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.