Personally, I haven't been involved in that, but that target area has been finalized, I thought it was still in the process of some discussions going back and forth.
Well, I don't know whether it's been finalized because they never got back to me.
Well, it wasn't a list, 135 5/28/02 - FINANCE - BILL 020275, RES. 020285 it's kind of like, you know, your district is very big, like all districts, and it's kind of like, what's the priority area.
I'll get back to you then to the next steps. I didn't realize --
But once we identify 15 target area, then, as we said, inspectors are deployed and so forth and so on.
I didn't realize that your target area has been signed off on.
We had a meeting with Dana Flemming. We looked at a bunch of 136 5/28/02 - FINANCE - BILL 020275, RES. 020285 computer-generated pictures. We had a lot of discussion, very nice discussion, very nice people. They were supposed to get back to me with the details of it. I've not heard back from them.
I'll look into that. I can't answer that. I just wasn't involved in that meeting, but I will follow up on that.
Okay. Let me also make sure I understand both the demolition chart and the encapsulation chart. This seems to indicate that the first bid opening -- and I understand that the schedule has slipped, but I want to make sure that I'm understanding this. First bid opening was August 21, 2002. Notice to proceed September 12, 2002. Start the asbestos abatement September 30, 2002. Start the demolition October 14th. Complete the contract April 25th, '03. Is that --
And you were going start this in the 10th Councilmatic 137 5/28/02 - FINANCE - BILL 020275, RES. 020285 District?
Well, what we've been doing is we kind of looked at -- there are two Councilmatic Districts which have such a low number of total dangerous buildings and unsafe conditions, and some of them don't even require complete demolition, we thought it made sense to kind of get that done and over with because it was such a low number and just prioritize that. I think total may be somewhere of just dangerous buildings on our list may be less than 80 or something in that area. And then I don't have the -- I have to pull the list. And then we kind of are going, you know, by Council District. We've already started field inspections, I know. I believe the next one up was the 3rd District. And we also looked at the number of times --
It was the 10th, the 6th, the 3rd, the 8th, the 5th, the 5th, the 2nd, the 7th, the 1st, the 4th, the 9th and some of them repeat. So let me just make sure I understand the philosophy. I'm not making any comment about whether a dangerous building is more dangerous in one district versus another. 138 5/28/02 - FINANCE - BILL 020275, RES. 020285 But the philosophy or the mindset here was to go to the areas that had the least number of dangerous buildings first?
No. We thought because most of the Council Districts have an extraordinary number that you can only do over multiple years, what we thought was that since the total number was 83 or some number like that in those two districts, we could get to them, knock 'em out and be kind of like done in that area. Whereas, in other districts because of the number and given the slots we have, you know, we programmed based on the number of dangerous conditions and how many times we would have to go back through that district to meet our 2000 production goal in Year 1. So that's, you know, basically how we came up with it.
Now, when will the plans for the various neighborhoods either start or be completed? Because you're going to do neighborhood planning, right?
Let me see if there's anyone from the Planning Commission. They can talk a little about that in more detail. 139 5/28/02 - FINANCE - BILL 020275, RES. 020285 (Witness comes forward.)
Yes, good morning. My name is Victoria Mason Ailey and I'm here from the City Planning Commission.
There was discussion earlier, and it's also in the CDBG final plan, about neighborhood planning process. And Miss Smith has certainly talked about neighborhood plans, and I think the front part of the book here, kind of some of the centerpiece of NTI is around -- it says Item No. 1, use planning as an investment tool. So I want to do talk about plans and where these various plans are and how they are guiding our work or how we're using them as an investment tool. Now we're planning to demolish a whole host of buildings. Certainly, many of them need to come down. But are the plans in the neighborhoods complete before we do the work or they will be completed after we do all of the demolition?
In some instances, plans 140 5/28/02 - FINANCE - BILL 020275, RES. 020285 are complete. In some instances they have not been developed.
Where are they complete and where are they not developed?
As I'm looking through the book, I just want to point out that the Planning Commission staff tried to build on existing plans as the foundation for our focus for Year 1.
If you look at the appendix, I think the Community Planning Section.
Right. You will see a 141 5/28/02 - FINANCE - BILL 020275, RES. 020285 list of -- actually, there are 28 areas. There are neighborhood areas and corridors.
Some of these areas have 6 neighborhoods plans. For example, the second 7 corridor, Lancaster Avenue is an example, I 8 think, in your area, Councilman, that has a plan 9 that will serve as the basis for the work that 10 the Planning Commission will move forward with. 11
Okay. What are 12 you going to use for West Philadelphia? 13
West Philadelphia, let's 14 see. Any particular section of West Philadelphia 15 or are you talking generally? 16
Well, generally 17 the part of West Philadelphia that I represent, 18 although I'm sure Councilwoman Blackwell is 19 concerned about West Philadelphia as well, it's a 20 fairly large area in the City to the west of us. 21
Right. Well, we have 22 identified, again, sections of West Philadelphia 23 that will be the area of focus for Year 1. 24 Mantua is one of those areas. 25
Mm-hmm. 142 5/28/02 - FINANCE - BILL 020275, RES. 020285
The West Powelton is another area. Let's see, Wynnefield and West Parkside are some other areas that we've identified and also discussed closely with you and the other Councilmembers to ensure that we were zeroing in on the areas that were of greatest interest to you as well.
Well, you know, I have many wonderful areas, and as the parents say, you know I love all of my children equally. So I'm not only concerned about Wynnefield and West Parkside. I understand that they're on here because there are either plans in existence or we plan to do something, but you generally don't want to tell a person in West Parkside or in Wynnefield that they live in West Philadelphia. It's just kind of a little West Philadelphia thing. There are other areas of West Philadelphia to the south of these neighborhoods that were actually a part of a Planning Commission document which was called the Plan for West Philadelphia so. So what I'm trying to understand is in this framework, as we call it, where does the rest of West Philadelphia fit in 143 5/28/02 - FINANCE - BILL 020275, RES. 020285 because it's not listed in the other areas. Kingsessing and West Shore are either in Councilwoman's Blackwell's district or Council President Verna's district. Mantua is clearly and West Powelton and Sanders Park are in West Philadelphia, but not in the areas that I represent. So what I want to know is what parts of the West Philadelphia plan and when will they be listed in this document as planning areas that already have plans established. This is a document done by the Planning Commission?
Correct. Again, the 14 areas that are referenced in this document 15 represent those areas of focus for Year of 16 the -- 17
These were, again, areas 20 that were recommended by Planning Commission 21 staff after careful internal consultation, and 22 then they were presented to each Councilperson 23 and discussed at length with each Councilperson. 24
That these areas 25 would be on this list? 144 1 5/28/02 - FINANCE - BILL 020275, RES. 020285
Well, the last time this issue was raised, I actually had this same discussion, I believe, with Director Griffith. I've not seen any adjustment to this because we had this whole West Philadelphia discussion a couple months ago.
Okay. I'll make a note of that and I'll have to get back to you on that particular item. I know we made adjustments in the boundaries to several sections of the areas that were identified within your district. But with regard to what you're speaking, I will have to follow up and get back to you on.
The adjustment you made was that Wynnefield and West Parkside would be done together as one area. That does not comprise the totality of West Philadelphia on the north side of Market Street west of 54th Street.
What I want to know is what's going to happen or what is the plan for those areas? Are you going to use the 145 5/28/02 - FINANCE - BILL 020275, RES. 020285 plan that the Planning Commission developed back in 1994 --
-- or are you going to develop a new plan since the area that has the highest concentration of either vacant or derelict or dangerous properties in the portion of West Philadelphia that I represent? Yet there is no plan here to deal with that.
Clearly, where a plan exists and where a plan has been developed in consultation with the staff of the Planning Commission, it will be used as a guide and will serve as a road map for traditional planning activities. Just because an area is not listed in the document does not mean that the planning activities in the normal since will not continue. And so that information or that -- those existing documents should serve as a guide.
Okay. Well, I appreciate that. But with every respect to you, knowing this process a little bit, generally, you'd rather be on the list than not on the list.
Understood, understood. 146 5/28/02 - FINANCE - BILL 020275, RES. 020285
That helps to ensure that something might actually happen.
Okay, thank you. Let me talk a little bit about -- there's a provision -- Ms. Smith, I'm sorry, I don't want to keep calling this the big book. What are we referring to go this document as?
The language that is included in the authorizing legislation is the Annual Program Statement and Budget.
Okay. In the Program Statement and Budget book on -- I haven't gotten this down completely, Pat. On , West Philadelphia Empowerment Zone, what is the $1.2 million for?
That represents resources by the -- one of the things that we indicated in the authorizing legislation that where there were other resources that were non-bond proceeds, we will provide information for informational 147 5/28/02 - FINANCE - BILL 020275, RES. 020285 purposes those other resources. These are traditional monies made available by the empowerment -- under the Empowerment Zones. That's the 1.2 is monies flowing through the West Philadelphia Financial Services Institution that services that Empowerment Zone.
I'm sorry. I have to admit you did totally confuse me. Is this NTI money going to the West Philadelphia Financial Services Institution?
Or is this West Philadelphia Financial Services Institution's money --
It's Empowerment Zone -- yes, other funds. That's why it's under the heading "other funds."
What we made an effort -- this is not bond proceeds. What we were trying to do in response to the legislation that Council adopted was to provide for informational sake other resource that advance NTI-type goals and objectives. 148 5/28/02 - FINANCE - BILL 020275, RES. 020285
I will have to get back to you on the specifics of that. I will have Eva Gladstein put together the specifics of the 1.2 million.
Basically, it reflects -- and I'm sorry, I just don't recall the level of detail. We were trying to gather up information from other departments as a part of this process. So I will definitely break out the specifics of it. We intended it just as a general description to show other resources that were available.
Okay. On 17, under land acquisitions, the program description says that you're going to acquire in FY '03, approximately 8,000 lots as a citywide average cost of $500 per lot plus direct expenses. And then later on in the same section, there's a reference made to another $500, although the total cost -- and I understand that 500 plus 500 does equal 1,000. And then in your 149 5/28/02 - FINANCE - BILL 020275, RES. 020285 budget detail, basically, it's $1,000 per lot. What's the first $500 for and what's the second $500 for and how much does it cost to acquire a property today?
For budgetary purpose, on average it's about $500 for a vacant lot based on past experience of the Redevelopment Authority. But what we also tend not to count sometimes is the what I call the hard cost that may be related to that. For example, the cost of getting title for reports and other types of things that you pay. So for budgetary purposes we allocated monies to cover both what would be the fair-market value of the lot plus additional expenses. That's why we in the budget use the thousand as opposed to 500.
And how do you plan to acquire these 8,000 lots and what are we going to do with them?
Again, this is -- Mr. Wetzel can come back and maybe talk a little bit more in detail. But as we've stressed that we thought in order to get ahead of the curve is to proactively begin to take in vacant land. You 150 5/28/02 - FINANCE - BILL 020275, RES. 020285 know, historically, the City has for the most part waited until there was a specific expression of interest to initiate the acquisition and then take it through that process and convey it out. We do want to begin the shift where take title to vacant land and begin to aggregate that title so that we can proactively market it, to begin banking it. And we were trying -- we were using -- and even though I remember Councilman Rizzo raised the question of demand-driven versus supply-driven, but we looked nationwide and found that when we use a supply-driven -- where there was land banking taking place, taking in title without regarding to whether or not there's an immediate redevelopment opportunity on the table, that over time, it enabled the City to really jump-start development activities.
I certainly understand strategically and I strongly encourage in that one case the Redevelopment Authority to pick up a very large piece of property that was, I think, strategically located that we would want to have it our inventory so as we could better control what was going to happen there. I do, 151 5/28/02 - FINANCE - BILL 020275, RES. 020285 again, at some level wonder what we're going to do with 8,000 lots. How many lots do we presently own?
Of the 31,000 vacant lots that were identified in the previous survey, between the public entities about percent of 8 those public lots are publicly owned between PHA 9 RDA and the City. 10
Well, I think what we're doing are the following things. Let me just give you an example in the Strawberry Mansion prototype.
Well, I think it's really important to understand real estate development. And if somebody comes and wants to 152 5/28/02 - FINANCE - BILL 020275, RES. 020285 do development and we don't have title, we're a year away from getting title, at the best.
Let's go back to our earlier discussion. Now, these 8,000 lots, which are -- is this the same 8,000 -- can't be. Let's go to . Estimated number of property acquisitions, I'm assuming that number must be 2000 since it's 2 million in the total costs. And on you talk about the City expects to spend a total of $8 million on land acquisitions, $2 million on vacant lots tied to NTI's demolition activity, $1 million for side yards, and $5 million on acquisitions in designated acquisition zones in each Council District. Now, what is an acquisition zone?
For example, one of the challenges, I think, in some areas where we have lots of land and there's titles individually, I think a perfect example could be the lower part of the Logan triangle where even though there's been some development interest, we don't have title so the idea is to again identify where we already lots of lands.
So how are you 153 5/28/02 - FINANCE - BILL 020275, RES. 020285 going to get title of these properties, and what's the methodology or what's the mechanism that you're going to use all over the City to get title of all of these properties, to assemble all this lands for all of this development activity?
Well, if I follow up on Pat's mentioning of the Logan triangle area, we've worked with Councilwoman Tasco to create an urban renewal area specifically for the assembly of that land up in the Logan triangle. There are significant parts of City already covered by urban renewal areas. And as I mentioned before, we would continue to use Act 94 in non-urban renewal areas. To give you an example of how this plays out in the Strawberry Mansion prototype, there's going to be a demolition of approximately 100 properties, yet there will be a land assembly activity of a little over 450 properties. And that's a result of previous years demolition and abandonment that has taken place in the neighborhood.
So are the other 300 presently vacant lots? 154 5/28/02 - FINANCE - BILL 020275, RES. 020285
And so what we're doing, because you're doing concentrated demolition, what we're doing then is saying, okay, you've made a policy decision --
I'm sorry, I don't mean to cut you off. The hundred properties, are they vacant or occupied?
I think the majority of those are vacant properties. To my knowledge, most of those are vacant. I don't know if all of them are vacant.
Well, if you're telling me that the majority are vacant, then that means that some minority is occupied, right?
I do not know, but I can get back to you on that. Do you know the answer to that?
I'm sorry. I didn't 155 5/28/02 - FINANCE - BILL 020275, RES. 020285 catch the whole question.
Mr. Wetzel was continuing to emphasize to me that the majority of the hundred or so properties in the prototype area are vacant.
A couple of things from a managerial and policy perspective that I think are important here. One is, in the past demolish a property and we don't come back until somebody decides they want it years later. And then we go through the rigmarole that we've gone through. Every property that will be demolished will a simultaneous decision to acquire. So when in your district there's a decision to demolish X 156 5/28/02 - FINANCE - BILL 020275, RES. 020285 number of properties in a concentrated area, it's also a decision to acquire those lots that will result from the demolition. But what you do then is you begin to look what's surrounding the area that you're doing the demolition in, and there's probably significant amount of existing vacant lots in that particular area.
So while we're there, let's take in the properties, the land that results from demolition, let's take in the other vacant land and let's also take a look at if there any encapsulated properties in that target area. That's also a simultaneous decision to acquire so we can put them back out on the market. So when we go to an area, let's assemble all of the vacant land that's available, let's acquire any encapsulated properties, put them back on the market. Let's begin to identify out of the vacant properties that we're going to acquire are there any identifiable neighbors or businesses that want land for expansion or neighbors who want sides yards and then we're going to have to bank the rest of it right now 157 5/28/02 - FINANCE - BILL 020275, RES. 020285 and find interim uses for it or interim reuses for it such as greening those particular properties. But I think the example in Strawberry Mansion is, you know, we're going to go in and create a hundred additional lots. There's already over 350 existing lots. We're going to go in and take them all at one time.
Okay. Let me at least say for the record, I mean, I don't necessarily want to keep talking about Strawberry Mansion but it is, I guess, a current live or soon-to-be real example so that's my only interest in continuing that part of the discussion. So that demolition activity starts this summer. You then knock the hundred, start going after the other 3 plus the 100 that you're knocking down, although I'm left with the impression -- obviously, I don't know all the neighborhoods that you're going to be working in. I mean, will there be many side yard opportunities? I'm left with the impression at least here on the record that there's not really 158 5/28/02 - FINANCE - BILL 020275, RES. 020285 going to be anybody left in that particular area which is why you're going after it in the first place.
No. There's also existing vacant lots and a lot of times when looking at a neighborhood, we're trying to look at it in its totality. So we see that there's an existing vacant lot where a past demolition that's appropriate for a side yard, we're saying let's go ahead and take title to that. I mean, we're just -- there's various principles so for new -- I guess you could say what we're saying is if we're going create a vacant lot, we want take an acquisition.
So how long is that going to take to get the 400 properties under control?
And what's going 159 5/28/02 - FINANCE - BILL 020275, RES. 020285 to happen during the nine- to twelve-month period kind of out on the street at the ground level? What's going to happening? What are you going to do with all of these properties in the year that it takes maybe to get title?
Again, what we've done is, one is the principle of banking it.
So we acknowledge that we may not have an immediate redevelopment use. Second, we've been working with partnering organizations around interim maintenance strategy, particularly around the gateway streets and corridors. Also, we'll start reaching out to existing homeowners to when there is a side yard. I mean, right now, again, we're always in the reactive position so --
Well, no, not really. We usually respond -- you know, someone says they want a side yard. They come in. We issue an abatement agreement. We initiate a sheriff's sale. You know, and so on and so on. So it's a 160 5/28/02 - FINANCE - BILL 020275, RES. 020285 reactive thing. You know, the thing that's critical is once you have title to the land and you can just proactively say, you know, this is available. So while we're doing that, you know, we're going to be as part of the community planning process beginning to see if there's people interested. Yes, I do want that side yard. Now, you know, we wait. If someone comes, they don't come. So we're trying to be just more proactive.
Well, are we going to do that with the 3100 that we already own? I mean, what have we been doing with those?
We haven't been proactively doing a lot with it because a lot of it's very scattered, but some of it is in and we're beginning to identify where we have those concentrations.
Councilman, when the property, for example, is already in the public inventory and persons come to the Redevelopment Authority and apply for it, it's a City-owned property, an application is taken and then moved 161 5/28/02 - FINANCE - BILL 020275, RES. 020285 through the VPRC process.
When you do an urban renewal taking or what is it, Act the 94?
Do you have to have a plan for the particular parcel? I mean, do you have to have a game plan for it or some determination as to what you want to do with it before you do that? And obviously, you need the money and fair market value. And who's going to decide fair market value and all of those kinds of issues?
No. Legislature has provided in the statutes for the taking of properties and the elimination of blight. Far better it would be nice to, you know, to have developers lined up for these properties right now. And in some cases, there are developers who are seeking properties, but the reality is you don't need to have an identified project in order to assemble the land because the Act itself is to eliminate blight or blighting influences in a community.
Councilman 162 5/28/02 - FINANCE - BILL 020275, RES. 020285 Nutter, could we have a short question then a ten-minute break for some people, including the stenographer. If that's okay with the rest of the committee. Some people need a ten-minute break, okay? Thanks.
All right. We'll take a break. Thank you. (Break taken.) (Proceedings resume.) - - -
Councilman Nutter has agreed to ask just three more questions, and then we'll take public testimony. We thank you for your patience. Councilman Nutter.
Thank you, Madam Chair, and I do appreciate it. I regret that the 163 5/28/02 - FINANCE - BILL 020275, RES. 020285 questions went on for so long. Miss Smith, if I offended you in any way, I certainly regret that. In my slightly more than ten years in Council, I've never had a witness storm away from the table, but notwithstanding that, I still enjoy the most wonderful relationship with you and have the greatest admiration and respect. And we can talk about whatever it is that I did a little later on. (Laughter.)
Let me just ask a couple other questions and then, as the Chair said, I will yield. With regard to -- there was testimony earlier with regard to the insurance issue, so I want to talk about that and I want to go back to the area where we were a little while ago and just one other item. When we engage in a demolition presently, I will make the big assumption and leap that the contractor involved has to have insurance.
And that provides a certain level of, I'm assuming, of indemnity to the City of Philadelphia. They have to fix whatever they break for any adjoining property owner. If something goes wrong with the job, I'm assuming that they hold us harmless in their contract with us. Are all of those the current provisions?
Okay. Now, the proposal going forward is that some $12 million in insurance costs need to be covered, and I want to make sure I'm using the right terminology. Is it wrap-up or wrap-around?
I've heard people refer to it in both regards. It's probably a term of art. I'm quite sure there's a specific insurance term, you know, with respect to that, but I don't know it.
Okay. Now, is the assumption here that if we didn't pay for the insurance, that the contractor would get the insurance and then build that into the cost of whatever they charge us, is that the underlying 165 5/28/02 - FINANCE - BILL 020275, RES. 020285 assumption here?
Now, I guess my question about that is -- I mean, these people already have insurance or should already have insurance if they're in the demolition business, right? I mean, they're not sitting around waiting for us to come along to give them work so that they can then go out and get insurance, right?
I'm not really an expert. I probably would have to have someone from Risk Management to talk about it. I don't know if people purchase it specifically on a project-by-project basis, depending on the size of the contract and things of that nature. I just don't have that level of, you know, intimate detail. But what I would want to say is that one of the issues that has come forth out of number of meetings, I think going back to the transition work, is it ability for smaller contractors with disadvantaged businesses to be 166 5/28/02 - FINANCE - BILL 020275, RES. 020285 able to participate in contracting opportunities offered by the City and that a barrier to participation has been things such as the cost of the insurance for these smaller guys or the cost of getting the requisite bonding. So what we did under the leadership of the Office of Risk Management was began to explore other approaches that will enable to us, you know, to lower those barriers around participation in order to meet our economic opportunity objectives as a part of NTI. And that was one of the ideas and the concepts that was put forth. And there are other ones. But I know that has historically been an issue with respect to the smaller contractor, so that's the impetus. The details of how that would work, the operational components, what we can do is in writing to the entire committee or how we would like to handle it, is maybe, you know, a briefing by Joe Parella to talk about how things are done now and how things will be done with the wrap-up insurance concept. The other thing that's --
I would be interested in additional information. 167 5/28/02 - FINANCE - BILL 020275, RES. 020285
But, again, let me just make sure I understand. So as a part of the response to help ensure that either smaller companies -- I mean, are there a growing number of small demolition companies? Are people going in the demolition business to take advantage of this opportunity?
I think there may be a number of individuals and companies already involved who's capacity may be smaller. I really don't feel like I'm the expert to talk about, you know, the capacity issues, the interest of smaller and disadvantaged businesses in terms of contracting opportunities. I don't know if, Mjenzi, if you could talk a little bit generally or otherwise I can just maybe bring someone forth from MBEC. But as an issue, things like bonding, things like insurance have been routinely cited as an impediment in terms of participating in City contracting opportunities.
Okay. You're going to get us some additional information about that? 168 5/28/02 - FINANCE - BILL 020275, RES. 020285
Because I would be very interested in that. And I'd also like to know what, if any, additional responsibility, liability we may have as a result of this or if it's going to be the same as it's been in the past, those kinds of details. It sounds like we're trying to create a product, if you will, to allow people to participate in City work, which I understand and certainly is an admirable goal. On the other hand, I'm not necessarily sure that we should be the ones paying for it. And I understand your philosophy here is you're paying for it one way or the other. I'm not exactly sure about that, and we don't have to debates this point at this time, but it is of concern. Tell me, as a part of the earlier question I asked you, which was the first question, what are the benchmarks for success of NTI and CDBG? What are our goals? How will we know if things are working? Where are we trying to go with all of this? Tell me specifically, what are our goals and commitments around the two areas of 169 5/28/02 - FINANCE - BILL 020275, RES. 020285 affordable housing and accessible housing?
Overall, we put in the NTI Program oversight, you know, overview program strategy -- I can't remember. I think we were looking for new production of affordable housing. If I recall correctly, it was around 3500 units over five years. That doesn't count also production on affordable housing that -- because I also think that when we preserve a unit and invest in that, that's also a part of the an affordable housing strategy for owner-occupied units so that doesn't include like the number of, say, a basic system repairs or other types of activity we're doing. Do you want to talk about the accessibility issue? MS. McCOLLOCH: In terms of accessibility, we require for all of our housing developments that 10 percent of the units built be wheelchair-accessible -- I'm sorry. I beg your pardon. Five percent of units built to be wheelchair-accessible. So any --
How did we decide on that number? Where did that number come from? 170 5/28/02 - FINANCE - BILL 020275, RES. 020285 MS. McCOLLOCH: That number was essentially negotiated as a part of the partnership initiative which has been part of the consolidated plan for the past several years
What's the demand? MS. McCOLLOCH: The demand for accessible housing, I'm sure is much higher than 5 percent, but the real issue is affordable housing and the real issue for accessibility is affordability, that property houses must be both affordable and accessible.
So what are we doing about that? And tell me again, what is our goal and how are we meeting it? MS. McCOLLOCH: Overall?
Mm-hmm. MS. McCOLLOCH: Okay. If look -- you have a copy of the Con Plan? On of the Con Plan, it shows what our goals are for rental housing and homeownership housing.
Are you talking about the Consolidated Plan? MS. McCOLLOCH: Do you have a copy of 171 5/28/02 - FINANCE - BILL 020275, RES. 020285 the Con Plan? Okay.
Yep. MS. McCOLLOCH: It shows the rental housing and homeownership housing. And on 20, I think it is, on , it shows the special-needs housing. And you can see under special needs, it's broken down by categories of households assisted. So those -- in terms of the benchmarks for CDBG, these are the benchmarks as we present them to HUD. And then -- because this document, of course, is our funding application to HUD. And then every year, we report to HUD on our accomplishments in achieving those through a document called the CAPER, C-A-P-E-R, which stands for Consolidated Annual Performance and Evaluation Report. So we tell how these are what we're planning to do, and then at the end of the year we report to HUD on how closely we met them.
Can you give to us through the Chair a five-year comparison between of was sent to HUD in a final plan and 172 5/28/02 - FINANCE - BILL 020275, RES. 020285 approved by City Council and put next to it for each of those years in the categories for and for what the actual was that you reported out of the CAPER process? MS. McCOLLOCH: Yes.
Thank you. Miss McColloch, while you're up, I sent some correspondence not too long ago with regard to 5946-48 Vine Street. To the best of my knowledged, I've not received a response back. That was a request for some funding of a property at that location. Could you be sure when you get back, unless you already know what the answer is, to get me an answer on that? That's a request made by a community person for development activity at that location. MS. McCOLLOCH: Okay.
It could be an integral part of the revitalization in that corridor of West Philadelphia. You remember that West Philadelphia discussion we had a little while ago. MS. McCOLLOCH: Yes. I'm sorry, Councilman, it was a development request? 173 5/28/02 - FINANCE - BILL 020275, RES. 020285
Now, lastly, for this time, I'd like to talk about a couple of the areas in the -- what did you call this a Con Plan? MS. McCOLLOCH: Yes, Consolidated Plan, Con Plan as we affectionately refer to it.
With great affection. First let me commend you for, I think, starting at Appendix in an effort to 14 respond to some legislative amendments to 15 previous CDBG bills and plans, you have now 16 included in Year 28 these areas of additional 17 requests for information by City Council back in 18 2000 and 2001. I appreciate you putting these 19 items in the rear of the document. 20 I do want to ask you a question. 21 Back in Bill 010373, which was the Year 27 22 application, one of the amendments was that you 23 were going to provide a detailed listing of the 24 funding amount and percentage of funds being 25 utilized by category of all CDBG-eligible 174 5/28/02 - FINANCE - BILL 020275, RES. 020285 programs and activities as provided in 24 CFR 570 subpart C, which is all eligible activities under the federal regulations. What I'm seeing, though, in Appendix 28 is -- and maybe there was some misunderstanding in the language. What I see here is a listing of the eligible activities by category for the categories that you're actually funding. Did someone make a decision that you would only list the categories that you're actually funding and leave out the categories that you're not funding? Do you understand the question? MS. McCOLLOCH: I'm sorry, I don't exactly understand the question.
That's all right. Do you have Appendix 28? MS. McCOLLOCH: Yes.
So you have CFR No. 570.201A which is acquisition , right. MS. McCOLLOCH: (Nods head.)
And then you skip to D, which is clearance. My question is, what happened to B and C and all of the other eligible, the categories? 175 5/28/02 - FINANCE - BILL 020275, RES. 020285 MS. McCOLLOCH: Now I understand the question. The decision was made to only list those activities that we are funding.
Why is that? Why did you make that decision? MS. McCOLLOCH: Just to show how we were spending the money, proposing to spend the money.
I understand. But the reason I ask the question is because the bill says that you're going to list all CDBG-eligible programs and activities in accordance with the guidelines of the regulation. It really wasn't a discretionary decision. MS. McCOLLOCH: Okay. Well, we can revise this part of the appendices to list all of the activities
The expectation was that you would list all of the categories, whether you were funding them or not. MS. McCOLLOCH: I understand. We can revise it.
Now, in this year's bill, which is 020275, those same 176 5/28/02 - FINANCE - BILL 020275, RES. 020285 requirements are not listed in the bill. And I understand that they're not in the Council or the Philadelphia Code, but we've now had those items in the last two CDBG bills by amendment, albeit. Was there a conscious decision made not to include all of these items in the particular section of the bill where they've been for the last two years? We've made amendments in the past two years in Section 8 of both of the previous CDBG bills. That's why you did what you did, because the bills were amended to make these reporting requirements. I don't want to say I assumed you were going to put them in, but... MS. McCOLLOCH: We provided -- we did not include them as a part of the ordinance, that is accurate. We provided the information in the document in lieu of making them a part of the ordinance.
Is there any problem in including it actually in the ordinance 23 that all of those items will be in what's going to amount to the next year's CDBG -- MS. McCOLLOCH: There's no problem. 177 5/28/02 - FINANCE - BILL 020275, RES. 020285 We simply thought we were covering it by providing them in the document.
Right, I understand, okay. And this is my last question. In the 2000 bill, which was Bill No. 000344, there was a provision that said specifically that "It shall be the policy of the City that beginning in CD Year and each CD year thereafter the City will 11 consolidate administrative functions associated 12 with each agency participating in the CDBG 13 program in order to avoid duplication of services 14 and reduce administrative costs. Use and 15 expenditure of any CD Year 26 funds made 16 available pursuant..." And then there's a whole 17 section. 18 Now, the review of your total costs, 19 that's general operating and program delivery, in 20 Year 25, those costs were $29,532,000. In Year 21 26, it was $29,703,000. In Year 27, it was 22 $31,069,000. And in Year 28, there is a 23 reduction between Year 28 and Year 27 of, as best 24 I can figure out, $9,000. 25 Now, does that lay out the 178 5/28/02 - FINANCE - BILL 020275, RES. 020285 Administration's position that you are seeking to reduce administrative costs? MS. McCOLLOCH: Well, we are always seeking to reduce administrative costs.
I understand, and I'm always trying to get my hair to grow a little longer, but it ain't working. The costs are not going down. MS. McCOLLOCH: The costs have remained stable, that's correct.
So what are we doing to reduce -- I mean, we're now at $31 million of the -- what's this year's allocation, 83? MS. McCOLLOCH: The CDBG portion of it is 69.4, and the home portion is 16-something.
Well, what percentage of the CDBG funds are allocated to -- MS. McCOLLOCH: On of the Con Plan lists the resources. So the total resources for CDBG, including the entitlement program income and so forth is the 83,000 that you just --
$83,773,000, 179 5/28/02 - FINANCE - BILL 020275, RES. 020285 right? MS. McCOLLOCH: Excuse me, 84 million, yeah.
Okay. Of which $31 million is allocated to your annual operating costs. What's the percentage on that? Is that about 38 percent? MS. McCOLLOCH: 38 percent? I'll take your wore for it that you've done the math.
It's the small numbers I'm really good at. It's the big numbers that I have a problem with. I mean, it's rather obvious, but I'll mention it and then I'll just conclude. I mean, we're taking in $83 million, 31 of which is basically not seeing the light of day in terms of actual on-the-street production. What's going to happen over the next few years to lower that cost while at the same time we're still operating -- what's our Section 108 principal and interest payment? I understand it went down. Did it go down from 15 to 12? MS. McCOLLOCH: Yes.
So if you take 180 5/28/02 - FINANCE - BILL 020275, RES. 020285 the 31 plus 12, you're now, at 43? MS. McCOLLOCH: Yes. The 31 million -- the characterization that that money is not seeing the light of day is not entirely accurate in that that money is being used to put the programs out on the street. I understand it's not going-
What exactly does that mean? MS. McCOLLOCH: That means it's funding salaries and operations of employees at OHCD.
It Doesn't build a house, does it? MS. McCOLLOCH: It doesn't build a house, but it provides the funding to the folks that make sure those houses get built and those contracts get let and those invoices get processed and so forth. And in part, there have been as a result of negotiated labor contracts, there have been increases in salaries.
I understand. MS. McCOLLOCH: So that has made -- 181 5/28/02 - FINANCE - BILL 020275, RES. 020285
Again, and we've had this conversation on a couple of occasions both in your deputy position and now you get the pleasure of having it directly as director. Forty-three million of the $83 million is covering salaries, overhead, and interest payments, interest and principal payments on previous decisions that were made to put Section 10 108 loan money into housing, which for everyone that got a house as a result of that, I'm very happy for them. We are now paying the cost of that and we will pay it over a significant period of time. That's now more than 50 percent of CDBG funds are currently not going into actual production. How are we going to get those numbers and percentages down? What is the plan for that? MS. McCOLLOCH: Well, the plan on the 108 portion is that we're not taking out any more housing 108 loans.
Well, I'm glad to hear that. Because we've maxed out on that, right? MS. McCOLLOCH: We've maxed out. And 182 5/28/02 - FINANCE - BILL 020275, RES. 020285 that as time goes by, those annual loan repayments will decrease.