COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE COMMITTEE ON FINANCE - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, 5/29/02 12:53 p.m. - - - BILL 020275 - Authorizing the Mayor, on behalf of the City, to file an application with the United States Department Housing and Urban Development (HUD) for a Community Development Block Grant (CDBG) as required by Section 104 of the Title I of the Housing and Community Development Act of 1974 (P.L. 93-383), as amended, including all understanding and assurances contained therein... RES. 020285 - Approving the annual program statement and budget for the expenditure of the NTI bond proceeds for Fiscal Year 2003. (Hearing continued from 5/28/02) PRESENT: COUNCILWOMAN JANNIE BLACKWELL, Chair COUNCILWOMAN MARIAN B. TASCO, Vice Chair COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DICICCO COUNCILMAN JAMES F. KENNEY COUNCILMAN MICHAEL A. NUTTER - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 5/29/02 FINANCE - BILL 020275, RES. 020285 I N D E X WITNESSES Luis Cortes, President, Nueva Esperanza CDC Patricia Smith, NTI, Director, NTI.......... 6 Herbert Wetzel, Executive Director, RDA..... 65 7 Debra McCullough, Director, Housing......... 81 8 9 10 11 12 13 3 5/29/02 FINANCE - BILL 020275, RES. 020285
This is to resume our hearing from yesterday regarding NTI and community development block grant application. We have a quorum. To my left is Councilman DiCicco; to my right is Councilman Kenney and Councilman Nutter; and also to my right is Councilman Darrell Clarke. The bill numbers are 020275 and 020285. Is there anyone here who -- I understand there was a Reverend Cortes who wanted to speak; we will permit Reverend Cortes. We said we would not have any public testimony, but for one individual, certainly, we're happy to let you make your testimony now, Reverend Cortes. And after that, we will have questions from members of the committee for the Administration. Is there anyone else here who's asking to testify? (No response.) (Witness comes forward.)
Okay. Reverend Cortes, we'll ask that you identify yourself for the record, and we're happy to receive 4 5/29/02 FINANCE - BILL 020275, RES. 020285 your testimony.
My name is Reverend Luis Cortes, and I'm the President of Nueva Esperanza Community Development Corporation, and I want to thank City Council for the opportunity to address you regarding NTI. The establishment of the neighborhood initiative is a sound one as it begins to address fiscal blight problems of our city and the way in which we think of our neighborhoods. I want to request for you today that the community of Hunting Park, east of Broad Street and west of Front Street, be included as a part of the NTI action plan. I believe that the exclusion of our community is an error, given the investment that many organizations and other businesses and nonprofit groups and individuals have made in turning around a neighborhood with many abandoned commercial and residential properties. Nueva Esperanza alone has acquired over eight acres of 5 5/29/02 FINANCE - BILL 020275, RES. 020285 distressed or abandoned properties in order to reclaim this neighborhood. In the last four years, we've had major plans for the coming five years. I'm here hoping that you would include us in the NTI action plan. I'm here because in the document that has come forward, we were distressed to find that there were various communities. If you look at the map that we have included, you will see that Nueva Esperanza's community was skipped over; whereas, the entire area around us was, in fact, included in the City Planning's proposal. The neighborhood has strong nonprofit organizations and businesses that are committed to turning it around. We have in this community Aspira, the oldest educational organization; Casa del Carmen, the second oldest Latino social-service organization; Roberto Clemente, Taylor, McClure, Cayuga, Central East, Barton, Sheridan, Stetson, Aspira, Nueva Esperanza, Edison, and the public schools. All of these schools are in the community that was skipped over. We have the largest educational community in the City, with over 15 percent, or 20,000, of Philadelphia's school children within 6 5/29/02 FINANCE - BILL 020275, RES. 020285 our boundaries. Aspira and Casa del Carmen have invested over $3 million in the community in the last four years. The public school system has invested over $18 million of rehabilitation of the existing schools. Tierra Colombiana, regarded as one of the best, if not the best Latino restaurant in Philadelphia, has also invested over half a million dollars in their business. Nueva Esperanza is an anchor in this community that can and has led significant community-development efforts and can deliver community change. * We have invested close to $7 million in a four-block area over the last four years. 7 million that now contains over 250 jobs. 1 million. An additional $3 million will be invested at the industrial site and high school, totaling close to $9 million. * The City of Philadelphia invested 7 5/29/02 FINANCE - BILL 020275, RES. 020285 $100,000 of that $9 million through a Department of Commerce grant that represents Nueva Esperanza leveraging $9,000 for every City dollar that we have received. Neighborhood transformation requires this kind of leadership and not just demolition. 2-acre lot, which at the time of purchase, was a large, blighted industrial building. The building cost Nueva Esperanza $450,000. We had the State of Pennsylvania invest over $50,000 in remediation, an additional $50,000 in a site development plan. Nueva Esperanza has already paid over $40,000 in back taxes from the previous owner. The building suffered arson, and we now face a City bill for the demolition, and we are being charged for additional taxes and fees by the City of Philadelphia. Nueva Esperanza has a $28 million development plan to create a Latino corridor in North Philadelphia. That plans is included in the back of your packets. We continue to work closely with HUD and with the House and Senate at the federal level 8 5/29/02 FINANCE - BILL 020275, RES. 8 million of the project cost.
And, as I mentioned, the proposal is in fact in the packets we handed out. 4 million loss. HUD, Housing and Urban Development, is interested in developing a partnership with us. We need to have our city be a part of this development and treating us in a fashion similar to for-profit developers downtown where tax revenue, its collection and assessments, are seen as part of a development package. The collection of taxes and placement of liens and court appearances only lend to the problem of development. We have tried to dialogue on this issue, but to no avail. Neighborhood-development projects must get similar treatment to the Kvaerner and stadiums and other development projects. Tax relief to support commercial development is good in the neighborhoods as well as downtown. The Federal Home Loan Bank in Pittsburgh is considering the Nueva Esperanza community as one of three in the state to invest in 9 5/29/02 FINANCE - BILL 020275, RES. 020285 a strategic-development initiative. They are willing to assist us through both funding and technical assistance. This neighborhood has a strong core of commercial and residential owners and is strategically located off of the Roosevelt Boulevard. There are many viable businesses in this area, including restaurants, auto-repair shops, bank branches. In addition, most residential properties in this community are, in fact, not abandoned. This neighborhood can become a popular destination for first-time homeowners. Our request. Nueva Esperanza has a successful track record of development and investment in North Philadelphia. We have managed to do very much with very little City of Philadelphia investment. We ask City Council to award our past and current efforts with a vote that we will be included as a City of Philadelphia NTI planning area; that particular attention be given to the tax and demolition relief at 4530 North Fifth Street in order to assist, and not to squash, that development. We also encourage Council to examine 10 5/29/02 FINANCE - BILL 020275, RES. 020285 development of tax treatment to encourage neighborhood economic development. Finally, we hope that the HRP project that has not had enough funding for nonprofits not be open to for-profit organizations without assuring those who have made the program successful in lower-income communities continued access. Thank you for holding these hearings and thank you for allowing me to speak to you this afternoon.
Thank you very much, Reverend Cortes. And let me say that, obviously, your representation has preceded you in the way that Nueva Esperanza has been wonderful for our city and for the community. Do we have any questions from any members of the committee? Councilman DiCicco.
On of your testimony, you referenced that the City is 11 5/29/02 FINANCE - BILL 020275, RES. 020285 insisting on collecting $53,000 in taxes and an additional $15,000 in fees.
Could you be a little more specific as to what that represents.
Yes. When we purchased the property, there were $60,000 in back taxes.
60. We have paid 45 of those 60. Other taxes have accumulated, and as they have accumulated, they've also accumulated liens as well as fees. So in addition to the -- we have about $15,000 in additional fees in addition to the $53,000 in outstanding taxes.
Yes, due to the fact that it's an empty lot. 12 5/29/02 FINANCE - BILL 020275, RES. 020285
No liens, there aren't any liens -- are demolition liens --
Thank you very much. Any other questions? (No further questions.)
Thank you, Reverend Cortes. Now we're ready for the questions for the Administration, so we ask you to come forward. (Administration witnesses come forward.)
Councilman Kenney? 13 5/29/02 FINANCE - BILL 020275, RES. 020285
Thank you very much. Just a few follow-up questions relative to yesterday's discussion. When Council passed NTI originally, there was a $20 million advance, I guess, on the money to get work started. Could you tell me what the status of the $20 million is, what work it accomplished, and if there's any left.
The closing on the bond issue occurred about two weeks ago, and out of that, the cost of issuance and other transactional costs would have been deducted; that would have been about $4 million.
Yeah. So that's connected to the actual issuance of the bonds and the closing and all of the transactional costs. That's been the only monies spent thus far.
So there's $16 million of that original approval left?
Yes. And in addition, as we testified yesterday, we are in the process of restructuring the PHIL Loan bond, and would include 14 5/29/02 FINANCE - BILL 020275, RES. 020285 approximately $2 million of NTI bonds as a part of that restructuring so that we could lower the interest rates to and percent. That bond closing, I think, is tentatively scheduled for sometime at the end of this month or at the beginning of --
A there a list available of the professionals involved and the fees paid?
I can talk to the City Treasurer's Office; they usually handle that part of it.
I would like to see a breakdown of who got what work and what they were paid and what they did and what services they perform; in addition, what professional corporate, legal, or other professionals have been engaged on the $2 million -- was it $2 million fees on the --
Okay? Also, on the issue of -- one of the 15 5/29/02 FINANCE - BILL 020275, RES. 020285 concerns I had yesterday is, as far down the road as this is, we still don't have bid packages and pre-qualification issues relative to contractors. That's a concern to begin with from my perspective, but the other question I have on that is, will this work go to the lowest bidder?
Yes. This is being issued pursuant to the City's standard procurement process, and that standard, as dictated by the Charter, is the lowest responsible bidder.
The lowest responsible; not necessarily the lowest bidder.
The Charter requirement is, you know, out of the Procurement Department.
Who will review the bids and who will make the final decision on who gets awarded what?
That work is let out of the Procurement Department. I don't know if they have a committee structure or how they actually review it, but it will be the work of -- it will be treated as our current demolition contracts and reviews are done.
Well, is it 16 5/29/02 FINANCE - BILL 020275, RES. 020285 envisioned that a larger kind of general contractor would be hired, and then that contractor would then hire subs? Or would each individual job be bid separately? Will there be an overall large construction or demolition company that would have the authority to hire subcontracting demolition firms?
I think -- I mean, I can't speak to how contractors respond to our bids, but it will be in the same manner as are traditional demolition contractors. I assume GCs sometimes bring in subcontractors; I assume some people, you know, bid and they do all of the work. But there's no, like, requirements that it has to be done one way or the other. It's the standard, you know -- what we can do is make available to you, you know, the standard bid packages and the requirements and the technical specifications that will be issued as a part of this.
But is it envisioned in a general sense that a large overall construction manager or a general contractor would be hired through the competitive bidding process, 17 5/29/02 FINANCE - BILL 020275, RES. 020285 and that individual would then have the ability to hire subcontractors to do the actual work?
I really can't answer that type of question; I, you know, must plead a little bit of ignorance between GCs CMs and subcontractors. As I said, we can make available to you the actual bid specification.
My concern is that we may engage in a competitive bidding process, as the Charter requires, but as a result of things that we've seen in the -- this is the demolition side, but on the construction side of it, what we've seen in the past are lowest responsible bidders being awarded the bid, and then through a process called "change order," and other negotiations, the bid itself, in some ways, changes: The scope of the work changes and the price often changes. So what I need to know is what the specific process is going to be from the response to the bid to the evaluation of those bids to the Awards of those bids, and then further down the road, to what happens to allow that scope of work to be changed during the course of this process. 18 5/29/02 FINANCE - BILL 020275, RES. 020285
'Cause I've seen construction bids, maintenance bids, stuff at the airport come through the airport, for example, wind up being one number, and a year later, it's doubled that because we've had a change order process. And one of the reasons why I was skeptical and voted against this in the first place is because I don't want the continued process of the way bids are awarded in this city to be part and parcel of this NTI if this is going to be successful. Because too many times, those contracts change without anyone's approval other than a small group maybe on the second floor. But Council, once we approve it, it's out of our hands, and then people have the ability to manipulate it the way they see fit, and I want to try to avoid that if we can, to avoid problems down the road with NTI's success or lack thereof.
Okay, I will follow up and provide that type of information as to what the City's procurement process is and the review process.
And, I guess, the initial Strawberry Mansion is the initial area we're going to be doing a large amount of --
What we've historically called "the prototype area" was to try to test out the, you know, new bids specs, things of that nature.
In the package that we are putting together, we're looking at all vacant buildings.
Okay, all vacant buildings. Is there a relocation plan?
A plan for individuals who need to move out of their homes or be located while the demolition is going on.
Well, there's always the issue of what we call "emergency and temporary relocations." For example, one of the things that we talk about is, prior to demolition occurring, to 20 5/29/02 FINANCE - BILL 020275, RES. 020285 do assessments and surveys of the neighborhood. You know, if there's an occupant next to a property that's going to demolished, to make sure that there's not a elderly person or someone with special, you know, health issues and, therefore, may need to be temporarily located to make sure that occupied house will be okay. That work will be lead, you know, by the Office of Adult Service, in partnership with Risk Management, doing what we call "a social survey assessment." And then depending on the outcome of that, if it's necessary, working with the person, we think their health or something may be at jeopardy, there may be a temporary, you know, or a emergency relocation. Historically the of Department of Licenses and Inspections has on occasion, you know, had to move somebody on an emergency basis.
Well, obviously, this is a larger number of properties that are being demolished in one period of time, and I would guess that over the course of the two years of planning, we would have some idea on the potential number of people that need to be relocated? 21 5/29/02 FINANCE - BILL 020275, RES. 020285
I really think it's going to vary from neighborhood to neighborhood, from community to community and the situation within each. And that's why, you know, we built in time to do those inspections.
We have not done the field- survey inspections on social services; we've just done the building-condition inspections, and then once we are clear about which properties will be, you know, included in the bid package, then the next step will be to begin to deploy -- to do the social-services assessment.
Right, and I do believe we included a percentage number to acknowledge that, and it would just be, you know, for hard costs. Like, for example, if you have to put somebody with -- you know, a lot of times, I believe, the Office of Emergency Services works with agencies like the Red Cross and other providers to provide temporary housing. 22 5/29/02 FINANCE - BILL 020275, RES. 020285
I assume the Housing Authority will be involved in any potential relocations?
They're not supporting -- they're not going to be providing any support?
The Housing Authority can and may be asked to do some stabilization work on houses that we want to preserve, but they will not be involved in the relocation work; that is through the Office of Emergency Services.
They were all -- I guess if there's a tenant, that if the property is PHA- occupied with a PHA tenant, they would then be responsible for handling that person, but if it's a privately-owned property, no. 20
And will the Section 8 Program be utilized in any way?
No. As we stated in the NTI bond program, that we would not be using Section 8 certificates out of bond proceeds to do permanent relocations. 23 5/29/02 FINANCE - BILL 020275, RES. 020285
You indicated in your testimony yesterday that the generally stable neighborhoods would -- what is "a generally stable neighborhood? Could you give me some ideas on which neighborhoods by name you would you believe would be generally stable?
I mean, basically what we've been saying with respect to some of -- we said neighborhoods and blocks, that there are a lot of blocks in the city and neighborhoods in the city where you just see one or two vacants on the block and, you know, they're all across the city. I'm thinking they're in the lower Northeast and in areas of Northwest Philadelphia, Southwest Philadelphia, South Philly, but even in North Philadelphia, where you may even have a significant amount of vacancy, you also have a significant number of blocks where there's one or two vacant properties on that block. And so what we want to do is to make sure that -- you know, if it's feasible and it's likely that that property can be rehabilitated, can we stabilize it in such a way, get title to it, get it back into the private marketplace. 24 5/29/02 FINANCE - BILL 020275, RES. 020285
Okay. Yesterday's Daily News article indicated that Westrum (ph), a very successful developer generally, has been trying to do more and more in Philadelphia, is looking at Brewery Town as a potential for market-rate residential housing. There were some indications in there from Mr. Westrum and also from Toll Brothers that they believe that right now, the climate and the environment in Philadelphia is not terribly suitable for the construction of market-rate housing at a profit to the developer. What discussions are going on as we speak, or will be going on, in an effort to deal with the construction costs associated with, I guess, Phase II of what comes after demolition?
What is going on to have those discussions? who is having the discussions? and what are the results of those discussions?
Again, the issue of labor costs, I think, again is a complex one, particularly where, you know, the City's not directly involved in one of our own projects. We 25 5/29/02 FINANCE - BILL 020275, RES. 020285 have begun to look at what are some, what people call, "cost drivers" for construction costs. I believe there's been some work done to say, you know, is it just the differential and wage rate? I think someone mentioned yesterday about the A rate and the B rate. You know, some people say it's work rules, are there other cost drivers, you know, permitting processes and the like. So, you know, there's been some work done with respect to that. The solution, I think, is one that, you know, the Mayor, I know, is very much committed to looking at, and probably himself personally would take the leadership on an issue like that.
It is a major part of the success to this project, is it not?
I think the issue of the cost of housing and the cost to build in Philadelphia, the same as with the Convention Center and others, is an issue, and we do have to 5/29/02 FINANCE - BILL 020275, RES. 020285 grapple with it. And sometimes I know there's been progress, and sometimes there hasn't been.
But I'm not, you know, I'm not in the leadership on that particular issue so I --
But without progress in that area, the potential of experiencing a situation where we have a lot of vacant land and nothing being built on it should be a concern for anybody involved in approving money for this or involved in the implementation of the program.
And that's the other -- the final question I have is, what happens during the course of the two, three, five years that we're talking about, when it comes to the securing, cleaning, and maintaining of these vacant parcels we're going to create over the next two to three years?
Mm-hmm. Well, as you know, we've incorporated into the beginning last year a process of going through and cleaning the current 27 5/29/02 FINANCE - BILL 020275, RES. 020285 vacant lots in neighborhoods. Because of the amount of debris and the scale of debris, it was very clear that, you know, we in government had to tackle that problem. I believe that as of today, we're probably about at least two-thirds through the approximately 31,000 lots. I believe the numbers -- and this work is being led by the Managing Director's Office -- is approximately more than 20,000 tons of debris have been removed. And then at the same time --
We budgeted, if I remember correctly, in that fiscal year budget somewhere in the area of $6 million to undertake this -- and it also included graffiti abatement. I mean, it wasn't just lot cleaning but a number of that type of work that you're seeing in neighborhoods. Then going forward, having gotten it dawn to a manageable position, we have been working to identify both private and other resources. We've done, you know, some pilot projects in some neighborhoods. I believe the Philadelphia Green 28 5/29/02 FINANCE - BILL 020275, RES. 020285 people yesterday testified about some work that's been done in New Kensington in the Empowerment Zone, where we learned that sometimes by tree-planting and basic seeding of the lot and low-rail fencing, you're able to maintain that. Working with the Horticultural Society, we were able to get monies from some of the private foundations. We've submitted proposals and have received a grant. At the federal level, there's also proposals going out to some of the other federal agencies like Urban Forestry and the Environmental Protection Agency. So we're beginning to try to mine the federal budget because increasingly, the issue of urban land is not one -- and the management of that is not one that is unique to Philadelphia. Cities like Chicago have been successful in getting a significant amount of federal resources to do different types of what people call "greening projects," and we've had some interest by the, you know, private banking community about playing a role, you know, where their offices are in this type of land maintenance.
The City of Chicago 29 5/29/02 FINANCE - BILL 020275, RES. 020285 also makes money from towing abandoned so -- and we pay money to have 'em removed while the City of Chicago makes money to have them removed, so I don't always want to be compared to Chicago 'cause I don't think we're right up there with them. But I guess the question is, what are we putting aside in the way of budgeting money to maintain these lots? If, in fact, they stay vacant for two, three, five years, you know that the refrigerators and the car tires and the other things grow off those lots.
Yes. We did include in this year's fiscal budget to go through it on a periodic basis, to continue to make sure the lots remain reasonably free of debris. So I don't -- I think it was around 4 or 4.5 million, but I can check.
Well, I think the annual budget is they budget it out in the Five-Year Plan for, you know, over the five years. But I will check it.
Thank you, Madam Chair. In the area of cleaning vacant lots, encapsulating vacant buildings that are not City-owned, that are privately owned, are we liening the owners?
And we'll continue if we have to go back time and time again?
That's the only question I have. I wanted to make sure. Thank you.
Good afternoon, Ms. Smith and Ms. McCullough and Mr. Traylor. 31 5/29/02 FINANCE - BILL 020275, RES. 020285
Councilman, would you pull your mic. closer because we absolutely can't hear you.
From the earlier hearing, Madam Chair, it was pointed out that I was being unusually quiet, and that has continued into this hearing. In response to an earlier question, I could not -- I was actually having trouble hearing over on this side -- you were responding with a question with regard to relocation, and I only heard a part of what you said, that there was an office of "something" services that was working with people, and I couldn't hear what that word was.
Okay. And usually they work very closely with the Office of Risk Management 'cause sometimes, you know, it gets to, you know, whether or not it's a dangerous condition 32 5/29/02 FINANCE - BILL 020275, RES. 020285 or something for the occupied property.
Okay. I had asked you yesterday about -- and I again want to say that while some of the questions may make reference to the current pilot area, which is in Strawberry Mansion, obviously. That's not in the area that I represent. At the same time, I will make a little bit of an assumption, which is that whatever may be going on in the pilot area, to some extent, is probably going to go on in other parts of the City when the plan is fully operational. So my questions are not so much directly about the Strawberry Mansion area but only in the context of whatever it is you're doing, and you happen to be doing it there, and it's probable going to be pretty much the same in another part of the City, and whenever it rolls over into the 4th District, I'd like to better understand better what the program is. So if you could answer the questions in that context, I'd appreciate it. I asked you yesterday about the upcoming pilot area activity, and I think you told me that there were a hundred properties that were going to be demolished, all of which were vacant. 33 5/29/02 FINANCE - BILL 020275, RES. 020285
Okay. But in previous materials or in earlier news accounts about the pilot area, I thought that I had actually read that it was 120 properties.
I can't speak to what's in the previous accounts, but as we've been doing the inspections and analyzing the building, having conversations with the District Councilperson, the number moves up and down basically. As we committed to in both the framework document that, you know, the District Councilperson we're going to be working very closely with in terms of identifying properties. You know, sometimes for example, you know, people raise the question that that particular property needs to be demolished, someone may assert they can rehab it, you know, it may make sense to take it off. So the numbers do go up and down. And even after we kind of size the package, you know, it's still possible that something can happen and a property gets taken out or added, but it really is a consultive process that we try to have with the District 34 5/29/02 FINANCE - BILL 020275, RES. 020285 Councilperson.
Right, and I understand that. And is there any expectation that there will be relocations in the pilot program?
I mean, you know, once you're out of your house, you're kind of relocated.
Okay. Well, there's -- what we always acknowledge and want to be sensitive to -- and we talked about it in the program description -- is two types of relocation. One could be temporary in emergency. The reason why, as I explained to Councilman Kenney, is due to, you know, a health issue, the presence of a elderly household. We really do kind of, since we're going to be working on a geographic basis, kind of want to be able to anticipate those issues, identify any special needs, and then make sure we have an appropriate response for that. You know, in addition --
I hate to cut across you, but we would temporarily relocate 35 5/29/02 FINANCE - BILL 020275, RES. 020285 someone because we're going to be doing a lot of work in the area and it's not safe for them? Or, I mean, what --
Yeah, I think if it's -- if we think there may be, for example, you know, say, someone has an asthmatic condition, and due to the dust that may result from the demolition activity, we do want to be in a position to move that person temporarily from their house, if they want to be moved, or find some other way to kind of accommodate those needs.
The Office of Emergency Services has, you know, worked with a number of providers that can provide temporary shelter or, you know, hotels, things of that nature. It really is a case-by-case type of determination. And one of the things that we said in the program framework was that any relocation or need also would be reviewed with the District Councilperson so that they're aware of the situation.
So, again, in that situation, the District Councilperson will decide 36 5/29/02 FINANCE - BILL 020275, RES. 020285 whether someone gets relocated?
What we said is that we will review and discuss that issue, but we do have to be sensitive to health issues. Sometimes there's concern, as I understand it, that a house, if you're demolishing an adjacent house, even if it's being done by hand, is there a risk of, you know, the other -- some houses may not be in very good condition, and if there's going to be a risk there, I know L&I historically will, you know, try to move people out. So, as I said, it's a case-by-case thing, and we're allowing for it if it's needed and necessary and recommended.
Now, what happens in a situation where -- I mean, I guess some element of common sense just makes it such that if you're going to take down -- I mean, if there are properties on the side of a street, 20 of which 21 are vacant and dangerous, 3 are occupied, and the 22 other 3 are already vacant lots, I mean, what 23 happens with the 3 people who would technically be 24 left after the 20 properties come down and you've 25 now got 26 parcels and 23 of them are vacant? 37 5/29/02 FINANCE - BILL 020275, RES. 020285
Well, again, I think this will vary from, you know, neighborhood to neighborhood, district to district. But, like, in the past, in those situations, you might explore the possibility of permanent relocation. In order to do that, just as the City has done in West Poplar, I think even in the Jefferson Square community, there's a whole process. I mean, we would have to initiate, you know, an eminent domain taking that has to be approved by City Council, you have to buy the person's house out, you have to compensate them, you know, for the value of the home. There's, you know, there's very stringent requirements around what they call "the uniform relocation code," when there's the taking of property for redevelopment purposes. And, again, it --
I can't really answer that, and the reason why I can't really answer that, I really do believe those types of issues you've 38 5/29/02 FINANCE - BILL 020275, RES. 020285 really got to deal with on a case-by-case basis, looking at the situation, seeing if it makes sense. So to project a number would be to project a number artificially and superficially. I mean --
As we're looking in partnership with the District Councilperson, looking at that neighborhood, looking at, you know, are there immediate needs for redevelopment opportunities for that neighborhood, is there -- you know, that's the type of thing that I envision, that there's a type of dialogue and a conversation going back and forth on, 'cause these are not, you know, simple or easy issues to deal with. And that's what we and the administration have committed to. I know historically, the Redevelopment Authority has worked on relocation in Jefferson Square and historically have done it in other parts of the City. It's a complex process, it's not a easy one, it's a sensitive one. And so it's not done, 39 5/29/02 FINANCE - BILL 020275, RES. 020285 and cannot be done, in a heavy-handed manner.
When would you anticipate this dialogue and these conversations taking place?
As we, you know, are sitting down with the District Councilpeople and looking at the target areas, looking at where demolition is going to occur, what the issues are; you know, that's when we would see that, that's when you start having the conversation. And so we've, you know, begun to talk. First we got to do the field inspections, you know, just getting the conditions of the house: Is it vacant, is it occupied, is it structurally dangerous? And then, you know, we tend to map that information out, update it when we have a target area, and that's why we're trying to work within a defined geographic boundary.
And some people may elect to say you know even though there's three properties left there on block, you know, we, for whatever reason, you know, and the City has in the 40 5/29/02 FINANCE - BILL 020275, RES. 020285 past, you know, done demolition if it's need be around that.
Well, I understand you're going to handle them on a case-by-case basis. I mean, since there is a schedule and we talked about this yesterday and I know you might be a little behind because that's just how things happen sometimes. I'm still hopeful that in this process, even with a schedule that might be a month or so behind, can you give me some idea of when these kinds of conversations, based on the bid package timetable or the demolition timetable, when will this activity start?
Well, the first step that we've done is, we sit down and try to identify the geographic target area that we want to focus on in the first year, and there's been a couple of meetings already in the process.
Do you have a deadline by which you want to have that done?
Well, sometimes it's been going back and forth with the District Councilperson. It was my hope that we could at least have the initial meetings done in April, May, 41 5/29/02 FINANCE - BILL 020275, RES. 020285 and June with each Councilperson in that target area identified. As I said, I think it has not gone as quickly; Councilmembers have been very busy and this has been, you know, a very busy time of year in catching everybody and so forth. Then second, once we kind of define the geographic boundaries, then they deploy L&I inspectors who go out and do a reinspection of the areas as to the physical buildings: Is the building dangerous, unsafe; is it a vacant lot; does it appear to be occupied? Then we update, you know, the existing -- they take the existing records which, you know, again, things don't stay stagnant, you know, things move. They update that, and then there's a sitdown, again, with the District Councilperson to begin to look at what may make sense in terms of, you know, a demolition package: What do we move forward with? At the same time there's existing vacant lots, do we identify those parcels for acquisition? You know, we stated that we wanted to demolish -- acquire prop -- take title when we do demolition, but are there other vacant parcels in 42 5/29/02 FINANCE - BILL 020275, RES. 020285 that community that it makes sense to take title. Maybe there's just a vacant lot on the block that could be a potential side yard, what's the current ownership. You know, are there any -- you know, what would be the -- so then you start kind of sizing. Again, it's experience -- it's a kind of a give-and-take type of a process that goes back and forth. Then you can -- and then we also have committed to in our documents that we, at the direction and in partnership with the Council office, you know, have community meetings. So, again, I think each District Councilperson takes that part differently. You know, you have big meetings, small meetings, leadership meetings. So that gets built into it at the same time. It's a very dynamic process, I'm finding, of going back and forth. It's not a simple, straight line.
There was a story in today's paper, which, I guess, was some combination of a bit of reports from yesterday's hearing, and then there seemed to be some 43 5/29/02 FINANCE - BILL 020275, RES. 020285 information that had nothing to do with yesterday and more generally about --
Okay. Well, there was a story in the Inquirer this morning which made reference to some of the activity, I guess, going on in the pilot area, and you were quoted as basically saying -- I'm going to paraphrase and possibly not do a good job -- that you had learned a great deal through the process, there are a number of residents who are expressing, I think, some concern about getting information either outside, or it may have even been at yesterday's hearing.
But also that there may be a need to slow things down a little bit in the context that getting additional information might be helpful and will actually make things better going forward. Do you remember that?
Yeah. You know, they grab you as you're walking out, so -- 44 5/29/02 FINANCE - BILL 020275, RES. 020285
So basically what I was saying was that -- I guess the things I've learned is that it's not a linear process, it's not a simple --
A linear process. You know, you do A, you do B, you do C. That it's dynamic, that it goes back and forth. And you just have to be open to those processes. You know, I mean you -- it's -- that was the gist of it. And whenever you have processes, you know, sometimes they don't stick to timetables, and there has to be flexibility. That was kind of, like, the gist of our remarks. It really is a dynamic process between the Administration and trying to package the bids and put things together and move things with just working with the District Councilpeople, getting that input, working with the community.
As they say, these processes sometimes are, you know, messy, and 45 5/29/02 FINANCE - BILL 020275, RES. 020285 they're not simple or straightforward.
I just re -- that was -- I just reconveyed what my sentiment was, and I didn't read the actual report.
Okay, and when you said that you might want to slow some things down, what actually did you mean?
Well, that it's clearly the process of reviewing the properties and does it make sense; at what point, you know, are you getting feedback from community; you know, getting meetings set up. And all of that takes time. So that's what I was referring to when I said things, you know, took longer. We initially, again, had plans and timetables, but they slip sometimes. That's what I mean. It's not, like, intentionally slowing it down, but you have to allow for the process and how that process plays out. And I think it's going to play out differently in different community. And that's why we really welcome and are happy about the partnership with District 46 5/29/02 FINANCE - BILL 020275, RES. 020285 Councilpeople, 'cause they help us with those processes. And it's always maintained that, you know, it's not one size fits all, one process fits all. It really isn't.
Well, yeah, I mean, that's fairly clear, and I think that that has been part of the discussion both on the record and off the record over some extensive period of time about this in the first place. There's been a lot of consternation, if you will, about getting this done, getting it done, getting it done, and now that you're in the middle of a process, people are now maybe coming to the realization that some of this work probably could have been done at an earlier point in time, some of this work and information could have been gathered at an earlier point in time when we were arguing about whether we should do something or not do something, have a bill or not have a bill, when, clearly, there's still more work to be done and there's more information to be gathered. Is that accurate?
Well, I think, again, but then it changes, time changes the information. As 47 5/29/02 FINANCE - BILL 020275, RES. 020285 we've said, you know, we've done surveys before and things like that just in terms of that.
But because conditions change and environments change, you still need to update. So, yes, you know, we've had surveys, and that's a good start, like we're not going out from scratch. So we're confirming or affirming information. If you had something happen, you know, there could have been intervening factors.
So I don't know if that would have really changed some of those steps.
Okay, but you do know more today than you did a year ago.
And that was the whole purpose of what we had always envisioned, what we call that "prototype project." We built into our processes the idea of trying to work through some of those operational issues.
You know, it's easy to sit in a room and, you know, make a plan and say this, that, and the other, but when you put it -- test it 48 5/29/02 FINANCE - BILL 020275, RES. 020285 in the field, other things change, and it was one of the reasons why we built in this concept of the prototype project.
Okay. Tell me a little bit about the budget on of the -- you told me yesterday this is the program statement and budget. How was this budgeted put together?
Basically it was myself working with various individuals within the operating departments. So, for example, for residential demolition, which took the number that's been historical experience, allowed for the fact that we are changing bid specs to do additional treatments -- you know, like some post-demolition treatments -- and then base than on a per-unit and average it out. So in that sense, it's a flat number. We allocated the --
It is -- the number, depending on whether or not, when you say "demolition," if you're including party wall treatments and the like and -- 49 5/29/02 FINANCE - BILL 020275, RES. 020285
Yeah. Well, some people don't; sometimes they give just the number for the demolition activity, and it will be around 6 or 7,000, and I think it's around or 9,000. 8
The reason why is that in looking at the number -- the past experience has been the combination of some machine and the lot. We wanted to look at -- make sure that we had enough resources to make sure we do appropriate treatments for party wall and how you're finishing off things. I mean, the historical complaint has been how occupied properties have been left behind. We also wanted to make --
Given the massive size of what you're planning to do, my sense would be that there would be fewer party walls given the amount of demolition, especially string demolition, than we would normally have in the present environment where we pretty much do them on a complaint-driven basis as opposed to in any 50 5/29/02 FINANCE - BILL 020275, RES. 020285 significantly coordinated fashion.
I mean, there's no 5 stucco to worry about if you take 20 properties down at the same time.
Yes, but in a lot of neighborhoods there aren't vacant properties in 9 a string like that. 10
There may be five in a 13 string and then some properties and then three in a 14 string. So that's one variable. 15 And I have to admit I do -- 16
You're going to 17 have more string demolition in this program than 18 we've ever had before, though, right? 19
Yes, in some neighborhoods; 20 in other neighborhoods, maybe not.
You know, and as I said, we're also beginning to try to contemplate different treatments on party walls and edging, and we're also trying to budget for things like, you 51 5/29/02 FINANCE - BILL 020275, RES. 020285 know, what can we do around some of the post- demolition treatment. You know, there's the environmental costs component of this that's starting to go up, you know, how we allow for that and landfill. And what I can do is, again, you know, get back to you and talk about you know, having somebody put together a short paper about how the types of things that we are looking at and do them somewhat differently than we've done before to make sure that when we leave a neighborhood that we're trying to leave it, you know, without a lot of issues that have been raised in the past.
Well, I mean, I'd be glad to read the paper. I'm trying to understand -- I mean, some of this goes against some of the fundamental laws of economics, that -- I mean, we have a tremendous supply here of product and I don't understand why the price is going up as opposed to down.
Again, I mean, we may be -- until we actually test the market, we don't know. Again, I'm being very conservative. I understand your point of view. I -- 52 5/29/02 FINANCE - BILL 020275, RES. 020285
I mean, if you budget $11,000, I think you could pretty much anticipate that that's probably what they're going to charge us, right?
Mm-hmm, mm-hmm. And if we budgeted -- I mean, I think it's a question of how you want to budget. I mean, the other side of the coin is if you budget low and then you get the issue of, you know, the bids coming in a lot higher, and then since we have to approve this each year, you know, with Council, how do we -- you know, we have to come back and things like that. So it was just a decision on my part on how to budget this.
I understand, and I'm not questioning your ability to budget; I'm just saying that, mean, you're going to set the floor wherever you're going to set the floor, and it seems to me that for what it is that we're trying to accomplish with quality and with good standards, we want that floor to be as low as possible.
We're apparently 53 5/29/02 FINANCE - BILL 020275, RES. 020285 setting the floor higher than the current ceiling. And, I mean, I'm sure the market would love to respond to it. I'm just questioning why we would put out that kind of number when it is clearly above what we're currently paying and there should be, I mean, certain economies of scale. I mean, we don't need to get Lawrence Summers in here to have a discussion about how you're massively increasing the number of demolitions, many of them are not going to result in party walls and some of these other treatments, people are getting more work than they ever got before, so it seems to me that we should be driving the number down as opposed to potentially inflating it to start with more work to come. I mean, who's controlling the process and whose money is it?
You know, I already gave you my rationalization of, you know, what we are trying to accomplish in that number. We just differ on that.
I'm not sure what more I can say. 54 5/29/02 FINANCE - BILL 020275, RES. 020285
And so you expect, based on your budgeting, that every demolition is going to cost -- and what is the number, 10? or is it 11?
This is just an average, it's an average number that's projected in the budget.
Okay. Let's talk about the housing and neighborhood preservation areas. And that starts on... I guess it starts with the vacant property stabilization, . This is encapsulation? Is that what this budget is?
Okay. Now, in the past, when we've done the encapsulation, you're saying that we have put a lien on the property?
I believe in FY '02, there were around 50 or 54 properties that were 55 5/29/02 FINANCE - BILL 020275, RES. 020285 encapsulated. I can get back to you with the exact number.
Okay. And what, if anything, happened with the liens, or was there any collection?
What we've done is we then began to slate those properties for acquisition, and through the public-taking process, if someone were to step forward, those liens get deducted from any fair-market value. Experience has shown that demolition liens and any other liens tend to exceed the value of the property. You know, at the end of that process, you know, money gets paid into court and so forth and so on.
And how many properties of the 50 last year did we acquire?
We've initiated acquisition on -- that's why I know the number 50, it's approximately 50. I can get back to you on the exact number.
It hasn't been completed 56 5/29/02 FINANCE - BILL 020275, RES. 020285 yet; it's just been initiated. And the request went over -- I believe the funding for those acquisitions were included in the midyear transfer ordinance.
The funding to support the Act 94 actions for those encapsulated properties was included in the just midyear transfer ordinance. So they're winding their way through the process.
Are you talking about the list -- is that Attachment 4, that list?
All right. You're saying that these were encapsulated properties and we're acquiring them based on that?
Right. And one of the, quote, projects in that speaks to the properties 57 5/29/02 FINANCE - BILL 020275, RES. 020285 that have been encapsulated by the City.
I'm sorry, it was left off, but it was in the original grouping. I don't know if we got a page missing. I apologize for that.
Okay. And this is the list that starts with 1600 Diamond Street?
But there was about 54 properties which we -- that's the number, for some reason, that's sticking in my head, around 50 that we wanted to make sure we budgeted dollars for acquisition.
Okay, but you're saying that that's not a part of this package here?
I think it may have been 58 5/29/02 FINANCE - BILL 020275, RES. 020285 left off. I apologize. We did have one more thing and it got of left out. It's a lot of paper.
It's a lot of paper, yes. Our paper budget gone up also. And you'll get that to us?
Yes. And I'll get what we originally submitted, you know, by letter to Council, and then we broke everything out. I know it was on that.
Okay. And along the similar line of the earlier questioning, with regard to the encapsulation or what you're calling "stabilization general," we're anticipating an average cost of $10,000; is that what we're currently spending?
Yeah. Again, it really varies in terms of the type of work that needs to be done. I believe the historic experience could be as low as 3 or 4,000, up to, you know -- in some instances, I think there were some properties around 15,000. It depends on, you know, taking off that -- what you need to do to stabilize the property.
Okay, all right. 59 5/29/02 FINANCE - BILL 020275, RES. 020285 Now, I know we had some of this discussion when we were actually going through this process earlier this year. Tell me a little bit about the CLIP Program and how it will function and what, I guess, the difference will be between what's going on in the 6th and the 10th and the other eight districts across the City.
The exact program is being let out of the Managing Director's Office, and basically, it's kind of like a quality-of-life enforcement program to coordinate the quality-of- life type of code-enforcement issues in those districts. That's, you know, sort of like the core of it. We also recognize -- what we try to do is show that there will also be some vacant property stabilization. These are areas of the City, again, with very low vacancy and demolition needs, but there are other types of quality-of-life issues. And there was a proposal that was submitted called "CLIP," Community Life Improvement Program, and it can deal with everything from, you know, citing for, you know, improper disposal of 60 5/29/02 FINANCE - BILL 020275, RES. 020285 trash and, you know, those quality-of-life types of things.
Now, when do you expect that program to go citywide, or what would someone have to do to have, I mean, the same type of coordinated effort in other parts of the City?
I think what is happening is that the Managing Director's Office wants to get a sense of the cost and what kind of changes they have to make, I guess, within the internal workings of government to do that. So I don't know when they've projected to take it citywide or the like. I would have Miss Richman get back to you on that. It's not a core piece that I've been working on other than to make sure that we show that there will be some vacant buildings and to help stabilize properties.
That program is funded out of -- it's not funded out of bond proceeds other than the vacant property stabilizations. Like in all the rest of the City, it's funded, you know, out of the regular City's general operating budget 61 5/29/02 FINANCE - BILL 020275, RES. 020285 resources. And that's why we called it "an associated activity."
But the million dollars is being funded out of bond proceeds, right?
That's for vacant property stabilization, just like we've talked about in other districts; that's the same thing.
It's just to kind of highlight, you know, again the idea of this coordination work.
Right, I understand. So what will the Clip Program actually cost?
I'm not sure what's been budgeted for that, the actual for the other components. This is what we've put aside for vacant property treatment in support of it.
Mm-hmm, okay. So that takes care of the first $6 million under housing investment and neighborhood preservation. Now, tell me about the $5 million for housing rehab and preservation programs. How did 62 5/29/02 FINANCE - BILL 020275, RES. 020285 you -- there seems to be four components, you're doing an expanded HRP program. Are we adding money to the PHIL Loan Program? You have the new anti-predatory loan product?
That's correct. And we've also talked about doing -- it's doing a targeted basic system repair program. Essentially because of the timeframe involved in putting together this budget, we made the decision to prioritize some of the existing programs that are preservation-focused. For example, the PHIL Loan program, that's a program that does not need to be created and get up and running. It's program that we thought could also be a great service to the City by lowering the interest rates, by making it much more flexible in terms of income eligibility requirements. So that's why we included that in this FY '02. Similarly, the HRP Program has been an historic program that's used for moderate 63 5/29/02 FINANCE - BILL 020275, RES. 020285 rehabilitation of vacant properties that's been funded exclusively with Community Development Block Grant dollars. That program historically has just been opened or used by CDCs. We have not, you know, marketed or brought in other types of developers to use that program. Again, there's, I guess, innumerable neighborhoods within the City that's beginning to see one or two vacant properties, that if the person would be able to get title off the private market or if there needs to be a public taking, there's a public taking, that the rehab of that will bring it back, and it will need a rehab. The challenge is that not every neighborhood has a community-based development corporation with the capacity to do that.
So the thinking is to be begin to work with the contracting community to get -- and there are lots of small rehabber-type guys and women, and there are businesses, you know, 64 5/29/02 FINANCE - BILL 020275, RES. 020285 outside of government that pick up vacant properties, rehab them, and then turn 'em, you know, and sell them. So our thinking is to begin to bring together and identify a pool of individuals. When we've met with each of the Councilpeople, we've said, If you know of contractors in your community who do this type of work, we are going to try to partner with the Commerce Department. PCDC, I believe, already has a working capital fund for housing contractors. So begin to kind of create this network and make this program known to them, and it's being managed out of the RDA. Herb could talk about some of the things we're trying to do to begin to reach out to that community.
The RDA is going to work with these people to acquire the properties?
Yeah, the RDA right now is the agency that manages the HRP Program, the Home Repair Program -- the Homeownership Repair Program, sorry. (Mr. Wetzel comes forward.)
Councilman, prior to the 65 5/29/02 FINANCE - BILL 020275, RES. 020285 change that's being made -- excuse me. My name is Herbert Wetzel and I'm Executive Director of the Redevelopment Authority. The HRP, or Homeownership Rehabilitation Program, was created about eight years ago to help CDCs transition from being a direct contractor to the City to becoming a developer and earning a development fee. Over that period of time, a significant number of properties have been rehabilitated; it's now well over 300 properties under the program. Except that the criteria limited it to nonprofit Community Development Corporations and, therefore, it became a geographically-targeted program because most of the nonprofits, with a couple of exceptions, one of them being Resources for Human Development, which has done properties all over the City of Philadelphia, but almost entirely, the users of this program have a defined geographic area. What we're doing now is, we're going to open up a program to for-profit developers as well as to nonprofit developers, and there will not be any geographic restriction or profitability versus 66 5/29/02 FINANCE - BILL 020275, RES. 020285 nonprofit restriction. The second, I think, key thing is that we're putting NTI bond funds into the program, which will -- currently, HRP is funded with CDBG so the maximum income a buyer can have to acquire one of these houses is 80 percent of median. With the bond proceeds that we're going to be using the income limit, if we use private-activity bonds, it would be 115 percent; and if it was taxable bonds, there is no limit on the income of the buyers of the properties. So it begins to make sense in areas -- and I know you and I have discussed in your district areas like in Roxborough where you might have an after-rehab value of between 80 and $100,000 or even higher than that.
And in some cases, properties could not be done, you know, in high-value areas because of the 80 percent median cap on the income of the buyers. So in two ways we're opening it up: One, we're expanding it to for-profits; and the second is, we're putting additional financing that 67 5/29/02 FINANCE - BILL 020275, RES. 020285 doesn't have the income requirements that CDBG has.
Excuse me. May we interrupt you, Councilman, and members of the Administration for an announcement? Thank you.
Good afternoon. My name is Tim Kearney, and I'm the clerk of the City Council Law Committee on Law and Government. The hearing on Resolution No. 020171 on the experimentation survivors in the Philadelphia City prisons is recessed until Tuesday at 2 o'clock -- will be postponed and rescheduled for Tuesday, June 12th, at 10:30 a.m. here in this room. Tuesday -- I'm sorry, Tuesday, June 11th at 10:30 here in room 696. Thank you.
Thank you very much, Mr. Kearney. We can now resume with our questions. Thank you.
Just quickly, Mr. Wetzel, in opening up to the for-profit community, how will the Authority work with -- there's, naturally, been a lot of discussion, 68 5/29/02 FINANCE - BILL 020275, RES. 020285 through the NTI process, about working with local elected officials. What either has been the process mor what will be the process going forward, with regard to use of NTI bond proceeds opening up to the HRP Program and the involvement by the for-profit community?
Well, I think it starts with the decision that District Councilpeople make on what properties are going to be encapsulated, and that's a also mas I mentioned yesterday, a simultaneous decision to acquire. So when we decide to encapsulate, we're going to begin the acquisition process, and the reason we can do that is we actually have the money to start the acquisition process. In the past, it is, you know, we encapsulate or we desire to do something, and then we have to wait to find the resources to proceed with the acquisition. Because the funds are available now for both activities, it will be a simultaneous decision. We would want to work with District Councilperson to figure out, do we want to package these, are they in a concentrated area, do we want 69 5/29/02 FINANCE - BILL 020275, RES. 020285 to put out an RFP and look who comes forward? Let's say there's of them in a particular area. 4 You know, we will work with District 5 Councilpeople in a process to design a methodology 6 to achieve what the District Councilperson wants to 7 achieve. And that could be, "I want to package all 8 of them in a group and see who comes forward," or 9 "I want to offer them one at a time and I want to 10 see if two or three particular contractors in my 11 district -- you know, they tell me they're good; let me find out -- you know, each one of them can have a house and let me see how they do that."
I mean, I think that's what we want to be able to do. I think the second thing is, we have discussed, and I think we have to make a final decision on any potential deed restrictions, because you've expressed the desire that if the property is publicly acquired and disposed of to a developer for home ownership, that we deed- restrict that property so it doesn't become a rental property.
Either shortly after rehabilitation, you know, it's sold and then the owner walks away from it. So I think we have heard that and I think we want to come back to you to talk about a specified period of time in which the property would be deed-restricted for home ownership.
Now, for privately- acquired ones, what we'll have is a second mortgage on the property, you know, for the subsidy money that will control its use for a period of time. So there will be two levels of controls that will be available.
Okay. Ms. Smith, on , the Employer- Assisted Housing Program, can you tell me a little bit about that? What employers do we think that might target, and how will the program be implemented?
This was one of the newer program ideas that we wanted to bring forth to City Council. We do have experience about the successful work of the University of Pennsylvania 71 5/29/02 FINANCE - BILL 020275, RES. 020285 in West Philadelphia providing, I believe, mortgage assistance and down-payment assistance for employees to buy within a defined geographic area. And it's served as a wonderful stimulus, we think, for the private market. There are other cities and states that have also done different types of employer-assisted housing. I'm having a staff person now review other national programs to get ideas, but essentially, the principle is to maybe do a match, you know, if an employer -- I mean, some colleges and universities say that not everybody may have the resources of a University of Pennsylvania, or you may have smaller employers. I know there was interest by Frankford Hospital -- I don't know if we ever got that up and running -- of doing an employer-assisted housing program in the Frankford community in partnership with that CDC. You know, we've had meetings with, you know, representatives from places like LaSalle and St. Joe's. So we wanted to use this as an opportunity to craft that program, to look at other experiences and come up, you know, with a strategy. 72 5/29/02 FINANCE - BILL 020275, RES. 020285 So we don't have the specifics on that yet. What we would do is, when we have the program defined, you know, we'd bring that back, but we wanted to say that this is an area we consider a priority area in terms of furthering one of our objectives.
Are you talking about in the original program statement that was a part of the book?
Oh, okay, I'm sorry. I thought said you didn't have it.
I said it's just in a different place. 73 5/29/02 FINANCE - BILL 020275, RES. 020285
A different place, okay. Well, you have the master document; we all just have copies. This is under the heading of the NTI bonds and the different things that they'll be used for. One of the bullet points is repair of streets, driveways, curbs and sidewalks and retaining walls, and provision of utility infrastructure and public facilities.
Can you tell me in the budget that we have where those items are covered, or under what heading any of those items are dealt with?
Those are just what we call "eligible uses." I mean, those are the types of things that are eligible to be used for various types of bond proceeds. We did not include in this document a program with respect to that. What I've been doing in response to the letter that I received from you, I guess, about a week ago is to begin to think about what a program like looked like; are there existing programs that we -- like, for example, can 74 5/29/02 FINANCE - BILL 020275, RES. 020285 we -- or do you tweak a PHIL Loan Program to include this; would that work to address issues around retaining walls and driveways. Or do we do something differently. What else in the City looks like a program like that. For example, the Water Department, I've learned, has a revolving-loan fund for water (indiscernible) sewer repair. So what I'm in the process of doing is trying to put together background information to think about how we might craft such a program.
Well, I mean, my recollection is that we pretty much had a program like that some number of years ago. It primarily functioned through the Redevelopment Authority using funds provided the City, where we did do curb and sidewalk work; we have not done retaining walls. But I guess I am intrigued as to why something like that wouldn't be included in this proposed budget given that there's been this topic of conversation for many, many years here in the government. And, quite honestly, other than another conversation with OHCD, wich these are all 75 5/29/02 FINANCE - BILL 020275, RES. 020285 eligible uses as well, these are many of the kinds of things that are of great demand in some of the neighborhoods that -- I mean, I think our mutual objective here is to preserve maintain some of the communities. Now, in some of instances, there's also the Model Blocks Program, of which OHCD is a participant in, and you could use that as a bit of a prototype, where there is a payment of some funds -- I believe 30 percent -- by the homeowner, and the balance, the 70 percent, is picked up. I mean, I would say that I don't necessarily know that we need to scour the universe in terms of research and information. We have done these things in the past. There were line items in City budgets in the past called "Site Improvements," and that's what Councilmembers used to do that kind of work.
Again, I mean, I am not aware of all of the variety and different programs, you know, that we've done before. You know, again, 76 5/29/02 FINANCE - BILL 020275, RES. 020285 one of the reasons -- given the amount of time we had in terms of, you know, trying to bring forth this document, you know, in accordance with the timelines, you know, it's one of many ideas and suggestions that have come forth --
Well, we were supposed -- because we needed to submit a program statement and document by May 1 for the final program between the passage of the legislation and all of the other work that we're doing with respect to, you know, meeting of Council people, my office and myself and others, we just have not -- I just simply haven't had the time. I've gotten a lot of ideas that we still need to vet through. So we made a decision to kind of, you know, for this first one, to take a conservative approach to it, make it a conservative budget. This is only the first year. We know we can come back to Council under the ordinance with specific changes in that budget. But I just was not in a position to put something together in response to that particular 77 5/29/02 FINANCE - BILL 020275, RES. 020285 issue. We heard you, I understand it's a major issue. How we manage it, what does it look like, what type of resources, how does it operate; you know, does it look like the Model Repair Program; if we create a revolving-loan fund, you know, how do we use the tax resources to structure that. It's kind of like technical-development program work that, to be frank, I haven't gotten a chance to get to.
Well, I understand that but, I mean, Ms. Smith, based on your testimony here today, there are, I think, admittedly -- I mean, this is certainly nowhere near any level of criticism and there a lot of work here. On the other hand, there are a number of items that either myself or other members have asked about that you have, I mean, very forthrightly said that more details need to be put together, you're still working on elements. And, quite honestly, given the fact that, again, this has been the topic of a great amount of discussion over many, many years, why something couldn't be at least put in in terms of the budget, and similar to many of the other items 78 5/29/02 FINANCE - BILL 020275, RES. 020285 you've discussed here today, you could, you know, fine-tune some of the details. I mean, you've got a number of items here that are not rock-solid and tight as a drum, right?
Okay. So this could be another one of those, which, again, to be honest with you, we have done in the past, and at least a couple of the people up at the table there, I think, have some experience with that, who could work along with you, but if you'd at least have the item in the budget, it would clearly and very directly and, I think, somewhat forcefully address an issue that many of us have raised over a long period of time and would probably generate additional interest and support. And you'd also be doing something that many Philadelphians would like to see done in their neighborhoods, in contrast to some other activities.
You could say you're going to amend the budget, you could say 79 5/29/02 FINANCE - BILL 020275, RES. 020285 you're going to put something in and work on the details later; you could say a lot of things.
Okay. Again, I'm just in the process of beginning to explore what our options are in this area, and I was planning to report back out, you know, what we can do with respect to that. I understand there are proposals and ideas over at the Streets Department and other places. I just apologize for not having included it.
Well, is there a question as to whether or not we can do these things or not?
I -- I mean, I just haven't had a chance to really look into this personally and begin to think through those sets of issues.
Okay. And so you would not be in a position to put forward that there should be an adjustment made here and at least some dollars set aside and you'll continue to work on the details, but they're at least there, and help to focus the program in that particular area, which many of us have raised over a long period of time? 80 5/29/02 FINANCE - BILL 020275, RES. 020285
You know, we could go back in and, I guess, prepare a budget amendment. I mean, Council can amend it. I just, you know, wasn't in a position to put something together in time for this document.
All right, good. Thank you. Let me ask Ms. McCullough a couple of questions about her testimony yesterday. (Ms. McCullough comes forward.)
Ms. McCullough, on of your testimony, you say that funding for the operations of L&I has been introduced, in part, to ensure that the City meets the federal requirements governing the expenditure of funds for basic City services. 81 5/29/02 FINANCE - BILL 020275, RES. 020285 Can you tell me what that means? MS. McCULLOUGH: Yes. My name is Debra McCullough, and I'm the Director of Housing. CDBG regulations require that --
I'm sorry, whose regulations? MS. McCULLOUGH: CDBG, federal regulations, require that a city does not simply replace a city service with community development block grant funds.
Right. MS. McCULLOUGH: So the idea being the City -- and this would be any city -- could not simply say, In this year's budget, we're going to stop funding police officers with city general funds; we're going to fund them with community development block grant funds.
Right. MS. McCULLOUGH: There are specific regulations regarding the funding of what's called "public services," and it must be for a specific program that a city wouldn't otherwise have unless you were using these funds, or it must increase the budget by a certain percentage showing that the 82 5/29/02 FINANCE - BILL 020275, RES. 020285 city is making a commitment to what is essentially a new activity that's being funded with the community development block grant funds and not simply replacing city funds with CDBG funds.
Right. So what funds did you take away from L&I? MS. McCULLOUGH: In this proposed budget, we have reduced Community Development Block Grant to L&I in order to make sure that we didn't do that -- that we didn't want run afoul of the federal regulation.
Okay, and the reduction was...? MS. McCULLOUGH: The reduction was $400,000.
Okay, okay. Now, there was also a fair amount of testimony, especially by a number of advocacy groups and the like. You're testimony talks about that although the Housing Counseling Program has been reduced by $647,000, all core services of housing counseling, including default, etc., are still being provided. MS. McCULLOUGH: Mm-hmm.
How did they do 83 5/29/02 FINANCE - BILL 020275, RES. 020285 that with a $647,000 reduction? Is it being made up somewhere else? MS. McCULLOUGH: We have reduced the amount of counseling services that are being provided to the City compared with past years, but we're still providing the core services of default and delinquency counseling, tenant counseling, mortgage counseling, and anti-predatory lending counseling.
And why did we make the reduction? MS. McCULLOUGH: We made the reduction in part because over the past couple of years, the counseling budget has increased, and we just felt we could bring it back down to sort of a standard -- there's not really a standard, but to bring it back down to a level that it was at a couple of years ago and still be able to meet the needs that are being listed here, still meet those services.
Well, what was being done that won't be done now as a result of the reduction? MS. McCULLOUGH: There will be fewer 84 5/29/02 FINANCE - BILL 020275, RES. 020285 people served because there will not be as much housing counseling money out there as there was in the past.
Now, why would we do that? MS. McCULLOUGH: We did this in part because we needed to reduce the budget, and we did it in part because we still are providing the largest -- we still have the largest housing counseling program in the country, and we thought that we would still be meeting the needs of Philadelphians even with a reduced budget. The settlement -- as we discussed yesterday, the Settlement Grant Program has been reduced because of the lead-paint requirements, although there was testimony yesterday from the housing counselors that although the settlement grants have been reduced, the need for mortgage counseling is still great, and I think that's the case.
Well, I understand when you have to make a budget cut, I mean, you've got to make tough decisions, and everybody doesn't always get what they want. I mean, it does seem a 85 5/29/02 FINANCE - BILL 020275, RES. 020285 little bit at odds to some extent with -- I mean, we are about to embark on one of the greatest neighborhood preservation and revitalization programs that the City has probably ever done, and as was mentioned yesterday, possibly going on in the country. At the same time, we're reducing our housing counseling services. How many people do you think don't get served as a result of the reductions? And, I mean, from your perspective, is there any conflict with these simultaneous actions? MS. McCULLOUGH: Well, I can't tell you -- I don't know the number of people that won't be served. The way we made the reductions essentially was, we put out a request for proposals this year and solicited proposals for housing counseling services, and for the most part, organizations -- we continue to fund most of the organizations that we have funded in the past, not 100 percent of the organizations, but most of them. So there will be some people -- the services will be reduced because perhaps the neighborhood counseling agency that that individual 86 5/29/02 FINANCE - BILL 020275, RES. 020285 would have been gone to isn't being funded this year, and so that individual would have to go to -- if that individual's going to pursue counseling services, would have to go to a counseling agency outside of his or her neighborhood. So I can't exactly predict how many people would then choose not to go get that service. But for the most part, the reductions came in not funding some groups that we funded last year and not giving groups the increases that they requested. We didn't do that across the board because we analyzed each proposal as it came in, and in fact, some organizations received an increase in funding from what they had last year.
Have services been -- I mean, I'm assuming that they've been requesting these increases in funding because they've been providing more service? Has service activity been going up over the past few years? MS. McCULLOUGH: I think activity has been going up and generally costs have been going up; people want to give their housing counselors raises, which is understandable.
They want to do 87 5/29/02 FINANCE - BILL 020275, RES. 020285 what? MS. McCULLOUGH: Organizations want to give their housing counselors raises.
Right. MS. McCULLOUGH: Appropriately so. In some cases, organizations wanted to hire an additional counselor to provide some additional services. Um...
Let's talk about BSRP. One, again, I heard yesterday and I read in your testimony that the Tier 3 Program, you're saying, being ended or dropped or discontinued? MS. McCULLOUGH: The Tier 3 Program is being eliminated for new cases; any Tier 3 property that's in the budget -- to which we've made a commitment, we will meet that commitment, but we will no longer take -- starting in Year 28, starting on July 1st, we will no longer take new Tier 3 cases.
Now, that was the -- I mean, that's the highest level? Is that the most amount of money that -- MS. McCULLOUGH: That's the highest level of service. 88 5/29/02 FINANCE - BILL 020275, RES. 020285
And why are we doing that? MS. McCULLOUGH: We're doing that in part because of the tier of the BSRP that has the lowest demand. The highest demand of tiers in the BSRP Program is Tier 2, which we actually gave a modest increase to. And the average number of cases we were doing under Tier 3 was 20 to 25 cases a year. So it was -- in the scheme of things, it was a more minor program.
Well, all right. What happens to those or properties that end 17 up not applying next year, what happens to them? 18 MS. McCULLOUGH: We're hoping that we 19 can give them, through the expanded PHIL Loan, some 20 combination of a grant and the loan. Or if that's 21 not possible -- I mean, that may not be possible in 22 all cases, and we would need to work with that 23 family to figure out if there was some other option 24 for them. 25 Without knowing an individual 89 5/29/02 FINANCE - BILL 020275, RES. 020285 situation, I can't describe it, but we would have to work with the families.
Now, you mentioned that you had provided a slight increase to Tier 2, but did I also hear yesterday -- 'cause I thought I took down in notes that you were cutting the maximum amount you could get from $15,000 to $7500? MS. McCULLOUGH: Yes.
And we're doing that because...? MS. McCULLOUGH: To expand the number of people that can be served under Tier 2.
But if you need $10,000, what happens? MS. McCULLOUGH: Well, again, we're expanding the pool of loan funds, so people may be able to have a combination of a loan and a grant.
If I may a little bit, Councilman, this is something we've been discussing within, you know, the community development group and looking at our programs. I think basic system repair programs, 90 5/29/02 FINANCE - BILL 020275, RES. 020285 when you start doing $25,000 and $15,000 worth of work, is really a moderate rehabilitation program. Initially, I think, you know, this idea that people need a roof or a system or a couple things done to their houses, I think the program's designed to try to give money, you know, to those individuals. And one of the things that, you know, we want to use as part of this effort in kind of looking at, you know, our program and our delivery systems are if you're starting to look at properties that require $25,000, $15,000 worth of work, these are basically rehabilitation. And, you know, do we need and does it make sense to create a program that's specifically designed that's basically a moderate rehab of occupied property. You know, we have a moderate rehab program, so to speak, on the books for, you know, a vacant property. The basic system repair grant, you know, this idea of giving grant assistance to do a basic system repair. But there is this -- I think, there's this area in between. And then how you do, like, basic system repairs is kind of done on a citywide basis; it's first come/first served and things of 91 5/29/02 FINANCE - BILL 020275, RES. 020285 that nature. You know, do you start crafting a program that also supports -- is part of, you know, your other rehabilitation and revitalization activities. So the Administration, you know, as we said, you know, one of the things we think is important is to begin to -- just begin to rethink and take a look at, you know, some of our programs, some of our policies. I think we've put things on the books, you know, and created them when it was a different environment and it was a different time and there was a different need.
And we kind of you know, keep chugging along. You know, we're trying to use NTI as an opportunity to really rethink some of those policies.
That's why we were having that curb and sidewalk discussion.
What's the backlog 92 5/29/02 FINANCE - BILL 020275, RES. 020285 of the BSRP Program? MS. McCULLOUGH: I don't know. Let me see if there's anyone here that knows that. (Ms. McCullough confers with colleagues off the record.) MS. McCULLOUGH: In general, there's about 800 to 1,000 people in the backlog. Not Tier 3, but overall.
Okay. And what's our anticipated timetable for cleaning up the backlog? (Ms. McCullough confers with colleagues off the record.) MS. McCULLOUGH: As we move forward, it's going to take a year to go through all those cases, but all of those cases may not - all of those cases may not all come through. I mean, every case that's in the backlog, as we're describing it, may not ultimately receive a grant because, for one thing, time has passed and the situation may change or, you know, the client may end up not being eligible and so forth. 93 5/29/02 FINANCE - BILL 020275, RES. 020285
Well, the roof may have fallen in. MS. McCULLOUGH: (Inaudible.)
And how many people would be coming on line new in the upcoming fiscal year? MS. McCULLOUGH: Well, it's an open program so people continue to call.
Right. How many new applications, net new applications, do you get a year? MS. McCULLOUGH: We'll get another thousand cases through the year. So it's sort of a roll -- you know, it's a rolling -- it's like a rolling thousand going through the system at all times.
Okay. And how many people do you actually serve a year? MS. McCULLOUGH: About 2500.
Ms. Smith, did I take it from your comments earlier that you might be looking at changing the first come/first served process; did I hear you say that?
We have the Basic System 94 5/29/02 FINANCE - BILL 020275, RES. 020285 Repair Program continuing to be a citywide organ on the application. What we've done in response to conversations with Councilpeople over some of our briefings and issues that have been raised at community meetings, is it possible to do a basic system repairs program that's much more geographically focused and targeted. It will be similar for -- and then we're getting proposals from organizations who want to do -- you know, we use the word "basic system," which basically is a grant program and a loan program. So, you know, we've gotten people who've submitted ideas and concepts about grant and loan programs that focus in on a geographically targeted area, again, so that you can see the impact. So what we have put together is, the Administration is proposing to add $2 million toward what we're calling a "targeted basic system repair program." Again, it's one of those things that -- which we don't have the operational detail, but the general principle is, how can we do more targeted repair work based on criteria, making it 95 5/29/02 FINANCE - BILL 020275, RES. 020285 more accessible to individuals whose incomes are up to 80 percent. I believe the current basic system repair program, your income -- is based on the City's poverty level, which is significantly lower than the area median income, so there are people who kind of need grant assistance who may not have been able to access this program because of those requirements.
We haven't selected the targeted areas at all. Basically we said that we have -- there's one proposal that's come forth, and we haven't even had a chance to look at it, that says, can we, you know, use the concept of It's Your Turn, which was something working with the CDC, and they brought in outside resources for loan grants, can we replicate those in other areas of the City.
Well, will a person who's not in a targeted area be a disadvantage to a person who's in a targeted area?
As to the income requirement, yes, because the current basic system 96 5/29/02 FINANCE - BILL 020275, RES. 020285 repair --
That's what I mean. For example, if you're making 80 percent of median in income and you're not in one of these targeted areas, if you were to go to the regular basic system repair program because that program was also designed to serve, you know, some of our most neediest homeowners and the like, you would not be able to access it.
Going forward. What we -- as we said, what we were intending to do is to, in targeted areas, try to take it up to 80 percent, but the regular basic system repair program that operates citywide will continue to operate, and its income limits are lower; they're based on poverty rates.
Okay. Now, do you have budgets developed? I know, obviously, there's a big budget, the $65 million, which is in your Five-Year Plan, as well as it sits alone on . 97 5/29/02 FINANCE - BILL 020275, RES. 020285 How does that budget break out by Council District?
What we've done where we have that information -- where we can glean that information in each of the sections, like it's easy for demolition and the encapsulation, what we -- for programs like PHIL Loan, which is what we call a "customer-driven program," where a person goes and applies for it, it's harder to break that out. We can probably give you past statistics on usage of PHIL Loan by Councilmatic District. I know we've shared that information before as an indicator, you know, who applies for it from a variety of places.
Right. Well, I mean, I wasn't just solely speaking about the PHIL Loan Program. What I was asking was, you have a budget $65,140,627.
What I'm asking you is, do you have ten sheets of paper that lay out demolition, land assembly, housing and neighborhood preservation MIS, which I assume is pretty much citywide.
How does it break out by Council District? is the question.
Oh, you know what? I didn't summarize -- I can go back and summarize how we could take each of the ones. For example, you know, the Councilmatic, the 2nd, the 1st, or 4th and go through each of those areas. I didn't do that. You meant the collective, cumulative one.
I think that may have been part of the expectation back at the time that we approved NTI. I'm not criticizing any of the work in the book; I'm just asking, how does the --
We followed the template that we submitted in the ordinance; we didn't have a consolidated template. I can go back and have someone add up the numbers.
Okay. So you'd be able to provide us with a budget for each --
It's just a question of 99 5/29/02 FINANCE - BILL 020275, RES. 020285 going through each one and adding those up.
Mm-hmm. All right, how long do you think that will take.
Well, I guess it depends on what time the hearing ends this evening. I have a community meeting tonight too. I can just, you know, try to take -- you know, get somebody maybe from Herb's shop or Debra's shop to go through this and add it up for us and give it to you.
And Ms. McCullough, how do those numbers break out for the CDBG budget?
(Addressing Ms. McCullough.) Do you break it out through CDBG like that?
That's all right. I realize you were extracted. How do those same numbers break out or the same process, how does that lay out by Council District for the consolidated plan in front of us 100 5/29/02 FINANCE - BILL 020275, RES. 020285 and specifically the -- what is it, four major funding sources, or is it five? MS. McCULLOUGH: It was four plus the -- the question is, can we break out each of these numbers by Councilmatic District? In some cases, we can break out what's projected; and in some cases, we won't be able to because it's a citywide program like basic systems repair. And so we wouldn't be able to give you what that number is because that's client-driven, but we can provide that information.
Right. MS. McCULLOUGH: Insofar as we have it, we can provide it.
Okay. That would be helpful. Do you plan -- and I know you were a part of this and also Scott Wilds. A couple years ago, OHCD provided documents by program by District over, I think, Years 21, 22, 23, and 24. Former Director Kromer had some staff directed to take every program that was funded. Obviously that was going backward. MS. McCULLOUGH: I remember those 101 5/29/02 FINANCE - BILL 020275, RES. 020285 reports.
You remember some of those discussions, right? That information actually is very helpful. So, one, I'd like to make the request that we get the same information in the format that you provided for Years 25, -- I understand we're 9 in 27 and you won't be able to do that right now. 10 We discussed also yesterday, and I 11 understand you put it in the book, having an 12 amendment made to reflect the information requests 13 that have been in the Year 2000 and the Year 2001 14 CDBG applications. I think you indicated yesterday 15 that you didn't have a problem with that. 16 MS. McCULLOUGH: No. We have that 17 information in a slightly different format on Pages 18 26, of the Appendix 26 and 27. 19
Right. 20 MS. McCULLOUGH: And the eligibility on 21 Appendix Pages 28 and 29, and we'll revise that as 22 you requested. 23
Okay. I did have a 24 question on number 2 on that Appendix 26. 25 MS. McCULLOUGH: Mm-hmm. 102 5/29/02 FINANCE - BILL 020275, RES. 020285
The comprehensive assessment of community development; now, your response is: Contained in the needs assessment and market analysis sections of the Year 6 Consolidated Plan, these sections are required to 7 be updated every five years. Copies of the Year 24 8 consolidated plan are available. 9 Now, are you taking it that, 10 notwithstanding the request of that information in 11 the Year 27 application, that you don't have to do 12 that because it was already in Year 24? 13 MS. McCULLOUGH: The last comprehensive 14 assessment of community development needs that was 15 done was a part of the Year 24 Consolidated Plan, 16 so that's the data that we have, those are the data 17 that we have available. 18
Right. 19 MS. McCULLOUGH: The next time we have 20 to do that as part of the consolidated plan to be 21 submitted to HUD will be in Year 29, so we'll have 22 to redo the entire document for next year. 23
Well, I understand 24 that. Is that a five-year requirements based on federal regulations? 103 5/29/02 FINANCE - BILL 020275, RES. 020285 MS. McCULLOUGH: Yes.
Okay. My question was, if we ask for it in the bill that was approved by Council, are you taking the position that you don't have to respond to that because you have the five-year process as laid out in the federal regulations? MS. McCULLOUGH: I was taking that to mean that the document that we had available was sufficient to meet the needs of what you've requested.
Okay. The purpose of that being in there is that there would be that kind of assessment done on a yearly basis. And what does the response to number 1 mean, which says "Sources for items not included"? Number one is how minority residents in each area benefit from each project. The response here says, "See response preceding." Are you talking about the response at the bottom of the left-hand column? MS. McCULLOUGH: Yes.
How does that respond to that? 104 5/29/02 FINANCE - BILL 020275, RES. 020285 MS. McCULLOUGH: It refers to the sentence sort of midway through that bottom paragraph: "There is no specific area benefits to these programs. The benefit is based upon consumer demand." In the same way minority residents in each area benefit from programs because they are consumer-driven, and so there's no way to show how they benefit except insofar as where minority residents live, then they are benefitting from the project.
Okay, we'll have a little more discussion about that. Let me lastly ask you, in 5, it's crystal-clear in the various budgets what the administration costs are, but later on, you say, "The breakdown of CDBG program delivery and administrative costs is provided in the budget detail in the consolidated plan. OHCD does not track CDBG program delivery costs of specific projects." Why is that? And if you don't, then how do you know what your program delivery costs are? 105 5/29/02 FINANCE - BILL 020275, RES. 020285 MS. McCULLOUGH: We know what the program delivery costs are for OHCD, PHDC, and RDA, but one -- just to use an example, one inspector may work on a variety of projects, and as long as that person is working on CDBG-eligible activity, then that's an eligible program delivery expense.
Okay. And is there any limit on program delivery expenses, similar to administration expenses? MS. McCULLOUGH: No. 12
There's no limit? MS. McCULLOUGH: No, because it's a cost of the program.
But there is a limit on the administration costs? MS. McCULLOUGH: Correct.
Okay. With regard to the request for -- similar to the NTI budgets and the analysis of how each of the districts is affected by the Year 28 Consolidated Plan, how long do you think it would take to put that together? MS. McCULLOUGH: Oh, this is for the current budget looking -- I mean, what's been budgeted? 106 5/29/02 FINANCE - BILL 020275, RES. 020285
Right. MS. McCULLOUGH: Oh, we could have that for you next week.
Okay. There was some discussion yesterday, and there was some discussion last year, about the cycle of when this all comes upon us, and that there was, again, apparently a tremendous history to this. I don't know all the history, but that we start -- well, we say we're going to have the money as of the fiscal year, that the money actually was allocated -- refresh my memory -- in January? MS. McCULLOUGH: The money that we are currently reviewing -- for which we're currently reviewing the budget is a part of the federal fiscal year that started last October.
'01. MS. McCULLOUGH: Yes. So we could -- we could change our community development block grant year to either mirror that, which, I have to say, HUD does not usually recommend because the federal funds aren't always available on the first 107 5/29/02 FINANCE - BILL 020275, RES. 020285 day of the federal fiscal year.
Right. MS. McCULLOUGH: Or we could change it, as was discussed last year, to start January 1st, and that would give us that time between October 1st and January 1st to have these hearings to get our budget together and so forth.
Right. MS. McCULLOUGH: And then we could begin to draw down federal funds on January 1st.
Right, okay. I mean, has that discussion gone anywhere or are we looking to do that? Are there pluses or minuses to that? Are we just going to keep doing what we've been doing? MS. McCULLOUGH: At this time last year, there was a lot of discussion with the City's Finance Department of this proposal last year, and there were some administrative barriers that the Finance Department discussed that would make it difficult for us to be on a different schedule than the City's fiscal year.
Okay, so we're not -- I mean, that's pretty much the end of that 108 5/29/02 FINANCE - BILL 020275, RES. 020285 discussion, okay. MS. McCULLOUGH: Right.
Okay, then we don't need to talk about it anymore, okay. Ms. Smith, let me just ask you lastly, with regard to the discussion we had earlier about curbs, sidewalks, driveways, retaining walls, and the prospect of putting some dollars aside to deal with that while we work on some of the mechanics, do you think you will be able to put together an amendment on a timely basis?
Thank you. I just wanted to go back over to the basic systems repair program again. MS. McCULLOUGH: Mm-hmm.
How much money is set aside for the regular basic systems repair, aside from the $2 million you put aside for the targeted area? 109 5/29/02 FINANCE - BILL 020275, RES. 020285 MS. McCULLOUGH: That $2 million that was discussed today, that's new NTI funds, so that's separate from the community development block grant budget.
So the community development block grant dollars will still be citywide based on income? MS. McCULLOUGH: Correct. What's being proposed are two different things: There's our budget of 7.3 million for Tier 2.
Okay. MS. McCULLOUGH: And then, if you will, the standard program. And then what's being suggested today is an additional $2 million in NTI bond proceeds that would be for this so sort of targeted initiative and would increase the income level for eligibility a little bit. Pat just asked me what the Tier budget is. That's 3 million of state funds and then $700,000 for the heater hotline. So it's 3.7 for Tier 1.
3.7, okay. 110 5/29/02 FINANCE - BILL 020275, RES. 020285 So, Pat, on your 2 million for the NTI, would -- could an individual call for your program, or would it have to go through an organization something like It's Your Turn?
We have to figure out how we would deliver those resources and the mechanism, I mean, because it's to be modeled in terms of principles, like a basic system repair, but we haven't done the design development work. So do you have them apply, you know, through another agency, do they come to government, do they go to PHDC? I mean, we're just putting that forward as a strategy. And that doesn't necessarily mean for the whole thing; there is a proposal that someone submitted where they would want to do, you know, It's Your Turn in some other neighborhoods. But that wouldn't service, you know, everyone 'cause it's CDC, you know, tied to CDC. So we haven't designed it yet. I mean, this is an idea -- and that was one of our challenges with this year. I think there's opportunities and ideas as we continue to go through the planning processes for communities that 111 5/29/02 FINANCE - BILL 020275, RES. 020285 for new programs or delivering program resources differently. And getting that up and running is something, you know, that we'll have to take this summer and the early part of fall to get into place. And with really ideas and suggestions as to how that might operate, we would welcome that.
Well, in your thinking and discussion, I hope that -- you know, these districts are very large, and we service about 152,000 people, and that we don't end up -- well, if there's one It's Your Turn in the 9th Councilmatic District, which operates on the west side of Broad Street, someone from the 9th District on the east side of Broad Street we turn down because if they came up with an idea for a program, well, there's already one in the 9th District 'cause you have to think broader than just the district; you have to think in terms of neighborhood and location and that kind of thing.
And that's the type of thing that I hope that we can have more dialogue about. I mean, you know, just to say we're putting it there as a placeholder, we heard the concerns about, you know, the income. And so now it's 112 5/29/02 FINANCE - BILL 020275, RES. 020285 figuring out how you craft the program, how does it work, how do you address those issues.
The other thing is, if someone, say, in the It's Your Turn targeted area is not a part of that program, hopefully they would not be turned down by the regular basic system program if they meet the guidelines.
Yeah, they could still -- MS. McCULLOUGH: If they're eligible under BSRP, they would be eligible under BSRP; it doesn't matter if the family happens to live in the It's Your Turn target area.
Okay. We were talking about -- I just really have one question. I've tried to figure out, looking at this NTI budget, at the end of the day, what resources will come to the 9th Councilmatic District, 'cause I've seen demolition, acquisition, $50,000, vacant property stabilization, and stabilized proposition for expanded HPR, home repair program, which comes to $1,125,000.
One of the challenges on some of the programs, what we call "customer-driven," or in that instance, it would be 113 5/29/02 FINANCE - BILL 020275, RES. 020285 developer-driven, it's where, you know, a developer picks up properties and applies for the HRP program. So that's one of the challenges of breaking it out by Council District. One of the things that we're hoping is that, you know, by expanding it to other CDCs, you know, like resources for human development, other people will start doing programs, you know, accessing that program. And then the other thing that we're, you know, trying to do is we're saying if we have the encapsulated properties and we know which ones we're doing in each Council District, that we take those and, as Herb explained it, maybe put those out as an RFP and then maybe we can do other strategies to get people to pick up those properties. And we can kind of project, you know, going forward at $25,000, you know, per property, if a developer comes forward, that represents just the public subsidy. But some of the programs don't lend themselves easily to kind of breaking out a dollar amount. 114 5/29/02 FINANCE - BILL 020275, RES. 020285
Now, are you telling me that these 50 properties that are designated in the 9th Councilmatic District are --
No, no, no. That's what we're, you know, putting as the budget numbers. So if we stabilize 50 properties, we want to show that 50 properties will be -- we want to have enough money to acquire them, and we would want to make sure we have resources, that someone comes forward with a moderate rehab program, but we still need somebody to come forward and say, "We're willing to rehab this program under HRP."
Okay. I recently, a few months ago, gave a memo to Joyce as well as to, I think we may have sent you a copy, as well as to the Mayor of an assessment of what we see the needs are in the 9th Councilmatic District. Have you seen that?
Yes, I have, and I don't think I have it with me so I don't quite recall all of the details. I do remember there were some 115 5/29/02 FINANCE - BILL 020275, RES. 020285 issues around the Logan Triangle and the urban renewal area.
I guess my question is -- and it's very little money, when you look at the overall amount of money that you will have. How can I look at your program and a community development block grant and find out if any of that stuff is going to get done?
I think probably the best way is for us to sit down and look at it and say, These are the needs, these are the resources there, and make sure that they hook up. I think that would be one way we could go about that. And I don't remember -- other than that one issue, I don't remember all the details.
And I do think that we were asked by the City Planning department to come up with a planning area, a targeted area.
Some suggested planning areas, candidate planning areas. 116 5/29/02 FINANCE - BILL 020275, RES. 020285
Right, right, right. But that doesn't mean that we have to commit all of our resources to that area.
No, no. As we talked about on a number of occasions, that the planning area is not the only place where resources from the City will be spent. What it is saying is that this is the area we're going to focus in on and try to do comprehensive written plans; and if there's existing plans, taking a new look at them, updating them, coming up with some action items out of them. But there's other, you know, ongoing things that happen, you know, outside of those planning areas. And then these aren't the only ones forever; these were the suggested ones, you know, the starting-year one. Did we want to, you know, have conversations saying, Where do we go next and where do we go next for each year? But there's this commitment to, you know, doing community-based planning throughout the City, either supporting and facilitating the work of current plans or helping, you know, create new ones.
I think I only 117 5/29/02 FINANCE - BILL 020275, RES. 020285 have one more question 'cause Michael asked all of them. On , I believe, of this OHCD, the program book, you talk about a -- this was my question yesterday, and I had to leave and I don't know if it's in here. Someplace, you have a acquisition zone. Is that you or NTI?
There was NTI under land bank. It's under land assembly, land acquisitions. That's probably on .
I'm not sure. That was my question yesterday. I'm not sure that it's this page. I have . Where is ?
At the bottom, you say you say, Acquire an additional 5 million in land within delineated acquisition zones.
And Logan is in that acquisition loan. Would you explain that to me?
Yes. One of things, as a result of, you know, the urban renewal area, the reason why we're creating that urban renewal area is that we also want to fund and begin to consolidate and aggregate title in that lower part of the triangle, so that means that this will -- and the reason is, there's already cleared land, and we understand that there's development interest in that area, and the thing that has held us back in the past is not having enough resources to consolidate title so that you can begin to market or review development proposals. So that's an example of an acquisition zone where we want to try to take in a lot. We already have lots of vacant properties in areas east of Broad, and most of it's cleared, you know, and maybe some of it still has some vacant houses. Can we start looking at areas where we can get some economy of scale. So that was cited as an example of what we would consider an acquisition zone. 119 5/29/02 FINANCE - BILL 020275, RES. 020285
Okay, I think I'm finished, I don't know. I do think the CLIP Program -- I know it's not under your jurisdiction, but I think the CLIP Program could also fit into areas such as the lower part of the Northeast.
The Lawncrest and Olney area. So we'll be talking about that.
Yes, very much so. And out of the planning process, that may be a priority activity for areas, 'cause I think that's one of the planning areas that people might say makes sense.
We're trying to schedule a date certain. We're checking with the Chief Clerk's Office. So can we just sit here a few minutes until we get a date certain for a hearing next week. 120 5/29/02 FINANCE - BILL 020275, RES. 020285 Councilwoman, just for clarification, in order to respond to the issues raised by some of the Councilmembers, we want to continue this hearing, but we need to do it to a date certain so that we maintain our guidelines. So we're just asking everybody to give us a few minutes more to schedule this hearing to a date certain next week so that -- 'cause you know our time is short since we need to report these out. So we're just asking if everybody can give us a few minutes more. (Break taken.) (Proceedings resume.) - - -
We can resume on the 4th at 11, or if it appears to be a long process, we can schedule them on the 6th. I will ask, what is your pleasure? We already have PGW and some other finance bills that we have to report out on the 4th. Is that all right? The 4th is a Tuesday, Tuesday at 11 o'clock? Then we will continue this finance hearing until June 4th at 11 o'clock at an already-scheduled finance hearing. Is that okay 121 5/29/02 FINANCE - BILL 020275, RES. 020285 with the members of the Administration? Thank you. Then we'll see everybody at a continuation on Tuesday the 4th, at 11. Thank you, everyone, for your patience and thank you for attending. (Committee proceedings end at 3:05 p.m.) - - - 122 CERTIFICATE I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia's meeting of the Committee on Finance of Wednesday, May 29, 2002, are contained fully and accurately in the stenographic notes taken by me, and that this is a true and correct transcript of same. _______________________________, Josephine Cardillo Registered Professional Reporter and Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)