VOLUME II COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE THE COMMITTEE ON FINANCE - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, June 15, 2000 9:10 a.m. - - - BILL 000344 - an Ordinance authorizing the Mayor, on behalf of the City, to file an application with the United States Department of Housing and Urban Development for Community Development Block Grant - - - PRESENT: COUNCILWOMAN JANNIE L. BLACKWELL, Chair COUNCILWOMAN MARIAN B. TASCO, Vice Chair COUNCILMAN FRAN DiCICCO COUNCILMAN JAMES F. KENNEY COUNCILMAN DAVID COHEN COUNCILMAN MICHAEL A. NUTTER COUNCILMAN BRIAN J. O'NEILL COUNCILMAN DARRELL L. CLARKE COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN ANGEL L. ORTIZ COUNCILWOMAN BLONDELL REYNOLDS BROWN - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center Plaza, Suite 600 Philadelphia, PA 19103 (215) 561-2220 273 I N D E X BILL 000344 PAGE John Kromer, Director, Office of Housing and Community Development----------------------- 274 Joyce Wilkerson, Secretary, Strategic Planning and Initiatives, Office of Housing and Community Development---------------------- 275 Shirley Kitchen, State Senator---------------- 325 Shariev Street, Chief Legislative Advisor, State Senator Kitchen--------------------- 325 Ralph Winder, Ward Leader, 38th Ward--------- 330 Nora Licktash, Director, Women's Community Revitalization Program------------------- 340 Theresa Youngblood, Executive Director, Northern Liberties Neighbors Association---------- 370 Rick Sauer, Director, Philadelphia Association for CDCs--------------------- 378 - - - PUBLIC MEETING----------------------------- 392 - - - 274 BILL NO. 000344
Good morning. This is a continuation of a finance hearing on the Community Development Block Grant application, Bill No. 5 000344. Certainly we do have a quorum present. Councilwoman Tasco is here, Councilman Kenney is here, Council Dave Cohen. And, in fact, for the purposes of our quorum, if it is okay, Councilman Ortiz and Councilman Goode are here. So that would give us more than enough to begin our hearing. There is also another Committee on Law and Government that is also scheduled for 9:00, so we are going to try to get started right away. State Senator Shirley Kitchen was here to testify. And if she comes in this morning, certainly we will honor her. So we have asked John Kromer and George Wilkerson to approach the table. And at this time does either of you have a statement to make, or are you prepared to just respond to questions?
We each have statements to make. For the record, I am John Kromer, 275 BILL NO. 000344 Director of the Office of Housing and Community Development. At the conclusion of the Finance Committee hearing on this bill, a series of issues were raised and it was requested that my office respond to those issues. We have done so to the best of our ability in correspondence addressed through the Chair, which was delivered last Friday. Other requests were made during the course of the day, and we are in the process of responding to those requests, as well. I will be available to answer any additional questions that members may have. I would like to request a suspension of the Rules so that this measure can be passed by committee today and be presented for final passage a week from today so that we can meet our funding deadlines. Thank you.
My name is Joyce Wilkerson. I am the Secretary of Strategic 276 BILL NO. 000344 Planning and Initiatives. I was asked to come and talk about the Administration's plans moving forward to address some of the concerns that have been raised during the course of the hearing.
I am prepared to do that. I know that some of them were of concern to Councilman Nutter.
I understand that as of last night, about 6 o'clock, he was still very concerned and was going to be presenting a series of amendments. He is parking the car.
I will admit that I know nothing of any amendments, but we are happy to entertain any Councilperson's concerns. But we are ready to proceed certainly to allow for another important hearing, Law and Government. And this is our Council chambers, so we want to move quickly and expeditiously and go on. Ms. Wilkerson.
Madam Chair, I was not able to stay for the final votes with respect to concern bills yesterday. 277 BILL NO. 000344 But I wanted to state that on the bill that Council Members Tasco and O'Neill, I understand, voted no, my vote would also be no. And I would like the record of the Finance Committee to show that. I don't know how many ayes there were.
All bills were reported out of committee. The middle bill, I believe, 226, was reported out with two no's, their no's.
I assume that we can legally do that. Since we reported it out, I don't know.
No. That's all right. I just wanted the record to show later.
Thank you, Councilman Cohen. Okay. Ms. Wilkerson, Councilman Nutter is here, and so we are very happy to hear your statement. Thank you. And thank you, Mr. Kromer.
There were four specific issues raised. 278 BILL NO. 000344 One was the need to develop a process that was more inclusive of neighborhoods in addition to those typically serviced by the CDBG program. As you may know, in connection with the Mayor's campaign announcement of the Blight Elimination Program, he also indicated that he wanted to see as well planning occur in every neighborhood across the city. It is not just those neighborhoods that have CDCs that need to have an assessment made of their needs and plans made for enhancing their stabilization or to prevent the deterioration of the neighborhoods moving forward. As we have embarked upon developing the various aspects of the Blight Elimination Plan, it has become very clear that the city doesn't have an adequate planning mechanism. If you talk to Maxine Griffith, the city's new City Planner, she will tell you that, for a city of this size, Philadelphia has an extremely small Planning Department. What we are looking at is trying to make better use of the resources that we have. Conversations have begun about 279 BILL NO. 000344 perhaps trying to consolidate some of the planning resources that are now outposted in the various agencies like PHA, like RDA, to better develop a capacity to plan comprehensively across the city, and planning that's not just in connection with the CDBG, development of the CDBG application. But that's something that we are going to be looking at very carefully. In addition to simply planning, one thing the city has found challenging historically is developing the capacity to respond to the plans. Because so many neighborhoods don't have CDCs, you end up with all kinds of permutations happening on development. In a number of the districts in the city, you actually have Council Members functioning like mini CDCs. You know, I have met with Councilman DiCicco, Councilman Clarke, and a number of other Councilpeople who have taken on the planning responsibility and the responsibility for also making sure that the resources are brought to bear and development plans are actually implemented for those areas. 280 BILL NO. 000344 We understand those concerns and are trying to work to develop strategies to respond to that issue. There were also concerns raised about the need to develop plans and actually implement strategies in neighborhoods not traditionally impacted by CDBG funding. We are looking at a number of alternatives for bringing additional resources into those communities. The Mayor has -- we have actually met with Fannie May. Fannie May next week will be hosting a meeting between realtors, bankers, and others to assess the situation in nontraditional neighborhoods; what is it that will make some of those neighborhoods stronger, what is it that will make some of those neighborhoods more marketable. That's a critical piece of moving forward with the blight elimination agenda. You can't hope to spend money just in the blighted neighborhoods, and leave the other neighborhoods to fend for themselves. We are looking at strategies like mortgage guarantees perhaps by the city. We have 281 BILL NO. 000344 had conversations with GMAC about that, with Fannie May about that. We are also looking at bringing additional revenue to the table. There are insurance companies in the city interested in making investments in the city. And so we are talking with a number of parties about bringing additional dollars to the table. And some of the blight elimination dollars will be spent in nontraditional neighborhoods. It was never anticipated that those dollars would go simply into the most devastated areas of the city. Another area I was asked to comment on is the heavy reliance on Section 108 dollars, and what that has done to the city's ability to respond to needs moving forward. I don't have a quick answer on that. The decision to borrow as heavily as we did against the CDBG dollars of the future, I think, has had a day-to-day impact nobody anticipated.
We intend to do a survey of the literature and look at some of the other cities that 282 BILL NO. 000344 have also borrowed heavily against Section 108 -- although I understand nobody has quite done it to the extent that Philadelphia has -- to see if there are ways of repaying the money without such a direct impact on our ability to run the CDBG program moving forward. And we will also be talking with financial advisors and others to see if they can help us develop strategies for addressing our repayment obligation under the Section 108 program. I think, on a day-to-day basis, some of it will be alleviated if we do generate the blight elimination dollars. They will supplant some of the dollars lost for those years when we will have a fairly dramatic cutback in our CDBG budget. But I don't have a quick answer. I will come back to Council with a written report on that issue. The final issue raised was the question about the level of CDBG resources committed to administrative costs and program delivery costs, as opposed to bricks and mortar. The Mayor has convened a Private Sector Management and Productivity Task Force that 283 BILL NO. 000344 has been charged with looking at some of the outlying agencies. Historically those tasks forces have reviewed the operation of core city departments. This Administration has asked them to look at PIDC, PCDC, PHA, and most of the organizations funded by the Community Development Block Grant Program. It is our sense that there are efficiencies that can be gained that would reduce the level of administrative costs that we put out. Too many of these agencies have their own departments for personnel, for program administration. It is our sense that, particularly with the technology that there is, that we can do a better job of sharing responsibilities in order to conserve on some of the administrative costs. And we are also looking at a more strategic sharing of expertise. And I have just one example of that. The Housing Authority, for example, has developed software that enables its inspectors to actually go out and inspect Section 8 units with Palm Pilots, holding Palm Pilots. Carl Greene and his staff have used 284 BILL NO. 000344 the city's Building Code as a basis for those inspections. The Housing Authority owns that technology. I would like to say that it was paid for with PHA administrative -- CDBG administrative costs, but it wasn't. It was other city dollars that were actually brought to bear. But that's the kind of technology that we can integrate into the Department of Licenses and Inspections that can be used throughout all the other housing agencies, without actually having to outlay any additional dollars. As we move forward trying to develop comprehensive plans and better coordinate the agencies that we have, we hope to see a lot of cost sharing like at that that enure to the benefit of, you know, the ultimate users or customers to whom we provide the services in this city. That's just one of the kinds of efficiencies we hope to see moving forward. And we hope to have a more structured response after we have some of the feedback from the productivity task force.
As one of the original supporters and probably the only member of City Council currently, at least among those represented at the table here this morning, and who was involved in the passage of the 1981 or 1982 bill 7 that had been introduced by then Councilman Street, I think the evidence presented during the hearing and the concerns expressed and led by Councilman Nutter have convinced me that it is time to reevaluate. I haven't reached any final decisions, and I welcomed hearing your comments, Ms. Whitaker, because they seem like forward advances. But we never --
Wilkerson. Well, forgive me. It is early in the morning and it comes in the midst of our final drive to recess. I pride myself, as long as I get the right first letter of the name, I consider that a success. We welcome all of those initiatives. We never anticipated at the time. I 286 BILL NO. 000344 think we felt the need was so great, there was lots of discussions about Model City, and our emphasis at that point was really on the poorest sections of the city that desperately needed help. We never anticipated the drain on the funds that would come from the Section 108 loans or from all of the supportive services which are apparently classified as administrative expenses. We, I think, anticipated, if we anticipated anything, that the city was going to implement, you know, separately the supportive services. So I do think it is time for reevaluation in all of those areas. And I think Councilman Nutter is going to introduce, now that he has parked his car, some amendments.
I think you are right. I mean, I think you have to pay attention to the nontraditional neighborhoods. I think what we are going to find is that a lot of solutions are not nearly as costly as the solutions that apply in the more distressed areas. I think that we are going to find 287 BILL NO. 000344 out, if we try to intervene early, we can avoid a lot of the really costly solutions that we have to bring to bear later on.
Preventive care pays off not only in the health field, but in all fields.
Well, that's correct. There are a number of programs that we don't tap into that -- for example, HUD has a program that enables the city to develop programs that make houses available to teachers and police officers, HUD-foreclosed properties, for half price. The city hasn't marketed those programs aggressively. Those are the kinds of programs that can be brought to bear to market properties in attractive Philadelphia neighborhoods that help those neighborhoods, don't cost the CDBG program anything in terms of new dollars. But we have to be much more creative about identifying those resources and using them as we move forward.
Councilman Kenney? Councilman Ortiz, would you like to ask a question? Your light is on.
Yes. But why don't you have that discussion, and then it is on another matter with Mr. Kromer.
Let me note that as one who is involved a lot of housing, every neighborhood is different. And it is hard to say that one broom sweeps clean for everything. It has taken us many, many years to get to the point to get developers, property developers, to come in and invest, to bring together CDCs and other community members to get to the point that we have, for example, one private developer who is putting more than $40 million, they have extended themselves to that degree. So housing is unique. It is not like recreation or other areas. It is unique because neighborhoods are unique. What neighborhoods accept, what neighborhoods want to see, and what neighborhoods feel they need are different than any other field. And I only say that so that we keep 289 BILL NO. 000344 that in mind as a committee when we talk about how we are going to deal with administrative costs, or Section 108 loans, but how we deal with housing overall on a citywide agenda. We keep in mind that you have to deal with it in a unique way. Councilman Kenney.
Thank you, Madam Chair. There was a lot of discussion at the last hearing relative to the distribution of low- and moderate-income families throughout the city. One of the things I learned, which I was, I guess, on one hand surprised and on one hand felt a little better over the fact that low- and moderate-income families seem to be relatively evenly spread throughout the extent of the city, not just concentrated in one particular area. I think as low as some Northeast districts, as low as 8 and a half, 8.7 percent; to a high of 11.6, I think, or 11.7 percent in the First District, where I live. I mean, that's good and bad. It is bad that we have so many poor and low- and 290 BILL NO. 000344 moderate-income people, but it is also good that the entire community has to share in the burden of those needs. How do we determine the fairest way to distribute available federal dollars, if we don't base it on low- and moderate-income concentrations? What's the best way to make that determination? You would think that under the HUD regulations, under the rules that have been established by the federal government and what they would like to see us do with their money, is that they would like to see it concentrated or at least appropriated into the areas where there are more low- and moderate-income families. So it would seem to me, based on that theory, that it would be fair and equitable and the intention of the federal government to spread that money out throughout the entire community, as opposed to concentrating it in certain areas for whatever good-intentioned reason. I'm just wondering why it is not spread the way it seems it should be spread.
I tried to respond to that issue in the correspondence that was circulated 291 BILL NO. 000344 to members through Councilwoman Blackwell. The determination that HUD makes, the basis on which HUD determines the amount of funding that cities like Philadelphia gets, is not influenced by low- and moderate-income residency; it is influenced by three factors: One is population loss, second is poverty, the third is age of housing.
No. It is related, but different. And in an exhibit to that letter, the HUD formula was applied to the Council districts. And it was found that annually, during the past four program years, the variation between what was actually spent in those areas and what would have been spent if the HUD formula had been strictly applied, the variation was less than a half a million dollars a year in six out of the ten Council districts. 292 BILL NO. 000344 Now, as you might expect, there was a lot more variation in the 5th District, where more activities were funded. But the 5th District leveraged a lot of funding from other sources, the McKinney Act, the Homeownership Zone, funding in other funds that other Council districts were not able to leverage.
And why were they not able to leverage those additional funds? It would seemed to me, again, that if the concentration of poverty is relatively equal and spread throughout the city, why, for example, then is Southwest Philadelphia, if it is as poor statistically as North, why would North Philadelphia be able to leverage so significantly more money than Southwest or South or West Philadelphia?
Well, in terms of the two sources that I described, the Homeownership Zone opportunity was an opportunity to participate in a national competition. The notice provided was fairly brief; it was a matter of weeks, rather than months or years, to prepare to respond. And site control of a substantial parcel was a key consideration. 293 BILL NO. 000344 The only place where we had the site control and a large-scale Homeownership Plan happened to be the Cecil B. Moore area, where planning had begun during the mid 1980s.
Isn't a lot of this really driven by where the developers decide they want to develop? I mean, no matter how a developer or group of developers decide to pick a certain area, whether it is on their own initiative or whether it is on some other initiative -- which is legitimate; there is nothing illegitimate about any of this -- it is just, I guess, where the power was, the resources went. And that's fine. That's the way politics and government is. That's the way it always has been; that's probably the way it always will be. But I don't know whether or not it is appropriate that developers themselves, for whatever initiative, would be deciding where they would be developing properties. And my other concern -- and I have expressed this to you before and we have had discussion and you have justified to me in some 294 BILL NO. 000344 ways -- cost of that housing. To me it makes it even more suspect that the developers are not driving this train. I mean, if a house on average for low- or moderate-income people costs 130 to 140 thousand dollars to build, on average, which is a much more expensive house than I live in, and I'm not a low- or moderate-income person, and they are all concentrated in one specific area through developers that are building houses that are very expensive, you only have to wonder whether we are getting the best benefit and value for our dollar in that particular process.
Let me address those issues. I will try to address them in the order you raised them. The issue of where the developers want to develop really has a close relationship to the issue of, you know, could McKinney funding have been available in other areas of the city. And the answer is yes in theory. But the fact of the matter is that, over the years, one of the places where special-needs housing for formerly homeless people and other people has been 295 BILL NO. 000344 developed successfully has been North Central Philadelphia.
Before you do that, explain to me the issue, I hear this, since we have started this discussion, the term "special-needs housing" continues to arise. And I recognize that part of the cohort of special-needs clients or people are formerly homeless people transitioning from shelter system to housing. What other special needs? Are they physically disabled people? What are the other categories of special needs?
Physically disabled people, chronically mentally ill people, people in recovery from drug and alcohol abuse. Any person that needs a combination --
People covered under the Fair Housing Act, those categories?
So all the housing, or most of the housing, that has been developed in this particular area is serving either homeless or physically disabled people? 296 BILL NO. 000344
No. That is the category that leverages McKinney money from the federal government, which is extra money, which was one of the points I was making about the 5th District. In the 5th District, there has been a tradition of political support for special-needs housing development, more so than in some other areas of the city. There's been an array of service providers who are based there or who work there regularly, who are available to link into the housing and provide the services that are needed. There's been an array of nonprofit and private housing developers that want to and know how to develop special-needs housing. And that combination has worked in the 5th District, and it hasn't worked in some of the other Council districts for various reasons. But the fact is, that combination leverages McKinney money. And, because of that, we have committed CDBG dollars more so than in some other areas where we have no proposals for special needs housing. 297 BILL NO. 000344
I am not going to belabor this point. Councilman Nutter, I know, has a long list of questions. Just one kind of question/statement, and we said that at the last hearing. The Office of Housing and Community Development has a two-fold function in my mind; it is housing and it is community development. And I think, in many ways, over the last four to eight years, the emphasis, the total emphasis, has been solely on housing. Which is not necessarily a bad thing, but it does have another function. And those other functions of community development, community stabilization are important functions of that office that I think in many ways have been put aside in order to effect the housing issues. I really think that needs to change in order to, number one, be fair to the overall taxpayer and neighborhoods throughout the city, and also to keep some of our stable or marginal neighborhoods from declining into a devastation or a devastated situation. And I think that unless we start 298 BILL NO. 000344 concentrating at least a portion of those dollars in that direction, I think we are really not serving the overall needs of the city and its future.
I agree absolutely. I am very concerned about that, and that's one of the reasons why I circulated a series of four memos last fall to Council Members and others about the future of the community development policy in Philadelphia, and why I would like to meet with you to follow up on some of those items.
Before I call on Councilman Cohen, let me note that I think housing is community development. There is no way a community does not rise if you have good housing. And good housing can reverberate to cause other developers and other investment, commercial and residential, in neighborhoods. And certainly back some years ago there was a philosophy in OHCD, prior to Mr. Kromer's coming, that talked about saving neighborhoods, and there was an investment that way. And then that was criticized because we were investing dollars only in the communities, 299 BILL NO. 000344 or primarily in the communities, that could be saved. But that was to the detriment of those very, very poor communities who had no dollars. So there is no simple way to just invest. It seems too me, as I have said earlier, that housing is unique in that we have to include everybody. You have got to include the special-needs folks. And I heard Darrell Clarke say a lot of neighborhoods wouldn't take the housing he has taken. Every neighborhood doesn't want special-needs housing, and they won't take people who are in AIDS homes, or they don't take people who are homeless, they won't take all kinds of special-needs people. And so housing is different than other places. But I really, really do believe that housing is community development. And certainly in my area it has spurred a lot of development throughout West Philadelphia.
Madam Chair, I just wanted to make sure the record is clear. I said I thought -- and you are not 300 BILL NO. 000344 correcting me -- but I thought that housing efforts are critical, are critical. The only suggestion I am making is that there is other functions of this office that I think need to be paid attention to. And I agree with you about taking care of poor people in neighborhoods with needs. Because when I look at the First District, I learned, through Councilman Nutter's research, that it's got the highest concentration of poor people in the city, 11.7 percent, higher than any other area of the city. So I'm not in any way suggesting that we reverse or change drastically the effort of providing housing for people. The only thing I am suggesting is, we pay attention to some of those other needs on a smaller scale and also try to find a way to build houses that don't cost $140,000 on average. Because the average tax-paying person in the city doesn't live in a house that's worth 140. And I think there is no general inequity there. And may be a way for us to get more 301 BILL NO. 000344 people housed is by reducing the amount of money it costs to build these houses on average. Maybe we could even house more people in that regard. So I totally agree with what the Chairperson is saying. I just don't want the record to reflect that I was in any way we shouldn't do housing. I really think that it is an important function of your office, but I do think you have another function I would like to see you pay a little more attention to.
Thank you. And we also know it is always a challenge, you know, in some neighborhoods where you don't have an active community organization, or CDC, and very blighted areas, it is very, very difficult to get somebody interested in wanting to develop there. And that is where we, as elected officials, come in to try to get our developers interested in coming into certain areas. So it is not that simple, just a matter of choosing or not choosing. You have got to have people who want to build there and all the other factors have to be there to come together. 302 BILL NO. 000344 We have been at this a very, very long time, and I have a great appreciation for what it takes to develop housing. And, in fact, we have spent a billion dollars in West Philadelphia in my district since I've been in office in this area, and it takes a lot to get it done. But things have to come together. And it is not as simple as saying, let's invest a million dollars in ten places. It just doesn't work that way. A followup comment or question or point of view from Councilman Cohen, then I will get to you gentlemen.
I think this discussion is excellent in many ways. I also want to express my concern that I am not sure the formula of low and moderate income is an appropriate grouping. I think the 5th District -- to say that there is an equal concentration among the ten councilmanic districts of poor people, I think, is, as I see it, is a total misstatement. I do not believe that to be the case. 303 BILL NO. 000344 I believe in some of the districts the very heavy concentration is on poor, and I think it was the case in the 5th District. In other districts that seem to have the same concentration, basically, the heavy grouping is in the moderate income, like in the 8th, 9th, 10th Districts, and maybe in the 1st and others. I think we have got to begin to break down the concentrations and see what districts have what concentration of the poorest people. Special-needs housing, often the groups involved in that are not strongly financed. They are looking also for property that's the cheapest available property. And, therefore, districts where the property values are lower seem to welcome special-needs housing more. Because the nonprofit groups go in there, they can spread their money over greater territory, if they have to pay less for real estate. I think all of these are considerations that we have to take into account. And I think Councilman Kenney's last statement was 304 BILL NO. 000344 very important. It doesn't seem to make sense to say that we build houses at $150,000. And the moment they are built, their value immediately is dropped by 100,000. Most of them are -- and maybe it has dropped even more than that. Because rarely is there a house today built in a subsidized fashion for under $150,000 in the city, and rarely does that property have a market value of 50,000 -- of any figure higher than $50,000. I think these are all complex things. As the Chairperson aptly mentioned, you can't use the same broom to sweep away the problems in the different districts. You need different kinds of brooms. And I think what Councilman Nutter's emphasis is, you know, looking in hindsight, that maybe it is wrong, or has become wrong now, to concentrate the federal dollars, which are available for both groupings, low and moderate income, to just concentrate that in one of the areas. We think maybe we have to reevaluate what kind of division of that fund is necessary. 305 BILL NO. 000344 And, again, I just wanted to commend the initial report by -- this time I will try to get it right -- by Ms. Wilkerson. We are glad to see that the Administration is studying these different aspects. Because what we would like to see is that the federal dollars go for all the purposes that the federal government intended, that they not be used to supplement a city budget. The city ought to carry in its own General Fund the costs for many of these programs. The costs for these programs ought not to come out of the dollars that were supposed to work directly on behalf of the groups covered by the federal program. Thank you. Madam Chair.
Thank you. Councilman Ortiz and then Councilman Goode. All right. Councilman Goode.
Thank you, Madam Chair. Let me reiterate the points that Councilman Cohen made. First and foremost say that 306 BILL NO. 000344 it is a ridiculous statement to suggest that poverty and disinvestment is equally spread throughout the city. Anyone can drive around this city and see that poverty and disinvestment is centralized, is concentrated within certain neighborhoods. Furthermore, to suggest that we should examine any of this by Council district would only be done by Councilpeople. No one else examines anything by Council district, other than Councilpeople. It is politicians who examine stuff by political boundaries. And we should never, regardless of whether we agree with this whole reverse Robin Hood strategy or not, of funding for poor neighborhoods, we should never allocate Community Development dollars by political boundaries, and I wanted to put that on the record.
Thank you very much. Councilman Kenney, then Councilman Ortiz.
I just want to set the record straight that I believe that there are areas of this city in every Council district 307 BILL NO. 000344 that are extremely devastated and extremely poor. And, Councilman Goode, I would take him for a ride throughout South Philadelphia and areas of high concentrations of new immigrant families from Southeast Asia. And in Councilman DiCicco's district, I would take them into Kensington and some of the blighted and devastated areas of the 1st District. There are devastated and tortured areas in every section of the city. I have been representing the city as a whole now for going on nine years, and I have been in every neighborhood in this city. And some neighborhoods you can go from -- in my neighborhood you can go in a four-block area and have a stable, absolutely solid neighborhood, and go two blocks over and it is like another world. And my issue is, those are the kinds of neighborhoods and those poor people in those areas that are surrounding and abutting stable neighborhoods need to be helped as much as other areas of the city so that other stable neighborhood doesn't begin to decline. And I would argue, and respectfully 308 BILL NO. 000344 argue, that there are as many, there are blighted, devastated areas in the 1st Council District as there are in the 5th. There are blighted and devastated areas in the 2nd Council District as there are in the 5th. And all I'm saying is that we have lots of problems in lots of neighborhoods, lots of poor people. We may have had this disinvestment issue in certain areas. But, I will tell you, there are poor suffering people in every section of the city, and including the 1st District that people think somehow is in many ways affluent. You know, you go through that 7th Street corridor, where we have an influx of poor people that have been fleeing oppressive governments and living in squalor trying to survive, they need as much help as people living in the 5th District. So I would respectfully argue that there is spread out throughout this city areas of concentration where people are poor and destitute and in need of help.
I have worked with business associations and community development corporations citywide. I have worked with Universal Community Homes in South Philly. I have worked with Community Development Corporation Frankford Ministries in Northeast Philadelphia. I have worked in Germantown. I have worked in every section of the city. What I am suggesting is, first and foremost, that community development practitioners look at neighborhoods, look at the conditions of those neighborhoods. Not only poverty, income level, the unemployment rates; they look at the investment, who is investing and who is not investing there. And everything is not equal. And we should not change our way of allocating community development dollars to be done by political boundaries. We should not politicize this. As we look at the Blight Removal Plan, as we continue the Community Development Block Grant dollars and how we allocate them, we should not politicize. Let's come up with a strategy that's 310 BILL NO. 000344 based on needs and takes in all these factors. And I know of the poverty. I know of the low-income population across the city because I have worked with Community Development Corporations in trying to alleviate it. So while you were here sitting in City Council, I was at the executive branch trying to solve these problems.
Let me note also that I think most Councilpeople have area that run the gamut. We have more affluent areas and we have those blighted areas. And the challenge is to try to help everybody. I for one have developed a ten-year plan for my district that I announced over a year ago to make my area self-sustaining. So I have created a plan for my district so that where we have stable neighborhoods and there is a weak one in between, we have a plan for that area, where we are working with community and private developers to try to make that area stable. And certainly I agree with my colleague that we have to deal with what is needed. We have to always deal with housing on what makes 311 BILL NO. 000344 sense. We have to deal with housing on who the community is and who the developers are that we can get to come in, as well as all government funding available. Councilman Ortiz and then Councilwoman Tasco.
Madam Chair, if I could enter this part of the discussion.
Thank you, Councilman. Let me just say that there has certainly been a lot of discussion about district-by-district comparisons. And I certainly contributed to that by way of some of the preliminary analysis of the distribution of dollars. And while I did put that analysis out there, you'd have to have some basis, I think, at a fundamental level to be able to compare and contrast 312 BILL NO. 000344 what is going on. That does not necessarily mean that the dollars should absolutely and strictly be allocated on a district basis. But I think you have to have some starting point to look at what is going on. And in my situation, the people in the 4th District do wonder what is going on. And so, as their representative, I at least have to make some accounting of what are the dollars that have come in and how does that stack up anywhere else. I think there will always be a case to be made in other areas of the city where you have a higher concentration of poverty, which is the case and it has been discussed on a number of occasions, and I have had discussions with Councilman Clarke about this. There is no dispute, there is no 21 question that there is a higher concentration of low- and moderate-income people in the 5th District and in the 3rd as compared to any other district throughout the city. It is up over 70 percent. No 25 other districts are as high. The rest are in the 313 BILL NO. 000344 either mid to low 60s. So there will always be a case to be made and a basis for making more investment in some other areas. But I think, as Councilman Cohen has made the point and Councilman Kenney and Secretary Wilkerson, there have to be different strategies in different places. The neighborhoods don't all naturally follow our councilmanic boundaries. And there are ways to look at neighborhoods on a neighborhood-by-neighborhood basis. Some of them do stay within councilmanic districts. We share West Philadelphia. But some of the things that go on on the south side, the side I grew up on, are different than some of the things that go on on the north side, which I now represent. You have a plan for that particular area. And as I continue to work, I am sure we will have one, as well. There will be different land acquisition costs, there will be differences in 314 BILL NO. 000344 availability of land. One of the reasons you don't see some of the activity going on, for instance, in the 4th, as compared to the much talked about 5th, is a sheer who has land and who doesn't. I'm, you know, at some level in a fairly fortunate situation that I don't have large tracts of land that a developer might want to come in to develop. That does not mean, though, that there aren't needs out there, some of which are not being met for the homeowners and in more stable neighborhoods who just have different needs. They don't need a lot of new housing; they need to preserve what they have. So, I mean, I would only say to my colleague that, to be honest with you, we have not had this level of discussion about these issues in most of the time that I have been here, and I have not been here that long as compared to some of my other colleagues. But I think it is an important discussion. And I think that Secretary Wilkerson's testimony is going in the direction of the need for 315 BILL NO. 000344 more of this kind of discussion and I think ultimately some changes that Mayor Street will probably make in this regard.
Thank you very much. Let me say for all those that are here that this is a continuation of a Finance hearing for the Community Development Block Grant application. There is also another committee hearing due to take place, Committee on Law and Government, and we are doing this before Council session begins. We are sorry to hold you up for those who are here for other purposes. But, as you may know, this is the week before our last session of Council. If we do not have our legislation on the record, then we cannot pass it next week and we will miss it, because then, technically, we recess, although we will be here, until September. So we are trying to get all our bills, all our legislation complete so that we can get it passed before recess. We will have two people testify, only two today, State Senator Shirley Kitchen. 316 BILL NO. 000344 As soon as we have Councilman Ortiz' question and Councilwoman Tasco, we will have State Senator Shirley Kitchen testify, Nora Licktash the Director of Women's Community Revitalization program. And I will say that we did invite everybody to testify last time. Some couldn't wait. But we will make an exception and permit the Director of the Women's Community Revitalization Program. We did promise State Senator Shirley Kitchen that she could speak this morning. And then we will try to deal with getting the legislation -- ending the community hearing and going into our Stated meeting so that we can complete this hearing and give the Law and Government Committee their time. Councilman Ortiz.
Thank you, Madam Chair. I think it is about time that we really started discussing the overall strategy of how we are going to deal with blighted neighborhoods. 317 BILL NO. 000344 I most often said to Mr. Kromer during the last few years that it really makes no 4 sense whatsoever to build a lot of housing, put poor people in them, and then those individuals have no 6 jobs and no way of maintaining, fixing, and being able to improve the neighborhoods. The strategies have to go hand in hand. One is the production of housing, but also the other one is how do we create jobs in those neighborhoods that my colleague Wilson Goode calls have been disinvested over the last 30 years. And how do we begin taking money back into those neighborhoods and reinvesting in those neighborhoods so that every time we build a development of housing, we have a very sure expectation that 10 or 15 years from now, when we go back, that housing will have proliferated to more other housing and more affordable housing that is not subsidized because people have jobs within those neighborhoods. The economic corridors of Fifth Street, Frankford, all of those areas, become revitalized. And if we reinvest in them, in order to be able to get those individuals back and those 318 BILL NO. 000344 families back to the job market. Also, like the information that I asked Mr. Kromer for, we have to find out how many of the individuals that are working in all of these developments that we are producing across the city are really residents of Philadelphia. How many jobs are we creating with all of the CDBG monies that we are spending in neighborhoods for Philadelphians, how many of those jobs are going to individuals that will then keep those jobs and go on to other projects across the city. We don't have any analysis of that. Mr. Kromer sent me some information as to contracts and jobs and who has them and who doesn't, but the information is not yet complete. And I expect that during the next week, we would get a total picture of where we are at. But I do believe that a rethinking of strategies, how do we begin reinvesting in neighborhoods that have been misinvested in over 30, 40 years, and getting them back on their feet. Because it is not just blighted homes that we are looking at and talking about; it is blighted commercial areas, boarded businesses up and 319 BILL NO. 000344 down the different neighborhoods that we live in. And I think we have to begin thinking how we can begin to take those boards off those store fronts and off those buildings and begin putting the people back to work inside them.
Thank you, Councilman. I will note that in my district, where we are doing a lot of development, the developers have to deal with the community group in terms of any jobs that come there. And, if it is housing, in terms of people who move into the units. We demand that. For example, I have the University of Pennsylvania, which all of you know is the second highest employer next to the city itself, and obviously has unlimited resources. And certainly we have them doing job training with GPUAC. And we make sure that they have minority inclusion, and minority inclusion on their projects is at least 30 percent. And we also make sure that they have job training. And the last thing that we ask for, that we demand, in my area is that West Philadelphians some first. Because I have got to 320 BILL NO. 000344 take care of my district first, because that is why I am here, and they are the people who put me here. So I say that to say that there are those of us -- I also deal with a Welfare to Work school that helps a lot of people and carries some people who have even been on the street on grates for me for nothing, and they absorb the cost. So I believe if there is a will, there is a way. If you have a real interest in this area, I would always be glad to talk with anyone. And there are always people around who have a lot of ideas about how it we get it going. And I don't believe in being frustrated about something I want done. If I think about it, believe me I have a program or I am working on one to make things happen, at least for my area. So I am always glad to share what we do and how we see it with any member of this panel or any member of Council. Councilwoman Tasco.
Yes. Comments have been made, particularly by Councilman Ortiz. 321 BILL NO. 000344 But I think, you know, we have to look as what is the goal and purpose of our housing program. And years ago, when we focused in 6 on the area that needed the housing most, we have to 7 go back to look at that history, what was then. 8 We have to look at the city now, 20 9 years later, and what is going to be the overall 10 comprehensive plan not just for any one district, 11 but for the City of Philadelphia. 12 And I too represent an area. It 13 doesn't have a lot of blight, but it certainly is a 14 neighborhood on the edge. 15 And I can lose my residents to 16 Lavarock, which I have done, a lot of professionals 17 have moved across the street. 18 And yesterday we were talking about 19 tax abatements and relief for people to build 20 housing in Philadelphia, maintain our residents. But people move -- sire we need new housing, we need to help them -- but they move because we don't provide just the basic services that they require and they need, and they get frustrated and they leave the city. 322 BILL NO. 000344 So I was encouraged the other day, Ms. Wilkerson, when I met with Ms. Griffith, our new Planning Commissioner, because she stated that there will be a more cooperative and collaborative effort between the agencies that plan for our city, and provide services for our city, so that we will know where we are going to build new houses, where we are going to invest in neighborhood stabilization, which is very important to those of us who live on the borders and can lose our residents to the other counties. And I think those are important issues. And while we want to be cooperative in passing this budget, I have sat at this table on many occasions and talked about neighborhood stabilization, and we have gotten yes, and we will talk about that, and we pass the budget, and then we don't have anymore conversation about that. But I think at the end of this session, you will notice that all of us are concerned. Not just about my district, but about the city as a whole. And we do want that seriously taken, discussion to take place. Because next year I don't think it will be as easy of a time in passing this 323 BILL NO. 000344 budget as it is this year. Because we do have a new Administration. Although our Mayor was the President of City Council and a member of this Council for many years, and did fight for his district, he is now the Mayor of the entire city. And we are going to give him an opportunity to let his Administration look at this in a comprehensive way. And when we work for the next -- towards the next application, I certainly want to see a different plan on the table for Philadelphia and a better distribution of whatever funds we have left, appropriated in a more equitable way. Because they are tax dollars that are coming into this city. They are just not tax dollars by certain citizens. We all pay taxes. It is my tax dollars coming back into the city. And I think those of us that pay taxes are concerned about what Philadelphia will look like. Thank you.
Thank you. Councilman Cohen has an announcement to make. 324 BILL NO. 000344 And while he is making that announcement, if Ms. Wilkerson and Mr. Kromer don't mind, we want to bring State Senator Shirley Kitchen up. We want to get this testimony out of the way. Then we will come back and Councilman Nutter has his questions. Thank you.
This is Councilman David Cohen. In my role as Chairman of Law and Government Committee, I am announcing that the 9 o'clock session scheduled for this morning, with respect to the chemical NTBE, and with respect to campaign financing, that session will be recessed until 11:15 this morning. Thank you, Madam Chair.
So all persons here for either of those two matters can feel free to leave and to come back at 11:15.
Thank you. Let me say good morning to State Senator Shirley Kitchen and good morning to Mr. Shariev Street. 325 BILL NO. 000344 We welcome you here. And please identify yourself for the record and proceed with your testimony. STATE SENATOR SHIRLEY KITCHEN: Good morning, Madam Chair. I am State Senator Shirley Kitchen.
Good morning, Madam Chair, the Chief Legislative Advisor to State Senator Kitchen. STATE SENATOR KITCHEN: And good morning to members of the committee. I will be brief, because I can understand the time constraints that you are up against. But while I agree with most of what was said here today, I do think that we have to consider the neighborhoods around the blighted areas. I do think we need to revisit how we are spending the money. But I also must put on the record that North Philadelphia, especially the area east of Broad, has been considered the most deteriorated area in the entire city. And we have spent years and years and years trying to save our neighborhoods. 326 BILL NO. 000344 And we did not go in and just put two or three houses in a block. We have a plan. We started with a five-year plan and a ten-year plan. And we are specifically talking about areas where the city controlled 60 percent of the land, 50 percent of the land. Our plan also includes commercial development. But at this point we do not need our monies just disrupted. Because I haven't heard another plan to consider the other blocks around the blighted areas. And we are trying to create home ownership. And we have to consider that foundations come into the areas, fund plans. Those foundations sometimes do not agree with the plans that we have created, they interject rentals into an area where we are trying to put home ownership. So home ownership is what we are seeking. And we are seeking to work, you know, with the rest of the city in a comprehensive plan. And I do know, since becoming State Senator, there are communities whose neighborhood are not as blighted, but they are in need of a 327 BILL NO. 000344 program for housing repairs. And an extension of a program may be called HEMAP, which assists homeowners when they are in trouble with their mortgages. So the neighborhoods do call for a different plan. But I do not want it in the record as though we were -- it was recklessly done. Our developers -- we operate the same manner as you, Madam Chair, as you know, our developers do have to be accountable to the community, hire from the community. But we also have a problem with skilled labor, so we are working on that. So we seek the corporation, you know, to work with everybody on a plan for the city. But we do not want to turn the clock back to the days where our area was totally forgotten, which led to the condition that, you know, it was in seven years ago.
Certainly. We concur with your testimony. We agree with you. We thank you. You and Councilman Clarke are doing an excellent job to fight to bring housing and to bring all kinds of economic 328 BILL NO. 000344 development to your community, and we applaud your efforts. STATE SENATOR KITCHEN: Thank you.
Senator Kitchen, if I could also comment. I, one, deeply appreciate your testimony. And if under any circumstance you may have thought that anyone's comments, and certainly any of mine, were taken in any way, shape, or form that something inappropriate -- or I think your word was "reckless" -- that is certainly not my view or my belief. Quite honestly, I think that you and Councilman Clarke, both in his present capacity as Councilperson, but also, you know, I think what people overlook or forget sometimes is that Councilman Clarke was a long-time staff person here and did a lot of work both out in front and behind the scenes. And I didn't have as much time as a staff person here, but I was a staff person here once myself. I think that the reason you have been 329 BILL NO. 000344 able to do what you have been able to do is because of what you said, because there has been a plan and you have tried to follow the plan. And part of this discussion here today is about not only other areas of the city and what their needs are, but also what are their plans and what are the plans that have been developed for those areas, and how do you proceed along the same path. And I think that's most of what this discussion is about, not so much who's gotten what or who has to justify what they got. I said this to the Councilman the other day, I don't think you have to justify anything. The issue is, how do other people get some of those same things in a pie that, quite honestly, never grows. STATE SENATOR KITCHEN: Thank you.
We just wanted the record to reflect that the need as it pertains to vacancy is not only a past need, but continues into the present. 330 BILL NO. 000344 We have maps to develop, which may have been share by the Office of Strategic Planning, developed by the University of Pennsylvania, which reflect that the level of vacancy, both residential and commercial, in the 3rd and 5th Councilmanic Districts continues to be much higher than it is in most other parts of the city, with the exceptions of some western portions of the 7th District.
Thank you very much. We agree. And we are absolutely fighting it. Thank you very much. Mr. Ralph Winder, Ward Leader, 38th Ward, please come forward. And certainly talking about staff members, having been a staff member for 15 years, I appreciate the experience we gain and certainly the struggle that we inherit. After Mr. Winder, we will have Nora Licktash, Director of Women's Community Revitalization Program. And that is it for those testifying this morning. Welcome, Mr. Winder. Would you identify yourself for the record and begin.
Thank you, 331 BILL NO. 000344 Councilwoman Blackwell. And hello to all of the Council Members. My name is Ralph Winder, and I am the 38th Ward Leader and also Chairman of a community group called The Residents Coalition. I have come this morning on the heels of testimony that I gave earlier this week, testimony that was seeking support from the city in terms of helping those residents who are being held responsible for the fixing of retaining walls and alleyways and driveways, property which has been deteriorating over the years and which no one has taken responsibility for fixing. The city says that these properties belong to the homeowners; that is, the homeowners' responsibility to fix it. The homeowners don't see these driveways, which are beyond their backyards and property lines, or at least their supposed or apparent property lines, they don't see these retaining walls and alleys as being their property. I mean, they can't move anyone from those areas. If a car is double-parked outside of their home in the back, in the driveway, they 332 BILL NO. 000344 couldn't remove it. Homeowners don't see these things as their properties, so therefore it is like a no-mans land. And these areas are deteriorating and getting worse and worse, and the costs are escalating. I am here because I am in harmony with Senator Shirley Kitchen's testimony that North Philly is the most devastated area and needs the greatest support. But somehow I think that areas such as the one I represent in North Philly also, and East Falls, should be given some attention and some support. And that when properties are being damaged and destroyed, the city needs to come to the relief of these homeowners. In my area, right behind my home there is a driveway that has been crumbling for so long -- I have been there for a number of years -- that the neighbors got together and sold chances in an effort to raise enough money to fix that driveway. But we could not raise enough money to fix an area so large and so vast and that had deteriorated so long. 333 BILL NO. 000344 I think that the city should come to the aid and relief of residents who have historically tried to fix up their property, who have historically had clean-up efforts, wars on dirt, and they can do everything in the area of cleaning, but they cannot tackle this problem of economic development and crumbling retaining walls and driveways and alleys. I am here to ask for support of the Council, that they consider other funding sources. Not to take anything away from what's being given to North Philly, but to come up with some monies, some relief, for residents who are locked into areas that are demoralizing and deteriorating because the city is not giving any assistance. I am not asking that the city fund these projects 100 percent. But that if they can come up with some kind of a ratio or solution in which the residents pay one-third and the city pays two-thirds, or half and half, or whatever. Residents and citizens of our neighborhood need help. They need the support. They are doing the best they can. And if nothing is done about this problem, the problem will only 334 BILL NO. 000344 continue to get worse and worse, and people will move away from Philadelphia and these other areas. And they will become frustrated with their efforts to have wars against dirt and cleanup efforts because other problems that they cannot handle will continue to overwhelm them. So I am here to ask for the support of this money, Community Development Grant money or any other funding that can be given to these areas. I do not feel as though the neighbors of these areas, which do not have devastating housing problems, but at the same time have these types of problems, do not feel that these residents and these areas should be discriminated against simply because their problems don't deal strictly with abandoned housing.
Thank you, Mr. Widener. Let me note we did not announce that Councilman DiCicco, who is a member of this committee, is also here. I think we mentioned everyone else.
Councilman O'Neill is likewise here. So the record will reflect that all 335 BILL NO. 000344 members of the Finance Committee are present. Councilman Clarke, did you have a question for this witness?
Thank you, Madam Chair. I actually don't have a question for this witness. I wanted to make a brief statement.
I would like to say, first I would like to thank my Senator and my friend Senator Kitchen for coming in to testify on behalf of her district, which encompasses several Council districts. I would like to also say that, over the past few weeks there has been a lot of discussion about the distribution of wealth. And I hope during the course of these proceedings that facts have come out that have talked about the process. The reality is, on very few instances are the Request for Proposals for low- and moderate-income housing designated or site specific. It has been my understanding in my 336 BILL NO. 000344 work both as a Councilperson and as a staff person that most of these RFPs are for citywide opportunities. But the reality is that when you have very candid discussions with developers who ultimately end up responding, they frankly say that they don't feel that they are going to be successful with placing low-income housing in a lot of these neighborhoods. So I guess what they end up doing is taking the path of least resistance. And I think in large part that is why you see a substantial amount of low-income housing in North Philadelphia. Not just in the 5th Councilmanic District, but also in the 8th and in the 7th and in the lower part of the 9th. I think the same thing holds for West Philadelphia part of the City of Philadelphia. So I just wish that, you know, people look at the process. If there wants to be some discussion about changing the process, so be it. But to suggest somehow that certain political pressures or influence were a part of the process, I think, is frankly just not being 337 BILL NO. 000344 accurate. So I just wanted to say that for the record, that people go where they think they are able to develop housing. The bottom line, for-profit developers need to get in, they need to do the job, they need to get their percent profit margin. So 9 I think that that in large part is driven the 10 process. Thank you, Madam Chair.
Thank you very much. Thank you, Mr. Winder. Excuse me, Councilman Nutter.
Mr. Winder, now you represent an area that does have a couple of Community Development Corporations; is that correct?
And, over the years, have you had any knowledge or information that they have either responded to any of these RFPs or been able to respond to any of these RFPs? Or away from the housing activity, because I think, as we all know, these programs are 338 BILL NO. 000344 not just are not just for housing, the dollars are not just for housing, have you seen any other investment as it relates to the neighborhoods that you represent and a ward leader in getting portions of CDBG funding into the neighborhoods that you represent?
Well, I am sure that there are -- some of these organizations have applied for funding of that sort. One particular organization, which is the Allegheny West Foundation, has done extensive development of housing, abandoned housing, in that area. I do not know whether they have ever received any money from this particular source. But I do know that they probably have applied and others have applied. Most of the money that I think they receive comes from other sources, though.
Just for the record, in the plan for Allegheny West and the Tioga/Nicetown area, there does not appear to be any funding designated in the Year Plan for the 25 Allegheny West area, just so you know. 339 BILL NO. 000344
Thank you very much. Nora Licktash, Director of Women's Community Revitalization Program. Let me note that this will be the last person testifying today. And after which time the -- Councilman Clarke.
I would like to respond to Councilman Nutter's question.
With respect to Allegheny West, it is my understanding that Allegheny West in the past and anticipate in the future that they will be participating in the City of Philadelphia's HRP Program, which does not necessarily show up in the application. It is basically an as-need type of funding source that throughout the year, to my understanding, they have and will be applying for funds out of this upcoming Community Development Block Grant Fund.
Absolutely. That is a good point. 340 BILL NO. 000344 We have a lot of funds that are not site-specific that interested developers and community groups can apply for. So OHCD does also offer that kind of funding. After this testimony, and any questions for this witness, we are going to recess our Finance hearing until 11:15, so we don't hold all you Commissioners and other folks who are here for other purposes. But we will hear this one last witness. Thank you for your patience, everyone. Ms. Licktash, identify yourself for the record and begin your testimony.
Good morning. My name is Nora Licktash. I am representing a group called the Women's Community Revitalization Project, or WCRP. We are an organization that has been committed to working with very low-income families, both advocating for and organizing them to help them promote their own social and economic advancement. And to us that just means we build 341 BILL NO. 000344 buildings and help people plan and build buildings. And we also build leadership, help people fight for the things that they feel are important in their community. We submitted some testimony, and I hope you will get a chance to read it. And being part of these hearings really helped me understand the complex decisions that City Council Members are called on to make. And I appreciate that this is another complex decision. I just really want to talk about two recommendations this morning and for a minute tell you a story. The first recommendation is that we hope you will approve the consolidated plan as it has been submitted to you, without any amendments.
Excuse me. Could we keep our voices down. The committee is having a hard time hearing the witness. Thank you very much. Proceed.
I will speak up. So the first recommendation is that I hope that you will approve the budget and the consolidated plan as it has been submitted, without 342 BILL NO. 000344 any amendment. The second recommendation is about the future. And we hope that in the future, based on some of the things that were said last Tuesday, that you will develop a process or that we can work together to develop a process to more inclusively plan CDBG and OHCD resources. So what I'm suggesting is that we develop a plan -- excuse me. We develop a process that starts this fall that will enable folks in the neighborhood to be involved in stating what's happening in their communities related to the needs that are eligible under the Office of Housing Resources. And that it is not just citizens that are testifying or being involved in this discussion, but it also involves people who have access to the data that we all need. And that data needs to be understandable by all of us. So that's my second recommendation.
Thank you. Ms. Licktash, again, thank you for your testimony. I think you know from the previous hearing, I would certainly agree that more input is better in a longer time line. But did I basically understand you to say that the process of handling just the one hearing at the time of the preliminary plan back in April might not be enough --
Uh-huh. That there need to be meetings neighborhood by neighborhood, and they have to involve real information from real people, as well as people have the data, talk about need. That there needs to be a correlation between need and allocation of resources. And, again, I'm not talking about -- I'm talking about need here as it is defined -- well, I don't have the definition. Sorry.
Did you 344 BILL NO. 000344 participate in the development of the preliminary plan?
Correct. And I think there needs to be a process by which we hold ourselves accountable once the plan is put together, to make sure that the plan is meeting the needs and that we are accountable to what we said we wanted to do. But, again, this issue of equity. People keep talking about equity last week and today. And I think it has been stated a few times that people who would make 80 percent of median income in the city are making roughly $46,000. And that is eligible under OHCD -- under CDBG requirements. But we can't compare those folks who are making $4,600 a year, and the needs there are very, very different. It has been stated before, but I just 345 BILL NO. 000344 want to reiterate.
Thank you for your testimony. And, again, we have very committed community groups, developers, and elected officials here who work to make sure that when a group makes a commitment, when a developer makes a commitment, that they follow through. And when we are diligent, things work well. And when we find developers, there is one or two that all of us agree do not work in community's best interests, we don't support them again. So working hard and being diligent in this area makes all the difference. Councilman Cohen, did you have a question?
Thank you very much. Then the Finance hearing for Bill 344 will recess until 11:15. Thank you. (Hearing stands in recess.)
Thank you very much. 346 BILL NO. 000344 We will reconvene the Finance hearing on the Community Development Block Grant application, Bill No. 344. I believe we have a quorum. Councilman Nutter is to my right, Councilman DiCicco is here, Councilman Kenney, Councilman Cohen, and Councilman O'Neill. There being a quorum present, we will ask Mr. Kromer and Ms. Wilkerson to please come back and approach the table. If there is no objection to members of the committee, we would like to end the Community Development Block Grant hearing and enter into the Stated meeting. Councilman Nutter you still wanted to ask various questions before we end the hearing? Do you want to ask questions?
Thank you, Madam Chair. Good morning, Mr. Kromer, Secretary Wilkerson. Sorry we have had such an extended 347 BILL NO. 000344 session today. Mr. Kromer, you had responded to a number of questions that were asked last week by way of, I think, two communications, one large and one smaller, one on the tax credits. First, I appreciate the information you sent on the tax credit data. But it is my impression that the information that you sent was a listing of the tax credit deals, but the dollars that were associated with them were the CDBG dollars. I thought my question was, tell me about the tax credit deals and the tax credit allocations that went with those deals. Was I not clear, or is that what the information reflects?
Whatever the reason, we can certainly provided that information immediately. It is on the record and certainly can be made available to you at once.
But the information you sent was what the tax credit deals were, but the dollars are actually the CDBG dollars, as opposed to the tax credit allocations for those 348 BILL NO. 000344 projects; is that right?
Can you tell us briefly how the preliminary plan is put together?
The preliminary plan is published after a needs assessment hearing, which takes place in the fall. And a lot of the planning that occurs at that time is conducted by the city's housing agencies, the Office of Housing, Redevelopment Authority, PHDC, and so on.
Then the preliminary plan is then published. And the hearing, I believe, is usually in December every year. And that's an opportunity for citizens to comment on the current year program, but also to comment on the preliminary plan, which is a general summary of plans for the next fiscal year. But, although general, is a city document and is intended to be the first draft of the city's proposed policy for the next fiscal year. 349 BILL NO. 000344
So there was a hearing back in December that is supposed to help in the development of the preliminary plan?
I don't have the exact number. But characteristically to 30 10 individuals, many of them representing 11 organizations, testified. 12 Others, perhaps as many as a dozen 13 groups, submit written testimony. 14
And then out of 15 that you develop the preliminary plan, and then you 16 have a hearing about the preliminary plan? 17
Do you have any 350 BILL NO. 000344 sense that, I mean, that group of people, not that they don't represent whatever their interests are, but that to 30 people in the city of a million 5 and a half people is a significant outreach or 6 outpouring or input for the expenditure of over $100 7 million between all of these programs? 8
I don't think it is 9 adequate. And I think much more could be done. But 10 I believe that doing that much more needs to be a 11 collaborative process. 12 And a number of attempts have been 13 made. And some of them have not been successful. 14 I know before my tenure, an attempt 15 was made to schedule town meetings in each 16 district. And because those weren't well attended, 17 the conclusion was, well, they don't work. 18 I am not convinced of that, having 19 attended town meetings in certain districts that 20 were very well attended. In addition, under the last Administration, there was an attempt to establish a so-called Mayor's Housing Partnership Council, with the intent of broadening the discussion. That didn't work out well. 351 BILL NO. 000344 Again, I'm not going to sit here and say, therefore, no effort of that kind will work. And I agree with you that more needs to be done. And I believe we should be exploring ways to make this more effective and broader.
As I see the Councilwoman just coming in, I guess the thought just occurs to me, if 20, 30, maybe 40 people come in and they represent different organizations, I mean, did people come out in the 9th Councilmanic District to testify about either the development of the preliminary plan or at preliminary plan time, for instance?
Some will, yes. And there are some citywide organizations, such as the Housing Consortium for Disabled Individuals, that show up regularly.
But I think your testimony is, more needs to be done in this area? I mean, it is hard to get a true indication of what's going on or what the needs are out there if you have 40 people citywide come to a hearing one day.
Now, is it my reading of some of the documents that have been shared with us that there is a proposed reduction in the BSRP program in Year 26? Is that correct?
The level of BSRP activity in each year is based on the level of support that is received through the Department of Community and Economic Development at the Commonwealth of Pennsylvania, which is the funding source for the program. This year the funding anticipated from the Commonwealth, based on the budget from Harrisburg --
So what's the Current Year budget and what's the anticipated 22 Year 26 budget? 23
In here, under Category 24 B, Emergency Repairs, there is -- the first line is 25 the Tier component of the Basic Systems Repair 353 1 BILL NO. 000344 Program, funded at a level of $2.5 million.
Tier 1, the core of the program, is funded at a level of 2.5 million in the current fiscal year. And the expected funding is 1.6 million in the coming fiscal year. As I indicated in the correspondence to Council through Councilwoman Blackwell, the actual amount appropriated after the publication of this document was slightly more, half a million dollars more. So the total amount that we will have will be somewhat increased. But the program will still be be short because of the shortfall in state funding.
Even with the increase over what's published here, based on what you are telling me, would that result in about a 20 percent cut in that program? It's about $500,000 less than last year? 354 BILL NO. 000344
Is there any way to make up that funding? I mean, isn't this an important housing preservation program out in neighborhoods that people use?
I think it is absolutely critical. And in response to your request, again in the correspondence submitted through Councilwoman Blackwell, I proposed an approach for collaborating with DCED and matching funds in certain areas of the city where maintenance and repair are a priority. Excuse me.
There's been a fair amount of testimony with regard to the Home Ownership Zone Program. And I did read the materials that you provided, and I have gotten some others. How many houses were done? Was it 292, 278? How many houses. 355 BILL NO. 000344
The number that will be developed in the Home Ownership Zone is 296. Of that amount, a first phase of 35 houses has been completed and a second phase of, I believe, 40 houses is now under construction.
So there is still a significant amount of work still to be done based on that?
And what so far has been the average cost of construction per house?
The Home Ownership Zone has been a mixture of rehabilitation and new construction, so it is a blend. But it is certainly safe to say that construction costs are in excess of $100,000.
And these are home ownership units. So what do they end up being sold for?
The sales prices varied. And I believe the first phase units were priced at less than $50,000 and that the phase 356 BILL NO. 000344 that is under construction, although I don't think the prices have been set yet, I believe the intent is to price them at between 55 and 60 thousand dollars.
Now, last week's discussion, one of the concerns was around the current plan and timing and the like. Now, the plan was transmitted to us on May here in City Council, and I believe 11 introduced that day. 12 Is it my understanding that there is 13 usually a 45-day review period by HUD on these 14 applications? 15
And so is it at 17 least correct by way of the calendar that when the 18 plan got to us, it was already late?
Yes, in the sense that it would not provide for the award of the HUD funding prior to July 1, the start of the program year, yes. And that's the way it's been for some time now, in light of the fact that the Community Development Block Grant budget has for some years 357 BILL NO. 000344 now been submitted to Council after the Capital Program and the Operating Budget. And I believe that as long as that continues, then we will have that lag.
Well, have you been asked to submit it subsequent to those budgets, or do you just think that that's a better time to submit it? Or, I mean, has any thought given to actually submitting it at an earlier time, and then you won't end up here at the last final days trying to deal with this?
Well, it is a policy decision. But we have adjusted to that change by staging other contracts so that they take effect in the late summer and early fall months, so that there will be no shortfall in funding.
What's the policy issue of when you submit CDBG application to us?
It is really a decision for the Mayor's Office to make, as to the timing of the CDBG proposal relative to the timing of other matters submitted to Council.
As I discussed 358 BILL NO. 000344 when State Senator Shirley Kitchen when was here, she talked about very eloquently the North Philadelphia Plan that is resulting in a significant amount of growth and development. And I complimented and praised her for that. Can you tell me about the same type of plans that exist in other parts of the city?
Well, as has been discussed here today and earlier, there really is a need for improved neighborhood strategic planning. Despite that fact, there are some neighborhoods which have very sophisticated plans and which have achieved a great deal through the implementation of those plans. After the Eastern North Philadelphia Plan --
I think that I would mention Germantown, where the Greater Germantown Housing Development Corporation has been consistently following a very well developed strategic plan for near nearly a decade. And I circulated to Council a letter 359 BILL NO. 000344 from the Director of that organization indicating that they were now selling houses with no subsidy for over $100,000 apiece. That doesn't mean that Germantown is now a perfect neighborhood, but it is a clear progression from the heavy subsidies of some years ago.
And in that vein, then, what is the plan for West Philadelphia or Wynnefield or East Falls or Manayunk in that regard?
The only plans for those areas of which I am aware are the targeted plans; such as, the Wynnefield Conservation Area Plan that was implemented some years ago, or the Schuylkill Falls Revitalization Plan now underway.
The Schuylkill Falls is a PHA development. And the much heralded Wynnefield Conservation Program I think was over about five years ago.
That's right. As I said, some years ago. And, finally, the Empowerment Zone, which is the result of a very comprehensive planning 360 BILL NO. 000344 process.
We had a lot of discussion about this issue around the, and I don't know if you have -- other than the material you sent the other day, have you had any opportunity to have further thought or discussion about the use of the dollars not on the programmatic side, but the continuing -- I think it is about, 54 and a half percent of the funds basically now don't make it to the street because of administrative and program delivery and project management costs, as well as the repayment of the HUD 108 loans, principal and interest. Any further thoughts on ways and opportunities and options to reduce those costs and put more money out on the street for programmatic activity?
I know that the Secretary of Strategic Planning will be looking into that. We have had some discussion, but do not have 361 BILL NO. 000344 anything concrete to present to you at this time.
The Administration has a task force that is going to be looking at the duplication of administrative overhead throughout the agencies. Years ago when the Rendell Administration undertook very productive management and productivity initiatives, they did not do some of the outlying agencies. We think that if we go in, look at PIDC, PCDC, PHDC, RDA, OHCD, we are convinced that we are going to find areas in which we can conserve on the administrative overhead. We think, you know, the program administration undertaking we believe can probably be consolidated and streamlined in some ways. We think we can incorporate the use of technology more effectively than we do currently. So we do believe that it is an area where there can be a number of savings garnered. I think that it is important to distinguish the administrative costs from the 362 BILL NO. 000344 program delivery costs. Program delivery is a term of art as it is used throughout the CDBG program. The program delivery costs are the same costs that support the Weatherization Program and the BSRP Program you talked about before. Unless we are prepared to pay some of those program delivery costs, we will not have programs at all. I think it is also --
Because program delivery, it is a large term for -- there are people behind that.
And they provide a service, they inspect the work that's being done or those kinds of activities.
That's right. I think it is important that we look at how we do it. For example, I talked to you before about some of the changes at the Housing Authority. The Housing Authority has incorporated technology into its building inspection. It has, you know, individuals going out 363 BILL NO. 000344 with Palm Pilots. They do inspections on the Palm Pilots, come back in the office, do the download, and they have eliminated a lot of clerical needs. They don't have to have people typing the information that was on the inspection into the computer; that's done automatically and done in a matter of seconds. I think that if we are aggressive in how we approach some of these issues, we are going to surprise ourselves with what it is that we find, and it is going to be savings in the area of program delivery costs savings in the area of administrative costs. But I think you can't simply target program delivery, because a lot of those costs are linked directly to our ability to have programs that we want.
At the same time, just so we are clear -- and I think your intention is such, but I do want to get it on the record -- that in an effort to show a lowering of administrative costs, it is certainly not the intention to, from an accounting standpoint, shift the lowering of those costs over into the program 364 BILL NO. 000344 delivery or program management side of the ledger and then say, well, we have reduced our administrative costs.
That's right. I think we share the same goal. I don't think we have any interest in keeping overhead high. I think that, you know, that as we move throughout the streets of Philadelphia, we see the same things you see. You know, we understand that there is a need for getting more dollars out into the streets. And I think that there are any number of levels of our whole program that we have to take a look at. You know, we are going to have to call into question, well, how are the CDCs doing it? Do we have too much tied into CDBG overhead? I think at every level we are going to have to be willing to go in and take a hard look at how it is that we deliver these services. I don't think any area can be sacrificed. I don't think the Administration has an interest in protecting overhead, administrative overhead. 365 BILL NO. 000344 I think if program delivery is insufficient, we have to take a look at that. If we have CDCs and neighborhood-based organizations that aren't delivering efficiently, or we are not getting what it is that we anticipate when we fund these programs, all of that has to undergo scrutiny. I don't think any area is going to be exempt as we move forward, if we are going to be able to get maximum leverage out of the dollars that are minimal, at best.
Let me try to very clearly state for the record. The two primary reasons that I have focused in this particular area is, one, I think we do share the goal of trying to make sure that the operations are running efficiently and effectively and that we are not, quite honestly, taking away, if you will, money that comes to us for the benefit of low- and moderate-income people and just offload costs, i.e., salaries, from those dollars for the public employees, when the city government could in fact step up to the plate, even ever so slightly, and pick up potentially some of those additional costs. You then free up dollars for program activity. 366 BILL NO. 000344 That's one. Two, because there will always be projects or programs in the pipeline, and because of the concern that any effort to expand potentially comes at the expense of people who already have projects and programs that are ready to go, if we are able to identify those kinds of dollars from administrative savings and reprogram those dollars, not taking a dime out of anybody's current project or activity, but if there are savings to be had, you could use those dollars for other activities that we have talked about here today and keep the CDCs and other groups in a hold-harmless situation. Are we clear about what it is about and what it is not about?
I think two things. The General Fund is not available to absorb these kinds of administrative costs. I think we are moving forward. We are looking at making, you know, an enormous expenditure of city General Fund money for neighborhood blight elimination, stabilization. It is unprecedented in this city. You know, you can't find precedent for it anyplace 367 BILL NO. 000344 in the country. So I think the city is going to be coming to the table in a way that is unprecedented. We do not have the money. And other people can come and testify in greater detail about the capacity of the General Fund to absorb administrative costs. I can't make that commitment. What I can say is that, I do believe we can do better in managing our administrative costs, and we are committed to doing that. It is not our intent to shift it around. The intent is to put the money into those areas where we all want to see it. You know, we had a discussion earlier, though, that some of our goals fly at cross-purposes. We want to have enhanced planning taking place in the city. That costs money. We have a tiny Planning Department in this city. If we want to have kind of aggressive planning these amendments anticipate, we are going to have to pay for that or find those resources someplace. You know, those are traditionally administrative costs, or program delivery costs, in 368 BILL NO. 000344 the CDBG group. So we are finding at cross-purposes. But the intent is not to simply identify savings in the administrative line item and then put them in areas that don't reflect the dialogues that have been going on over the course of the last several weeks. We want to have planning throughout the city. We want to have as much money as possible actually serving the kinds of programs that address, you know, the deterioration and the neighborhood stabilization that we have all talked about. We are not looking to just move things around.
And through all this you would anticipate a more active, more visible role by our city Planning Commission as a part of this planning process?
Yes. I mean, I think that everybody, everybody would like to see planning happen more comprehensively. We need a framework in which the neighborhoods plan so that, you know, it will help 369 BILL NO. 000344 all of us as we go make resource allocation decisions. There are areas that don't have CDCs, and so have no plans at all. And we look to have city Planning step in and fill the void that has occurred in various places. We don't want to reinvent the wheel, as John has said. We have a number of wonderful plans in some areas, but we don't have that in every neighborhood, and so we look to have city Planning take the lead. We look to integrate city Planning's work more closely with what actually happens so that the plans don't sit on the shelf, that they really become the guiding documents for some of the decisions that are made in specific neighborhoods and as we go to allocate resources across the city.
Okay. Madam Chair, thank you very much. I do have a series of amendments. There has been some discussion about them, and I would be glad to read them into the record during the public meeting.