You say I'm issuing a default. We're taking the land back.
But, A, I'm not required to give you $50,000. I'm required to give you only what I can sell the parcel for. So if I can only, in a separate and secondary transaction, sell 121 5/26/10 - FINANCE - BILL 100129, etc. the parcel for $25,000, that's all I'm going to give you. I don't think that that would withstand a court challenge at all. I just don't see -- not being a lawyer, I don't understand how that's legal.
Well, I hear you, and because we haven't done this in the past, it's certainly a new -- an issue of first impression, as lawyers would say. What I will say is, we've had -- the Redevelopment Authority has had outside counsel look at this, and outside counsel have advised that it is indeed legal. That's why we're doing it, because we've been advised that it's legal. I think the question of the monetary recoup is what -- we have a theory that we're entitled to getting -- the public is entitled to get its money back. It's not my money; it's the City's money.
Well, hold 122 5/26/10 - FINANCE - BILL 100129, etc. on.
How is it the public's money if the person bought the property for market value?
It depends on what the economics are. So let me just say two things. In some cases, we've given this property to developers.
I'm talking about I buy a parcel. You say the market value is whatever, your appraisal. I buy this market value, and then you say I'm issuing a default notice and I'm taking this property back and I'm not required to give you back what you paid for it.
Well, I think that's the question, or are we required to pay back what they paid with an inflator, number one? So is there an inflation number and --
I'm not talking about inflation. You're not required under your, what I understand 123 5/26/10 - FINANCE - BILL 100129, etc. your regs to be, to pay that person back the amount that they paid for that parcel. I don't understand how that's legal and how in the world that passes any court challenge.
But let me just say that the other consideration in a lot of these cases in many times the developer has been making money off the parcel and in many cases, for example, they have a parking lot and they've made money. So I think it's an open question as to whether the public should share in those proceeds as well.
I'm not talking about that. That may be one out of a million, because more often -- 124 5/26/10 - FINANCE - BILL 100129, etc.
One out of a million. Because more often than not, if there's a default -- and you've indicated that this is -- this is a parcel where nothing has happened on that parcel. That's why you've issued the default. So this is not something that somebody has made money off of. If anything, they've paid taxes on it.
Oh, Councilman, I beg to differ. In fact, in many of the cases where there are large sums of money at stake, in fact the developer has been making money off of them. Absolutely. We should sit down.
Since you're making the statement in the public, I'm going to ask you to give me that list.
And I also want you to give me the list of default notices that you've issued and I want to 125 5/26/10 - FINANCE - BILL 100129, etc. see the percentage of properties where you've issued default notices where people or entities or companies have made money off of those parcels versus the ones who have not made a dime and have actually paid taxes on the parcels during the course of their ownership.
Actually, Madam Chair, I understand that there was a request that there would be a recess on these bills, and if you're going to do that, I'll just hold my questions until -- because there's some interaction we probably need to have before the next hearing. Is that the understanding, that there'll be a recess on the bills?
All right. 126 5/26/10 - FINANCE - BILL 100129, etc. Thanks. I'll just withhold my questions until that time.
Thank you. These questions are for Ms. Gillen. In the spring of 2008, my office sent a letter requesting a list of all properties that were assigned by the RDA that were in default. We received several responses that you had begun, based upon that letter, looking at all contracts to try to figure out what you own, what you didn't own, whether or not there was a contract that would have put it back in the RDA or not. We received partial responses to that spring 2008 request. It's now spring of 2010. Have you completed that work, and, if so -- or if not, when are you going to complete it?
We have not completed it because it's, as I've described it, sort of like an 127 5/26/10 - FINANCE - BILL 100129, etc. archeological dig for us that we're going back into the files. We've started with the most recent agreements, and the files at the Redevelopment Authority are not in great shape, especially the further one goes back. So we're working our way through it, and we can and will share what we have up until now.
If you could do that and let us know how far you've gone back, how many properties you've looked at, give us a list of the properties you've looked at and what you've concluded about them, whether that's in a spreadsheet form or whatever it is --
-- in your current form and provide that to the Chair prior to the next hearing. Thank you.
Well, since you're here, I have a question. 128 5/26/10 - FINANCE - BILL 100129, etc. And it's not a big one. You don't have to answer specifically to this issue, but we've had some discussion with your office about the disposition of properties to individuals, and then -- without the knowledge of the Councilperson, and then an ordinance 9 comes to us to complete the process. What happens if we decide not to deed the house over or pass the resolution giving that property to someone? What happens to that property and what is the relationship between you and the person that wanted the property?
Yeah. Well, we hold it, and we have held it in several cases when a Councilperson has said no, I don't want to move forward with it. I think what we try to do is figure out whether it's a fixable problem or not a fixable problem. Sometimes if it's a fixable problem such as they need -- the Councilperson needs more information or needs to meet with the neighbors or 129 5/26/10 - FINANCE - BILL 100129, etc. something, we try to fix it. If we decide it's not a fixable problem and it's just that this is a use that the Councilperson doesn't want, we, I guess -- I don't -- I think in those cases, we just have to go back to the developer or to the purchaser and say that we're not going to enter into the contract with them, and then the property will either go back onto the website list or go back for sale. At that point, we'd have a better understanding of what the issue is. So, for example, I think there may have been a case in your district where there was a property and the neighbors didn't want it multi-family, and so we'd go back and we'd make sure that the next purchaser who purchased it but not for multi-family purposes. Do you know what I mean?
Well, wouldn't it be better if you contacted us first since we have the relationship with 130 5/26/10 - FINANCE - BILL 100129, etc. the community and know the community? Because if you had said to me this guy is interested in this property for multi-family, we would have told you no, and that would have saved whatever energy or time your office put into dealing with this gentleman. That would have saved it, because we have -- and I don't have a lot of these, but certainly I pretty much know -- we all pretty much know our district and where things are and how we worked with zoning changes and things of that nature. I would appreciate it that I get notified first that the person is interested in purchasing it, so at least we could talk to them about what they're going to use the facility for.
Because sometimes it doesn't meet with the plans or it's not in the interest of the community to have that facility used the way that the developer might want to use it. 131 5/26/10 - FINANCE - BILL 100129, etc.
Right. I understand that, and we are trying to do it earlier, but we have to do a certain amount of due diligence just to get a sense of whether the thing is real at all. You know what I mean? So we try to balance moving it along a little bit. In that case, yeah, we probably -- we for sure should have talked to you earlier. There's no 12 question about that. So we are trying to strike that balance. There's no 14 question, Councilwoman, that that's what we're trying to do.
Thank you, Madam Chair. Ms. McColloch, let's go back to the Child Care Facilities Fund for a second. You said that there was $5 million put into that fund that was meant to be spent down over several years? 132 5/26/10 - FINANCE - BILL 100129, etc. MS. McCOLLOCH: Well, it was put into the Fund in 2003. It was allocated through this process, through the Consolidated Plan, in 2003, and it has taken until this year to spend that down to -- by the end of the year. There's currently a balance on our books of a little over 400,000, about 430,000, but the Non-Profit Finance folks who carry out the program have indicated that that $400,000 is committed to specific projects, but they're not at the point of drawing the funds down yet.
So there has not been any more money put in since that 5 million in 2003? MS. McCOLLOCH: Last year an additional $200,000 of General Fund money was added, not Community Development Block Grant funds.
And there was no CDBG-R money put into it? MS. McCOLLOCH: No. 25
And this is 133 5/26/10 - FINANCE - BILL 100129, etc. done through RFP? MS. McCOLLOCH: This was not done through an RFP. It was added at the discretion of City Council in 2003.
I'm saying more recently was there an RFP for any additional money? MS. McCOLLOCH: No. The $200,000 of General Fund money was not --
I'm not referring to the 200,000. MS. McCOLLOCH: I'm sorry. The current -- the 650 of this year, no, we did not do an RFP. We put them in as a line item in the Plan.
So how was the 650,000 determined? MS. McCOLLOCH: The amount?
Yes. MS. McCOLLOCH: We received a proposal from Non-Profit Finance Fund requesting $1.1 million. So I asked them to submit it. We knew that we wanted to continue to support the program, and they 134 5/26/10 - FINANCE - BILL 100129, etc. submitted a proposal for $1.1 million.
So you asked them to submit a proposal. So there wasn't a request for proposal, so to speak? MS. McCOLLOCH: Yes. There was not a formal request for proposal, but I asked them to -- yeah, I asked them to submit a letter.
And they said the figure that was necessary was 1.1 million? MS. McCOLLOCH: That's what they requested.
So why is the number $650,000? MS. McCOLLOCH: Because we have other programs that we're -- because we have $11 million less than we had last year and we have other programs that we're supporting.
You have $11 million less than last year, but the $5 million that was put in in 2003 was being 135 5/26/10 - FINANCE - BILL 100129, etc. spent down. There was another $200,000 added in terms of General Fund. There was no stimulus money put in. So just in terms of prioritization, particularly since you decided to even request that it be submitted, it seems that 1.1 million is the figure that is actually needed, and our CDBG allocation is in fact higher moving forward than it was if you subtract the stimulus money. MS. McCOLLOCH: It is -- there's currently $3 million more in CDBG funds, but we're trying to replace CDBG-R, the Recovery Act funds, in other programs that were supported last year that we want to continue to support, such as the Basic Systems Repair Program to keep that level and the Mortgage Foreclosure Prevention program to keep that level. Those are priorities, and we made -- those are decisions about how we decided to set the priorities of the funding.
And the 136 5/26/10 - FINANCE - BILL 100129, etc. $650,000 is supposed to cover what period of time? MS. McCOLLOCH: The next fiscal year.
And how much has been spent on an annual basis on average? MS. McCOLLOCH: On average? Well, again, it goes back to the discrepancy between what they have asserted has been allocated and what has been drawn down. In any given year, what's been drawn down is around $650,000 or $700,000, but it's always because there is this lag in when funds are drawn down. It's really a cash management issue, and I think in the same way that they've managed the funds up till now, that system could continue, because there are still funds available that haven't been drawn down. So what hasn't been drawn down going forward is about a million dollars. The 400,000 that's there and the new 650. 137 5/26/10 - FINANCE - BILL 100129, etc.
So what do you believe the $1.1 million request was for if they were only going to draw down an additional $600,000 or $700,000? MS. McCOLLOCH: I believe it's to allow them to continue to make commitments even though they won't draw down that much money.
And you don't believe they can draw down that much money? MS. McCOLLOCH: I'm just saying historically they have not drawn down that much money in a year.
One last question, Madam Chair. Just real quick. Can you tell me -- and I know the answer. Can you tell me the status of the Year '10 NTI program? 138 5/26/10 - FINANCE - BILL 100129, etc. MS. McCOLLOCH: The Year '10 --
Is that the one we just passed? MS. McCOLLOCH: Year '10 is the one you just passed. What I would call the program funds of that, which are funds that are committed --
What's the status? MS. McCOLLOCH: The status is that City Council passed it recently.
We know that. MS. McCOLLOCH: And we're moving it forward. That's what I was --
So when do you anticipate the ability for Councilmembers working with both your office and the Redevelopment Authority to identify acquisition and other pertinent issues with respect to -- MS. McCOLLOCH: That's what I was just going to answer.
Like is 139 5/26/10 - FINANCE - BILL 100129, etc. that going to happen soon? MS. McCOLLOCH: Yeah. Can I answer the question?
Because there's this March deadline looming that a certain reporter keeps calling me about, and I don't want it to be somehow thought that we're the ones that are not prepared to proceed. MS. McCOLLOCH: Okay.
I'm sorry. MS. McCOLLOCH: Can I answer? There are two pieces of the Year '10 Program Statement. One is what I would call program funds, which are funds that are being committed to the Adaptive Modifications Program, the Basic Systems Repair Program, that sort of thing. Those funds are moving forward. We've directed PHDC to proceed. We've informed them. This money that was on hold is no 23 longer on hold, and that it can go ahead and let contracts with contractors to spend down the BSRP and Adaptive 140 5/26/10 - FINANCE - BILL 100129, etc. Modifications Program funds. So that's one piece of it. The second piece is the land acquisition funds, to which you're referring, and we need -- as you know, last fall, I and my colleagues met with each Councilmember to review the acquisition requests. From those meetings, there were a series of questions. Some Councilmembers have responded to those. We're going to do one more circle back to confirm what the list of priorities is, and then once those funds are ready to be released by the Finance Director, we can move it forward.
When those funds are ready to be released by the Finance Director? MS. McCOLLOCH: I believe that will be soon.
Just one last thing, Madam Chair. I'm sorry. I just want to -- I'm sorry. I know that's why you hate for me to come to these hearings when I'm not on the committee. I seem to ask more questions when I'm out here. Real quick. With respect to the contractual relationship with outside entities, I just want to make note that there is a difference between PHDC and the Redevelopment Authority, because they are quasi-government agencies as opposed to PHS, which is not a quasi-government agency. MS. McCOLLOCH: Yes.
So there is a difference in those two decisions to make -- I mean, those two entities as it relates to the ability to contract with them without an RFP. I just want to acknowledge that -- well, say that then. I do recognize the difference. All right? 142 5/26/10 - FINANCE - BILL 100129, etc. MS. McCOLLOCH: Okay.
Thank you. Thank you, Madam Chair. Thank you for being so patient with me.
Thank you very much. Thank you, Ms. McColloch. We're going to have a list of people come before us to testify. We hope you will stay in case there are questions. We will now call on Mr. James White from the Association of CDCs. (Witness approached witness table.)
Good afternoon. Would you state your name for the record, please.
Good afternoon, and thank you for the opportunity to testify. My name is James White and I am the Policy Coordinator of the Philadelphia Association of CDCs. PACDC is a citywide association of more than 80 community development corporations and other 143 5/26/10 - FINANCE - BILL 100129, etc. organizations with extensive experience working with housing and community development in Philadelphia. My testimony today focuses on three issues that are critical to meeting the needs of Philadelphia's residents and fostering successful revitalization of our neighborhoods. And I'm going to just summarize.
Thank you. First is restoring and expanding funding for affordable housing through the City's Housing Trust Fund. While we applaud the efforts of this esteemed body, the City Council, and the Mayor to support an increased dedicated revenue for the Housing Trust Fund through the approval of a local ordinance 23 last December, the state authorizing legislation necessary to implement this increase has been stalled in the House 144 5/26/10 - FINANCE - BILL 100129, etc. Appropriations Committee at the State Capitol for over ten months. We urge you to do two things to address the shortfall of resources for affordable housing in our city: Engage the City's active support to advance state authorizing legislation to expand dedicated funding for affordable housing through the Housing Trust Fund and restore the full 3 million per year commitment from the City's General Fund to the Philadelphia Housing Trust Fund made two years ago by this body. Issue 2: Improve the City's property acquisition and disposition process. We commend the City, in particular the RDA, for beginning a process to reform its system to acquire and dispose of vacant and abandoned properties and to facilitate putting vacant properties back into productive use and also to help benefit growing the City's tax base. Given the acquisition pipeline has been frozen for nearly two 145 5/26/10 - FINANCE - BILL 100129, etc. years and a number of our members have reached the point where they do not have the site control needed to advance development projects critical to addressing resident and neighborhood needs, we urge the City to do the following: Move quickly to utilize remaining acquisition funds to accelerate the acquisition and disposition of property to support planned development projects that will not be able to leverage outside resources without site control. Two, implement the Recycling Agreement to generate additional funds from these payments to support future acquisitions. The last issue, mitigate impact of property tax increase on low-income residents. We understand that the City is in a difficult financial situation and is faced with hard choices of how to balance its budget. Given the planned 9.9 percent increased property taxes, it 146 5/26/10 - FINANCE - BILL 100129, etc. is critical that measures also be put in place to limit the impact on low-income homeowners and renters. We urge the City to pursue implementation of two specific property tax relief measures for low-income residents: Create a homestead exemption that would exempt the first thousand of assessed value of residential property from property taxes and implement a deferral of property tax increases over X percent until the sale of the property. While this will have some impact on revenue collected in the short term, it will ensure a more equitable solution to the City's budget challenges, especially for many low-income homeowners who do not itemize deductions on their taxes. We look forward to the opportunity to continue to work with the City Council and the Administration to strengthen the City's neighborhoods and residents' needs. 147 5/26/10 - FINANCE - BILL 100129, etc. Thank you.
Thank you very much for your testimony. I want to say thank you for your vigilance on behalf of the Association. We appreciate your attendance to Council hearings and information you provide to us. Thank you. Any comments or questions?
Let me underscore the remarks shared by Chairwoman Tasco. You state on the first page, second paragraph of your testimony, you indicate at least that state authorizing legislation in Harrisburg has been 148 5/26/10 - FINANCE - BILL 100129, etc. stalled in the House Appropriations Committee. Share with us what the Association has done collectively in terms of activism around that.
Myself and the Executive Director, Rick Sauer, have both made several visits locally as well as in Harrisburg to our Philadelphia delegation and reached out to address the issue of moving the bill out of committee. We've had numerous conversations here and in Harrisburg with legislators to advance the issue. We've also enlisted the help of several Councilmembers and fallen on their leadership and knowledge and experience to help us as well. Madam Chair as well as Councilman Clarke and Council Lady Blackwell have also been assisting us, as well as a number of staff members, Mr. Wetzel, for one.
I think there's been a number of challenges in 149 5/26/10 - FINANCE - BILL 100129, etc. Harrisburg. For someone new to Harrisburg, they've been kind of mind-boggling at first, but most of them have centered around a little bit of confusion, because when our bill was introduced, there was also a statewide Housing Trust Fund bill that we had been working in partnership with the Housing Alliance of Pennsylvania that had been in committee and had been confusing folks clearly, because when you say Housing Trust Fund, we had to differentiate what we were talking about. Also, there seemed to be a little bit of misunderstanding as to how our control of what we do here in Philadelphia and how we seek to raise funds to support our affordable housing needs was kind of being misunderstood, that other entities outside of Philadelphia kind of saw it as us trying to raise taxes or that it might impact first-time home buyers and frighten them from seeking to purchase homes in 150 5/26/10 - FINANCE - BILL 100129, etc. Philadelphia, when in reality the price of homes in Philadelphia is quite lower than the surrounding counties. We enlisted Econsult's help in doing a study of that, and we shared that with our state legislative delegation. We've since had some favorable response, especially from the delegation's Chair, State Representative Williams, Jewell Williams, who has been very helpful, as well as a number of other members of the state delegation to Harrisburg. So we hope that we will be moving forward and the bill will be on the floor as the session progresses and out sometime this summer. But this is what I'm estimating. I may come back to you a couple of months from now. But I think in the short term, we still have to address the needs of thousands of Philadelphians, particularly renters, who can't seem to find adequate, quality, affordable housing within their means, and this is quite disturbing to us, as 151 5/26/10 - FINANCE - BILL 100129, etc. I'm certain it is to you, Madam.
Well, thank you very, very much. As -- thank you very much. Thanks. Thank you, Madam Chairwoman.
Thank you. We thank you for your testimony. It is true that they are struggling in Harrisburg with this, and you might want to expand your advocacy and education to other members of the Legislature who may not be on that committee but who are part of Philadelphia but not specifically in the areas that we're talking about. So you need to expand your discussion with all state legislators from Philadelphia.
Thank you. The Chair recognizes Mr. Rowe, John Rowe. Next we have Allison Hughes, 152 5/26/10 - FINANCE - BILL 100129, etc. Jason Greenaway, Philip Fitzgerald, Cynthia Roberts, Joan Reilly and Bob Grossmann, in that order. (Witness approached witness table.)
Thank you, Madam Chair, members of the Finance Committee. I have written copies of the testimony here.
Thank you for the opportunity to testify and thank you for the continuing support of City Council to the Utility Emergency Services Fund. UESF provides emergency financial assistance to vulnerable families to restore utility service or to prevent utility shut-offs. Each grant that we provide is matched dollar for dollar by PECO, PGW or the Philadelphia Water Department. We are the last resort for families, and we work with families to 153 5/26/10 - FINANCE - BILL 100129, etc. completely zero out their utility bill. We refer families to other services. And we have expanded our approach to more fully address those root causes of why families come to us for utility assistance. Of the 23,950 families we assisted over the last five years, over 90 percent did not return to UESF for additional UESF assistance. In the Year 36 Plan, OHCD is proposing to cut $200,000 in funds that are targeted entirely for grants to low-income families. This cut will adversely affect about 500 families. Since we are the last resort, especially when LIHEAP is closed, these families will either get their utilities terminated or will not be able to have their utilities restored. Additionally, since each grant is matched dollar for dollar by the utilities, the City will lose the opportunity to leverage the $200,000 into $400,000 of assistance. We are requesting that this 154 5/26/10 - FINANCE - BILL 100129, etc. $200,000 is reinstated in the Year 36 Consolidated Plan. Now, these funds are crucial. PGW is projecting 30,000 shut-offs this year for non-payment. PECO is projecting 82,000 shut-offs this year. We see the immense need. During the brief three weeks before this year's LIHEAP season, UESF provided $750,000 in financial assistance in three weeks, a quarter of a million dollars a week. As of today, our funds are just about exhausted. The need is growing. The electricity rate caps will expire on December the 31st. Lance Haver recently delivered testimony in City Council stating that in every other place where rate caps have come off, the bill went up shockingly high. In Delaware, electric bills went up 50 percent; in Baltimore, 70 percent; in Maine, 100 percent. Vulnerable families need help now more than ever. UESF is an essential part of 155 5/26/10 - FINANCE - BILL 100129, etc. the safety net structure. The cutting of $200,000 deeply affects other areas, such as housing stabilization, children's health and homelessness. We know some families may pay their utility bills, but at the expense of their not paying rent or mortgage. Families will decrease their food purchases to pay for heat. Many families will cut back both food and heat. Utility terminations and homelessness are intertwined. Providing utility assistance over the short term is simply less expensive than the $2,000 to $3,000 a month necessary to pay for homeless shelter stays over the longer term. The Self-Sufficiency Standard for Pennsylvania, a study commissioned by PathwaysPA every two years and just released about a week ago, stated that a family needs $60,000 annually to survive in Philadelphia without subsidies. The average income of a family receiving UESF assistance is $12,800. 156 5/26/10 - FINANCE - BILL 100129, etc. On behalf of the 500 families who would be without utility assistance this coming year, I ask that the $200,000 is restored. The $200,000 will be leveraged into $400,000. Problems would be prevented before they occur, and Philadelphia communities would have long-term and measurable positive impacts, both socially and financially. Thank you for the opportunity to testify.
Thank you very much for your testimony, and thank you for the work that you do to help our families. And I agree with you, we can cut off $200,000 and spend -- because if people can't pay their utilities, they move. We have a vacant house and then we have them in a homeless shelter. So, Ms. McColloch, we got to find that money. Thank you.
Thank you 157 5/26/10 - FINANCE - BILL 100129, etc. very much. Allison Hughes. (Witness approached witness table.)
Good afternoon. Again, my name is Allison Hughes. I'm the Executive Director of the Homeownership Counseling Association of the Delaware Valley, a trade association for housing counselors. We provide training, technical assistance, mentoring and a certification program for our area's housing counselors. I greatly appreciate this opportunity to be a voice for our members and other housing counselors who are providing critical services to thousands of families and individuals each year. In my testimony today, I really want to concentrate on 158 5/26/10 - FINANCE - BILL 100129, etc. the foreclosure crisis, which is partially a by-product of unregulated predatory lending practices, in addition to the current economic conditions and unemployment. Currently, the City's housing counselors, which I'm sure you're well aware of, are working every week with the residential Mortgage Foreclosure Diversion Program, seeing more than 250 new cases per week each Thursday down in Room 676. Not only has this caused a huge increase in the number of clients and cases that the counselors have to manage, the foreclosure cases are far more complex and require a greater amount of knowledge, including understanding legal processes, legal terminology, new foreclosure guidelines, such as HAMP and HARP and RESPA, and foreclosure proceedings. So our counselors are really navigating and balancing a lot of demands from clients, from lenders, from attorneys and certainly from their own 159 5/26/10 - FINANCE - BILL 100129, etc. organizations and funders. It's important that agencies are funded in a manner where they can adequately provide compensation to the housing counselors and be able to attract and retain well-qualified candidates to do the counseling. Many of our counselors tell us thank goodness they have an HCA, homeownership counseling association, to provide guidance to them, training and support. For many of our counselors, we're fulfilling a function that is crucial. We create a network of skilled housing counselors and we've played an essential role in the last two years in responding to the foreclosure crisis, many times going above and beyond the call of duty to ensure that the housing counselors are competent and possess a strong knowledge of foreclosure intervention, foreclosure laws, procedures, loss mitigation options, as well as relevant state, local and federal laws. We've made a tremendous drive to 160 5/26/10 - FINANCE - BILL 100129, etc. encourage consistency in the quality of foreclosure counseling in order to better serve homeowners. There are a list of our accomplishments over the last year, which I'm just going to highlight a couple of them. We've offered over six training sessions for housing counselors on topics from basic housing counseling, which is more for first-time home buyers and pre-purchase counseling certification, as well as foreclosure intervention to more than 139 housing counselors. We launched a mentoring program where we've mentored 17 housing counselors in foreclosure prevention. And in the mentoring program, we provide the counselors not only with training but hands-on support. We bring them in for case reviews. We meet them at court to go over their cases and offer them support. We take them on excursions. So we've taken them to the Sheriff's sale so that they can actually 161 5/26/10 - FINANCE - BILL 100129, etc. learn the process, learn the people and be able to explain to the families that they work with the best ways for them not only to avoid foreclosure but in those cases where inevitably a family has to lose their home, what their options are beyond staying in the house. We've also administered the City's Diversion Outreach Program, which is under partnership with OHCD, the organization formerly known as ACORN and PUP to go out and provide door knocking to families to encourage them to attend their diversion hearings on Thursday, and an increase in participation has been about percent.
18 However, HCA has accomplished 19 these things with very limited resources. 20 The contract we received from OHCD 21 provides a partial subsidy for the work 22 that we do. We have to raise significant 23 private-sector dollars in order to 24 complement this contract, as well as we 25 have to earn income through workshops 162 5/26/10 - FINANCE - BILL 100129, etc. outside of City-funded training. The ability of the private-sector dollars is really diminishing significantly given the economy. We have still been successful in seeking some new resources, but we also need to keep the training affordable for the non-profit agencies that we service. That leaves us between a rock and a hard place. The current funds we receive don't cover the actual cost of what we do, especially research development and data -- updating our curriculum. Moreover, though funding for our training contract has remained level for the past several years, the number of counselors that we have to train and the frequency of the training that we have to do has increased twofold. HCA has found some ways to expand its course offering and offer the mentoring program, as well as launch the new certification program. However, with these new program areas, both of which 163 5/26/10 - FINANCE - BILL 100129, etc. were established at the request of OHCD, come new responsibilities, new staffing needs and ultimately new costs. It's quite one thing to design and pilot a program and another one to run it for a long term. HCA needs to be able to hire more staff to continue these high demands, but we cannot plan for the long term when we do not have committed funds. Without the contract that HCA relies on, it would be extremely difficult for us to provide the quality of service or the quality of service for which we've become known. We've also realized that an RFQ is going to be listed for housing counseling training in the next fiscal year. We believe HCA is highly competitive for such a proposal. However, we would need to have a clearly defined scope of services, and in the future, we hope that we receive earlier communication when such changes will take place in advance so that a small agency 164 5/26/10 - FINANCE - BILL 100129, etc. such as ours can have time to plan for such a contingency or look for funding to fulfill a gap so that we won't have to severely reduce our services. I thank you for this opportunity to speak today.
Are you saying that you're going to have to bid on your contract next year?
Ms. McColloch, why is that? Is this a new process and who will it cover? (Witness approached witness table.) MS. McCOLLOCH: Deborah McColloch, Director of Housing. This was the year that we had all of the housing counseling agencies bid on housing counseling contracts, and so as part of our effort to make everything at an even keel and issue an RFP, we decided we were also going to ask for proposals to provide the training for 165 5/26/10 - FINANCE - BILL 100129, etc. housing counseling services, as we have put out an RFP for providers of housing counseling services, that we have some activities that we want to have carried out. We want to make sure that we're reaching the broadest possible group that might be able to provide those services.
How many other groups in the City provide the service? MS. McCOLLOCH: I don't know. We haven't issued the RFP yet. We're about to.
Has anybody ever contacted you to provide this service? MS. McCOLLOCH: There have been expressions of interest of other agencies to provide services, yes.
So when did you notify the agencies that there would be an RFP process? MS. McCOLLOCH: We notified them at the time that we issued the 166 5/26/10 - FINANCE - BILL 100129, etc. preliminary Consolidated Plan, which was in March.
So you think that gives them sufficient time, especially this program -- they've been in business for so long -- to comply and compete with other agencies? MS. McCOLLOCH: I'm sorry. I just didn't hear you.
Is that enough time for them to prepare to bid on a program such as this, including the consideration to be given to an agency that has been providing this service for a long time? MS. McCOLLOCH: I believe it gives them -- we have not yet issued the RFP. So we're about to issue that, and there'll be time for this agency and other agencies to respond.
What other agencies -- MS. McCOLLOCH: Could we have informed them earlier, we might -- 167 5/26/10 - FINANCE - BILL 100129, etc.
What other agencies have expressed an interest? MS. McCOLLOCH: In responding to this? The Consumer Credit Counseling Agency of Delaware Valley and Unemployment Information Center.
Okay. What is the comparable size of these groups in comparison to this agency? MS. McCOLLOCH: Hold on. I'm going to ask my staff member who works on this most. (Witness approached witness table.)
Good afternoon. I'm Laura Taylor, Contract Administrator at the Office of Housing and Community Development. Those two agencies are significantly larger. As we know, Consumer Credit Counseling is one of the largest housing counseling agencies in the area, and Unemployment Information Center, which has offices here in Center 168 5/26/10 - FINANCE - BILL 100129, etc. City, does have significant number of staff as well.
Are you going to put them in a pool -- they're an association of counseling -- Homeowner Counseling Association of Delaware Valley. So they counsel the housing counseling agencies, which would be --
They provide counseling, too. So it would be a different perspective. Yes, you're correct.
See, I got a problem with this kind of stuff and especially at a short period of time, because there's always something going on in the background and we don't know what that is. We don't know what that is. So you take an agency like this that's provided service for a long time and you put them in the pot with two larger agencies, who do you think is going to win? You going to put them out of business, and we don't like that. 169 5/26/10 - FINANCE - BILL 100129, etc.
That is not our plan to put them out of business, because we consider --
When these ideas come up, there's always unintended consequences that you all never think about. This is the first I've heard of it, so I'm getting mad and I don't even know the details. So we're going to talk about that. Okay? MS. McCOLLOCH: Okay.
Please, I do have a follow-up to the professional. The other two again are the Credit Counseling of -- help me out.
Consumer Credit Counseling Association of the Delaware Valley.
Which I'm very familiar with. 170 5/26/10 - FINANCE - BILL 100129, etc.
And Unemployment Information Center. John Dodds is the head of that. You probably know him.
Those are the three that have expressed interest, but, of course, we haven't issued the RFP yet.
Okay. To underscore Chairwoman Tasco's concern, we saw this also with a group of agencies on the social service, DHS, side, and the history has been that the smaller agencies lose out.
Always. And you're the professionals; I am not, 171 5/26/10 - FINANCE - BILL 100129, etc. although I used to do what you do. And comparing agencies whose missions are the same but whose sizes are obviously different, for me, triggers or signals that there has to be some weighting of the criteria, particularly if they are delivering the product. And so as you move to roll out the RFP process, we want to be kept informed of what that is and how that happens. So what's the timeframe? What's the timetable?
Okay. So walk that through. Walk through the process.
For them to write the proposals and to apply. So we're looking at a July due date for the 172 5/26/10 - FINANCE - BILL 100129, etc. proposals.
Got it. And is that a committee review or a professional review, or what? MS. McCOLLOCH: It's a committee. There would be a committee of -- it's generally OHCD staff with some other staff members from other agencies who may have some other perspectives, other input. The proposal review committee reviews the proposals, scores them based on the criteria that are established in the RFP, and then they would make a recommendation to me and then the contract would be awarded.
I see. Okay, then. Well, we'll be paying close attention. Thank you.
And I'd like to have a meeting with you to talk about this first. 173 5/26/10 - FINANCE - BILL 100129, etc. MS. McCOLLOCH: Okay.
Before the 9th. MS. McCOLLOCH: Before the 9th. Okay. Fine.
All right. Jason Greenaway. (Witness approached witness table.)
Yes, Councilmembers and all those who are in attendance. My name is Jason Greenaway. I have some copies for you to take a look at as well. My name is Jason Greenaway, as I said. I'm the Executive Director of Timothy Academy. We're located in North Philadelphia, and for well over 53 years, Timothy has been committed to servicing 174 5/26/10 - FINANCE - BILL 100129, etc. the children of the area, with a mission to assist families by providing a quality, Christ-centered education. At Timothy, a well-rounded education includes challenging academics supplemented with extracurricular activities that together encourages a spiritual, intellectual, personal, social and physical growth. We currently serve approximately 240 children on an annual basis by administering a child care program, K to 8th grade education and after-school and summer programs. We serve primarily African American children and Latino children. 1 million level. Let me first begin by sharing -- I'm very grateful for this opportunity to speak regarding the 175 5/26/10 - FINANCE - BILL 100129, etc. importance of this increase, and I can speak firsthand, as three years ago our child care program was in dire need of a playground area. Our program equipment was dilapidated and presented significant health and safety concerns. Fortunately for Timothy, our organization, with the assistance of the Child Care Facilities Fund initiative, we were able to secure the necessary funding to complete the completion and the installation of new playground equipment. Through this initiative, our children were given the chance to play in a safe environment where they were able to interact with their peers, develop their gross motor skills and further develop socially, emotionally, physically and mentally. The initiative helped us to address the serious playground safety concerns we were facing at the time in 2007 and had been facing for many years. The initiative was also a major catalyst in the maintenance and attainment of 176 5/26/10 - FINANCE - BILL 100129, etc. Keystone Stars standards and the improvement of our programmatic offerings. As a result, our children as of today continue to enjoy the playground in a safe and fun environment. While our school boasts a very strong child care program, Timothy Academy has extremely limited resources to assure that its curriculum and, most importantly, the facilities, since that's what we're talking about today, and resources remain current. Coupled with the recent economic downturn, local municipality and state budgetary constraints, increase in our utilities and operational expenses, our organizational challenges have reached its apex. To combat these myriad of challenges, Timothy Academy drastically reduced its fixed and variable costs during the past two school years, and this is not an uncommon practice by most organizations. In addition, 85 percent of the families we serve receive some 177 5/26/10 - FINANCE - BILL 100129, etc. form of subsidy to enable their child to receive an early childhood education. Subsequently, it is nearly impossible to reach out to our families for charitable contributions in support of our capital projects. We realize a high-quality, early learning environment can be only achieved by maintaining a safe, healthy center and strong programmatic focus. Unfortunately, funding opportunities are extremely limited, particularly to address pressing capital needs. I don't necessarily speak today just for Timothy Academy, but I speak on behalf of the many child care facilities located in North Philadelphia, South Philadelphia and the Greater Philadelphia area. The need is great. The need is pressing. Many funders are reducing the scope in which they fund non-profit agencies. Today, the need for funding is greater than it has ever been. That is why your decision is crucial as we plan for the 178 5/26/10 - FINANCE - BILL 100129, etc.
future of our city and the future of our children, the children not only at Timothy, but the children of the Greater Philadelphia area. 1 million in support of the Child Care Facilities Fund for the 2011 fiscal year.
Thank you very much for your testimony. Councilwoman Brown.
I also thank you for your testimony, and let me urge and suggest that you go to the Philadelphia's Foundation website, pull up the Children's Fund and look to see where additional opportunities exist for dollars to fund what you're doing already. Given what I've heard about your program and your testimony, there's a neat fit there. So you want to seize the moment and go to that website.
Thank you 179 5/26/10 - FINANCE - BILL 100129, etc. for your testimony.
Thank you very much. Mr. Philip Fitzgerald. (Witnesses approached witness table.)
Good afternoon. My name is Philip Fitzgerald. I have some testimony for you. In the packet also is a list of grants we've made around the City by councilmanic district, testimony from one of our grantees, Settlement Music School, as well as testimony by Gina Koo, Manager of the Child Care Facilities Fund. As I said, my name is Philip Fitzgerald. I work for Non-Profit Finance Fund, working directly with non-profit child care and after-school programs supported through the Child Care Facilities Fund. I am joined today by my 180 5/26/10 - FINANCE - BILL 100129, etc. colleagues and their early childhood sector, Public Citizens for Children and Youth, United Way, Anti-Drug and Alcohol Crusaders, CORA Services, Parent-Infant Center, Settlement Music School and Timothy Academy, in support of the Child Care Facilities Fund. Over the past three and a half years, I have offered front-line support responding to inquiries for grant funding, managing applications, providing project planning support and giving practical financial advice. I have traveled this city from Southwark to the far Northeast, from Old City to Kingsessing where my parents still reside, and have come to know the names, faces and struggles of the women and men who work diligently in the service of this city's most vulnerable citizens. The Child Care Development Lab at St. Joseph's University is preparing a third-party evaluation of the impact of the Facilities Fund since its inception. 181 5/26/10 - FINANCE - BILL 100129, etc. As part of that study, the researchers conducted interviews with a random sample of non-profit child care centers. In Philadelphia, the study found that over 60 percent of the centers surveyed currently have HVAC and/or playground renovation needs. The average cost of all facility projects is approximately $50,000, and many capital projects are deferred for an average of five months due to cost. St. Joe's noted that even projects which are deemed critical by centers must be deferred, which has multiple and additive effects, impacting the usability and functionality of the program space. Anecdotally one of the center directors reported paying money out of her own pocket in order to make bathroom renovations to her site. Helping child care center operators has taught me two things. One, not many people like numbers as much as I do. Two, there is no room in a child 182 5/26/10 - FINANCE - BILL 100129, etc. care center's budget for capital repairs. The tuition and fees many programs charge only cover basic operating costs. Money for large facility projects is hard to come by, especially for sites in poor areas that can't raise their prices and don't have the donor base for a capital campaign. Programs end up spending money every year on short-term fixes like playground wood chips instead of longer lasting, more durable safety surfacing because they lack the capital to invest in quality equipment. One child care provider told the St. Joe's research team, quote, "These projects are crucial to running a child care facility. In order for children to develop and grow, the environment plays such a key role. It's not that we're trying to build mansions. We just need to operate," end quote. The early childhood programs we work with not only strive to serve all families, but also to run a quality 183 5/26/10 - FINANCE - BILL 100129, etc. center. There are more than 200 non-profit child care centers in the City of Philadelphia that have not accessed grants or services through the Facilities Fund. 1 million to the Office of Housing and Community Development for Fiscal Year 2011. Funding at this level would allow us to award as many as to capital 13 grants in the coming year. OHCD has 14 currently budgeted $650,000 in CDBG funds 15 for the Facilities Fund, an amount that 16 we are grateful for but which would allow 17 us to support no more than seven grants.
18 While we understand the tight budget 19 constraints that the City is facing, we 20 hope that OHCD can find room to increase the CDBG allocation so that more working families can be served. I am honored to play a small part in what the Child Care Facilities Fund has achieved and know that we owe a 184 5/26/10 - FINANCE - BILL 100129, etc. great deal of our success to the public-private partnerships with our funders and City agencies like OHCD. And as a native Philadelphian, I am proud that our great city is home to this dynamic program. Thank you for your time today.
Thank you very much for your testimony. Thank you for the information. You sent this out earlier, right, but you didn't have the Council districts in there, right?
No. This is my testimony. It's new. The other one was from Gina Koo, the Manager of the program.
I thought for the sake of time, it would be better just to submit a written to you all.
Would you 185 5/26/10 - FINANCE - BILL 100129, etc. identify yourself for the record, please.
Yes. This is Gina Koo. I'm the Manager of the Child Care Facilities Fund at the Non-Profit Finance Fund. I just wanted to reiterate a little bit about what Ms. McColloch had said earlier pertaining to Councilman Goode's question about the discrepancy in the contract amount, if it would be helpful to you. I wanted to kind of make the point that the contract term for us currently ended January 31st, 2010. It started in February 1st, 2009, and we were allocated about a little over $800,000 to commit to providers in the form of grants for capital needs. To date, we have actually committed everything, with the exception of $50,000, and the only reason that we haven't committed the last 50,000 is because all of the grant requests in our pipeline right now exceed that amount. So all this to say that we do 186 5/26/10 - FINANCE - BILL 100129, etc. historically have a track record of being able to commit anywhere from 850,000 to about 1.3 million if you add in all the leveraged resources we bring from private funders as well. And so on that basis and it's on that premise that we submitted the $1.1 million request to OHCD when Ms. McColloch had requested us to do so. So I just wanted to clarify that point, that by the end of this fiscal year, June 30th, 2010, we will have spent down everything that the City has allocated to the Child Care Facilities Fund.
Thank you. Let me ask you a question. I'm looking at the list by Council district. What is the minimum amount a child care facility can apply for?
The minimum amount is $10,000. The max amount is 75. And we probably range anywhere between $40,000 and $75,000 as our average grant amount. 187 5/26/10 - FINANCE - BILL 100129, etc.
Okay. All right. Thank you very much. We appreciate that. Councilwoman Brown.
Thank you for the breakdown by district. This matters to all of us, quite frankly, and District Councilpersons like to see how their district is faring. What I care about in addition to that is when you look at the fact that most of the -- that's group homes. I'm reflecting on group child care. I know when it comes to group child care, at least in 2004, 2005, most of them sat in Councilwoman Tasco's district and Councilwoman Jannie Blackwell's district. So my thinking is, is there -- where you have the greatest need, are we indeed making sure that these dollars go to 188 5/26/10 - FINANCE - BILL 100129, etc. where there's the greatest need? If the need is not there in district X, yet most of the dollars are going to district X, that's a problem, number one. Number two, if there is not -- what would be helpful to know is where you see grant award, it would be helpful to know what is the dollar size of that agency, for obvious reasons, and then beyond that, you mention that the 200 have not ever applied for these dollars?
So what's the flip number? What's the total number of agencies, child care providers, who have applied for these dollars?
And of that 150, I'd be curious to know the breakdown by size, from number of children to the total amount of dollars used to run that center. Because all of that plays into ensuring equity and the 189 5/26/10 - FINANCE - BILL 100129, etc. access of these dollars, and it goes back to an earlier point. Most often because smaller child care centers, smaller arts and cultural organizations, smaller CDCs don't have the capacity in terms of staff to go out and go after these dollars, and so what do we do as a government to create a level playing field so that the smaller arts and culture emerging organizations and the smaller child care centers also have access to these dollars. And so going forward, the request is that you show us the entire -- the total budget for that agency as well as what the grant award is, number one. And, number two, be prepared to tell us what outreach, what extra effort is done to go after that small child care center at Stenton Avenue, that small child care center at 52nd and Haverford Avenue, A, who might not know about it, but, B, need it as much, if not more than, some of these large organizations over here, like Trustees of the 190 5/26/10 - FINANCE - BILL 100129, etc. University of Pennsylvania.
I just wanted to comment, because I'm glad you said that. We actually have an after-school provider from 52nd and Haverford who has a small agency, as well as a large agency such as CORA Services here. So we do understand your point and we do make that outreach.
Thank you. I hear that you understand it, but what I need to know is what considerations in terms of action is going to be done to ensure a level playing field with access to opportunity for these dollars.
Because it becomes difficult to advocate, period, if there that is not -- if the issue of equity is not being seen across the board.
I think that's a great point that you make. I'll just follow up to Phil's point on two things. 191 5/26/10 - FINANCE - BILL 100129, etc. One is, we're absolutely concerned about geographic dispersion, but based on need. And so it's kind of a two-pronged effort. One is, we want to make sure obviously that in areas where we have not invested, we do invest, especially with the smaller organizations that you're speaking about. The second piece is, we are -- for the past few months, we have been trying to plot out on a map where the quality centers are located throughout Philadelphia, and I think that's a really important point, because we want to make sure that every neighborhood has access to a high-quality center, not just a center that's open, open for business. And so as we plot out where these high-quality centers are located, we are trying to make targeted investment, so that where we see just a lack or a desperate need for a high-quality center, that we are actually in that neighborhood somehow. And so, again, we are working 192 5/26/10 - FINANCE - BILL 100129, etc. to map these things out, and we'll hopefully get that to you. It should be a very good visual to show you how the investments are being made and what assumptions are being made.
And I will add that that's a step in the right direction, but that doesn't get us where we need to be. That becomes added information, and seeing a mapping of that is very, very, very useful, but at the next step and request and what I'm urging you after that is to at board level or staff level, figure it out, figure out a way where small child care centers who do not have budgets like University of Pennsylvania get opportunity.
And you understand the ask to be what? 193 5/26/10 - FINANCE - BILL 100129, etc.
That we will be able to show you on that list the operating budget side for each of the organizations that we're considering, as well as the number of children being served and to show by way of their operating budget, that we are working with organizations that have less capacity than someone like University of Pennsylvania.
And this is in no way to discredit the enormous value University of Pennsylvania brings to the City, being the number one private employer.
And I will say that name is a little bit misleading, only because they are on the University's campus and they do partner with the University, but, again, child care businesses across the board are low margin, and so to date, we have not held any biases against child care centers 194 5/26/10 - FINANCE - BILL 100129, etc. that are affiliated with these university partners. But I do hear your point.
And I would not use the word "biases," because that sends a different message.