We license8 home inspectors in Philadelphia County.9 We've licensed other types of10 professionals who put their stuff out for11 sale, put their credentials out for sale.12 So I don't think there would be any13 reason why we wouldn't be able to require14 certain levels of bonding, certain levels15 of insurance, other types of things. If16 they're not already required, I'd be17 happy to work with Councilwoman Tasco's18 staff through the course of the summer to19 maybe come up with something that we can20 do in the fall to kind of rein these21 fellows in and get some control over22 their activities so they don't further23 abuse people more than they've been24 abused already.25 102 6/2/09 - FINANCE - BILL 0902881
Our organization2 would be happy to work with you on that3 throughout the summer.4
Thank you.9 Don't leave.10 Now I think we're ready to have11 testimony on Resolution 090451 and Bill12 090437.13 The Chair recognizes14 Ms. Deborah McColloch.15 (Witnesses approached witness16 table.)17
Good18 afternoon.19 MS. McCOLLOCH: Good afternoon.20 I have testimony.21 Shall I begin, Councilwoman?22
23 MS. McCOLLOCH: Good afternoon,24 Councilwoman Tasco and other members of25 103 6/2/09 - FINANCE - BILL 0902881 the Finance Committee and members of City2 Council. I am Deborah McColloch,3 Director of Housing. I will present4 testimony on behalf of the Administration5 on Resolution 090451, which permits the6 City to apply for $14,046,629 in federal7 Community Development Block Grant funds8 which are being made available through9 the American Recovery and Reinvestment10 Act of 2009. S. 15 Exhibit A to the resolution is the City's16 Proposed Substantial Amendment, in the17 form dictated by HUD. On May 5th, 2009,18 HUD released the guidelines and19 requirements for applying for these20 funds. The City must submit an approved21 Substantial Amendment to HUD no later22 than June 5th, 2009. 8 Community Development Block9 Grant funds are made available through10 the American Recovery and Reinvestment11 Act, ARRA, known as CDBG-R funds. CDBG-R12 funds are one-time funds designed to13 advance the ARRA goals of job creation14 and economic benefit. 23 Transit-Oriented and Livable24 Communities Commercial Development Fund:25 105 6/2/09 - FINANCE - BILL 0902881 This fund will provide gap financing for2 projects that have seen a reduction in3 debt or other financing due to the4 recession. 10 Affordable Housing Development:11 This activity will provide gap financing12 for affordable housing developments that13 are ready to go to construction but need14 additional resources. 19 The Mortgage Foreclosure20 Diversion Program: This activity will21 support the City's existing program which22 assists homeowners to remain in their23 homes. CDBG-R funds will support24 outreach, legal services and housing25 106 6/2/09 - FINANCE - BILL 0902881 counseling. 18 In addition to these19 activities, which were outlined in the20 Proposed Substantial Amendment, the21 Administration is now recommending adding22 a new activity: Utility Emergency23 Services Fund. 3 A revised budget for the4 Substantial Amendment which incorporates5 UESF and also increases funding for6 affordable housing development is7 attached to this testimony. 19 My colleagues and I will be20 happy to answer any questions you may21 have. 22
Are there23 any questions from members of the24 Committee?25 108 6/2/09 - FINANCE - BILL 0902881 Councilman DiCicco.2 COUNCILMAN DiCICCO: Thank you,3 Madam Chair, and good afternoon.4 Thank you, Ms. McColloch, for5 your testimony. Aside from what you just6 put forth in your testimony regarding the7 Administration's request for the Utility8 Emergency Services Fund, is there9 anything in your testimony that is10 different than what was given to us at11 our briefing?12 MS. McCOLLOCH: The only13 difference is that the budget has been14 revised. In the budget bill as presented15 at the briefing, there was $7.5 million16 in the Transit-Oriented and Livable17 Communities Commercial Development Fund18 and there was approximately $3.6 million19 in the Affordable Housing Development20 line. And so what this -- what is21 proposed in this amendment is to increase22 the funding for affordable housing23 development, decrease the funding for24 transit-oriented and livable communities25 109 6/2/09 - FINANCE - BILL 0902881 commercial corridors and add the $500,0002 for the Utility Emergency Services Fund.3 COUNCILMAN DiCICCO: Two4 questions. Do you have the amendment,5 and how did this all come about and when6 since the briefing?7 MS. McCOLLOCH: Since the8 briefing, we met with Council leadership,9 and this was a request from Council10 leadership, and there is an amendment11 that has been prepared.12 COUNCILMAN DiCICCO: I'm not13 sure as to why this was being -- this14 request is being made. I'm not15 suggesting I would not be in favor of it.16 At the last minute I'm hearing of it for17 the first time.18 Does anything change in the19 formula? As an example, for the20 affordable housing increasing 3.6 to 621 million, is there anything that changes22 in the formula or does it just add that23 much more money to the pot?24 MS. McCOLLOCH: It adds that25 110 6/2/09 - FINANCE - BILL 0902881 much more money for affordable housing2 ventures and decreases the pot for3 commercial corridor activity.4
Let me try5 to explain since I was in the meeting.6 During the course of the7 discussion, because the Recovery money8 has to be spent by a certain date and9 we're looking at "shovel-ready" projects,10 the number of affordable housing projects11 that are shovel ready, that we believe12 would generate additional jobs and13 stimulate the economy faster. Some of14 the other projects that were listed on15 the -- in the first line of the16 commercial, some of those projects that17 were listed were projects that were put18 together basically by the Commerce19 Department. Some of those projects had20 applied for gap funding. A number of21 them are still -- some of them have been22 completed, some of them have not been23 completed. And we're trying to find24 projects that will put people to work25 111 6/2/09 - FINANCE - BILL 0902881 faster.2 COUNCILMAN DiCICCO: And I3 appreciate that, and I certainly support4 housing development, but I'm just curious5 as to which ones are shovel ready. I6 mean, commercial corridors to me, if I7 had to make the choice between the two,8 provide much greater economic returns,9 because it creates jobs, which ultimately10 gives people an opportunity to have work11 and be able to afford housing. Just12 doing housing is one thing, but13 decreasing the amount of money -- and if14 I have it wrong, correct me -- for15 commercial corridors, I just don't see16 the logic.17
Well, the18 commercial corridors, they were basically19 individual businesses. It was not like20 the commercial corridor development as we21 knew it under the bond that we were doing22 where you could go in and you could do a23 whole block or something of that nature,24 these were scattered sites of businesses25 112 6/2/09 - FINANCE - BILL 0902881 throughout the City. Some of them may2 employ one person, maybe two. You're not3 sure how many they're going to employ.4 So we thought doing the houses would5 be -- and Councilman Clarke can speak to6 this. He was part of the meeting -- to7 generate a quicker return on the dollar,8 plus put people to work quicker. And9 some of the projects have been waiting --10 COUNCILMAN DiCICCO: Well,11 putting to work is the construction, but12 once those projects are complete, those13 jobs go away. I guess that's --14
Well, it15 didn't take away all of the projects for16 the commercial corridors.17 COUNCILMAN DiCICCO: I'm sorry?18
We didn't19 take all the money out of the commercial20 corridors.21 COUNCILMAN DiCICCO: I know.22 It's been decreased, so I'm just trying23 to figure out --24
Councilman25 113 6/2/09 - FINANCE - BILL 0902881 Clarke, would you like to comment?2
I'm sorry.3 Before Councilman Clarke, as a member of4 the Committee -- and, again, as5 Councilman DiCicco said, this is kind of6 the first we're hearing about this. And7 I know that Councilman Greenlee -- I just8 had a discussion with him, because he's9 been at the forefront of this10 transit-oriented development -- was not11 aware of the reduction in the line item12 for transit-oriented development. And13 I'm not saying at this point in time that14 I would be against shifting this money15 from transit-oriented development and any16 place else into affordable housing, but I17 will say this only on my behalf, because18 as a member of this Committee, I would19 like you to talk to me as a member of20 this Committee before you decide to21 develop an amendment which you are22 putting forward to move money anywhere in23 this CDBG process, even though I24 recognize that it's a short period of25 114 6/2/09 - FINANCE - BILL 0902881 time that we need to get our stuff in2 front of HUD. I realize that3 shovel-ready projects are something that4 in this particular short timeframe are5 something that's more desirable than6 something that needs planning and won't7 have an impact immediately, but I find it8 somewhat -- I won't say offensive,9 because I'm not there yet -- somewhat10 disconcerting that I have an amendment in11 front of me moving around millions of12 dollars that I'm supposed to approve as a13 member of the Finance Committee that I've14 had no discussion with anyone about up15 until probably five minutes ago.16 So I recognize this process is17 shortened, and I hope to be able to18 support this amendment and the19 legislation generally, but as a member of20 the Committee, I am making a request to21 the Administration that I get some22 information beforehand.23
First, let24 me -- in defense of the Administration,25 115 6/2/09 - FINANCE - BILL 0902881 they were notified yesterday afternoon in2 terms of some concerns about how the3 funds were laid out. We met with staff.4 We met with them again this morning. We5 have not been doing this for a period of6 weeks. It was the last 24 hours. So7 it's not their call. It's our call, and8 so you have to take issue with the9 leadership in how we handled this.10 Probably we should have called, but we do11 plan to meet with Councilmembers12 tomorrow. We do not intend to vote this13 bill out today. We will come back14 Thursday morning. We will go over this15 with all of the members of the Committee16 and other Councilmembers to see how they17 feel about this.18
Madam19 Chair, with all due respect, I recognize20 the short timeframe and I find no fault21 with leadership relative to trying to get22 this thing done in an appropriate time.23 I'm saying as a member of this Council24 and a member of this Committee, I'm not25 116 6/2/09 - FINANCE - BILL 0902881 finding fault with the Administration.2 I'm telling you this is a $19 million3 issue right now we're dealing with.4 Going forward, starting in September, I5 need to hear from you also.6 MS. McCOLLOCH: I understand.7
And they10 agree, and we agree with you, but given11 the 24 hours, they did not have time,12 because we were -- that's why we've been13 here all day.14
Madam15 Chair, I don't want the record to have16 any misunderstanding that I'm upset with17 the Administration or I'm upset with18 leadership, but I do think as a member of19 the Committee -- again, this is hindsight20 between 20/20 -- the members of the21 Committee should have this information22 prior to an amendment being prepared or23 at least to have some input. Whether or24 not our input is taken or whether it's25 117 6/2/09 - FINANCE - BILL 0902881 included or not, that's another thing,2 but as a member of the Committee, I would3 like to in the future, this issue aside,4 have some direct contact with the5 Administration.6
Thank you,10 Madam Chair.11 Good afternoon.12 MS. McCOLLOCH: Good afternoon.13
I don't know14 if this question is more appropriate for15 OHCD or Commerce. Was there a projection16 of jobs on the original proposal,17 construction and/or permanent?18
For the record, my19 name is Kevin Dow. I'm the Deputy20 Commerce Director for the Commerce21 Department.22 There were not entirely across23 the board, but there were for the TOD24 projects. We had some estimates of what25 118 6/2/09 - FINANCE - BILL 0902881 the jobs creation would be there. As far2 as the other projects, we had some, but3 not all.4
I'm saying5 for the total amount of the CDBG-R funds,6 was there a projection of jobs under the7 original proposal and is there an amended8 projection of jobs under the new9 proposal? In other words, how many10 construction jobs were you going to11 create under the original proposal and12 how many permanent jobs were you going to13 create under the original proposal and14 now how many construction jobs are you15 going to create under the amended16 proposal and how many permanent jobs are17 you going to create under the amended18 proposal?19 MS. McCOLLOCH: Right. I20 understand your question, Councilman.21
If you don't22 know, just say you don't know.23 MS. McCOLLOCH: I don't know.24
Is it fair25 119 6/2/09 - FINANCE - BILL 0902881 to say that you will be creating less2 permanent jobs in the amended proposal?3 And Commerce can answer that question,4 other than OHCD.5
It's hard for me to6 answer that question whether or not those7 would be less permanent jobs. Without8 individual projects, I think it's9 premature.10
It's11 possible that there could be more12 construction jobs because, as the13 Chairwoman said, those housing projects14 are more shovel ready, and so that may be15 a better use of the funds by creating16 more construction jobs.17 So I'm not saying one proposal18 is better than the other. I'm simply19 saying we should have that sort of20 analysis before us, if you're shifting21 that amount of money in terms of the22 amount of construction jobs and permanent23 jobs created in one proposal and the24 amount of construction jobs and permanent25 120 6/2/09 - FINANCE - BILL 0902881 jobs created under the new proposal.2
And I would agree3 with that. I would also say that when we4 look at construction and we look at the5 process by which construction creates6 jobs for our economy, that if you look at7 that stream of the economy that that8 impacts, that jobs are created along the9 economic path. And so construction jobs10 might come in and be temporary in nature,11 but the service jobs that that would12 create, the need for services along the13 commercial corridors where those14 neighborhoods are being rebuilt up are15 created. So the economic development and16 economic opportunity that results is17 permanent in nature.18
I would19 challenge that, but rather than challenge20 that, I'll just go back to the original21 debate that took place in Congress in22 terms of what is the whole purpose of the23 American Recovery and Reinvestment Act.24 To what extent is it supposed to be25 121 6/2/09 - FINANCE - BILL 0902881 focused on permanent job creation and to2 what extent it's focused on construction3 jobs. And I'm not pitting one against4 the other, aside from saying that we5 should have that analysis before us6 before we make a decision on shifting7 funds.8 Thank you, Madam Chair.9 COUNCILWOMAN TASCO:10 Councilwoman Brown.11
Thank you,12 Madam Chair.13 I'd like to shift the14 discussion, if we could, to where15 it's my first time that I'm seeing these16 dollars used for what you're calling the17 Creative Industry Workforce Grants. I18 think it's brilliant, and knowing how19 arts and culture has the economic impact20 that it does on our city, just briefly21 discuss what that is for those of us who22 may not be familiar with that sector and23 how you expect those dollars to be made24 aware to that particular community.25 122 6/2/09 - FINANCE - BILL 0902881 MS. McCOLLOCH: I'll ask my2 colleague to answer that.3 (Witness approached witness4 table.)5
I'm Gary Steuer,6 Chief Cultural Officer and Director of7 the Office of Arts, Culture and the8 Creative Economy.9 And the thrust of this will10 really be to reenforce the fact that11 arts, culture and creative industries are12 part of how you build a healthy13 neighborhood, and the focus will be, as14 in the rest of these areas, on jobs and15 looking at projects that can get off the16 ground immediately and generate both17 short-term jobs in terms of the actual18 construction/renovation jobs and then19 also long-term jobs in these businesses20 that we are supporting.21
Have you22 had a chance to flush out targets, what23 corridors may benefit, what the process24 will be, how arts and culture communities25 123 6/2/09 - FINANCE - BILL 0902881 can access, what the criteria might be2 for those who want to take advantage of3 these grants?4
Sure. It's going5 to be a broad process. So there'll be an6 RFP. So we'll be trying to get7 information out widely, and we'll call on8 Council and your expertise in terms of9 whether there might be projects within10 your districts that you might know about.11 And there will be a focus, as I said, on12 what the particular requirements are of13 this Act and of this particular pool of14 funds. There are, for example, a number15 of projects that were considered as part16 of the Cultural Corridors Bond funding17 that we had where there might be some18 additional funding that's needed for19 those projects. So this will be a great20 opportunity to look at projects that are21 already underway where we can come in and22 provide some funds that will allow them23 to fully finish their projects.24
Is this25 124 6/2/09 - FINANCE - BILL 0902881 new potential practice unprecedented?2 Are other cities around the country using3 these dollars in that way? Can you speak4 to that?5
Well, I think a6 particular dedicated use like this in7 Philadelphia is relatively new here. So8 this would be new here and very exciting,9 I think. There have been programs like10 this all around the country. There's11 been a program in New York City that has12 used CDBG funds for supporting cultural13 projects in eligible neighborhoods that's14 operated since the inception of the15 program. There's a really innovative16 program in Denver that specifically17 targets creative industries. So there18 are examples from all over the country of19 how these funds have been used to use the20 arts as an engine of how we build healthy21 neighborhoods.22
So it23 certainly will not be -- there are24 certainly cities we can look to on how to25 125 6/2/09 - FINANCE - BILL 0902881 ensure that we get this right?2
Thank you4 for your testimony.5 Thank you, Madam Chair.6
Thank you,10 Madam Chair.11 Going back to the affordable12 housing development versus -- not versus,13 but juxtaposed to the other things we14 were talking about and transit-oriented15 corridors and things, what's your16 definition of "shovel ready"?17 MS. McCOLLOCH: It has a fairly18 wide range of definitions. We want to19 support those developments that are ready20 to go and that -- we have a couple that21 are all ready, I mean literally could22 start as soon as we provide the money.23 They have the zoning, they have their24 permits.25 126 6/2/09 - FINANCE - BILL 0902881
Could you2 give us an example?3 MS. McCOLLOCH: An example4 would be there's a homeless housing5 facility on Kensington Avenue called6 Rites of Passage. It's a 30-bed facility7 that has already has some support from8 the Office of Housing and Community9 Development and it has its zoning, it has10 its design, it has its permits, it's11 ready to go. It has a funding gap of12 about $500,000. So when we make that13 money available, it can go to loan14 closing and begin.15 That's as shovel ready as we16 can get. We also have some developments17 that have submitted proposals. We18 haven't been able to support them and19 move them forward because we don't have20 the resources, but when we put out a21 Request for Proposals, put out the RFP,22 they'll come in, we'll do that review and23 we'll be able to move them forward.24
When we had25 127 6/2/09 - FINANCE - BILL 0902881 the briefing last week, the proposal that2 you brought forward to us I felt you3 defended quite well, Mr. Altman, yourself4 and others defended quite well. Now,5 it's been tweaked and changed, and the6 argument continues to be or at least the7 effort continues to be job creation. I8 think that's been the national -- the9 Obama Administration and Congress's10 desire to have increased employment as a11 result -- increased permanent employment12 as a result of the expenditure of these13 dollars. I know Councilman Goode and14 others in Council have been working for15 diversity in construction and a lot of16 the other issues. Could you explain to17 me how we can be assured on shovel-ready18 projects that are going to be -- that the19 construction jobs are being pointed to as20 the job creation piece, how we guarantee21 that the people on those sites are22 Philadelphians who will either get a23 semi-permanent job or a permanent job as24 a result of that? I mean, do we have any25 128 6/2/09 - FINANCE - BILL 0902881 requirements in our contracting with2 these shovel-ready projects that3 Philadelphia residents will be on these4 sites or are we going to still have the5 same situation that we have at the6 Convention Center and other places?7
I would suggest that8 EOPs, economic opportunity plans, that we9 would attach with any one of these10 projects. All the projects that we're11 doing through the Commerce Department12 will have this type of language, which13 would address contracting employment as14 well -- contracting and employment.15
But these16 are for positions that in the life of a17 construction project probably last 12,18 16, 18 months and then would be finished.19
So at the21 end of that 12, 16, 18 months, what22 happens to the people who we counted as23 job creation when the very important24 affordable housing complex is up and25 129 6/2/09 - FINANCE - BILL 0902881 running and taking care of people, as it2 should, as one of the goals that we have3 as a city, but that 12, 16, 18 months,4 where is the job creation number if that5 job goes away?6 MS. McCOLLOCH: It's not -- the7 housing developments that we're talking8 about, the affordable housing9 developments, are not in that sense10 creating those permanent jobs that you11 speak of. They're essentially -- the job12 creation is essentially construction jobs13 that would last the period of time that14 the construction takes.15
Which is16 important, and we're not discounting the17 importance of that.18 MS. McCOLLOCH: Right.19
But at this20 point in time -- and, again, you've had a21 very short period of time to deal with it22 and even a shorter time to get it where23 it needs to be in HUD -- do you have any24 indication or guarantees or at least25 130 6/2/09 - FINANCE - BILL 0902881 something you can give us that would2 indicate that there's an effort to have a3 more diverse workforce in these4 shovel-ready projects that are being5 funded with this stimulus money?6 MS. McCOLLOCH: Well, that, as7 Kevin just mentioned, the equal8 opportunity plans.9
And then that's10 the -- we will include that language in11 the contracts.12
Well,13 again, time is short and I don't want to14 beat this, but counting job creation in a15 job that's going to last no more than 1816 months is a difficult stretch.17 Thanks.18
Councilman19 Clarke, you have your light on.20 Oh, I'm sorry.21
Real briefly. Just to kind of talk about some of the4 issues that were debated, and I know it's5 a limited timeframe as it relates to6 everybody making decisions and amendments7 and changes to the proposed Plan. The8 issue around affordable housing versus9 TOD/commercial projects and loan funds,10 because we need to characterize it for11 what it really is, there is a limited12 number of shovel-ready projects as it13 relates to commercial activity, and I14 believe there's probably two at this15 point of significant size, Weavers Way16 and Progress Plaza. The rest -- and I17 hate to use the term "speculative," but18 they're not ready to go, those other ones19 under construction. 21 The reality is, on the housing22 side, at this point there are currently23 nine projects that are currently at PHFA24 that have been approved for funding for25 132 6/2/09 - FINANCE - BILL 0902881 tax credits. Those projects will2 probably -- well, do have a gap of3 varying sizes. The question with respect4 to those nine, if the City -- this is5 based on conversations with PHFA. If the6 City is in position to help support those7 funding gaps, those projects are shovel8 ready. These are actually 2007 projects9 that are in the pipeline. There are10 actually approximately ten projects that11 are 2008 projects that have been12 submitted to PHFA that a decision will be13 made later on in the year. 17 This whole issue about18 permanent jobs versus short-term jobs,19 the reality is is that from a20 construction standpoint -- and I agree21 with Councilman Kenney that the diversity22 level in construction is not even close23 to where it needs to be, and that's24 something that we need to deal with on25 133 6/2/09 - FINANCE - BILL 0902881 the broader construction for both2 commercial and residential. The reality3 is that the construction phase tends to4 create a broader spectrum of jobs. It5 touches pretty much every particular6 trade as it relates to building in7 trades, electrical, masonry, all of the8 things. One of the things that we looked9 at from the housing side, our ability to10 leverage $90 million in PHFA funds that11 is also stimulus dollars. The12 Philadelphia Housing Authority received13 $90 million of stimulus dollars, and the14 Philadelphia Housing Authority has also15 made a decision to dispose of upwards of16 2,000 scatter site developments. 1 million,7 because there is money in the Year 358 Block Grant. 10 There's an additional one point -- I11 forget the exact number. 5 The reality is more from a6 philosophical perspective, that the7 Administration had committed $3 million8 in Housing Trust Fund dollars in the9 first budget and because of budgetary10 problems, that money has been reduced11 dramatically over the years, through no12 fault of the Administration. It's just13 simply based on the lack of activity in14 the City as a result of recording fees15 and the Administration's commitment. So16 the thought is that if you have a17 significant resource coming to the table18 for affordable housing at a minimum and19 we can still fill some of the gaps that20 were eliminated -- that were created as a21 result of the inability for the22 Administration and the City to continue23 to support affordable housing. 8 So based on all the things that9 were looked at, it is believed -- and10 understanding the fact that construction11 of affordable housing, even in the12 weakest of markets, is probably the13 strongest likelihood that will happen,14 because they are deeply subsidized. 20
Madam Chair,23 since I deferred to Councilman Clarke,24 can I ask him a couple of questions?25 137 6/2/09 - FINANCE - BILL 0902881
Councilman,3 we have a list here of commercial4 corridor TOD projects that were supposed5 to be funded by the Commercial6 Development Fund. There's 27 projects7 amounting to roughly $63 million in total8 project costs and 556 permanent jobs.9 Were all of these projects actually10 reviewed?11
No.12 Unfortunately, there was not time for us13 to receive a briefing. We did ask that,14 but the timeframe associated with --15
So we can16 assume that all these projects didn't17 necessarily need to be, quote/unquote,18 "shovel ready," because they may be19 business economic development ventures20 that don't require new construction or21 rehab?22
I would23 actually not assume that they are shovel24 ready. I'm sorry.25 138 6/2/09 - FINANCE - BILL 0902881
That's the4 problem. I don't know, Councilman. But5 they were all listed as financing through6 a loan pool, not direct financing for7 development.8
Mr. Dow, are9 you familiar with this list of 2710 projects?11
Do these16 projects actually amount to 556 permanent17 jobs?18
So how many21 jobs are we going to lose by reducing the22 amount?23
I'm not sure because24 we wouldn't know which projects would be25 139 6/2/09 - FINANCE - BILL 0902881 done and which ones we would do, so --2
Can we guess3 at that by the time we have first4 approval for this --5
-- how many7 permanent jobs we're going to lose?8 Do we know how many permanent9 jobs are going to be created by the10 housing projects that will replace it?11 MS. McCOLLOCH: No, I don't.12
Thank you.13 COUNCILWOMAN TASCO:14 Councilwoman Brown, do you have a15 question?16
Just one20 addendum to Councilman Goode's21 questioning, and I think they're22 important questions that have to be23 answered before we vote on this, but we24 had an extensive conversation in Council25 140 6/2/09 - FINANCE - BILL 0902881 Caucus Room when we were briefed about a2 combination of both, where in a3 commercial corridor, many throughout4 Philadelphia's older neighborhoods and5 existing commercial corridors, there's a6 desperate need for above-the-store,7 above-the-business housing, and we could8 possibly do both, that if we concentrated9 on housing components of commercial10 corridor improvements by creating jobs11 both in the retail and whatever other12 sector that goes in the bottom of the13 store, there's two and three apartments14 on the top of a lot of these buildings.15 I think Councilmember Quinones-Sanchez16 brought that up about Kensington Avenue17 being boarded up on the second and third18 floors. I mean, if we can do both the19 commercial corridor development, job20 creation and the housing that's21 associated with those commercial22 corridors, I think it's a win-win-win for23 everyone.24 So, again, I think we're25 141 6/2/09 - FINANCE - BILL 0902881 arguing over a relatively small amount of2 money compared to the need, but I do3 think that some of the issues that were4 raised in the briefing I think could be5 probably incorporated. For example, I6 could envision that if you did a7 commercial -- if you kept a commercial8 corridor's money the way it was and9 attached a requirement that, where10 appropriate, where available, there would11 be a housing component above that12 commercial operation that's not there now13 that maybe either was one that's now14 boarded up and not available, I think15 you'd get kind of where you want to be on16 both fronts.17 But the other issue too is that18 you, as I said earlier, you clearly and19 effectively argued your point at the20 briefing, and I sense that during21 Councilman Goode's questions there are22 things that you still can't answer. So23 I'm glad we're going to hold these until24 we have additional discussion and25 142 6/2/09 - FINANCE - BILL 0902881 hopefully you can get the numbers that2 Councilmember Goode is looking for.3
I'd like4 to ask a question about the list that we5 have here of the6 Transit-Oriented/Commercial Development7 funds. Have all of these businesses8 contacted the Commerce Department for9 assistance? And how old is the request?10 And have you had an opportunity to go11 back and evaluate if their application is12 still -- what the status of the13 application is? How did you generate14 this list?15
Through a combination16 of our resources through all of the17 Commerce Department. We worked with18 PIDC, PCDC, all of the folks that we felt19 like had loan resources or loan20 opportunities out there. We called them21 together.22 And so we do know that -- we23 have had contact with them in some shape,24 fashion or another to know that they are25 143 6/2/09 - FINANCE - BILL 0902881 real projects. We have qualified them to2 the extent that they are still options3 out there available for us, and there are4 some that are committed to that we5 could -- while not shovel ready in terms6 of being pick in the ground, there are7 businesses that are ready to receive8 financing in some shape or fashion.9 How long have they been in the10 cue was one of your questions. I'm not11 sure about that right now. It could be12 something that came up very recently to13 something that's been sitting out there14 waiting for us to provide the funding for15 for some time now.16
But has17 your department contacted 27 businesses18 to get a status report?19
In one shape or form20 or another. So either through the direct21 application that they sent in to us,22 through our outreach efforts through23 both -- all three, would be the Commerce24 Department and PIDC, as well as in our25 144 6/2/09 - FINANCE - BILL 0902881 efforts through the gap financing2 program.3
Councilman4 Jones, while I'm getting my question5 together.6 No, no, no. I'm sorry. I'm7 sorry. Councilman Kenney and then8 Councilman Jones.9
I'll defer10 to Councilman Jones. He's so patient and11 kind, and I will defer to him.12
Thank you,13 Councilman. I appreciate that.14 As Chair of Transportation and15 Public Utilities in City Council, as we16 start to talk about transit-oriented17 development, I note on No. 27, the18 Market-Frankford El, which extends from19 46th and Market to 63rd and Market, it20 covers the 3rd and the 4th Councilmanic21 Districts. There are over a million22 people that ride that a month, and I'm23 confused as to why there is not one24 project on there, after they've gone25 145 6/2/09 - FINANCE - BILL 0902881 through the worst seven years a2 business -- ten years a business could3 imagine. We've lost 50 small businesses4 along there and we can't find one5 shovel-ready project along that corridor?6
Well, that was not to7 pinpoint any one particular project on8 that corridor. We know that there are9 multiple projects along that corridor10 that are ready to go. So we didn't pull11 one out. We looked at that as a whole12 corridor that was ready to go that we13 know we could do some things, that we14 could augment some other stuff that's15 going on also through our shop through16 the state programs that are happening17 there.18
So is there19 a dollar amount attached to that20 corridor?21
We do not know at22 this time, because we would just -- I23 mean, for all intents and purposes, we24 would just be doing a full --25 146 6/2/09 - FINANCE - BILL 0902881
So what I2 see here then is actually good news, that3 you're going to include that --4
-- in a6 blanket way and the amount is to be7 determined as we identify the specific8 projects?9
That's correct,10 because we feel very, very confident with11 our activities on Market Street from 63rd12 Street to about 40th, if not down to13 34th, we can find projects there that we14 would be able to fund.15
And that's a16 good -- that's the best response I've17 heard in quite some time.18
The second20 thing I'd like to ask is, as we start21 looking at other areas like 61st and22 Lansdowne, which has the 10 trolley on23 it, and we had a, if you would,24 shovel-ready deal for a market that had25 147 6/2/09 - FINANCE - BILL 0902881 been closed for some decade along there,2 would that be the kind of eligible3 project that could have been a recipient4 of this kind of an award?5
Could be. Don't know6 without the details, but what I'm7 familiar with from that particular8 project, yes.9
No. These are just12 projections that we know right now.13 There would be a very open, transparent14 process to identify those individual15 projects that would be ultimately funded.16 So the door is not closed for any other17 projects that we have yet to discover.18
Thank you,19 Madam Chair and Councilman Kenney, for20 your kind deference.21
Madam24 Chair, I'm going to defer any more25 148 6/2/09 - FINANCE - BILL 0902881 questions. I think that if we're going2 to have further discussion and you're3 going to hold the bills, we can probably4 hash some of this out at a different5 time. Thank you.6
Okay. Just9 one quick question with respect to this10 list for the commercial corridor. And I11 hate the fact that we're here actually12 debating the merits of commercial13 corridor projects or loan pools for14 businesses and communities versus15 affordable housing, because I think that16 they are obviously extremely important on17 an equal basis.18 The question as it relates to19 the stimulus dollars, frankly speaking,20 centers around the readiness of those21 projects. I understand that Commerce22 went out and basically looked at every23 particular inquiry that they've received24 over the past year and a half from a25 149 6/2/09 - FINANCE - BILL 0902881 businessperson who is interested in2 financing, and when you look at that, as3 Councilman Goode suggested, I would ask4 for you to look at it in a sense that out5 of those 500-and-something proposed jobs,6 what's the likelihood that they will be7 created, not necessarily of jobs that8 will be lost, because they are9 speculative, with the exception of a10 couple.11 With respect to the proposal on12 the table -- and I understand we're going13 to have this discussion tomorrow -- in14 terms of the distribution -- that word15 was brought up -- my understanding, it is16 an equal distribution in both housing and17 commercial development. So it's not like18 these recommendations are weighted one19 way or the other, commercial versus20 housing, as was in the earlier version21 where it was close to $9 million -- and I22 won't use 9. I'll use 7 -- 7 and a half23 versus 3 and a half. So the record is24 clear on this issue about distribution,25 150 6/2/09 - FINANCE - BILL 0902881 it's not like the housing amendment2 proposes a significant amount more than3 the commercial.4 Getting back to the5 shovel-ready issue, because we were not6 in a position where we receive a list7 that is as detailed as the list for the8 commercial projects, because -- whatever.9 I don't know why that wasn't. If at all10 possible, if you can quickly put together11 a list of the housing developments --12 MS. McCOLLOCH: I have a13 pipeline list here.14
-- and the15 proposed job creation as a result of the16 construction. That's why I said as17 detailed a list. And the total amount of18 the construction. Because I understand19 in the nine projects that are at PHFA20 that have actually already been committed21 to by PHFA, it's close to $90 million in22 construction activity. So it would be23 nice to see the potential job --24 MS. McCOLLOCH: So I want to25 151 6/2/09 - FINANCE - BILL 0902881 make sure I understand the question,2 Councilman. You want to prepare the list3 of the PHFA --4
No. I want5 all of them.6 MS. McCOLLOCH: But in the7 pipeline I have here it doesn't include8 the PHFA. The PHFA proposals and the9 jobs we believe will be created by that,10 plus whatever else is the --11
Not just12 PHFA. If you're going to create a list13 of commercial projects that say that14 we've been approaching -- and a lot of15 them are speculative. I mean, this one16 at Progress Plaza, I don't even agree --17 that's in my district. I don't agree18 with the number, 1.5, because I was asked19 to give up 500,000 of other monies in my20 district to go to that, and I committed21 to do that. So that eliminates 500,000.22 I'm not suggesting that people are trying23 to pump up the numbers, but, I mean, it24 is what it is. So if you take the same25 152 6/2/09 - FINANCE - BILL 0902881 approach and say that every potential or2 every inquiry for funding for housing, if3 you create that list, I suspect that that4 will be a substantial list if you use the5 same formula that you used for commercial6 activity. So I would like to see, if at7 all possible, you compile a similar list8 for residential opportunities.9 MS. McCOLLOCH: Okay. And that10 list you want -- I'm just trying to make11 sure on the job piece -- what the number12 of jobs that would be created by that13 list? Is that --14
That would15 be -- I mean, that would be helpful.16 MS. McCOLLOCH: Okay.17
Thank you,20 Madam Chair.21 Just quickly. As it relates to22 Councilman Clarke's request, as you had23 in the commercial/transit-oriented TOCD24 list, could you also include the Council25 153 6/2/09 - FINANCE - BILL 0902881 district? Because the list I have of2 some of the housing projects are not -- I3 can kind of figure out where they are4 based on the title or the name of the5 project.6 MS. McCOLLOCH: Are you talking7 about my list?8
I'm talking9 about Affordable Housing Pipeline.10 There's a list we have here.11 MS. McCOLLOCH: Okay.12
Do you know13 what that is?14 MS. McCOLLOCH: I don't believe15 I prepared that list.16
Whatever17 list you're preparing for Councilman18 Clarke, could you include it by district?19 MS. McCOLLOCH: Yes.20
Because21 it's easier to figure out where it is.22 Just a couple of questions23 relative to the speculative nature of24 commercial corridor projects. Some of25 154 6/2/09 - FINANCE - BILL 0902881 the things you've talked about relative2 to the housing development dealt with gap3 financing and that some of the shift of4 funds allows the ability to provide the5 gap that's needed to get the project6 started. Well, on your list of7 commercial corridor projects, I see a8 number of them that says "next step, gap9 financing." Is that the same thing as10 the gap financing needs for the housing11 projects or are these somehow further12 behind in design and permitting and13 zoning and all the other things?14 I mean, there's an assumption15 during the course of this discussion that16 the commercial corridor projects were17 speculative or behind a timeline that was18 unworkable for an immediate benefit to19 the City, but I see on the list you have20 27 projects and the majority of them, or21 at least half of them, say gap financing22 as the next step. Is there any23 indication on these projects how many24 have been designed already, how many have25 155 6/2/09 - FINANCE - BILL 0902881 got their zoning, how many have their2 permits? I mean, are they that3 speculative or are they -- what's their4 status?5
They are not6 speculative. The gap financing ones are7 the ones that came through the program8 that we had recently. They are9 underwritten and pretty much ready to go.10 We --11
So the same12 gap financing issue that gets a housing13 development on whatever list you're14 preparing started is the same issue on15 the gap financing on the commercial, just16 so we're comparing apples and apples?17
So the list19 that you've given us you would not20 describe as speculative?21
Okay. Let25 156 6/2/09 - FINANCE - BILL 0902881 me ask you a couple other questions.2 Earlier this year, the City received3 Recovery funds for neighborhood4 stabilization projects. Has the Council5 selected providers? If so, who was6 selected, and has this been formally7 announced?8 MS. McCOLLOCH: The9 Redevelopment Authority issued a Request10 for Qualifications for developers to11 participate in that program, and it has12 identified, I believe, five developers in13 that, if you will, first cut. Those14 include APM, Asociacion Puertorriquenos15 en Marcha, APM; Community Ventures. Both16 of those are non-profits. OKKS, which is17 a for-profit developer; Penrose18 Properties, which is a for-profit19 developer. And the fifth one is20 Allegheny West Foundation, which is a21 non-profit. So of the first set, five22 developers have been selected through23 that RFQ, two for-profits, three24 non-profits.25 157 6/2/09 - FINANCE - BILL 0902881 The Redevelopment Authority is2 working to identify properties that are3 eligible under that program and will be4 acquired and rehabilitated. To date, two5 properties have been identified, and6 those are churning their way through the7 system.8
So these9 properties are houses, right?10 MS. McCOLLOCH: These11 properties are foreclosed upon houses,12 yes.13
So they14 will rehab them?15 MS. McCOLLOCH: They will be16 rehabbed through -- in the case of the17 two that have been identified, I believe18 both of them will be rehabbed by Penrose19 Properties.20
And the25 158 6/2/09 - FINANCE - BILL 0902881 profit is going to Penrose?2 MS. McCOLLOCH: No. And then3 it churns back into the fund.4
So what's8 the benefit to these five groups who are9 doing the rehabilitation?10 MS. McCOLLOCH: What's the11 benefit to them to participate? They12 receive a developer's fee as part of the13 cost of the rehabilitation.14
Okay. And15 so once the money revolves back in the16 fund, there will be another process?17 MS. McCOLLOCH: Yes, and then18 we'll continue to do more houses. The19 original application anticipated doing20 between 185 and 200 properties.21
So how22 long -- is there a time limit on this23 program?24 MS. McCOLLOCH: For the25 159 6/2/09 - FINANCE - BILL 0902881 Neighborhood Stabilization Program?2
Mm-hmm.3 MS. McCOLLOCH: Eighteen months4 from when we receive the funding of5 commitment, which was March 18th. So 186 months from March 18th, 2009 we need to7 have completed the 185 or 200 houses that8 we have. And then we continue -- the9 funds continue to revolve until we've10 ultimately drawn them all down, because11 we don't get back --12
The13 developer fee.14 MS. McCOLLOCH: -- the full15 amount that we spend. So over time the16 pot gets smaller.17 COUNCILWOMAN TASCO:18 Considering the fact that Mark Alan19 Hughes is leaving the Administration,20 have you all identified the point person21 regarding the applications for Recovery22 dollars?23 MS. McCOLLOCH: I have not. I24 mean, I'm not privy to that information.25 160 6/2/09 - FINANCE - BILL 0902881
Are you2 the person right now?3 MS. McCOLLOCH: It is not me4 right now, no.5
On Page6 119 of the budget detail of the7 Consolidated Plan, it is anticipated that8 PIDC will generate -- did you testify on9 the Plan yet?10 MS. McCOLLOCH: I haven't11 testified on the Plan yet.12
Okay.13 We're still on the -- any more questions14 on the Recovery plan?15 (No response.)16
19 MS. McCOLLOCH: Good afternoon,20 Councilwoman Tasco and other members of21 the Finance Committee and members of City22 Council. I am Deborah McColloch,23 Director of Housing. 9 The bill refers to Exhibit A, which is10 the Year 35 Consolidated Plan, the11 required HUD funding application. In12 order for the City to receive funding13 from HUD, the City is required to submit14 an approved Consolidated Plan to HUD no15 later than August 16th, 2009. 5 The Year 35 Consolidated Plan,6 for the fiscal year which begins July7 1st, 2009, details our plan for spending8 the monies from five primary federal9 sources. The proposed budget generally10 carries forward existing programs and11 commitment. The first source of federal12 funds is the Community Development Block13 Grant, which is still the largest source14 of funding for affordable housing, aside15 from subsidies which the Philadelphia16 Housing Authority receives directly from17 HUD. 271 million in new entitlement19 funding, an increase of 536,000 from Year20 34. 25 163 6/2/09 - FINANCE - BILL 0902881 In Year 35, based on resources available,2 we are anticipating a reduction in prior3 years' reprogrammed funds and in program4 income. 7 I am happy to tell you that8 despite the reduction in available CDBG9 resources, the Proposed Year 3510 Consolidated Plan maintains core housing11 and community economic development12 initiatives and programs. 20 Continued funding is proposed for rental21 ventures financed in conjunction with the22 Low Income Housing Tax Credit and special23 needs housing to assist the homeless and24 those with other special needs. 49510 million in Fiscal Year 2010. 388 million. 21 These funding allocations do not include22 funds proposed for affordable housing23 development, either homeownership or24 rental, which will be available through25 165 6/2/09 - FINANCE - BILL 0902881 the American Recovery and Reinvestment2 Act. 5 The Basic Systems Repair6 Program is proposed to receive a $784,0007 reduction in total funding in Fiscal Year8 2010 due largely to the reduced resources9 expected to be available through the10 Housing Trust Fund earnings. 545 million in Fiscal23 Year 2010. 11 Operating costs associated with12 the housing and community development are13 largely CDBG funded. 22 The second primary source of23 funding for Year 35 is the federal HOME24 Program. 745 million. 17 The third source of federal18 housing funding which is included in the19 Year 35 Consolidated Plan is the Housing20 Opportunities for Persons with AIDS,21 HOPWA, program, which the City of22 Philadelphia administers for a23 five-county metropolitan region,24 including Philadelphia, Bucks, Chester,25 168 6/2/09 - FINANCE - BILL 0902881 Delaware and Montgomery Counties. The2 federal formula for HOPWA funds is based3 on the historical and contemporary AIDS4 caseload in the region. 13 The fourth source of federal14 funding for housing in Year 35 is the15 Emergency Shelter Grant program. 303 million in ESG17 funds for Fiscal Year 2010. 22 In the past, another major23 source of funding for housing has been24 the Section 108 loan program. Under the25 169 6/2/09 - FINANCE - BILL 0902881 Section 108 loan program, the City is2 allowed to borrow funds against future3 CDBG entitlement grants. 9 While economic development10 Section 108 loans are self-sustaining11 through the repayment of debt, subsidies12 for housing funded with Section 108 loans13 must be repaid from CDBG entitlement14 funding. 8 million24 in proposed funding from the state25 170 6/2/09 - FINANCE - BILL 0902881 Department of Community and Economic2 Development's Housing and Redevelopment3 Assistance Program. These funds will be4 used to support home repair grants5 through the Heater Hotline and Tier 16 parts of the Basic Systems Repair Program7 and to support construction homeownership8 opportunities. 12 The Plan also contains a13 recommended budget for funds for the14 Philadelphia Housing Trust Fund.
The15 recession has limited Housing Trust Fund16 earnings, which are based on recording17 fees from deeds and mortgages. 5 million in Year21 34 and approximately half the amount22 earned in Year 33. Line items in the23 Consolidated Plan reflect the priorities24 recommended by the Housing Trust Fund25 171 6/2/09 - FINANCE - BILL 0902881 Oversight Board, as agreed when Council2 passed the Trust Fund legislation three3 years ago. 7 Thank you for this opportunity8 to present this testimony. In order for9 the City to receive funding from HUD, the10 City is required to submit an approved11 Consolidated Plan to HUD no later than12 August 16th, 2009. 20
Thank you21 very much.22 The Chair recognizes Councilman23 DiCicco.24 COUNCILMAN DiCICCO: Thank you,25 172 6/2/09 - FINANCE - BILL 0902881 Madam Chair.2 I hate to do this, but I just3 want to go back for one minute to the4 conversation we were having about the5 potential projects list. I just checked6 with a couple of my colleagues. The7 borrower or the description of the8 projects 1 through 9 is not included. It9 begins on Item No. 10. And if this10 question had already been asked, I11 apologize, but if not, would you also be12 able to supply us with the value of the13 next step? We know what the total14 project costs are, the district, the15 address and the jobs that they're16 purporting they'll create, but I'd like17 to know what the value of the gap18 financing would be for those projects.19
We apologize for23 that. We see that. That was an error in24 distribution.25 173 6/2/09 - FINANCE - BILL 0902881 COUNCILMAN DiCICCO: That would2 be helpful. Thank you.3
Thank you,6 Madam Chair.7 Are there any proposed8 amendments to this particular bill? Will9 there be any proposed amendments to this10 particular bill from the Administration?11 MS. McCOLLOCH: There are12 amendments that were discussed with13 Council leadership.14
I'm talking15 about amendments specifically to Bill No.16 090437.17 MS. McCOLLOCH: Yes. There18 were amendments that were discussed with19 Council leadership today that we would20 be --21
Where are22 they?23 MS. McCOLLOCH: We were going24 to bring them back when we bring the25 174 6/2/09 - FINANCE - BILL 0902881 bill -- it's my understanding that the2 session was going to be recessed and we3 would bring them back when we come back.4
Are you at5 liberty to discuss them?6 MS. McCOLLOCH: Oh, yeah.7 Sure.8
How many9 are there and what are they?10 MS. McCOLLOCH: What was11 discussed in the budget was --12
This is13 specifically to this bill now.14 MS. McCOLLOCH: Yes, yes, yes.15 There was a request to increase the16 funding for Utility Emergency Services17 Fund, UESF, by $500,000. That's the18 program that provides utility grants to19 low-income households with arrearages.20 And 500,000 would be taken from the Tier21 2 Basic Systems Repair line to support22 UESF. That's the first one.23 And the second one was to24 create an acquisition loan pool that's25 175 6/2/09 - FINANCE - BILL 0902881 not currently in the budget. It would be2 a new line item for an acquisition pool,3 of which it would be supported with $24 million in General Funds, which are5 currently under contract to the6 Redevelopment Authority, and an7 additional $1 million in Corridor Bond8 proceeds, which are listed in the budget9 on Page -- as gap financing on .10
Well, the11 question I have relative to -- and,12 again, this is new information to me, so13 bear with me because --14 MS. McCOLLOCH: We were going15 to present it more fully.16
Well, we17 don't have a lot of time either, and I18 recognize that on both sides, both the19 Administration and on Council's side.20 You're taking $2 million of the21 General Fund?22 MS. McCOLLOCH: It's General23 Fund money currently under contract to24 the Redevelopment Authority.25 176 6/2/09 - FINANCE - BILL 0902881
What's the2 Redevelopment Authority -- what were they3 doing with it?4 MS. McCOLLOCH: It was General5 Fund money from Fiscal Year 2003 which6 was part of the NTI program before --7
2003?8 MS. McCOLLOCH: Wait a minute.9 I'm with you -- (continued) before the10 first Program Statement and Budget for11 the NTI program was passed. There was12 General Fund money put at the13 Redevelopment Authority to support14 acquisition activities, because there was15 money that was needed for, if you will,16 preliminary work such as appraisals and17 title reports and so forth before the NTI18 bond proceeds were going to be available19 for acquisition. So that money is --20
The $221 million in the General Fund that's under22 contract to RDA --23 MS. McCOLLOCH: Correct.24
-- is that25 177 6/2/09 - FINANCE - BILL 0902881 all of it?2 MS. McCOLLOCH: All of the3 General Fund money?4
All of the5 General Fund money from whatever fiscal6 year we're talking about, because we're7 going back as far as 2003 at this point.8 Does the $2 million represent all the9 money that's in that category under10 contract to RDA?11 MS. McCOLLOCH: I'm sorry. I12 don't know that.13
Who would14 know that? How do you know that the 215 million is there?16 MS. McCOLLOCH: I know that the17 2 million is there because I checked it18 with the Finance Director before this.19
What I20 would like to do when we get the21 information -- when the amendments22 finally come before the members of the23 Committee, I would like you to try to24 find out through the Administration if25 178 6/2/09 - FINANCE - BILL 0902881 there's other money parked over there2 from other budgets. I mean, if we can3 find $2 million from 2003, it's kind of4 frightening as to what may be parked over5 there in the way of General Fund, even6 though committed dollars but General Fund7 money.8 MS. McCOLLOCH: Okay. I9 understand the question.10
I know11 you're not the Finance Director, but12 doesn't that make you wonder?13 MS. McCOLLOCH: I can --14
You don't15 have to answer.16 In your testimony it says the17 Plan identifies 6.8 million in proposed18 funding from the state Department of19 Community and Economic Development's20 Housing Redevelopment Assistance program21 to support the Heater Hotline and Tier 122 parts of the Basic System Repair Program.23 Since we haven't had a state24 budget yet, what's the likelihood or25 179 6/2/09 - FINANCE - BILL 0902881 percentage -- how would you handicap that2 money staying in the budget on the state3 level and coming to us?4 MS. McCOLLOCH: I believe that5 we're going to get some portion of that.6 I'm not sure we're going to get 1007 percent of what we're anticipating. This8 was based on the Governor's budget. This9 figure was based on the Governor's10 budget.11
I'm sure12 you're aware there's the Governor's13 budget, there's the House budget and then14 there's that very austere, Spartan Senate15 budget that hopefully will not come to16 pass.17 MS. McCOLLOCH: Right. Well,18 I'm just telling you what this number was19 based on was the Governor's budget.20
So the odds21 are at some point $6.8 million will be22 less than 6.8; is that fair?23 MS. McCOLLOCH: I think that's24 a fair assessment.25 180 6/2/09 - FINANCE - BILL 0902881
What are we2 doing to make up that gap? Because it3 would seem that if we bumped up the Basic4 System Repair Program line item in5 CDBG-R, we would kind of be protecting6 ourselves in the event that we don't7 get -- either we get half of it or8 three-quarters of it or none of it, that9 we would have money available for10 emergency -- basic systems repairs would11 keep people from becoming homeless in the12 first place.13 MS. McCOLLOCH: I think you14 could increase it. It would just be a15 question of where you --16
But20 considering the fact that your testimony21 is -- and, again, you don't have a22 crystal ball and neither of us do23 relative to the state budget -- that 6.824 is likely to be less than 6.8?25 181 6/2/09 - FINANCE - BILL 0902881 MS. McCOLLOCH: I think that is2 likely.3
So I think4 we ought to be taking that in5 consideration in our discussions relative6 to CDBG-R, that if we recognize that the7 6.8 we're looking for might not be that,8 that we maybe find a way to ensure that9 we have the heater repairs and the roof10 repairs and some of the other things we11 need.12 MS. McCOLLOCH: Okay. I think13 part of the thought is that because we're14 going to have this increased money, this15 large influx of money for weatherization,16 which --17
We don't18 know what that is yet.19 MS. McCOLLOCH: We don't know20 the exact amount yet, no. We know we're21 getting -- well, we're getting about 1.722 from PHDC increase in July and then we23 will apply for additional funding for24 weatherization, that there will be some25 182 6/2/09 - FINANCE - BILL 0902881 influx of funding through the2 weatherization program.3
My request4 to you is to help address that, what I5 just raised to you now, when we have our6 discussion.7 MS. McCOLLOCH: Right.8
Thank12 you, Madam Chair. Real quickly. And13 maybe this is a question to you. The14 amendments that Councilman Kenney and Ms.15 McColloch were just talking about to this16 bill, when would they be available17 written-wise? I mean, will they be18 available tomorrow?19
Tomorrow?22 All right. Because I know time is going23 to be tight on Thursday morning, so maybe24 we can see them ahead of time.25 183 6/2/09 - FINANCE - BILL 0902881 All right. Thank you.2
Just6 quickly.7 Ms. McColloch, you mentioned $38 million in the acquisition pool.9 MS. McCOLLOCH: Yes.10
Two million11 coming from RDA and the other 1 million12 coming from where?13 MS. McCOLLOCH: Coming from on14 . I want to make sure we're15 looking at the same book. Page -- is16 that the budget?17
No.18 MS. McCOLLOCH: It's under19 Community Economic Development, Section20 B, Targeted Neighborhood Commercial Area21 Assistance, Line 8, Gap Financing, which22 is currently at 2.1 million.23
Go ahead.24 MS. McCOLLOCH: So that line25 184 6/2/09 - FINANCE - BILL 0902881 item that's currently at 2.1 would be2 reduced to 1.1.3
And so how4 does that affect your compliance with5 Bill 000716?6 MS. McCOLLOCH: It has no7 effect, because this number was not8 included in the calculation for the five9 percent.10
I'm not sure11 that's true.12 MS. McCOLLOCH: The CDBG funds13 are what's in the bill, and this is bond14 proceeds.15
This is bond16 money that's going toward targeted17 assistance?18 MS. McCOLLOCH: This is bond19 money -- leaving aside the proposed20 amendment, this 2.1 is corridor bonds21 that are going to assist commercial22 corridor development, which --23
I only have24 a copy of the preliminary plan. Do you25 185 6/2/09 - FINANCE - BILL 0902881 have a copy of the Year 35 here?2 MS. McCOLLOCH: Yes. That's3 why I thought you were looking at a4 different book.5 So in that book, Councilman, on6 is where we're talking about.7 And you can see B-8 is called Gap8 Financing, and it's 2.1 million and it's9 under the Other category, which is the --10 I'm sorry.11
It's12 reflected on . Thank you.13 MS. McCOLLOCH: Okay.14
It shows 1.115 rather than 2.1 on . Thank you.16 MS. McCOLLOCH: Okay.17
On of your testimony, you talk about the19 rental housing program, the rental20 housing program supported by Low Income21 Housing Tax Credit. Are those tax22 credits available -- what kind of23 housing? Is it single-family housing or24 multi-family?25 186 6/2/09 - FINANCE - BILL 0902881 MS. McCOLLOCH: It's2 multi-family. The Low Income Tax Credits3 are the funds that are available through4 the Pennsylvania Housing Finance Agency,5 PHFA, and PHFA has an application round6 every year.7
But it's8 for multi-family?9 MS. McCOLLOCH: Multi-family.10
That's my14 question.15 of the budget detail,16 it is anticipated that PIDC will generate17 $1 million more in program income over18 last year's total of 6.7 million.19 Considering that PIDC has only generated20 $3.1 million in program as of May 31st,21 with only 30 days left before the close22 of the fiscal year, how will it generate23 this increased amount of $7.7 million in24 program income next fiscal year?25 187 6/2/09 - FINANCE - BILL 0902881
Well, the number in2 the budget, from my understanding,3 strictly is an authorization of the4 dollar and not the actual. So we're5 authorizing the 7.7 million this year as6 an authorization to allow us to do that.7 Then we will go through and then see what8 programs are funded and the actual9 result. So the actual will probably be10 consistent year to year.11 MS. McCOLLOCH: And also the12 number that you have, the 3.1 as13 generated, which was based upon a report14 that was requested and that I provided to15 City Council, that number was an16 inaccurate number. There was a17 misunderstanding in collecting data from18 PIDC about what information we were19 seeking, and that 3 million was only20 about new loans, not about ongoing and21 cumulative program income. So, in fact,22 PIDC generated more than the 3 -- I think23 it's 3.1 million. They in fact -- it in24 fact generated more than that. It was a25 188 6/2/09 - FINANCE - BILL 0902881 miscommunication about what was actually2 generated.3
Okay.4 Thank you.5 In prior years when program6 income goals were not met, how will OHCD7 make up the difference in the8 Consolidated Plan?9 MS. McCOLLOCH: If the program10 income that was not generated was in the11 loan pools of PIDC, then it just meant12 that it had less money to loan out. It13 didn't mean a reduction in the program.14 In other categories if there was less15 money generated, it essentially became a16 cash management issue for OHCD to work17 with either the Redevelopment Authority18 or PHDC about what additional -- what19 resources it hadn't earned and how we20 could make that adjustment. It generally21 was just a carryover.22 Because we got a new CDBG23 entitlement, we were able to manage the24 budget without having to cut programs.25 189 6/2/09 - FINANCE - BILL 0902881 The point at which we would have to cut2 programs would be if we never received3 any additional CDBG funds and we wouldn't4 be able to roll over any money, then we5 would have to actually cut it off. But6 because it's been an ongoing program for7 35 years, we're able to manage the8 reduction in program income by just9 essentially carrying the debt forward.10
During14 budget hearings, there were a number of15 questions raised around the Childcare16 Facilities Fund. An aside that occurred17 to me as I was sitting here, is there any18 reason why a childcare center could not19 qualify for the Basic Systems Repair20 separate from the question I'm going to21 pose about a Childcare Facilities Fund?22 MS. McCOLLOCH: Basic Systems23 Repair Program is --24
Strictly25 190 6/2/09 - FINANCE - BILL 0902881 for individuals?2 MS. McCOLLOCH: Is for3 single-family houses.4
And not5 for non-profits at all?6 MS. McCOLLOCH: Right. And not7 for --8
That9 answers that.10 The fact is that the Childcare11 Facilities Fund has 1.4 as budgeted?12 MS. McCOLLOCH: I'm sorry.13
The14 Childcare Facilities Fund has a contract15 now for 1.4 million?16 MS. McCOLLOCH: Yes. It has an17 existing contract with Philadelphia18 Housing Development Corporation for 1.419 million.20
And it is21 my understanding that the Facilities Fund22 receives matching dollars from William23 Penn that grow with the City's24 contribution. Was that a fact and how is25 191 6/2/09 - FINANCE - BILL 0902881 that a fact into the decision-making2 around the allocation of those dollars?3 MS. McCOLLOCH: Well, the 1.44 million is all based on the original 55 million that was made in July of 2003.6 The Childcare Facilities Fund originally7 got $5 million in 2003 to carry out its8 program of grants to childcare facilities9 to make capital improvements, and it has10 a program of technical assistance to11 assist the folks that are running those12 childcare facilities.13 So this is still -- it's still14 carrying out that -- it's still using15 that initial $5 million. In FY09, it got16 an additional $200,000 of General Funds17 added to it.18
Okay. Who19 is administering the technical assistance20 for the Childcare Facilities Fund?21 MS. McCOLLOCH: Non-Profit22 Finance Fund.23
And given24 the length of time and how the 5 million25 192 6/2/09 - FINANCE - BILL 0902881 was spent, what is your prognosis for2 sustaining the program after 2010?3 MS. McCOLLOCH: It will have4 sufficient resources to carry it through5 2010. At this time, after the current6 1.4 million, which is the existing7 contract with PHDC between NFF,8 Non-Profit Finance Fund, and PHDC,9 there's still another million dollars10 that can be either added to that contract11 or a new contract executed all from the12 initial 5 million plus 200,000 of FY0913 money. So I think it can be supported14 through FY10 and even into FY11.15
After16 FY11, procedurally what happens with your17 office and those agencies that are18 contracted to receive dollars?19 Procedurally what do you do as you look20 to the next fiscal year?21 My long-term goal is22 sustainability for what it means and23 making sure that we have childcare24 centers that meet code, et cetera.25 193 6/2/09 - FINANCE - BILL 0902881 MS. McCOLLOCH: We would need2 to consider it as part of the FY12, the3 Year 37 Consolidated Plan, either to put4 additional CDBG resources toward it or to5 consider it as part of the operating6 budget, because the fund does receive --7 this year it did receive General Fund8 support. So it would be part of the9 budget process that we would meet here10 before you indicating how we were going11 to continue to support the fund.12