 affordable single-family dwellings, 700 rehabilitated homes funded through the Basic System Repair Program, a thriving 44,000-square-foot retail center, the maintenance of vacant lots through the NTI's Vacant Lot Stabilization Program and other programs that support the 113 11/14/06 - FINANCE - BILL 060005 quality of life initiatives that are so important to a healthy and sustainable community. As a developer of affordable housing for low-income families in North Philadelphia, we have encountered many challenges. However, we did not anticipate that they would include the installation of new water and sewer infrastructure as part of our development activities. Our current homeownership project, Pradera II, had this occur when it was determined that the existing private and antiquated sewer was no 16 longer to be used since the Water Department could not guarantee its condition and, therefore, would not permit us to hook up into this system. At this moment, this $13 million initiative was faced with a new $450,000 gap, making the project unfeasible to build. This additional cost could have been the catalyst for this development to fail. 114 11/14/06 - FINANCE - BILL 060005 My experience with Pradera II has made it possible that our City's deteriorating infrastructure will continue to impact my abilities and those of other affordable developers as we continue our development strategies. Not only does APM support the New River City initiative that will assist projects in need of new water infrastructure, but it also supports those City policies that include planning for infrastructure to replace out-of-date facilities at a faster pace, as well as a commitment to capital funding to support and maintain the affordability needs of our developments. Thank you very much.

Thank you very much. Any questions? (No response.)

Thank you very much. Patrick Starr, Pennsylvania 115 11/14/06 - FINANCE - BILL 060005 Environmental Council; then Paul Lonie, Westrum Development; then John McDonald, Executive Director of Impact; then Charlie Kamps, Transactionable Property Solutions; and then anyone else who would like to testify that we overlooked. Thank you. Thank you all for your patience.

Good afternoon, Councilwoman. How have you been?

Pleasure to see you.

It's a pleasure to see you, too.

Thank you.

What I've been doing since our years working together in Spruce Hill has been focusing on my community or my professional life, and I'm proud to come here today as the organization that actually sponsored the creation of the North Delaware --

Pat, 116 11/14/06 - FINANCE - BILL 060005 excuse me. Please give your name.

I'm sorry. She knows me so well. That's the problem. Patrick Starr. I'm Vice-President of the Pennsylvania Environmental Council. I come here as the organization that has actually created the North Delaware Greenway Plan, which followed from the vision plan created by the City Planning Commission, and I'm pleased to say that the Greenway Plan has been adopted by the Philadelphia City Planning Commission. And some of the images you see over here actually come from some of our work, Councilwoman, including the plan for a new park on the river called Lardner's Point, which I recently heard Mark Foley refer to as what will be the new 63rd park of the Fairmount Park system. So I want to move quickly and jump over some of the material I have here and hand that into you to really what we see as the primary question. We 117 11/14/06 - FINANCE - BILL 060005 have a great opportunity to remake our riverfront and to remake our neighborhoods, but the difficulty that we face is that brownfield sites, which are these very large industrial sites that border most of our rivers, are really difficult and expensive to develop. And I don't need to tell you all about the ins and outs of that, but the bottom line is that our decision to invest some public money in infrastructure will help answer the question whose riverfront will it be. Will we create a riverfront that is the province of the rich? Because we require the developers do all of the heavy lifting for these large sites that have no water infrastructure, no sewer infrastructure, no road infrastructure. They cannot provide affordable middle-class housing if we don't step up to the plate as a community and invest alongside them. Additionally, we will not have the green infrastructure that we want. 118 11/14/06 - FINANCE - BILL 060005 We will not have the public parks, the trails and amenities, because we're also asking these developers to do that. So the question is, whose riverfront will it be. And I say we have a good public reason to invest in these riverfront infrastructures, because we don't want it to be just the million dollar condo buyers. So that's really the bottom line as to why this New River City funding initiative is important and is a good public investment and good for even the rate-payers of the Philadelphia Water Department. Now, I'd like to add one additional thought to that statement. We've heard a lot about storm water. I assume that this Committee is familiar with the fact that frequently when it rains in this City, raw sewage diluted by storm water flows into our rivers. That's because we have an antiquated combined sewer/storm water overflow system. So as we bring people to our 119 11/14/06 - FINANCE - BILL 060005 riverfronts, do we really think it's good public policy that they would have to avoid touching the water or getting into the water because there is raw sewage in the water? At this very time, our Philadelphia Water Department maintains a warning system via its website for the Schuylkill River. The same will need to be true on the Delaware River once we allow people to get there. So this is the reason why River City money in our neighborhoods is important, because in our neighborhoods on the combined sewer system we are rebuilding today, we have a unique opportunity to take some of that vacant land and to capture some of that storm water and to reduce the raw sewage going into our rivers. We need to do it now. This is our chance. If we rebuild everything -- I admit the Commissioner said there are new storm water regulations. So in deference to that, I don't want you to think that I don't know 120 11/14/06 - FINANCE - BILL 060005 that, but nonetheless, we need to be thoughtful about the fact that even with the new rebuilding, we have a huge deficit that we're already discharging that we're going to have to pay a lot of money. Talk about the impact on rate-payers when the billion dollar plus fix is mandated by EPA or DEP.

So this is the reason why the New River City initiative is a good investment of public dollars at this time in our rivers and in storm water management in our communities. I thank you for this opportunity to speak to you today, and if you have any questions, I'd be happy to answer.

Thank you very much. I hope my colleagues are listening in their offices. You made very important testimony. And I'm sorry we didn't call on you earlier, as one of my colleagues was asking that very question, who it affects, why and why is 121 11/14/06 - FINANCE - BILL 060005 it important for all of us. Very important testimony. Thank you very much.

I do have some copies of what amounts to bullet points of my testimony. I didn't write it out word for word, but if I may hand those in.

Thank you very much. Any questions? (No response.)

Thank you very much. Paul Lonie. It is a pleasure to see you. Certainly a pleasure to work for you. You did a great job for us. You moved on up.

It's a pleasure to be back.

Thank you. Thank you very much. Please identify yourself for the record. 122 11/14/06 - FINANCE - BILL 060005

Good afternoon, Madam Chairman and members of the Finance Committee. It is nice to be back again. My name is Paul Lonie, Philadelphia Projects Director for Westrum Development Company. Our current Philadelphia office addresses are 3200 South 20th Street, 3101 West Thompson Street, 4451 Ridge Avenue and soon to open at 2691 Somerton Avenue and 4501 Richmond Street.

What about me? You hear all those addresses. Did you hear one in west or southwest? No, no, no. Just kidding.

I will be back here next year.

Just kidding. Okay.

Today I'm here to testify on Bill No. 060005 as it relates to a new development for us, that of the former Philadelphia Coke site in the Bridesburg section of the City. This lies along the North Delaware River near 123 11/14/06 - FINANCE - BILL 060005 the foot of the Betsy Ross Bridge and will hopefully be part of the New River City. It is Westrum's policy to meet with the neighborhood community organizations or simply the neighbors at least once a month prior and during construction. We have formal community agreements which we negotiate with various organizations for each of our developments. We have formal agreements with the Somerton Civic Association, the East Falls Community Council and the Brewerytown Community Development Corporation, along with less formal agreements with the Packard Park Civic Association in South Philadelphia. In the next month, we also expect to formalize an agreement with the Bridesburg community and its representative organizations. We are a new neighbor and we like to become partners in the goals of our neighbors. Today I'm here to discuss our 124 11/14/06 - FINANCE - BILL 060005 75-acre Philly Coke site in which we hope to build over 1,000 houses. The challenges of this development are many: Pollution of the ground, challenging soil conditions, an industrial, not residential infrastructure. These conditions are not unique to the Delaware or even Philadelphia. But if we are to keep up with the other great cities of our nation, we must accept these challenges and work together with the community and the government to overcome them. Another Westrum development is the old U.S. Steel site which fronts on Lake Michigan and is on the south side of Chicago. Many of the conditions of that site are the same. The city has asked us that we donate a strip of ground along the lakefront as a community greenway and public area. In return, Chicago has committed many millions of dollars in tax incentives and Department of Transportation money for that project, 125 11/14/06 - FINANCE - BILL 060005 because it's economically feasible to do it only with the assistance of government. They know it will help the city to prosper and, more importantly, reuse the land that has laid fallow far too long. We ask for your help by giving a favorable recommendation to this bill. This bill would allow us to economically donate the land of North Delaware greenway and give existing citizens of the river communities and all Philadelphians access to the North Delaware that presently just simply doesn't exist. Rehabilitating old abandoned industrial sites into new housing is an extreme challenge. Transforming into green recreational area will be impossible without your help. Thank you for the opportunity to testify today and I'd be glad to answer any questions about this development. 126 11/14/06 - FINANCE - BILL 060005

Thank you very much. Any questions? (No response.)

Thank you, Mr. Lonie. Is Mr. John McDonald here, Impact Services?

I'm representing John McDonald.

Thank you. Welcome. Give him our best. Identify yourself for the record and welcome.

Good afternoon, Councilwoman Blackwell and members of the Finance Committee. My name is Ed Blaney and I'm Deputy Director of Impact Services Corporation. We're a non-profit community development organization located in Kensington. Recently, we expanded our housing activities that will add to the many services that we provide in our 127 11/14/06 - FINANCE - BILL 060005 neighborhood. One of the projects that we have adopted is the Twins at Frankford Creek located at Castor and Wingohocking Streets in Juniata Park. This project includes development of 50 new three and four-bedroom twin homes and a First Tee driving range for City kids along the Frankford Creek. Impact has adopted the project to assist with land acquisition, community relations and the sale of the houses. The Twins at Frankford Creek is a mixed-income development designed to have a strong and positive impact on the real estate market in the distressed neighborhoods of Juniata Park and southern Frankford. Houses will be selling for prices between $130,000 and $150,000. This will make a significant improvement in sales prices within the community. The Twins project will also provide houses for sale to low-income people, meeting a longstanding need in the neighborhood for affordable housing. 128 11/14/06 - FINANCE - BILL 060005 I am here today to express our support for the New River City initiative. This funding would be used for capital construction of water infrastructure, including sewers, water mains and hopefully storm water management infrastructure. The Twins at Frankford Creek project would benefit directly from this funding. As part of the project, we anticipate providing new water and sewers to all 50 houses. This will be an additional cost beyond the cost to build the houses. The cost of providing new sewers and water mains are prohibitive to developers of affordable and mixed-income housing, and there is no 18 direct funding source to take care of these costs. Thank you for your time.

Thank you very much. Thank you for coming. Any questions? (No response.)

Thank 129 11/14/06 - FINANCE - BILL 060005 you. Mr. Kamps, Transactionable Property Solutions. Good afternoon. Thank you for your patience. Welcome.

Good evening.

Good evening.

My name is Charlie Kamps. I'm President of Transactionable Property Solutions and I am here to address Councilwoman Blackwell and everyone else who is still here. My firm is one of the leading developers of distressed, impaired and underutilized properties in the tristate region. I am pleased to have the opportunity to testify in support of Bill 19 60005, as it will be a key ingredient for helping to bring about what will be a magnificent asset for Philadelphia and its people. " 130 11/14/06 - FINANCE - BILL 060005 I make note of that because I know many of you here for a very long time have dreamed about recapturing all the majestic beauty and enjoyment of Philadelphia's waterfront. That vision of a restored waterfront as an attractive, accessible place for people to live, work and play is what everyone would like to see. All across the nation, cities have realized that a substantial part of their river's edge no longer needs to be compromised by industrial blight. They have come to realize that their natural resources such as rivers, tributaries and associated wildlife are precious commodities that need protection from further degradation. So the work of turning underutilized and distressed riverfront land back to productive public use has finally come of age. As a result of Mayor Street's New River City initiative, the idea of converting distressed, impaired and 131 11/14/06 - FINANCE - BILL 060005 underutilized properties along the river's edge began as a stimulating dream. In the years that followed, developers like myself pulled together huge teams of professionals from every discipline imaginable to turn ideas and concepts into engineered designs to address the needs of the local community, the regulatory needs of the government and the economic needs of our investors. In the months to come, we will begin to break ground for two exciting new residential neighborhoods on the Delaware in the Northeast. These projects are called Tacony Point and Independence Point, and they will each replace sizable industrial brownfield sites that have sat idle for decades. The projects we are building will be unlike anything Philadelphia has seen. Together they will create more than 2,000 new market-rate homes in the City, homes that the average working family can afford. The project build-out will 132 11/14/06 - FINANCE - BILL 060005 become an economic engine that will keep running for a good five years, consuming materials, supplies and labor from the region, employing hundreds of workers from the City's labor force, and ultimately employing hundreds of full-time workers after build-out. In my line of work, I meet a lot of people from a broad range of disciplines, backgrounds and localities where all too often they are not familiar with Philadelphia. They truly are surprised when they hear that Philly is the second largest city on the east coast, that it encompasses 142 square miles, that in its metro area it has 300,000 college and university students and that it is a leader center for business, healthcare and education. More importantly, they are intrigued when I say it will be the best city to live in in the years to come. When we committed to these projects, we did so with the intent of 133 11/14/06 - FINANCE - BILL 060005 creating affordable open neighborhoods where residents, young, old and in between, could enjoy state-of-the-art energy-efficient housing and a high quality of life, with landscape trails, pathways, parks and public areas along the waterfront. More recently, we are working to create as a part of this what will be the nation's first healthcare housing partnership, which will be announced in the weeks to come. Doing that not only takes vision but also guts. These projects are considerably more complicated and risky than building another downtown high-rise where most of the infrastructure is already in place waiting to be connected.

For starters, we're talking about hundreds of acres of impaired land where over the last century environmental accountability and stewardship were rare commodities. Here we have grassroots projects involving tremendous engineering and construction management to ensure 134 11/14/06 - FINANCE - BILL 060005 that it is all done right, under budget and in a timely fashion. In order to develop these properties, we need to ensure that the ground is clean. We need to put in place expensive foundations in difficult soils. We need to bring in trunk lines for water, sewer, storm water, electric, gas, telephone, cable and more, miles and miles of pipes and miles and miles of cable, new roads, new sewers, new sidewalks, new pathways, new public amenities, recreation areas and more. All of that equates to hundreds of millions of dollars before a single home gets occupied and before a single shop opens for business. Passage of Bill 60005 provides the financial assistance or what I will call the infrastructure jump start that these exciting riverfront projects need in order to get moving before traditional construction can even begin. I believe this is a fantastic day that should be remembered as the City's major step 135 11/14/06 - FINANCE - BILL 060005 towards making all of this become a reality. Thank you for your time, and if you have any questions, I'd be more than glad to answer them.

Thank you very much. Are there questions? (No response.)

I'm trying to figure out how you made that testimony from that one sheet of paper. You folded it up and turned it. All that from one sheet of paper. That's what I'm trying to figure out. Thank you very much for your work and for your testimony.

You're welcome.

Is there anyone else here who would like to testify? (No response.)

Is there anyone else here? 136 11/14/06 - FINANCE - BILL 060005 (No response.)

Seeing none, as there are some issues we have to resolve with the Economic Opportunity Plan that we hope to conclude, I thank all who have been here. It was a great mix of information and interest and statements by everyone who has a stake in this. We will continue this hearing on Thursday, Thursday the 30th. Next Thursday is Thanksgiving. The following Thursday, November 30th at 1 o'clock at the conclusion of City Council hearings. So we will see you then, and hopefully we can get where we're trying to go. Thank you very much. Everybody have a good holiday. (Committee on Finance adjourned at 5:40 p.m.) - - - 137 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on November 14, 2006, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)