COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE COMMITTEE ON FINANCE - - - Room 696, City Hall Philadelphia, Pennsylvania Tuesday, 5/28/02 11:27 a.m. - - - BILL 020275 - Authorizing the Mayor, on behalf of the City, to file an application with the United States Department Housing and Urban Development (HUD) for a Community Development Block Grant (CDBG) as required by Section 104 of the Title I of the Housing and Community Development Act of 1974 (P.L. 93-383), as amended, including all understanding and assurances contained therein... RES. 020285 - Approving the annual program statement and budget for the expenditure of the NTI bond proceeds for Fiscal Year 2003. PRESENT: COUNCILWOMAN JANNIE BLACKWELL, Chair COUNCILWOMAN MARIAN B. TASCO, Vice Chair COUNCILMAN DAVID COHEN COUNCILMAN FRANK DICICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILMAN MICHAEL A. NUTTER COUNCIL PRESIDENT ANNA C. VERNA - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 I N D E X WITNESSES PAGE DEBORAH MCCOLLOCH, Director of Housing ....... 10 MJENZI TRAYLOR, First Deputy Dir. of Commerce .. 16 PATRICIA L. SMITH, Director of Neighborhood Transformation .............................. 22 CURTIS JONES, PCDC ............................ 46 JOYCE WILKERSON, Chief of Staff ............... 60 ROBERT FINA, PIDC ............................. 88 HERBERT WETZEL, Phila. Redevelopment Authority 101 VICTORIA MASON AILEY, Planning Commission ..... 139 CHARLES WINGFIELD, Mill Creek Development Corp ..184 LEE CAPKIN, Housing Consortium for Disabled Individuals ................................. 192 MARIE CHUCHMAN (ph) ........................... 194 DANIEL CHUCHMAN (ph) .......................... 195 JOHN ROWE (ph), Housing Consortium for Disabled Individuals .................................. 196 MARK CLAIRE (ph) .............................. 198 RICK SAUER, Executive Director, PACDC ......... 200 BLAINE STODDERT (ph), The Partnership CDC ..... 213 JOE WINGERT, The Partnership CDC .............. 217 JEFF BROWN, AFSCME Local 1971 ................. 238 JOANNE JACKSON, Advocate CDC .................. 250 CAROLINA HARRIS-RAMSUE, Snyderville CDC ....... 252 ANDY FRISHKOFF, GPUAC ......................... 257 JENNIFER LEWIS, People's Emergency Center CDC .. 262 TERRY MUSHOVIC, Neighborhood Gardens Assoc. ... 268 TONY HENRY, Tenants Action Group .............. 270 FRANCINE WILSON ............................... 274 DELORES BAXTER ................................ 283 ALLISON HUGHES, Homeownership Counseling ...... 290 RUTH GASKINS, Urban League of Phila. .......... 294 DENISE RIPLEY ................................. 301 BOB SMILEY, EPOP .............................. 307 JUDITH ROBINSON ............................... 310 CATHERINE NEWLAND, Philadelphia Green ......... 323 FARAH JIMENEZ (ph), Mt. Airy USA .............. 329 ANGEL RODRIGUEZ, YouthBuild Charter School ..... 339 JIM REED, African-American Reconstruction League 343 FLORENCE MASON ................................. 347 3 5/28/02 - FINANCE - BILL 020275, RES. 020285
Good morning. We would like to thank you for your patience. Welcome, everybody, to this public hearing of the Finance Committee on CDBG and NTI. Having said that, the committee hearing for the Committee on Finance is now in session. We will ask the clerk to read the titles of both bills; that is, Bill No. 020275 and Res. No. 020285.
Bill No. 020275, 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 a Community Development Block Grant as required by Section 104 of Title I of the Housing and Community Development Act of 1974, as amended, including all understandings and assurances contained therein; and designating the Mayor and the Director of the Office of Housing and Community Development as the authorized representatives of the City to act in connection with the application, and to provide such additional information as may be required, all under certain terms and conditions. 4 5/28/02 - FINANCE - BILL 020275, RES. 020285 And Resolution No. 020285, a resolution approving the annual program statement and budget for the expenditure of the Neighborhood Transformation Initiative Bond Proceeds for Fiscal Year 2003.
Thank you very much. We have a quorum present this morning. To my left is Vice Chair Marian Tasco; to my right is the President, Ann Verna; Councilman Jim Kenney; and Councilman Frank DiCicco. Before we begin, we would like to note that we have received two communications that we would like to read into the record. One will be from United States Senate and Rick Santorum. Will the Clerk please read that letter?
Dear Mrs. Blackwell: Thank you very much for your invitation to attend the hearing for public comment on Year 28 Proposed Consolidated Plan on May 28, 2002. Unfortunately, I am unable to attend due to a 5 5/28/02 - FINANCE - BILL 020275, RES. 020285 previously scheduled event. Once again, thank you for thinking of me and best wishes in your endeavors. Sincerely, Rick Santorum, United States Senate.
Thank you. Also, we have a letter and it's been requested that we read it. It's addressed to Pat Smith, Esquire, Director of NTI from our colleague Councilman Frank Rizzo. We will ask that that be read into the record per his request.
"To Councilwoman Blackwell, from Councilman Rizzo. Enter attached letter into the record in May 28th Finance Committee hearing. "I request that you read the attached letter into the record at the Finance Committee hearing which is scheduled for Tuesday, May 28, 2002 at 11 o'clock a.m. Unfortunately, I am unable to attend the Finance Committee hearing on Tuesday and, therefore, will not have the opportunity to question the Administration about the issues that my letter raises. The letter addresses specific concerns that I have regarding 6 5/28/02 - FINANCE - BILL 020275, RES. 020285 the use of eminent domain by the City of Philadelphia in its implementation of the NTI Program in the future. I request that you read the letter and enter it into the record when Patricia L. Smith, Esquire, Director of Neighborhood Transformation Initiative and/or her representatives testify at the hearing. "Thank you for your consideration." "Dear Ms. Smith: Thank you for the updated information that you have provided to City Council regarding the Neighborhood Transformation Initiative. I found it very useful and informative and I am happy to learn that there is sufficient groundwork to begin implementation of this bold and promising initiative. "In addition to the concerns that I've raised in the past about the shift from a demand-driven approach to a supply-driven approach, I have a special concern about the NTI Program: The use of eminent domain essentially to transfer private property from one private party (a resident) to another private party (a developer) and then to another resident. A 7 5/28/02 - FINANCE - BILL 020275, RES. 020285 government should use and has traditionally used its eminent domain authority to acquire property for some public use, example highways, which this is not. "Problems will certainly arise over the acquisition of the properties from residents relying on their property rights to resist the loss of their home. "I believe that this is an issue that will certainly arise as we move forward with the implementation of NTI. I also believe that this will be an issue that could potentially subject the City of Philadelphia to significant liability and added expense in the future as well as negative publicity. Please let me know how this matter will be addressed. "I look forward to your response on this issue. "Sincerely, Frank Rizzo."
Thank you very much. Certainly, we will ask Miss Smith to respond to that issue. I would only say from experience that we've used this as a process over the years, and if we didn't have it, we couldn't 8 5/28/02 - FINANCE - BILL 020275, RES. 020285 acquire a lot of properties that are even abandoned and where we can't locate owners. So we certainly appreciate his concern but certainly realize this is a very useful tool to us in trying to acquire properties to get them back into the hands of people who live and work in our city. Let me just say by matter of introduction that we are very happy to chair this committee. We believe that CDBG, the Community Development Block Grant hearings and NTI are our major ways to get housing production and that NTI is the most exciting program I've seen. And, obviously, it's the first of its kind across the country in order to have new and exciting ways to do housing and affords us the opportunities to create our own programs in this city. That is a big boon for District Councilpeople and Councilpeople-at-large. And we're absolutely overjoyed and excited about all that NTI means. In fact, Safe Streets Initiative is also a part of NTI, as the Mayor has said in my presence that he doesn't want to be mayor of a city where we don't deal with crime because you can't do 9 5/28/02 - FINANCE - BILL 020275, RES. 020285 neighborhood and commercial corridor revitalization if you don't have a safe city. So the two go hand in hand, and both of these programs are programs that don't exist anywhere in the country and we're just over-joyed and excited about all that that means. Having said that, we will ask the Administration to come to the table to be ready to testify. And I will ask my colleagues if anyone has an opening statement they would like to make before we begin? (No response.) (Witnesses come forward.)
Thank you very much. The Chair also notes that we have present Councilman Michael A. Nutter and Councilman David Cohen. Let me say that we tried to meet with each and every councilperson. In fact, we almost became a nuisance -- and Councilman W. Wilson Goode, Jr. We met with most individuals. Some did not need it and we were unable to meet, unfortunately, with my colleague Councilman 10 5/28/02 - FINANCE - BILL 020275, RES. 020285 Nutter and Councilman Kenney and Councilman Ortiz and Cohen. However, we even had a day for the Council-at-Large and we will try to make ourselves available today and as always are available for any special information that is needed. So we hope that they will keep that in mind. Some of this might be repetitious for those of us who have had meetings, but we hope that they will consider that we tried our very, very best to reach out for the last several weeks to each and every member of City Council because this is such a specific driven kind of process when you deal with specific properties and we wanted everybody to feel included. Thank you very much. We will now turn the testimony to those at the witness table and ask you to identify yourself for the record and begin your testimony. MS. McCOLLOCH: Good morning, Councilwoman Blackwell and other members of the Finance Committee. I'm Deborah McColloch, Director of Housing, and I am here today to testify on behalf of the Administration on Bill 11 5/28/02 - FINANCE - BILL 020275, RES. 020285 No. 020275 which permits the City to apply for the Federal Community Development Block Grant, Home Investment Partnership Funds, Emergency Shelter Grant, and Housing Opportunities for Persons with AIDS, known as HOPWA, funds and other State funds from the Department of Community and Economic Development. I submitted written testimony to the Members of Council. I believe you have received it. If not, I have additional copies. And I was not going to read my entire testimony; I just wanted to highlight a couple of things for you that we have discussed over the past few weeks. The Consolidated Plan, the Year 28 Consolidated Plan is essentially a carry-forward budget. It carries forward the programs and activities that were started in previous years. It continues to fund those development projects that are in the pipeline and are moving forward toward development of affordable housing. The main thing to note about this year's budget is that our Community Development Block Grant resources have been reduced. 3 million less from the federal government as 12 5/28/02 - FINANCE - BILL 020275, RES. 020285 part of our Community Development Block Grant allocation and we also have a reduction in program income. Program income is generated from various sources, but one of the main ones is interest earned on Section 108 loans. Section 8 108 loans are those loans that we borrow from the federal government against future Community Development Block Grant funds and then we have to pay them back. It's like using your credit card. We have to repay them each year. Last year we drew down those funds and didn't spend them all and so they were essentially sitting in a bank account earning interest which we then applied to the Community Development Block Grant Program. Over the course of the past year, we spent those funds for the activities for which we had borrowed the money, therefore, we had less money to generate interest. So program income was reduced this year because we generated less interest on our Section 108 loans. And those numbers are reflected in detail in the budget. The main programs that we've had to reduce in funds moving forward are proposed to be 13 5/28/02 - FINANCE - BILL 020275, RES. 020285 the Community Economic Development Program which the reduction of that is offset by the fact that the loan pools are fully funded for their commitments and also by the available economic stimulus funding.
We also reduced funding to the Department of Licenses and Inspections, in part to ensure that the City meets the federal requirements governing the expenditure of funds for basic city services. The housing counseling program has been reduced but we are confident that the core housing counseling services, those being, defaulted delinquency counseling, mortgage counseling, tenant counseling, and anti-predatory lending counseling are still being provided. In fact, Philadelphia has the largest housing counseling program of any major city in America. ) MS. McCOLLOCH: We also reduced funding for the Settlement Grant Program primarily due to the decrease in the demands for the program. Since last year, federal regulations were passed that are known as the Title 10 regulations which govern lead paint testing and 14 5/28/02 - FINANCE - BILL 020275, RES. 020285 treatment and they have made -- and they must be apply to do all programs that use federal funds and they have made it more difficult to implement the Settlement Grant Program and less desirable for the participants in it so that the number of settlement grants, the demand for the settlement grants has been reduced and the number that we've offered has been reduced. Last year at this time we had awarded 650 settlement grants to 154. So although the funding for that program has been decreased, I believe we will still meet the demand for it throughout the year. We also have reduced some funding for employment and training activities, and that is because these activities are more appropriately funded with State dollars through the Philadelphia Workforce Development Corporation. In keeping with our NTI objectives for a more targeted approach to spending rehab dollars, the Basics Systems Repair Program, Tier III, has been dropped. Tier III is the level of funding in Basic System Repairs that provides a grant of up to $25,000 for repairs to an owner-occupied property. 15 5/28/02 - FINANCE - BILL 020275, RES. 3 million. This funding level will allow us to rehabilitate more than 2,000 units under Tier II. The line item for urban renewal liabilities which paid for the Redevelopment Authority's cost for insurance and maintenance of land acquired through urban renewal has been eliminated. The RDA will become part of the City's self-insurance policy. And finally, the MEND II Program which offered grants up to $10,000 for the rehabilitation of small rental properties has also been eliminated. This program was undersubscribed, and certainly the City needs viable rental rehab program, perhaps modeled on the successful Homeownership Rehab Program. During Year 28, we will work to development a new rental rehab program. Some other programs experienced small decreases as well, but the ones I just outlined are the areas that had the major decreases. That sums up the part of my testimony 16 5/28/02 - FINANCE - BILL 020275, RES. 020285 about the reduction in the program. And I'm certainly available to answer whatever questions you may have.
If we may, we wanted to take all of the Administration's testimony at one time and then open up for questions.
Good morning, Councilwoman Blackwell and Members of City Council.
My name is Mjenzi Traylor and I'm the First Deputy City Representative and Director of Commerce. I am here today to present testimony in support of Bill 020275, the Fiscal Year 2003 Community Development Block Grant Consolidated Plan. With me this morning are Curtis Jones, President of Philadelphia Commercial Development Corporation and Robert Fina, Senior 17 5/28/02 - FINANCE - BILL 020275, RES. 020285 Vice President of Philadelphia Industrial Development Corporation and members of our respective staffs. Before I begin, I want to thank this Committee and City Council for agreeing to expedite this public hearing in consideration of this bill. My comments this morning will summarize the economic development section of the Consolidated Plan. Philadelphia's neighborhoods play a pivotal role in the City's economy. Most of the City's economic activity takes place in its neighborhoods. To ensure and improve quality of life for the majority of our citizens, we have targeted neighborhoods economic development as our number one priority. Please note that the allocation for economic development has been reduced this year by $1,734,000. However, we have reviewed the requirements of Bill No. 000716 and have determined that we are still in compliance, that is, within the 5 percent that is required for economic development. The City's approach to neighborhood 18 5/28/02 - FINANCE - BILL 020275, RES. 020285 economic development encompasses three goals: Assisting small neighborhood businesses, investing in neighborhoods physical infrastructure, including housing; to improve the business environment near residential areas an fostering the growth of communicate economic development skills and capacity, particularly within community development corporations. These goals are reflected in a Broad array of neighborhood development programs, initiatives, and accomplishments of the past year. To help meet these goals, we will be expanding our targeted CDC support efforts to community development corporations and special service districts. Our basic lending and grant programs are divided among the Philadelphia Commercial Development Corporation, the Philadelphia Industrial Development Corporation, and the Commerce Department. Small business lending and facade improvement programs are implemented from PCDC. 5 million. The 19 5/28/02 - FINANCE - BILL 020275, RES. 020285 facade programs will be funded at 370,000, and the Targeted Neighborhood Commercial Area Acquisition Program will be funded at 100,000. The Housing Contractors Program will provide approximately $1 million in lending. PCDC will also provide support for the Small Business Support Center and the Micro Loan Program. These efforts are funded principally, though, through non-CDBG resources. PCDC will continue to operate Targeted Neighborhood Commercial Area Program. This program provides an array of support services to 38 commercial areas. A listing of these areas is attached to this testimony. In addition, PCDC will provide direct assistance to for-profit businesses and nonprofit organizations which act as key service providers and employers in these commercial areas. The principal goal of the Targeted Neighborhood Commercial Area Program is to enable these businesses to remain and to expand while providing needed goods, services, and employment opportunities for Philadelphia's low and moderate-income residents. PCDC will provide 20 5/28/02 - FINANCE - BILL 020275, RES. 020285 acquisition grants to community-based development organizations located in the targeted areas. The nonprofit organizations will acquire and improve the properties. After the improvement is completed, the nonprofits will either lease or sell the properties to businesses which will provide retail goods or services to low- and mod-income residents of that neighborhood.
To qualify for a grant, the nonprofit must present a development proposal to PCDC that will include a commitment letter from the prospective business and a financial proforma. It is anticipated that at least 10 properties will be acquired, renovated, and occupied. Our major commercial and industrial lending programs are administered by PIDC. These include the CDBG Mortgage Loan Program, the Neighborhood Development Fund and the Section 108 Loan Program. 5 million will be used to support the Mortgage Loan and Neighborhood Development Programs. PCDC will draw down Section 108 funds to assist in larger-scale development projects and to support our neighborhood lending programs. 21 5/28/02 - FINANCE - BILL 020275, RES. 020285 The primary goals of these Section 3 108 loans will be to create permanent jobs for residents of Philadelphia, to stimulate private investment, and to generate tax ratables for the City. While the creation of jobs for low- and moderate-income Philadelphians will be the key criteria of these loans, the expansion of retail goods and services to our neighborhoods and the elimination of blight will be alternative criteria. The projects approved for the Section 12 108 loans will be appropriate to the City's overall economic development strategy. The Department of Commerce will offer various levels of grant support. One effort will be to support predevelopment and development project grants. Another will be to support planning and marketing grants. A third will be to support Special Services District programs in West Philadelphia, Germantown, and Frankford. We will continue our targeted neighborhoods support services grants. We will provide support to organizations in the American Street and West Parkside Enterprise Zones, Germantown, West Philadelphia, South 22 5/28/02 - FINANCE - BILL 020275, RES. 020285 Philadelphia, Frankford, Central North Philadelphia, and Eastern North Philadelphia. In addition, we look forward to being a key implementing arm of the Mayor's Neighborhood Transformation Initiative. This dramatic new program will aid us in leveraging public and private dollars in carrying out economic development projects in the targeted areas. I would like to take this opportunity to thank Council for their ongoing commitment to the Department of Commerce's economic development activities, and we look forward to working closely with the Members of Council to continue to strengthen the economic base of the City. My colleagues and I will be pleased to respond to any questions Council may have. Thank you.
Good morning, Councilwoman Blackwell, Members of the Finance Committee and City Council. I am Patricia L. Smith, Director of Neighborhood Transformation. I am here today to testify on behalf of the 23 5/28/02 - FINANCE - BILL 020275, RES. 020285 Administration on behalf on Resolution 020285, which approves the annual program and statement and budget for the expenditure of NTI bond proceeds for Fiscal Year 2003. In the interest of time, I will read only the highlighted sections of my written testimony. While NTI has achieved a great deal over the past year, in many ways, Fiscal Year 2003 marks the Initiative's true beginning. The Administration has set many ambitious goals over the next year, covering a wide variety of activities. Some of these activities will be funded by other City funds. These include community planning efforts, vacant lot cleanup, the removal of dangerous street trees, abandoned cars, and the start of the pilot Community Life Improvement Program. I am happy to discuss these activities with the Committee, but I've limited my remarks today to the NTI activities that are specifically funded with bond proceeds. The Administration has proposed a conservative budget for the Fiscal Year 2003 because many of the planning activities are 24 5/28/02 - FINANCE - BILL 020275, RES. 020285 anticipated in the program statement and program development have not yet occurred. The planning process will guide funding decisions. This approach is consistent with the overall NTI framework adopted by City Council in February. The NTI Program Statement and Budget and Resolution proposed to spend approximately $65 million in NTI and bond proceeds during Fiscal Year 2003. The cornerstone of NTI is community planning. The City's neighborhood planning process will develop, one, planning principals in a transparent process for community-based planning and land-use review; systems to ensure the community residents have an opportunity to review and comment on any proposed plan; and structures for community planning that encourage a larger framework for decision-making other than simply neighborhood boundaries. During Fiscal Year '03, working in consultation with Members of City Council and other City agencies, the City Planning Commission will begin coordinating planning activities in 25 different areas of the City to ensure that 25 5/28/02 - FINANCE - BILL 020275, RES. 020285 residents will help shape the transformation of their neighborhoods. The candidates for 4 community planning are listed in this appendix to 5 the program statement. 6 The second NTI Program area is blight 7 elimination. The Administration proposes to 8 spend approximately 38 million in government 9 purpose bonds in residential and large vacant 10 building demolition and associated costs in FY 11 '03. 12 During Fiscal Year 2003, the City 13 plans to demolish 2000 dangerous and unsafe 14 residential properties throughout the 10 council 15 districts. The Administration is committed to 16 working with City Council on NTI's residential 17 demolition activities and large building 18 activities. The Administration is currently 19 meeting with District Councilpersons to decide 20 each district's fiscal FY '03 demolition 21 afternoon encapsulation priorities. These 22 priority areas will serve as the basis for the 23 master schedule encapsulation activities. In 24 addition, any bid package for demolition and 25 encapsulation work funded with bond proceeds will 5/28/02 - FINANCE - BILL 020275, RES. 020285 be approved in writing by the District Councilperson whose district is directly affected by such work as required by the authorizing organization for the issuance of the bonds. The third NTI Program area is land assembly for redevelopment. The Administration proposes to spend approximately $11 million in private activity bonds on land assembly in FY '03. As a part of NTI, the City will acquire vacant land on a regular and consistent basis.
By holding title this land, the City will be able to market developable parcels according to neighborhood plans and to dispose of the properties without the delays and constraints of the current system. Where appropriate, vacant lots will also be disposed to existing homeowners for use as side yards. In FY '03, the City plans to acquire 8,000 parcels in this manner. However, until the City's proactive land acquisitions system achieves this economy of scale, the City must continue its current practice of acquiring properties for specific residential, commercial, and industrial 27 5/28/02 - FINANCE - BILL 020275, RES. 020285 transactions. In FY '03, the City will use NTI bond proceeds for land acquisition for specific development projects when those projects fall squarely within NTI guiding principles, and that includes neighborhood planning processes. The fourth NTI Program area is housing investment and neighborhood preservation. The Administration proposes to spend approximately $11 million in bond proceeds on vacant property stabilization and expansion of the Home Rehabilitation Program and expansion of the PHIL Loan Program and the design and implementation after sub-prime product and employer-assisted housing program. In addition, after consultation with our Members of City Council over the past few weeks, the Administration is proposing an amendment to FY '03 Program Statement in order to budget $2 million in bond proceeds to expand the Basic System Repair Program on a geographically targeted basis. It is intended that targeted grant assistance will be accessible to families earning up to 80 percent of medium and direct it towards areas of City that will leverage other 28 5/28/02 - FINANCE - BILL 020275, RES. 020285 NTI planning, demolition, and stabilization activities and resources or areas of the City where nonprofit and for-profit developers and contractors are working to revitalize a neighborhood. The final NTI Program area is management information systems. The Administration plans to spend $5 million in government purpose bonds to finance the creation of a vacant property management information system as well as other IT to support the City's housing and community development activities. In conclusion, the activities described in the NTI Program Statement and Budget for Fiscal Year '03 will enable the City to repair its neighborhoods for redevelopment and growth and preserve those that are healthy and stable. In this manner, NTI will transform Philadelphia neighborhoods so that they can meet the potential as clean, safe, and thriving places to live, work, an play. Thank you for the opportunity to present this testimony. I will be happy to answer any questions that you and other Members 29 5/28/02 - FINANCE - BILL 020275, RES. 020285 of City Council may have.
Thank you very much. I have just two questions. We have a museum in our area called Philadelphia Showcase Museum on 52nd Street, that's an arts thing. They deal with hair products, barbershops, and they have started a museum out there. Where can they apply -- they use space in other buildings on the strip, but they don't have the money to purchase the other buildings. Where can a museum -- they've started something that doesn't exist anywhere in the country. What can they do to try to get funds for that kind of a project.
Councilwoman, I think we would prefer for them to come initially directly into the Commerce Department.
Once we see what all of the needs are, then it may well be that certain portions of this will go to PCDC, or even within Commerce we may be able to find help on the City rep side of the house for assisting some of that. So I would prefer that they be directly in 30 5/28/02 - FINANCE - BILL 020275, RES. 020285 contact with me, in fact.
Okay, we'll get you documentation. One other question. Can someone there tell me the difference between Philadelphia More Beautiful, Weed and Seed, and Community Caretakers? Or is that kind of an L&I thing?
I think they all have in common that they're community outreach programs. The Weed and Seed Program is a program that is funded, I believe, out of the Department of Justice to do community outreach in neighborhoods. I think the premise was weeding out the bad elements or element that affect public safety and seeding economic development. I believe that program falls under the jurisdiction of the Police Department or at least the Managing Director's organization. In addition, when we launched the Vacant Lot Cleanup program, we began to also do community outreach around caretaking of properties. And the Philadelphia More Beautiful Committee is the lead agency around, what we call the Block Capital Network. One of the things 31 5/28/02 - FINANCE - BILL 020275, RES. 020285 that in the Administration as part of NTI and under, I think, the direction of the Managing Director's Office is that we'll be looking at a variety of our community outreach activities and make sure that they are working in synergy with one another since for the most part they fall under the MBO's jurisdiction. The Managing Director has begun to look at how it's going to restructure, kind of like the supervision out of her Department of these variety of community outreach activities so that they're in synch with one another.
So the Community Caretakers would come under her domain as well?
Yes. And they're looking at, you know, making sure things are consistent with one another and in support of one another.
Thank you very much. Questions from Members of the Committee? Councilman Cohen, then Councilwoman Tasco and Council President.
To Mjenzi Traylor 32 5/28/02 - FINANCE - BILL 020275, RES. 020285 first, but anyone else could answer. In addition to crime and drugs, it seems to me the next order, maybe it even precedes the other two, is the fact that our neighborhoods have been stripped of a lot of their dignity and sense of self-worth by the wholesale departure of supermarkets from every area of the City with practically very, very few exceptions. It seems to me that that's an area of economic development that existed as a problem where we have a blight program to revitalize neighborhoods but they can't be revitalized if you treat them as if they're not worthy of having a supermarket. By this time a supermarket has become part of a fabric of a neighborhood. What is the Commerce Department doing? In a recent discussion with the Mayor I said I was getting to the point of getting ready to introduce legislation to creat a City bank to make loans to supermarkets to come into neighborhoods. The Mayor responded, Well, we don't really need that because we have an apparatus whereby the City can guarantee loans and perform the same purpose. 33 5/28/02 - FINANCE - BILL 020275, RES. 020285 I'd like your reaction to that. Do we have it? And if we have it, why isn't it being used, and what are we doing to prevent the supermarkets from staying away from the City?
Thank you, Councilman. We have been working on the supermarket issues for the full time of this Administration, and some of that activity, of course, began, as you know, in the last Administration. And and we have helped a number of supermarkets to get established in the neighborhoods or to reopen. The problem right now is that there are certain neighborhoods which at one time the larger supermarkets would not service because they could not find the amount of acreage that they required for their stores. (Audience jeers.)
In the case, for instance, of Pathmark, at one point, where they were insisting on 55 to 65,000 square foot stores, they needed considerable acreage in order to develop them. Now, they have recently, over the past couple of years, changed their policy and they are now operating in smaller locations. 34 5/28/02 - FINANCE - BILL 020275, RES. 020285 For instance, Pathmark opened at Wayne and Chelten which was a considerably smaller store than they had been insisting on being located in in the past. So we think -- and we understand that that policy may also be changing with Acme, although we have not seen that to be the case at this point. We stand ready and do have programs to assist the larger operators as well as smaller operators between PIDC and PCDC, we are able to support those projects. So, you know, we stand ready to do that. And we have been doing it and will continue to do it.
Well, I know in the one case that I've been personally deeply involved in the one at Godfrey Avenue, Broad and Stenton. We have a local market anxious to perform. We thought everything was set, but Sovereign Bank at the last minute pulled out. We never heard of the City giving support in the form of a guarantee of the loan, because had that happened, there would have been a supermarket there and it would be, I'm sure, if the City made clear to community groups that if you get some 35 5/28/02 - FINANCE - BILL 020275, RES. 020285 action going, we're going to be proactive. And I'm urging upon the City, the policy of being proactive. If you talk about revitalizing neighborhoods, you've got to think of every aspect of a neighborhood. We need retail stores. We don't need just check cashing places or pawn shops. (Applause.)
So I'm just urging that in the funds that go exists and as part of the blight program -- I don't understand why it should not be a direct part of the blight program. If you're going to end blight, you've got to revitalize neighborhoods. That's the best approach. And so the supermarket and other retail operations later will come in. Every place ought to have shoe repair shops, clothing stores. Yet many of our neighborhoods have none of that. (Applause.)
So I would like to see is there a plan being developed other than demolition of homes for the creation of 36 5/28/02 - FINANCE - BILL 020275, RES. 020285 neighborhoods? (Applause.)
Let me likewise note that in West Philadelphia -- and I certainly agree with the statements made by my colleague that we have to foster neighborhood development and supermarkets. We have a Great Value. In fact, there's one now on Brown Street where that Shop and Bag was closed a long time. Its now a Great Value. We had one that opened a couple years ago at 58th and Baltimore. They're building one at 56th and Chestnut next to the Rite Aid. And we also ask a Fresh Grocery at 48th and Walnut. And we're also trying to decide if we can do a small one on the Kirkbride side of 49th and Market. So it's a struggle, but when communities and the City and private entities come together, we can get it done.
I just want to just comment briefly on one aspect of NTI which we think can serve as a stimulus for attracting supermarkets to neighborhoods. One of the impediments, as Mr. Traylor mentioned, has been do we have enough sites, developable parcels, for 37 5/28/02 - FINANCE - BILL 020275, RES. 020285 the building of supermarkets. And that's why we're putting an emphasis on land assembly activities connected with the unfortunate need to carry out some demolition activities in our neighborhoods so we can begin to create sufficient enough acreage and then proactively, as you said, Councilman, market that to supermarket providers connected. And in marketing that, also making them aware of the resources the City has to support them through loan programs. And then I think another important part of that marketing can also be whether or not these operators could avail themselves of the community renewal tax incentives that were recently passed by the federal government and for which the City has been designated a renewal community because that enables people to write down the cost of building private companies like supermarkets.
Does the NTI Office have a model program of a neighborhood of what it consists of so that there could be a model of what's needed when we talk about revitalizing neighborhoods? What does a 38 5/28/02 - FINANCE - BILL 020275, RES. 020285 revitalized neighborhood consist of, at least the minimum characteristic like retail shops, like supermarkets, that kind of a thing so we can know specifically what the clear goals and aims of the NTI Program are other than just demolition?
Councilman, I believe we've made this available at a previous hearing, but there is -- the City Planning Commission, one of the first things that they developed are what they call guidelines for, you know, a community, what are ideas, as you said, of that successful communities would look like. And it addresses all things from housing to recreational facilities and public facilities and transit and access to transit and the like. Miss Griffith will be happy to -- will follow up and make sure that Members of the Committee and Council get a copy of -- I think it's called Guidelines for Good Neighborhoods, or something like that.
Is there a statistical base which shows how many supermarkets there were, say, ten years ago in the City of Philadelphia and what the number is now and how they were divided among 39 5/28/02 - FINANCE - BILL 020275, RES. 020285 neighborhoods?
Again, the City Planning Commission has done a great deal of research in developing the standards. One of the things that has changed, I think, say, from 10, years ago 7 is that the economies of supermarkets are such 8 that they tend to want to build these big mega 9 stores whereas before, as we all know when we 10 look around our neighborhoods when I was growing 11 up, it was economically feasible to have smaller 12 supermarkets in neighborhoods. And I think what 13 we are is caught between that kind of paradigm 14 shift. I'm really excited by the prospect that, 15 you know, supermarkets are beginning to rethink their requirements when it comes to urban inner-city communities versus what they're used to building in suburbs where, you know, sprawl was the objective. But we will follow up. I will have the Planning Commission provide you with their analysis of, you know, what is an appropriate ratio based on the population.
Would it be practical to have a goal of a supermarket in 40 5/28/02 - FINANCE - BILL 020275, RES. 020285 every neighborhood? And if the City developed that like it moved the cars, like it took over the drug corners, I think we could have progress much faster And give our neighborhoods real hope. (Applause.)
One of the things that we do -- one of the grant programs that we have in the Commerce Department is one that, in fact, studies market feasibility for any given neighborhood. And so -- but, however, I think I do have to say that it's not always as simple as public participation in the process. As we know, the City was very much involved in helping to open the supermarket at Broad and Wingohocking and we know that currently that supermarket is closed. I mean, there are huge issues about operators and their suppliers. And so, sometimes they have difficulties that we cannot provide the level of support in propping them up. But where we can, we do. And so -- and, you know, I cite that just to say that that's one instance where we have assisted in the opening of a supermarket, but we will continue despite that what we hope will be a temporary failure. We will continue to 41 5/28/02 - FINANCE - BILL 020275, RES. 020285 support such projects.
Well, I raise it because of two instances now this Administration has shown that where it sets its purpose and its will, it can produce some positive results. They did it in car removal. Previous Administrations said you couldn't remove abandoned cars in the number required. They said there was nothing anybody could do about these drug corners. But this Administration, when it's determined to act, did act effectively. I'm suggesting the same kind of emphasis on specifically getting the supermarkets into the neighborhoods and showing the people that we're really interested in the quality of their life. (Applause.)
Thank you. Thank you, Madam Chair. I think the City has to set at its goal in real life in the neighborhoods so people don't feel like they have to go to somebody else's neighborhood in order to shop because that's what's happening today and it's having a 42 5/28/02 - FINANCE - BILL 020275, RES. 020285 devastating effect on the quality of life and on the morale of the people in the neighborhoods. They kind of feel deserted. We ought to turn that around. (Applause.)
Thank you very much. Let me say, before I call on Councilwoman Tasco that we welcome all of you and we're very glad to have you, but you must sit quietly and listen to the -- we don't mind a clap here and there, but we can't have verbal statements and responses during this process. This is what we do. This is the way we do it. And you have to respect our process. So feel free, we welcome you, we welcome your signs, et cetera. But you cannot respond individually from your seats. That, we cannot have and we will not tolerate. Thank you. Councilwoman Tasco.
Thank you. I am trying to work on this whole supermarket project that Councilman Cohen mentioned in my district at Broad and Godfrey. What I find very frustrating is the bureaucracy that we have to 43 5/28/02 - FINANCE - BILL 020275, RES. 020285 deal with in just trying to deal with getting a business. I mean, is there some way that you all can cut out some of the stuff that people have to deal with in trying to do business with the City? I mean, there are a lot of issues with Broad and Godfrey and not necessarily, I would say, of fault of your department, but just because of the nature of the businesses in that area trying to regroup and get together. But it has been very frustrating to try and to just deal with that. That whole issue of getting a market or something on that corner which brings it to the Council office as opposed to the Commerce Department's office, staying on top of what's happening there in that block. I mean, We constantly have to worry about, well, what's happening now, what's happening next. Do you all assume some of that responsibility of staying on top of what action is taking place in the community? It's been almost four years since we began talking about the supermarket at Broad and Godfrey as well as other projects that -- and I don't have a lot of them. I'm looking at this 44 5/28/02 - FINANCE - BILL 020275, RES. 020285 program. We don't have anything, actually, in my district that's going on. And how can we move things along more quickly?
I think, Councilwoman, as you know, we were brought into that issue at one point and there were some rather sizeable site control issues because of the purchase of certain parcels as well as the fact that the size supermarket that originally was asked for would have required -- under one plan would have required the purchase of the gasoline station on the corner. And that was not deemed to be feasible. Now, when Councilman Cohen mentioned the Sovereign Bank deal, this may be the example of what does happen very often, and that is that private interests do move in a way that does not always involve the City. In other words, we were not asked for any support for that deal. Now, I think that we would be willing to take a look at that. If there was need of public support, rather than just to say that based on some of the earlier issues that were involved in our looking at that project and the fact that it was not 45 5/28/02 - FINANCE - BILL 020275, RES. 020285 feasible does not mean that the project that they had at the point where Sovereign was involved was one that we could not have been involved in and maybe would not have wanted to be involved in. So I would like to take a look at that.
Do you have a business action center representative for that area?
Do they stay on top of what's going on in the -- I guess the question for me is, whose responsibility is it to follow through on these projects once we put them in your -- at least alert you to the fact that this is what's happening on this corner and whose responsibility it is to follow through on that project to see that whatever problems come up, somebody's there to take care of that issue. I mean, and particularly if we brought you into the process, and so many things had happened with that corner.
There are two levels of support. One is for certain types of supermarket projects. Bilal Qayyum from our department is 46 5/28/02 - FINANCE - BILL 020275, RES. 020285 the point person for those projects and has been involved in helping to reopen and open some of the supermarkets that we have. However, I am the responsible person. So that if something is not taking place, then I would appreciate it if the Councilwoman would let me know. But there is another level of assistance, and I would like for Curtis Jones from PCDC to speak to that. (Witness comes forward.)
Good morning -- or good afternoon. Two levels that we've been --
Excuse me. Please identify yourself for the record. Thank you.
Curtis Jones, President of the Philadelphia Commercial Development Corporation. We were developed in that particular issue to some degree. It is a little off of our corridor, but we felt that we should be involved because it impacted existing businesses at Broad and Olney. One of the potential deals there was an existing grocery store that had been at Broad 47 5/28/02 - FINANCE - BILL 020275, RES. 020285 and Olney for a number of years that wanted to do come north a block to expand its operations and continue the site at Broad and Olney but also expand to this site. One of the issues that came up was purely private sector. It was a major pharmacy that was to be a part of that land transaction because the parcels were owned by the actual drugstore. And in that negotiations, it went into a situation where the -- I don't want to say the name of the drugstore, but they did not want to give up front footage on Broad and Spencer, I believe the street is. And the negotiations broke dawn because they felt that they were the cart pulling the horse. And I say that in particular because it's true about a number of negotiations within grocery stores in inner-city areas that particularly certain drug stores do not want to see grocery stores actually reemerge in those commercial corridors because it takes dollars away from their particular entity. Some of the drug stores actually sell product that the grocery stores did. Case in point was 46th and Brown where there was another chain there and 48 5/28/02 - FINANCE - BILL 020275, RES. 020285 they were able to, based on bulk purchasing, underprice in particularly on items such as sodas and others and cut deals that actually hurt the market. And so a lot of these negotiations aren't a question of funding because no amount of money we were going to put up and were prepared to at Godfrey would have stopped this particular drugstore from giving up its frontage because they felt that they had a strategic advantage in competition to the grocery store. So there has to be some involvement when we deal with these drugstores that own land that have consumed a lot of land and negotiate how they kind of coexist with some of the other grocery stores that other people need in neighborhoods because they're not in the sharing mood, if you follow my point. They're try to monopolize their position on those corridors, and that's something that we have to look at.
Mr. Jones. Excuse me. Would you yield, Councilwoman Tasco, for a moment on that?
Because the 49 5/28/02 - FINANCE - BILL 020275, RES. 020285 drugstore you refer to and the merchant at Broad and Olney have been in continuous negotiations. Negotiations are not broken off. And the City's involvement -- the City withdrew, apparently, from the process because otherwise, you know, you would not have made the statement about negotiations breaking off. They're very much alive except on the financial question. There is a finance question that has to be dealt with. And the City, it seems to me, has to cooperate with Councilwoman Tasco and Councilwoman Miller and myself to bring this about. And as Councilwoman Tasco said, I think it's four years since she first raised the issue and we had meetings and the Zoning Board has been cooperative. Seems to me that if the City decided to wanted to do something, this is a place that it could do it in.
If you're considering us a part of the City, we're very much a part of those very negotiations and we're prepared to step up to plate. So it is not a question of lack of interest from our part. So as long as they can resolve some of their square footage 50 5/28/02 - FINANCE - BILL 020275, RES. 020285 issues, we are prepared.
Well, we'll pass word on and we will hope something will develop because we think four years is a pretty long time to struggle for the most basic part in an area that successfully had a supermarket for 50 years.
There's no 10 question as to the fiscal viability of it. There may be problems that have to be dealt with, but that's all. Go ahead, Councilwoman Tasco. Thank you for yielding.
I think what we need to do is to not belabor this hearing with this issue because it's one. But we need to meet about that because there may be some misunderstanding about the involvement PCDC with that market.
But then we need it citywide because everywhere I go as Councilman-at-large, the first question -- it 51 5/28/02 - FINANCE - BILL 020275, RES. 020285 precedes all questions about drugs and crime is, "When are we going to get a supermarket? Why do we have to go to some other neighborhood to shop?" And I've never been able to come up with a decent answer because there is none. Every neighborhood ought to have its own market area.
I'd like Mr. Mjenzi, on of your testimony, you talk about targeted neighborhood commercial area programs. Would you explain that to me and also explain to me how you came up with the commercial areas that you have attached to your list?
Usually it's demand-based. In other words, if the CDCs come to us or the community organizations come to us with proposals for specific assistance, then we have tried through the years to try to have a 52 5/28/02 - FINANCE - BILL 020275, RES. 020285 response to that. Our level of funding probably would not enable us to respond fully to every neighborhoods, as we know. But, you know, I think from year to year, under the CDBG program, we would just continue to look at the neighborhoods that are requesting special assistance, long-term assistance for doing work in their neighborhoods and try to develop the level of response. For a long time, for instance, we only had three such neighborhoods that we worked with. And we have tried in the current year, in the last two years to expand that.
A CDC has to be -- they're the recipients of the funds to work with the targeted neighborhood areas?
So tell me who is the CDC for the Logan business strip and for Fifth and Olney?
I don't know, but I 53 5/28/02 - FINANCE - BILL 020275, RES. 020285 will check on that. I will check on that.
We have a point of information. Councilman Goode.
I believe, Councilwoman Tasco is referring to the PCDC program, not the Commerce Department program.
Oh, I'm sorry. I'm sorry. When you said targeted neighborhoods support program. Thank you, Councilman.
David Boyd who is the manager for the commercial corridors will speak to that.
He just needs to let me know that. You don't have to answer that. I want to know that, okay? Let me just ask you, Mr. Jones, about the neighborhoods commercial revitalization corridors and how they are designated and how long does it take and when are we going to get new census information? Is it going to be 54 5/28/02 - FINANCE - BILL 020275, RES. 020285 another ten years?
I'm not prepared, Councilwoman, to talk about the census information because they have not released that. But what we are looking at in anticipation of some of that is looking at those areas that qualify for low and mod, continually working with them. But those that are deemed thus far above low and mod income guidelines, working with dollars outside of CDBG to be able to give them similar treatments that the low- and moderate-income neighborhoods get. And that has been an increasing problem because a lot of the areas that are marginal, they're doing okay, they're not as impacted as others, still need help. And what we're looking at within the Commerce Department in cooperation with them is finding dollars so that we can give them similar treatments such as facade treatment, sign rebates, security rebates, and capital infrastructure repair. And we believe that the Commerce Department is going to identify some dollars some dollars either through NTI or stimulus dollars to accommodate those corridors. 55 5/28/02 - FINANCE - BILL 020275, RES. 020285
Yes, the ones in the low- and moderate-income areas. And there are some that are outside of that that Commerce runs.
Okay, thank you. Could I have a question about that? And then I'll be almost finished.
And the ones that he referred to that are outside, the example would be Wadsworth Avenue.
What is the process for a person getting the facade money?
Excuse me, could you check this microphone, please? We can barely hear Mr. Traylor. Would somebody check his mic? Thank you.
To simply contact the Commerce Department, Councilwoman, and we will make certain that the manager for those programs 56 5/28/02 - FINANCE - BILL 020275, RES. 020285 works with whoever is applying.
What is the process for qualifying for a facade? If I'm a business person and I want to do my front, do I have to go through a CDC or I just come to the Commerce Department?
No, you can come directly to the Commerce Department for that.
Is there a limit on the number of properties I can have funds for?
Yes. Well, we're limited in the number we can handle because of budgetary restraints. But we would, you know, we would help as much as possible as we could. In the case of Wadsworth Avenue, and I hesitate kind of using that as an example because we don't have the same dollars available to us now that we had when we did Wadsworth Avenue, but we did that based upon making special funding available for those treatments. And we can do it on a limited basis now, but not nearly to the extent that we did it on Wadsworth Avenue.
You don't have any stimulus dollars available? 57 5/28/02 - FINANCE - BILL 020275, RES. 020285
That is correct. That is not to say we don't have any stimulus dollars; we have far fewer or a much smaller level of stimulus dollars than when we did that particular project is the point that I'm making.
So how do you identify a project? Suppose if we wanted Wadsworth Avenue, nothing was done, we wanted facades on Wadsworth Avenue; how would with we get entire street done? Or would you say we can only do businesses? 13 The point is trying to make a 14 difference. So if you look at Ms. Smith's 15 philosophy and the City Planning Commission's 16 philosophy is that you go in and you do work so 17 that at the end of the day, you can see that 18 there's something done. So if you go on a block 19 and you want to do a facade program as we did on 20 Wadsworth Avenue and we got it all done -- maybe we need another vote on some bill in Harrisburg, we might get the money, right? But in any case, so how do you come away from the area looking whole or if you spent your money in a wise way? 58 5/28/02 - FINANCE - BILL 020275, RES. 020285
The only offhand suggestion that I would have is that there be the level of cooperation between all of the businesses that would find a smaller level of public support going to a number of businesses rather than a higher level going to a few, okay? That's one way that we could do it. Now, for instance, if we talk about a facade treatment that we did on Cecil B. Moore Avenue recently, we did it in cooperation not only with the businesses and public funds, but Temple University also made dollars available. So we were able to do it that way. I don't think that there's any one answer to this. It kind of depends upon the corridor and what we're able to work up.
Excuse me. Councilwoman Tasco, Council President Verna has to leave. Would you yield to her and then we can come back?
Thank you. 59 5/28/02 - FINANCE - BILL 020275, RES. 020285 Can someone at the table please explain what wraparound insurance is?
Yes. Wraparound insurance, in order to facilitate the ability of contractors bidding on demolition projects and also as part of our economic opportunity plan, the City is going to purchase insurance for third parties. By doing so, a couple of things will happen. It will enable to us to basically, if you think about it, buy at bulk. Or just like you buy group insurance and therefore control those costs as well as make sure that appropriate safety protocols are put in place. I can have Joe Parella from the Risk Management Office and some of the his staff provide a more detailed response to that, but the essence is enabling the City to purchase insurance on part of the third persons to enable them to bid on City contracts with respect to demolition --
Well, with the information that was provided to us, it would indicate that the total cost of this insurance is $12 million, of which $6 million will be paid out of the NTI bonds. 60 5/28/02 - FINANCE - BILL 020275, RES. 020285
Where will the other $6 million come from? Whose budget? And what year?
The initial plan was to have a part of it funded out of the City's General Fund. When we take a look at the capacity of the General Fund to fund that in out-years, we may end up funding some of that out of NTI bond proceeds. Normally, it's the kind of cost that wouldn't be apparent, it would be just a cost of doing demolition. I think it stands out in this context because the City's making the purchase. What we expect is to have a slightly lower cost of demolition because demolition contractors aren't having to purchase their own insurance; the City's already providing that.
But why wouldn't this be a cost to the demolition companies?
The City requires that contractors have insurance in case something happens on the job, and what we know --
But we're 61 5/28/02 - FINANCE - BILL 020275, RES. 020285 paying for it.
But aren't we paying for it? Isn't that the testimony?
That's right. And normally, our demolition contractors for the City are required to have insurance. Normally, you know, when we put together the bid, their bid reflects their having to purchase insurance. What we're saying is we can buy it more economically than these little contractors who sometimes can't get it at all, we'll buy the insurance and not expect to have that reflected in the cost of demolition.
Is that reflected anywhere in the Five-Year Plan, The $6 million.
Yes. 62 5/28/02 - FINANCE - BILL 020275, RES. 020285
Would you, please? I'd like to know where it's reflected. Can someone tell me how many Tier III cases have been treated in the last three years? MS. McCOLLOCH: I'm sorry. I don't have that information with me right now, but I can get it for you, Councilwoman.
Well, can you give me some -- MS. McCOLLOCH: Last year, I believe it was 50 --
I'm sorry, I can't hear you. MS. McCOLLOCH: We did last year. 18 The average is about 30 a year. So I can provide 19 that information for you. 20
I hope I 21 misunderstood, but in someone's statement when 22 they mentioned that the basic system repairs will be available to geographically targeted areas, am I to believe that John or Jane Citizen can no 25 longer receive such services if they are not in 63 5/28/02 - FINANCE - BILL 020275, RES. 020285 an NTI area? I thought the whole process of NTI was to stabilize communities. Now, if we're saying that you can only receive these services if you're in a targeted area, by the time you get to the untargetted area, it will be time for demolition again. (Applause.)
Councilwoman, Council President Verna, that is not the intent. There is currently the existing Basic System Repair Program --
But isn't that what was said in the testimony? Geographically targeted areas, that's what was said.
The current Basic System Repair Program, which is funded with Community Development Block Grant funds will continue to be available on a citywide basis on a first-come first-served basis for Tier I and Tier II. In addition, after many meetings with representatives from City Council and other advocates, the question became, are and to what extent we could make bond proceeds available in a 64 5/28/02 - FINANCE - BILL 020275, RES. 020285 more targeted basis to augment the existing Basic System Repair Program. We are going to do that. An example could be replicating and It's Your Turn Program which was in West Oak Lane where we did a grant component to a loan program. The intent there is to target it in support of other NTI activities, in fact, to support existing -- a number of questions that have come out of community meetings that we've had, including constituents from your community, is the availability of resources in areas for existing homeowners where there's other work going on and where we're going to be doing planning work. So that's the intent. This is a supplemental component that we're suggesting that be on a targeted basis. It's consistent with the --
So that the record is made very clear, basic system repairs will be a service provided citywide?
Yes. MS. McCOLLOCH: Yes. 65 5/28/02 - FINANCE - BILL 020275, RES. 020285
Great. Could you tell us what the limit is for Tier II repairs in Year 27? While you're looking for that, maybe you could tell us what the limit for Tier II repairs is in Year 28? MS. McCOLLOCH: I'm sorry, Council President. I want to make sure I understood the question. You asked what the limit was currently or what's proposed?
For Year 27 and what will they be in Year 28? MS. McCOLLOCH: Okay. In Year 27, the current limit for Tier II is $15,000 a property.
And for Year 28? MS. McCOLLOCH: It's still 15,000, as indicated in the plan.
How many properties did you treat this year? MS. McCOLLOCH: I'm sorry. I may have misspoken.
I think you 66 5/28/02 - FINANCE - BILL 020275, RES. 020285 may have. MS. McCOLLOCH: I beg your pardon.
I think Tier II repairs in Year 28 will be 7500? MS. McCOLLOCH: I'm sorry. 7,500 limited. I beg your pardon.
Can you tell us for the record how many properties did you treat this year that fell between $7500 and $15,000. MS. McCOLLOCH: I don't have that information today, but I can provide it to you.
So what you're telling us is that Tier 3 is completely eliminated? I can't see you. I'm sorry, I like to look at people when I talk to them. Sir, excuse me. Can you just move a little please? Thank you. Now, with Tier 3 being totally eliminated, how are people that have the problems that one would have under Tier 3 be addressed? Do we just tell them to abandon their properties, that we cannot help them? How are we going to 67 5/28/02 - FINANCE - BILL 020275, RES. 020285 address a situation such as that? MS. McCOLLOCH: We're expanding the PHIL loan Program to provide additional.
I'm sorry. I can't hear you with the air conditioner on and the -- MS. McCOLLOCH: We're expanding the PHIL loan Program which is the program that offers loans and we're reducing the interest rate to make them more affordable so that people may be able to get a PHIL loan.
So will we give a grant and make a loan available? MS. McCOLLOCH: Yes.
And we will give them a grant that would be equivalent to how much money? MS. McCOLLOCH: They could get a grant up to the $7,500.
Well, you're saying -- MS. McCOLLOCH: Under Tier II -- 68 5/28/02 - FINANCE - BILL 020275, RES. 020285
Under Tier II it would be 7500. MS. McCOLLOCH: Correct. And then they would be able to --
Well, what is Tier I, how many is that? MS. McCOLLOCH: Tier I is $3,500.
That, I guess, would give somebody a new roof, if that. MS. McCOLLOCH: Yes. Tier I is designed to treat one system in the property. So, yes, it would give them a roof or it would give them a new electrical system or it would give them a new water system. And then if need something beyond that, the family moves to Tier II which provides -- which going forward will provide up to 7,500.
How many people do you think would fall into the category for Tier III? Do you have any estimate as to how many people would fall into that category? MS. McCOLLOCH: Well, last year we provided 22 Tier III grants.
And were we 69 5/28/02 - FINANCE - BILL 020275, RES. 020285 able to -- how many areas were we able to stabilize with the 22? None? Can you tell us specifically why we're abandoning the idea of Tier III?
Councilwoman, if I may, when we started to look at the level of participation and the average grant and the demand for the Basic System Repair Program, it became evident that once we went into Tier III, we basically were talking about a moderate rehabilitation program for owner/occupants, and at the level we were funding, we weren't reaching very many people. We thought that it made more since to try to -- and the concept behind the Basic System Repair Program, as it's so named that, that it is a Basic System Repair Program. I think what we would like to -- one of the things that we need to do and one of the things we've always talked about is a lot of times we've created programs many, many years ago and we don't take a look at their impact and evaluate them. If we need a moderate rehab program, I think this is the opportunity to really think anew of how that may operate. Could it operate 70 5/28/02 - FINANCE - BILL 020275, RES. 020285 as a grant and loan program. Could it just operate as a grant when you need that level, $25,000.
Just answer a question for me very briefly, please. Have we changed the eligibility for Tier II?
We're having trouble hearing. I'm sorry. MS. McCOLLOCH: No, we have not changed the eligibility for Tier II.
Thank you. I'm sure that there are other Councilmembers that have questions, so I will come back later. Thank you.
Thank you, Madam President. Thank you very much. We will now return to Councilwoman Tasco because she yielded to President Verna. And after her, Councilman Kenney, we know you're next, okay?
Councilwoman Verna, are you finished? Because Councilwoman Tasco said she will come back. 71 5/28/02 - FINANCE - BILL 020275, RES. 020285
I have a meeting; I can only stay for a few more minutes, but So I will be back. So I would then yield to Councilman Kenney.
Thank you, Madam Chair. Has any demolition been started yet with the use of bond proceeds?
No. We just received the sign-off on the first package about a month ago and we're in the process of putting the bid package together for advertisement. As you know, under the ordinance 17 passed by City Council, the District Councilperson must approve the package prior to advertisement for bids.
But there is demolition going on with normal City dollars, eminently dangerous properties.
Has bid package been finalized and sent out? It is it available 72 5/28/02 - FINANCE - BILL 020275, RES. 020285 to contractors who want to bid on this work?
I believe they're actually working on that this week. Our objective is to have a bid package on the street, I believe, it will be the first week of June.
Yes. There is a process in place being led by the Procurement Department and other City departments where doing prequalification processes. We can get information and copy of the prequalification package that's been developed and distribute that to all Members of City Council.
I'm not intimate with that level of detail. I would have to touch base with the representative from both Procurement, L&I, and Capital Program.
What I would appreciate is, if possible, if there is a list that, exists a list of those individual contractors or companies that have been 73 5/28/02 - FINANCE - BILL 020275, RES. 020285 prequalified and who the principals of those companies are, if possible.
And if it's not available, potentially when it may be available.
Could you give me an update on the Housing Development Agency's collapsing or streamlining? Could you give me an idea where the status that far process is relative to the housing agencies?
Actually, what we've been doing is just continuing to think through how we might be able to stage such a reorganization. Really, beginning internally, just getting a good handle on the variety of agreements that underpin the agencies. We haven't moved forward in a significant way in that regard.
And we also, just to get a sense of interest in whether or not and what it would cost to also retain management consultant services with specialists with re-engineering who 74 5/28/02 - FINANCE - BILL 020275, RES. 020285 are specialized in re-engineering projects, we issue what we call a request for expression of interest but have not completed looking at that.
We generally talk about that. It will take in all total, approximately months. That, with some specific benchmarks 10 in between that, including putting together a new 11 budget that would be reflective of a reorganized 12 ed agency, so 18 months from that point. 13
I think 18 months once we make sure we understand what we can and cannot do.
So it may be 75 5/28/02 - FINANCE - BILL 020275, RES. 020285 longer than months if we're not ready to go now. I'm not being critical, I just want to know it's 18 months once you come up with the final plan?
So we don't know 8 when the final plan is coming so it may be likely 9 more than 18 months from today? 10
Well, that would be 11 an outside figure. There are certain benchmarks 12 so there will be parts of it that we would hope 13 to have completed and operational, you know, well 14 short of the 18-month period. There may be 15 certain aspects of the reorganization where the 16 new job descriptions, the training are not 17 actually completed until the end of the 18-month 18 period.
It was my understanding at the outset of this discussion on NTI that the streamlining of these housing agencies overlapping many times in jurisdiction and responsibilities was something that was supposed to be a major keystone of this project. And to me seems it's way, way down the road and 76 5/28/02 - FINANCE - BILL 020275, RES. 020285 if it happens at all, it's going to happen quite a bit of time from now. I thought that was a part of the way in which we are going to save money and leverage more funds and basically streamline and reduce the size of the government. That doesn't seem like it's going to be happening any time soon.
Again, it's a complex undertaking with a multitude of issues, both legal and other, that are embedded in it. And we're just being prudent and diligent.
Again, I'm not being critical, but we're two years into this thought process. You would think at some point in time we'd have a more definitive at least framework of the plan. And will that potential plan result in the elimination or reduction in the workforce?
Again, one of the things when we testified in Council back in December, and we shared the high level of table organization, the commitment was made that any changes in workforce would be accommodated with other positions within local government. 77 5/28/02 - FINANCE - BILL 020275, RES. 020285
So the plan is that there would be no overall net reduction --
The employees will be held harmless, but the taxpayers won't necessarily be held harmless. Is that accurate? I mean, part of what was understood to be one of the major objectives of this is to streamline these agencies, reduce the size and cost to the taxpayer, whether they are City taxpayers, state taxpayers, or federal taxpayers. And what you're telling me now is that even if we do eliminate positions in those areas, we're going to be sprinkling those people throughout the government anyway so there's no overall net saving to the taxpayer.