Committee on Finance, June 5, 2024

Pull the mic closer. We're having an issue with the mics. MS. McCOTTRY: Is that better now?

That's great. Thank you. MS. McCOTTRY: All right. Good afternoon, Chair Gilmore Richardson, Gas Commissioner Jones and Councilmember Thomas. I am Melanie McCottry, Chief of Staff and Senior Vice-president for Communications and External Affairs at PGW. With me today are members of PGW's management team. I'm also joined to my right by Dr. Erica Patterson, PGW Director of Contract Management and Supplier Diversity. I'm here to testify in favor of Bill Nos. 240378 and 240417, and I assume I can do both at the same time.

Yes, please. MS. McCOTTRY: Great. PGW's submitted testimony describes each individual request in more detail and I'm prepared now to share a summary overview of items incorporated into each amendment. First, Bill No. 240378. PGW's Fiscal Year 2024 capital budget received initial approval from City Council in an amount totaling $192,432,000. PGW is seeking City Council's approval to amend the budget, increasing budget authorization by $65,451,000. This amendment will result in a revised budget totaling $257,883,000. While this increase is significant, the need for this amendment is necessary to support critical initiatives that PGW deems necessary to ensure PGW can maintain a safe and efficient utility and deliver quality service for our customers. The amendment before you today was consolidated into one bill from two separate actions taken by the Philadelphia Gas Commission in fulfilling their responsibility to reviewing and recommend approval of PGW's amendment requests. Next, Bill No. 240417, which would approve PGW's Fiscal Year 2025 capital budget. The majority of this budget request reflects funding of PGW's Cast Iron Main Replacement Program. Both PGW's historical 180-mile program together with authorization for an accelerated replacement program to be funded entirely through a distribution system improvement charge, which is a surcharge mechanism that is approved by the Pennsylvania Public Utility Commission. This budget also includes proceeds from the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration grant established by President Biden's historic Bipartisan Infrastructure Law, which is designed specifically to support municipally or community- owned utilities to repair, rehabilitate or replace natural gas distribution pipelines. This Infrastructure, Safety and Modernization Grant Program funding, provisionally awarded to PGW, will be used towards PGW's main replacement program, which directly supports the delivery of safe, reliable energy and advances PGW's methane reduction program efforts. Replacing aging cast iron pipelines with upgraded material that does not rust or corrode and that eliminates methane escape will help PGW to meet its 2050 goal of reducing methane emissions by 80 percent. This most recent $75 million award from the Biden Administration will allow the replacement of 40 miles of cast iron main and last year PGW also received a $10 million grant from the Biden Administration. Lastly included in PGW's request is funding to provide main and service facilities to support the requirements of new customer load. PGW has a tariff obligation to serve new customers who request service. Additionally, Commonwealth law also requires PGW to serve new customers. This investment is critical to PGW's effort to minimize any request to increase rates in the future. PGW respectfully requests the Committee give these bills its favorable recommendation and further that the Committee recommends that the rules of Council be suspended so as to permit first reading of these bills at the next session of Council. I would like to extend our appreciation to both the Gas Commission and its staff for conducting a comprehensive budget review along with public input. Also, on behalf of PGW I would like to thank City Council for its past support of our efforts to serve the citizens of Philadelphia and look forward to your continued support. Thank you for your time and consideration of this matter. I'm happy to answer any questions you may have at this time.

Okay. Thank you. Thank you so much for your testimony and for your work and again to your team for all the meetings and briefings in advance of this hearing. In addition to this, I wanted to correct the record for the folks who are here from Brith Sholom. I extend my humble and sincere apologies to each of you for assuming that you were here to testify in the Housing Committee. You are, in fact, already signed up. So when I saw additional witnesses coming, when we ask for additional witnesses to testify, that means we don't already have you on the agenda. We already have your names on the agenda and you will be called at that appropriate time for the bills that you signed up for so you're not technically additional witnesses. So I wanted to apologize to you for that error. Okay. But you will be recognized and we already have your name, so it wouldn't be any additional need and we'll ask for additional folks at the end. Okay. So we will call you shortly. All right. Thank you very much and my humble and sincere apologies to each of you for that initial incorrect information. Okay. All right. The Chair now recognizes Councilmember Jones for questions for this panel.

Thank you, Madam Chair. I will be brief. Couple of things. We need to thank the Biden Administration for those generous grants, which are allowing us to accelerate our cast iron replacement. I note that we do miles. This grant will 5 allow us to increase that to what? 6 MS. McCOTTRY: So we do 18 7 miles and then we have an 8 additional mileage because of our 9 DISC surcharge. So right now we're 10 roughly between 30 and 35 miles 11 annually. This new grant will 12 allow us to do 40 more miles. 13

41 miles 14 from 18, that's amazing. And I'm 15 so very glad now that City Council 16 did not sell PGW some years ago 17 because you're pulling your weight. 18 Thank you very much.

Thank you. And thank you so much, Councilmember Jones. You're still on the Gas Commission, right?

(Nodded affirmatively).

So thank you. Thank you very, very much for your work there. And we know how important this grant will be to really double, plus the amount of work that we're able to do year-over- year. Are there any other questions for this particular panel? MS. McCLENDON: I actually wanted to provide testimony on behalf of the Gas Commission.

Absolutely. So state your name for the record and proceed with your testimony. MS. McCLENDON: My name is Gemela McClendon. I am the Executive Director of the Philadelphia Gas Commission. Good morning, Chairwoman Gilmore Richardson, Councilmember Jones and Councilmember Thomas. The Gas Commission appreciates this opportunity to testify in support of Bill No. 240378, which embodies its recommendations to City Council regarding the amendment of PGW's FY24 capital budget, which was unanimously adopted by the Commission. PGW's testimony and the Commission's written testimony that's been submitted provides the details of the requested amendment as endorsed by the Gas Commission, and this is just simply to supplement PGW's testimony. We respectfully request this Committee to report out this bill with a favorable recommendation together with the suspension of the rules so that it may have its first reading at the next Council session. After completing its standard due diligence review of PGW's request to amend its FY24 capital budget, Commission staff found that the request appeared reasonable and made a recommendation to the Gas Commission that the requested amounts be approved by the Commission and a recommendation of approval be transmitted to City Council. During our proceeding, neither PGW nor the Public Advocate objected to these recommendations and the Gas Commission adopted the same. With regards to Bill No. 14 240417, which would approve PGW's FY25 capital budget, I simply wanted to note that the Commission's proceedings undertaken in reviewing PGW proposed FY2025 capital budget were completed in full compliance with the Sunshine Act and members of the public were allowed to testify at the Commission's public hearing held on February 27, 2024. A full transcript of that hearing may be found on the Commission's website. Further, one issue that is outstanding is related to the replacement of PGW's mains and new customer connections. Because this issue came out, the Gas Commission did seek advice and counsel from the City Law Department, first through its assigned legal counsel and then through a formal City Solicitor's opinion. And it is the Law Department's advice and recommendation that the Gas Commission not recommend any actions that would hinder PGW's ability to connect new customers, as it could potentially place the City in legal jeopardy with regards to the Commonwealth of Pennsylvania. That concludes my testimony.

Thank you. Thank you very much for your testimony and for being here. Do you have testimony to provide or are you here for questions?

I'm here for questions.

Questions, okay. Excellent. Just state your name for the record so the stenographer has that.

Hi. Yes. Good afternoon, Councilwoman Gilmore Robinson and other Councilmembers. My name is Dr. Erica Patterson. I am the Director of Contracts Management and Supplier Diversity in the Supply Chain Department at Philadelphia Gas Works.

Excellent. Excellent. Thank you very, very much for being here. Any additional questions?

Yes.

Chair recognizes Councilmember Jones.

I wanted to put on the record a thank you on behalf of the residents of Brith Sholom because they're, you know, because of the rules that are fairly applied in place for medical exemptions, the individuals that live there now are still getting gas because of you. And if you are an entity, a utility without a heart, then you don't do what you can for the public and the consumers that actually pay the bills. So I just want to on the record thank the Gas Commission PGW for their following of the rules with an eye towards humanity. And I want to put that on the record. Thank you so much.

Thank you. And thank you so much to Councilmember Jones and Gail who's here from Wynnefield Heights who has been working diligently with our community members in Wynnefield Heights at Brith Sholom. MS. McCOTTRY: And if I can add just that we care deeply about the residents of Brith Sholom and are wanting to work and continue to support on all the ways that we are able to while we work through this process.

Thank you. Thank you very, very much. Chair now recognizes Councilmember Thomas.

Good afternoon. Thank you for being here. Appreciate the work that's being done similar to what my colleague said. Clearly, when folks come down to City Council to testify, most of the time they're not coming to tell us the great job that we're doing. I'm hearing that there's going to be significant testimony from residents on a particular issue and I'm asking that if the residents are looking to testify specifically about issues related to your department, that you just give us your word that you'll stay, listen to their testimony and be willing to work with us for whatever issues are about to be communicated as it relates to the concern of the residents. (Applause.) MS. McCOTTRY: We will.

Thank you.

Thank you. Thank you so very much for being here. We have no additional questions or comments from members of the Committee. And so, we thank you for your testimony. MS. McCOTTRY: Thank you. MS. McCLENDON: Thank you.

Thank you.

Thank you. The Chair now recognizes public comment on Bill No. 240417, and I will call you in groups of three, John Sams, Jane Harvey and Rabbi Julie Greenberg and also Tara Faik, Cinthia Ibarra, Peter Furcht, Pamela Darville and Jackson Hart, if you could just come up, and Karen Melton. For each of you, I'd ask that you please state your name for the record. Then proceed with your testimony. (Witnesses approached Witness table.)

And if you can, please proceed with a summarized version of your testimony because we do have another Housing hearing at o'clock. 2

My name is John --

Hold on one moment, sir. I also ask that if each person could just pull the mic up so that we could hear you.

Okay.

All right. Okay. Please state your name for the record and proceed with your testimony.

Okay. My name is John Sams. I'm a resident at Brith Sholom. I've lived there for 2-and-a-half years. As far as it goes, we do need the help with the gas if it's turned off. Most of us have no way of taking a shower or at any time. Me, I have electric stove. It takes about a half hour just to heat the water up and it's very, very -- how can I say -hard. For anybody else, they would have to take a cold shower. I don't even like taking a cold shower. But we do need somewhere that's going to help us so that we can have a place that's stable. Most of us don't have anywhere. We have to move. If they shut the place down, I don't know what's going to happen. Living on the streets is no joke. I've lived on the streets already. Don't like it. The ones that's there at the Brith Sholom, done lived there a very long time. For the two years that I've lived there -- excuse me. They are very nice people, some of them. But I can't say -- most of the people there are very nice. I've taken them as family, I'll say that. But what's going on right now is not fair. It's not fair at all, not at all. If the gas gets cut off, what are the ones that's going to do right now? It's still people there that are paying rent where they shouldn't have to. The court said no. The owners or so-called people that's there right now, they telling them pay, where they can save their money and move, they have nowhere to go. There are people that's 90 -- it's a few people there that's in their 90s. What are they going to do? It don't make sense. It's wrong. It's wrong. The people can't even mail, you can't even pick up your mail. Far as the heating -- right now I don't know what else I can say. I'm fed up. The management don't really want to do anything for anybody there. They're heartless. They're heartless, and I'm just here to speak on that. And if some type of budget can be done, willing to work. I've had two letters from PGW asking me to help pay. If I could, I would. I'm on a fixed income. I'm sick myself. I got a defibrillator, pacemaker in my chest. I got COPD, CHF. I done had half my colon taken out. I can barely breathe right now. If I can help, I would, but I can't. I'm taking one day at a time like everybody else. I've joined the American Legion. I do what I can. I love America. I served the country. I still do what I can, but life goes on. So for Brith Sholom, love it. The place is nice. Can sit outside, enjoy the air, the people, nice area, but you can't really do -- you really can't enjoy it right now because you go over there right now, it's almost like a desert. The people there, they want you to go. They just -- I don't know what else to say. That's about all. Appreciate your time. Thank you. Please, PGW, help us. We need your help. (Applause.)

Well, we thank you for your service and we thank you for being here and for providing testimony. I wanted to recognize our District member Councilmember Jones.

Thank you, Madam Chair. And thank you again, PGW, for hearing that and understanding the plight of the residents of Brith Sholom. But it raises a greater question, colleagues, that this is not -- we didn't get here out of coincidence or something that the residents did. The owners of Brith Sholom bought that property as investors expecting a rate of return and they took -- and I really -- this is a matter of the court, it's in the courts. There was a hearing. It is at the next hearing. Their fate is being decided. Who wants to live day-to- day with the sort of Damocles hanging over their heads. These are veterans, these are seniors. There are some people with disabilities that don't need this stress. With that said, the City of Philadelphia and I thank the Mayor for taking this bull by the horns to try to figure it out. There are things I cannot say that are being negotiated as we speak. But one of the things, we've offered my members on Friday to take a tour --

Right.

-- to go see how things are and to see what conditions they live in. And I think, and more importantly than just Brith Sholom, that's the tip of the iceberg of many Philadelphia properties that are under water just like this, from Center City all the way to the neighborhoods, where unscrupulous buyers go in -- it's right out of the movie Casino -- where they buy it, they get it appraised. They take all the equity out, don't put any improvements back in, almost to kind of raid the value of the property. And what is as bad and creates a conundrum is that when you don't invest in elevators, when you don't invest in HVAC, when you don't upgrade the electrical so that in the summer they don't have power failures in 90 degree heat, they're living in conditions that L&I has to look at. And it puts the City in a catch 22. And we have to take a step as a City to say that we're going to recognize bad actors and we're going to step in and make the repairs for them and we're going to put liens on the property so that if at some point they sell those properties for profit, the City gets its money back. (Applause.)

At the end of the day, let's not be fooled. Brith Sholom is right down the street from Fairmount Park, couple blocks from City Avenue. If this property was in New York City, it would be worth 10 times as much as it is. But speculators from all over the world are looking at Philadelphia and its undervalued market to say, hmm, here's an opportunity for us to swoop in at the cost of the residents who have lived there for decades. And I'm going to just say this and I'm going to get off my horse because we got a hearing to run. It is not just the fact that they're facing relocation. You're talking about familiar relationships that they know on Friday who does the fried chicken dinners. They know on Saturday who does the hair. They know their way on public transportation to their doctors' appointments. To uproot them in this manner, some of them in the fourth quarter of their life, is cruel and unusual punishment. And we as a City have to step in. Thank you, Madam Chair. (Applause.)

We thank you, Councilmember Jones. And I will say to all of you here that Councilmember Jones has been sounding the alarm on this issue for a very long time, and it's been important needed advocacy internally to ensure that all members of Council recognize this issue, because what's happening in the 4th is going to happen somewhere else, and it is happening elsewhere. Even in our area, I mean I've even been down to Pavilion when those generators have been out, walking up those steps, up and down the steps all night long helping to get our seniors out of the building and working with OEM to ensure that everyone is safe overnight, and working with Councilmember Jones' office and staff very closely on all of this. And so, we have a lot of work to do. But I want to thank you for your leadership on this issue, Councilmember Jones, and for the work that I know we will continue to do together to solve this issue. If you could please state your name for the record and proceed with your testimony.

Hi. Steve Kohalni. I'm a resident at Brith Sholom, and I'm sure you guys are getting tired of seeing my face, but it's nice to see you all again. Councilwoman Richardson, thank you so much for the opportunity. Councilman Thomas, thank you for your kind words. That's very supportive. And, Councilman Jones, I don't even have words to tell you how much I appreciate you really get us. I don't want to speak for everybody, but I feel like you're really getting us. I mean, that's it. I just want to live the rest of my life, go see my doctors, blah, blah, blah, everything that you said. I echo everything that John said. God bless him. And I got two things, everything that we're talking about here today. One, thank you for PGW not turning my power off, my gas. It's nice to be able to take a warm shower. When you get older, cold showers are just not for you, you know. Being able to wash my dishes is a big deal. So I really do appreciate PGW for continuing to give us the gas and of course for the electric company. I mean, you know, we would be dying. What John said, there's people in that building that really need power just to be able to breathe. So I appreciate them for keeping things on. And my second thing that hasn't been -- well, yeah, Councilmember Richardson, you touched on this. It's clear that they want us out. And even if the City buys the building, my feeling is that we're going to have to move out for some time period anyway. So that's what I would like to see is help in finding a place to live. I've looked. And you may agree that the city of Philadelphia has a housing shortage, so I am not finding apartments in my price range anywhere. Well, pretty please with sugar on top, that would be the other thing, not everybody -- and I don't want to move. You know, I told you guys this the last time I saw you. I'd like to stay where I am. I really like it there. I feel safe. I like the people that I live with. There's some really nice freaking people there. I understand that you're coming to visit us on Friday. God bless you for that. Talk to some of these people. Some of my neighbors are really, you know, these are nurses and professional people. And as you said, Councilman Jones, they're like in the fourth quarter. I'm one of the youngest people there, you know. And I told you the last time I've been through the shelter system in Philadelphia. And God bless you for that. I know I'll survive that if I have to go back into that. But my neighbors, a lot of them aren't going to be able to do that. So they really, really need your help in -- for those that want in finding a place to live because that is just not easy. A lot of folks have family members that have, I don't know, moved them, you know, so they've got other support. But then there's a lot of people that don't have any support. So anyway, all right. Thank you so much for the time. I appreciate it. And thank you so much for your effort and caring. That's the hardest thing is finding somebody that really gives a damn. Thank you so much. I appreciate it. (Applause.)

Thank you. Thank you again, Steve. Thank you for joining us again in Council. And I just wanted to state for the record because I understand that our Office of Homeless Services has been working with this group. And I want to thank them for working with the individuals at Brith Sholom during this time. And I know that working together with OHS that they'll be able to help as many of you as possible with the issues that you all are facing. Okay. And so, I just wanted to put that on the record to say thank you to OHS who's been working with the residents at Brith Sholom. If you could please state your name for the record and proceed with your testimony.

Julie Greenberg.

Okay. Please proceed with your testimony.

Thank you, Councilmembers. I direct the Climate Justice and Jobs work at POWER Interfaith. And I want to start by saying that POWER Interfaith stands with our neighbors at Brith Sholom. PGW should not cut off the energy in their time of need. We've talked with constituents in every district across the City and we work with a couple foundational values that come up from the communities. Everyone deserves to have access to the energy they need at a rate they can afford. And we need a rapid and just transition from fossil fuels to clean renewable energy in order to protect the health and well-being of people here in Philadelphia and around the world. For these reasons, we need City Council to provide much more robust oversight and direction to PGW, our publicly-owned gas utility. We and partners across the City are developing lots of ideas about what specifically is needed over the long-term and today we want to repeat an immediate request for amending the capital budget ordinance that we've shared with Councilmembers in a sign-on letter. We disagree with the opinion that the Gas Commission has relied on. Our attorney has filed a detailed brief about why we strongly disagree. PGW should not be allowed to spend $19 million on new gas infrastructure without complying with the law to do a cost-benefit analysis. We also want to address a proposal from the Gas Commission to limit the role of the public in shaping future PGW budgets. We need to have a voice in our energy future. PGW is -- the Gas Commission is trying to limit the role of the public in these discussions. This isn't a new conversation. We've been testifying at City Council hearings about PGW for five years already. And with legal representation, we've been intervening in regulatory proceedings before the Philadelphia Gas Commission and the PA Public Utility Commission for three years now. But as utility costs escalate and the climate emergency grows increasingly urgent, the need for City Council to take action is greater than ever. We call on City Council to provide much more oversight and direction for PGW. My colleagues will share a little more. Thank you. (Applause.)

Thank you. Thank you very much for your testimony, I'll say your insightful testimony which is generating much conversation amongst the Committee. But we thank you very, very much for being here and for all the advocacy of POWER, because you all were a part of our Climate Advocacy Committee when I was Chair of Council's Committee on the Environment. And so, I thank you for that work and everything that you all have been doing --

Thank you for all of your work.

-- to show up and represent in this space. And thank you for locking arms with the residents at Brith Sholom and following their lead relative to advocacy. Chair now recognizes Councilmember Thomas.

I just wanted to say thank you for your testimony and also to make sure that you're aware that we did have a hearing as it relates to this particular issue, specifically looking at how do we meet some of our 250 carbon neutrality goals and what we need to do to work with PGW and other partners. That conversation will be continued this fall. So please look out for a date for a hearing specifically looking to address some of the concerns that you communicated and figure out how do we work with our utility partners to make sure that we're doing the best job that we possibly can.

Thank you so much. And if you would contest their position on June 11th, that they don't want the public, they don't want POWER and other community groups involved in these conversations, we would like to be part of shaping our energy future.

Well, I'll tell you this: When we do the hearing, the conversation will be public. You'll be allowed to come participate in public testimony and we'll make sure that the platform exists for you to be able to communicate some of the concerns that you have. And we'll ask that all of our utility partners be open to the conversation and be willing to listen to insight, not just from this legislative branch but from constituents that they serve in general. So thank you for your advocacy.

Thank you. Thank you very much, Councilmember Thomas. And for the record, we have additional witnesses that need to testify for this hearing today, several other bills and resolutions. We have another Committee hearing at 2 o'clock. We have another Committee hearing slated at 4 o'clock. I respectfully request that everyone please at this time give us the summarized version of your testimony and that's with all due respect. I do not mean to rush you, but we have a very robust hearing schedule today and we need to get through all of these bills and resolutions in this Committee in order to move our City's budget forward. Okay. And so, please if you could just summarize your testimony and state your name for the record. Thank you.

Tara Fayik. I'm here today with POWER Interfaith as an organizer and I'll be reading the first part of a letter that POWER and our allies recently sent to all of City Council. Dear, City Councilmembers, we write to ask for your leadership in achieving safe, affordable energy for all Philadelphians and in protecting a livable climate. This spring City Council will approve a Fiscal Year 2025 capital budget for Philadelphia Gas Works. When you review the proposed budget, we ask you to enforce existing City law by requiring PGW to produce a thorough cost-benefit analysis subject to public scrutiny for all load growth projects before investment in those projects is approved. Such an amendment will protect ratepayers, particularly low-income residents who struggle with unaffordable energy bills. It will also start to bring PGW's budgeting process into alignment with our City's 2050 carbon neutrality goal. In addition, it will uphold City law. As part of its budget proposal, PGW has requested authorization to spend million 8 next year building gas 9 infrastructure to supply new 10 customers referred to as Load 11 Growth Projects in the official 12 budget documents. 13 The capital program 14 protocols that City Council has 15 enacted as binding law require PGW 16 to substantiate proposed load 17 growth projects with a showing that 18 they will produce an acceptable 19 return on investment. However, PGW has not conducted any analysis demonstrating that the proposed projects will have a positive return on investment. Thank you.

Thank you. Thank you very much for your testimony. Please state your name for the record and proceed with your testimony.

Cinthia Ibarra. My name is Cinthia Ibarra and I'm here as a member of the Housing Equity Repair and Electrification for Climate Justice Coalition. We're here for Climate Justice for short. To continue with our letter, I'll add that earlier this spring POWER Interfaith intervened in the Gas Commission's capital budget proceeding. POWER recommended that the Commission uphold City law by requiring PGW to file cost-benefit analysis for each project before they could be approved and subjecting these analysis to public review. However, the Commission rejected the expert testimony and legal arguments that POWER and their attorney submitted. Instead the Commission approved expenditures of $19 million for load growth projects without requiring the cost-benefit analysis that are mandated by law. If City Council upholds the Commission's decision, ratepayers may end up subsidizing fossil fuel infrastructure projects that fail to produce a positive return for the utility. Careful analysis of proposed load growth expenditures is a sound business practice at any time, but it is especially important now during a time of unprecedented climate change and rapid technology shifts that are leading to less, not more, fossil fuel use. City Council Former Mayor Jim Kenney and our new Mayor Cherelle Parker have issued resolutions, executive orders and plans that commit Philadelphia to achieve net zero greenhouse gas emissions by no later than 2050. Reaching this goal would require phasing out the use of fossil fuels, including gas in most buildings across the City over the next years. 8 A shift towards the use of 9 electricity for space heating, 10 water heating and cooking has 11 already begun. That shift will 12 accelerate as residents and 13 businesses take advantage of 14 federal tax credits, grants and 15 rebates made available through the 16 Inflation Reduction Act. Lastly, I 17 also want to briefly uplift the ask 18 that City Council step in to 19 prevent a PGW gas shut-off at Brith 20 Sholom. Thank you. 21

Thank you. Thank you 23 very much for your testimony and 24 for being here today. 25 If you could please state your name for the record. Proceed with your summarized testimony.

My name is Peter Furcht, also a member of POWER Interfaith. I will read the last part of this letter. We should expect demand for natural gas to decline rapidly in Philadelphia in the coming years. Under those circumstances, there is a significant risk that many investments in new gas infrastructure may not produce a positive return on investment. We need thorough cost-benefit analyses in order to determine whether or not it is sensible for PGW to carry out each load growth project or if it would be necessary to impose additional charges on new customers in order to cover the cost of those projects. PGW's proposed budget is not aligned with the City's 2050 carbon neutrality goal. It does not account for the accelerating pace of building electrification and investment in building efficiency upgrades in our city and it ignores the PGW capital program protocols that City Council has enacted. City Council must act to protect ratepayers and ensure that PGW follows City law. We urgently need your leadership. Thank you. And this was signed by POWER Interfaith Citizens Climate Lobby Philly Chapter, Clean Air Council, Green Party of Pennsylvania and Philadelphia, Penn Environment, PennFuture, Philly DSA, Philly Thrive, Physicians for Social Responsible PA and Sierra Club PA. That's the end of the letter. I also stand behind Brith Sholom and want to point out that Brith Sholom is not the only building in Philadelphia that has these issues that you need to be looking at, many more, coming up with a wider policy. (Applause.)

Thank you. Thank you very much for your testimony. Thank you for representing so many groups. Okay. If you could state your name for the record and proceed with your summarized version of your testimony.

Okay. Sure. Thank you. My name is Pamela Darville and I live in Germantown section of Philadelphia. I'm the Co-chairperson of POWER's Climate Justice and Jobs Act. I just want to say I'm not an environmentalist. Don't ask me how a heat pump works. I don't know. But what I do know is this: I was born and raised in Miami, Florida, the Liberty City section. And I know what it's like to experience being unbearably hot, and I know what it's like to grow up in a neighborhood that has no 4 trees or parks, swimming pools. As a kid I sat in my house during a hurricane praying that the roof didn't fly off the house. Our climate is getting hotter. We need some action. I just read that in Phoenix close to 700 people died because of the heat, so this has to be addressed. The fact that PGW is asking for this enormous amount to expand this infrastructure is unacceptable. The fact that they are not transitioning to clean energy and a way in which it makes sense is unacceptable. As I said, I'm not an environmentalist, but I'm somebody that cares. I care about this city. I care about the fact that we have areas in a city where it is so hot that people are dying. This earth is warming. We need to do something about it. And you know what, we have a state Constitution that mandates that the people in this city enjoy clean air and clean water. That's a mandate. And the fact that PGW ignores that is unacceptable. Now, the fact that the Gas Commission is going to probably approve on June 11th the fact that third parties can no longer engage in budget proceedings is unacceptable. (Applause.)

City Council should look at that and they should say no. You know why, because it gives PGW a cloak of no 20 transparency at all, no 21 accountability at all. So I'm here to say the people need to know what's going on. They need to be aware of what's happening. The fact that PGW continues this position that they are not accountable to the people even though they are owned by the people is unacceptable. Please just don't rubber- stamp with what PGW puts forth. It is not business as usual today. People are suffering out there and they're going to continue to suffer unless some action is taken. So, City Council, please say no to the Gas Commission excluding people from participating in their budget proceedings. City Council, please support Brith Sholom.

Thank you. Thank you very much for your testimony. (Applause.)

Please state your name for the record. Proceed with your summarized testimony.

Okay. Hello. My name is Jackson Hart. I'll keep this quick. I'm here today as representative of Philly DSA, the Democratic Socialist of America. We work in a coalition with POWER Interfaith, Clean Air Council, Sierra Club and many, many other local organizations. I'm also here as an apprentice in the electrical trade. See, two years ago I took a good hard look at the state of the world and I saw the impacts of climate change. I saw power outages, forest fires, flooding, air pollution, poverty and how all this greatly harms Black and Brown communities disproportionately. Everything I was reading said we need to drastically cut fossil fuel use, expand the electrical grid and retrofit our buildings. Electrification is key and we need people to do that work. There's a shortage of trade workers and not enough electrical workers. So I left my desk job and went to trade school.

Wow.

I want a job in demand and one that gives me purpose. And being an electrician is pretty awesome, honestly. So what I'm seeing in the field of residential wiring is homeowners replacing their gas-powered appliances as much as possible, not just for cost savings -- and we all know about those PGW bills -- but they're also concerned about safety. Natural gas is methane. It's a highly combustible gas. Ask the people of Port Richmond, and it's proven to cause respiratory problems, especially child asthma. Folks who can afford to decarbonize are doing it because it's the right thing to do and the return on investment makes good sense to them. Meanwhile in Massachusetts, the first utility-run thermal network came online yesterday. (Applause.)

Good for them, right. So when I see that the Finance Committee is entertaining PGW's budget without the legally required cost-benefit analysis, I'm baffled. Is there a concept of an ROI regarding new pipes and hookups? And I don't just mean financially. I'm also talking about the reality of climate change and the health and future of Philadelphians. We can make much better sense and here's how: One, City Council should follow its own rules. Do not spend our money without a cost-benefit analysis from PGW and then have an accountant check the math. Two, listen to us. This coalition has been begging our City leaders to hear our concerns for years. We could be doing other things. We could all take up new hobbies and have shorter Finance hearings if we make No. 3 happen. Act, make good financial, moral and future- thinking decisions because the people of Philadelphia cannot afford the status quo. Thank you. (Applause.)

Thank you. Thank you very, very much for your testimony and thank you for being here. Is there any further witnesses for Bill No. 240417?

I'll be real quick. (Witness approached Witness table.)

State your name for the record and proceed with your testimony. How are you feeling.

Thanks so much. Thanks, Councilmember Gilmore Richardson and other members of Council. My name is Mitch Chanin. I also work with POWER Interfaith as well as DSA. I'm not going to talk about the fossil fuel issues right now. I just wanted to add a note about the Brith Sholom situation. So I am not a tenant there, but I wanted to just share a little more info. So from what I understand, there is a temporary reprieve because of medical certificates that were filed and that is required by state law. So what PGW has done as far as I understand is just comply with the law and give people a month and then there can be another month of a temporary halt on the shut-off when and if medical certificates are renewed. After that time, from what I understand the shut-off notice will be in effect once again. And so, also from what I understand PECO, which is an investor-owned utility, not publicly-owned, has not elected to threaten shut-off and is instead taking action to recover the money that they are owed from the building owner, who is the one who's actually responsible. So it's great that people have a temporary reprieve but what happens after that. In six weeks or so when the medical certificates can no longer delay a shut-off what is going to happen? And so, again I am not a Brith Sholom tenant, but I've been meeting and talking with folks. And I hope Council will take action to put pressure on PGW to ensure that there is not a shut- off once those medical certificates expire. PGW should do the same thing that PECO is doing and try to get payment from the people who actually owe them the money, the building owners. The tenants are not responsible for this. So I'll leave it there and I appreciate your time. (Applause.)

Thank you. Thank you so much, Mitch. Is there anyone here to testify on Bill No. 240417. (No response.)

Okay. Seeing none, we will now proceed to Bill No. 19 240416.

Tavare Brown. (Witnesses approached Witness table.)

Okay. And if you could just state your name for the record and proceed with your testimony.

How's everyone doing? I'm Tavare Brown, Deputy Budget Director and I'm here with --

We can't hear you.

All right. You know, shout out to the vertically challenged people. So I'm Tavare Brown, Deputy Budget Director, and I'm here with Jackie Dunn, City Treasurer. So good afternoon, Gilmore -- Chair Gilmore Richardson and members of the Finance Committee. I'm trying to do this fast. My name is Tavare Brown, Deputy Budget Director for Capital, and I'm joined by Jackie Dunn, City Treasurer. We're here today to testify in support of Bill No. 23 240416, which was introduced on May 9, 2024. The purpose of the bill is to obtain approval from the City Council to authorize an increase in non-electoral indebtedness in the City within the Pennsylvania constitutional limit. The loan in question requests an increase in indebtedness in the amount not to exceed $311 million to fund the City's FY2025 Capital Budget. The FY25 loan authorization will be amended to reflect any applicable amendments to the FY25 capital budget. So if things change, then we'll amend this in the future. As of May 31, 2024, the City's legal debt limit is 17.133 billion. And the amount of the debt applicable to that debt limit is 2.533 billion. As a result, the City has a debt margin of about 14.6 billion. The FY25 capital budget for a New General Obligation or GO bonds is approximately 298.67 million. The proposed ordinance includes the New GO loan amount plus an additional percent for a 3 cost of issuance. This brings the 4 loan authorization amount to approximately $311 million. And the loan authorization, if approved, would finance capital projects in a number of categories, which include transit, streets and sanitation, municipal buildings, parks, recreations and museums, economic and community development for a total of $311 million. On our written form, we have kind of broken out by the numbers per category. And then I respectfully request that you report Bill No. 19 240416 out of Committee with a favorable recommendation. And I further request that the rules of the Council be suspended so as to permit the first reading at the next session of Council. The FY25 loan authorization will be amended to reflect any applicable amendments to the FY25 budget. This concludes my testimony and I'll be happy to answer any questions.

Well, thank you. Thank you very much for your testimony. And again, thank you for meeting with my team and I on this bill and others. So I don't have any questions as of right now. Are there any other questions or comments from members of the Committee? (No response.)

And obviously, you know this is depending upon our process, but we thank you all very, very much for being here today and for your testimony. Thank you so much. Okay. We will now proceed. Is there anyone else here to testify on Bill No. 240416? (No response.)

Anyone else here to testify on Bill No. 240416? (No response.)

Seeing none, we will now proceed with Bill No. 240467.

Dr. Frank Franklin, Katherine Levins and Robert Brooks. (Witnesses approached Witness table.)

Okay. Thank you very, very much. Please state your name for the record and proceed with your testimony.

Good afternoon. Dr. Frank Franklin for the Department of Public Health. Chair Gilmore Richardson and Councilmembers, I serve as the Interim Health Commissioner, and joining me today is Ryan Taylor, Chief Operating Officer. I'm pleased to say in a few words about my support for Bill 5 240467 related to the Philadelphia Hospital Assessment, which is before you today. First, let me provide a little background. The purpose of this ordinance is to renew an existing assessment that has been in place since 2009. I hope you will join with past Philadelphia City Councils to approve this ordinance with the same strong support as they did. In fact, the ordinance 17 before you expands the program to include additional hospitals, specifically children's hospitals and cancer hospitals. This assessment allows the City and the state to generate federal Medicaid matching funds for a program that brings federal money to Philadelphia. As you know, Medicaid is a program that provides health insurance to people with low or no income. This ordinance 4 mirrors enabling state legislation that is expected to pass in Harrisburg. Next, I want to talk about who benefits from this hospital assessment. First, hospitals benefit. Overall hospitals receive more in federal Medicaid funding each year than they would without this assessment. There are federal dollars that would otherwise not flow into our City. As you know, our hospitals are large employers and provide critical health services for low-income Philadelphians. This assessment has broad support among our City's hospitals and has such support for many years. Through their letters of support and representatives here today, the hospitals have expressed their support this year as well. Second, the City's Health Department also benefits. This assessment provides funding annually to the City Health Centers and other public health program programs in the city of Philadelphia. This helps us to defray the cost of administering the assessment and provides funding that increases our ability to serve the very same patients who benefit from Medicaid, those living in poverty. Third, and most importantly, Philadelphians living in poverty benefit. They benefit by having better access to health care when they need it. This assessment has a strong support and approval from our state legislature as well as federal centers for Medicaid and Medicare services or CMS. I would like to add my strong support also. Lastly, I would like to address the amendment to the ordinance, which has been provided to the Committee. The Philadelphia Hospital Assessment requires several federal approvals, one of which is the approval of the assessment itself. Earlier this month the PA Department of Human Services or DHS submitted information to CMS seeking approval of the assessment structure. Based on the information provided to CMS, a modification to the assessment structure has been deemed to be necessary. In order to structure the assessment in a way that stays as close to the otherwise proposed assessment framework as possible while also adhering to CMS's requirements, DHS is proposing to add a separate assessment rate for high volume Medicaid hospitals without changing the assessment percentages for other hospitals. 6 percent. The assessment rate for children's hospitals will remain at 2 percent as originally proposed. 9 percent as originally proposed. Temple University Hospital is the high volume Medicaid hospital that will be impacted by this change. I want to thank the Committee for its consideration of this ordinance, and I respectfully request that the rules of the Council be suspended so that the bill may have its first reading at the next meeting of Council. We are available for any questions that the Committee may have at this time.

Thank you very much, Commissioner, for your testimony today. Any questions from the panel? (No response.)

No, okay. Thank you very much. Did you have something that you wanted to add?

No. 12

Okay. All right. Well, listen, thank you very much for being here today and we appreciate your testimony. Can we have the Clerk call the next panel of witnesses to testify.

Katherine Levins, Robert Brooks. (Witnesses approached Witness table.)

Good afternoon. Hi, Kathy. How are you?

Doing well, Councilwoman.

So please state your name for the record and proceed with your testimony.

Yes. Good afternoon. My name is Katherine Levins. I'm Vice-president of Government Affairs and Public Policy for the Temple University Health System. Thank you for holding this hearing today on a very important topic. On behalf of Temple University Health System, I want to express our firm support for Bill 18 No. 240467. This legislation revises provisions of The Philadelphia Code, establishing a model for the reauthorization of the Philadelphia Hospital Assessment for state Fiscal Years 2024-25 through 2028-29 and authorizes the Philadelphia Department of Health to enter into an intergovernmental agreement with the Commonwealth to effectuate this model. To illustrate the significance of this assessment, I want to share some background on Temple Health. Through our physicians, nurses and our employees of Temple Hospital, Fox Chase Cancer Center and Chestnut Hill Hospital, we provide comprehensive services to improve the health and quality of living in the neighborhoods we serve. Our hospitals provide indispensable health services to the residents of Philadelphia, which is the largest city in America that does not have a public hospital. Among Pennsylvania's full service safety net providers, Temple University Hospital serves the greatest volume and the highest percentage of patients covered by Medicaid. In addition to our main campus on North Broad Street, Temple Hospital includes our Episcopal, Northeastern, Jeanes and our future women's campus, all of which provide valuable services to many of Philadelphia's less- advantaged residents. Located in Kensington, our Episcopal campus is known for its recovery-oriented behavioral health treatment programs, offering a welcoming approach for those who are affected by mental illness and co-occurring disorders. Temple serves as a critical access point for public health services. We cared last year for over 150,000 patients in our emergency department, about 11,000 in our psychiatric response center, 1,600 in our inpatient behavioral health unit and delivered about 2,000 infants. About 86 percent of our inpatients are covered by government programs, half of whom are covered under Pennsylvania's Medicaid program. I turn now to the Hospital Assessment and explain why this is so important to Temple Health as well as to the City of Philadelphia's health care delivery infrastructure. The fees that the City of Philadelphia collects through the assessment serve as the state share of expenditures that qualify for federal matching funds under Pennsylvania's Medicaid Program. The Assessment Program enables the Commonwealth to provide more adequate reimbursement to hospitals to the care they provide to patients covered by Medicaid. These reimbursements are necessary to ensure continued access to the broad array of high quality medical services upon which philadelphians rely. The reauthorization model under consideration by this Council updates the assessment revenue base from State Fiscal Year 2016-17 to Fiscal Years 2021 to '22. It also reduces the funding risk to the Medicaid Program by shifting a portion of disproportionate share payments to other payment structures, including indirect medical education payments. This reduces the hospital's reliance on disproportionate share payments, which are a potential risk due to the scheduled reduction in the Commonwealth's allotment for disproportionate share payments that are scheduled to take effect next year. Temple Health appreciates the steps that are taken by the Pennsylvania's Department of Human Services and supported by the City to safeguard the Medicaid payments through this change in methodology. At Temple Health's recommendation during a public stakeholder meeting last November, the reauthorization broadens the scope of the assessments to include cancer hospitals, in addition the children's hospitals which were previously excluded.

In compliance with federal regulations, the two historic tiers for general acute care hospitals and for high-volume Medicaid hospitals, this broaden scope allows the Medicaid payment increases to include the children's and cancer hospitals while maintaining the program stability for the others. Sixteen years ago before Philadelphia first implemented its Hospital Assessment program, hospitals were receiving less than 80 percent of the cost of caring for those covered by Medicaid. This resulted in severe pressures on hospital operations, leading to hospital closures and reductions in its services. The Philadelphia Assessment helped stem these losses by ensuring that hospitals receive more adequate reimbursement. Thus, it is in the best interest of the City and its residents that the Council support this means to secure additional dollars needed to ensure continued access to high- quality equitable health care. In short, the Philadelphia Hospital Assessment is a critical element of Philadelphia's health care delivery system. Therefore, I respectfully urge your continued support for this bill incorporating the amendments presented today. On behalf of the Temple Health family, I thank you for your unwavering commitment to all Philadelphians, especially those who rely on our hospitals and our affiliated physician practices. I'm happy to answer any questions you might have.

Well, thank you. Thank you very much for the testimony and to Dr. Frank Franklin, our Interim Health Commissioner, and to you, Katherine, and also Robert. And I'd also like to recognize Bill 13 Ryan from Einstein who I spoke with about this legislation and he actually testified on this bill the last time we had to deal with this Hospital Assessment bill. And then also, Peter Grollman from CHOP, I wanted to thank him and his team, and of course, the Penn Medicine team, Kevin Mahoney, Steve Cobb and the entire team. I just wanted to say thank you to all those that we had the opportunity to speak with in advance of this hearing today. So I'm very grateful for your attendance and for your testimony and for the information that you provided. State your name for the record.

I'm Robert Brooks.

Yes. Please proceed with your testimony.

Good afternoon, Chair Gilmore Richardson and members of the Finance Committee. My name is Robert Brooks and I'm the President and COO of St Christopher's Hospital for Children. I appreciate the opportunity to share information about our work serving children of this community. For almost 150 years, St. Christopher's has provided exceptional pediatric health care to children in the most economically-challenged neighborhoods in Philadelphia. We serve as a vital safety net for countless children and their families. 85 percent of St. Christopher's patients are insured by Medicaid. This is the highest percentage of any children's hospital in America. Since Medicaid reimbursements only cover a fraction of the full cost of providing care, St. Christopher's must seek other support to close that gap. In addition, St. Christopher's is not compensated for the majority of the vital community outreach that we do to address longstanding social inequities that significantly impact the children and the families that we serve. These services include financial assistance to families, legal services and many other programs that help address economic instability, food insecurity, inequities in education, transportation and many more. Despite the challenges, we are proud to provide these additional services and will continue to do so because the children and the families we serve deserve the best possible care regardless of what zip code they are born into. St. Christopher's is a national leader in education. The pediatric physicians, nurses and other health care professionals of the future are trained at St. Chris. 53 colleges and universities send their students to St. Christopher's for pediatric training, including virtually every medical school in Philadelphia, making St. Christopher's one of the most important pediatric training centers in the nation and a critical educational resource for this City. As we speak today, there are 132 medical residents and fellows, 364 visiting medical residents from other schools and over 525 other students learning at St. Christopher's. These are our future health care providers. Finally, the economic contributions that St. Christopher's makes to our surrounding neighborhoods as well as to the City of Philadelphia as a whole and the Commonwealth of Pennsylvania are substantial. St. Christopher's serves as an economic engine helping to sustain the community employing almost 2,000 individuals, 54 percent who live in Philadelphia and 85 percent who live in the counties surrounding Pennsylvania. In tax impact, St. Christopher's has $155 million in payroll that annually contributes 12.2 million in City wage taxes and 12.6 million in state taxes. In addition, because the property that our building is on is owned by a for-profit company and leased back to us to operate, the hospital pays $341,000 a year in real estate taxes. In conclusion, please know that Philadelphia Assessment will have a significant impact on St. Christopher's Hospital for Children and the young patients and families that we serve. It will allow us to access the federal resources with City and state approval to continue to operate and provide care for the medically underserved children in North Philadelphia for the foreseeable future. This is truly a lifeline that provides stability and predictability for our future. Thank you for your time today and I'm happy to answer any questions.

Well, thank you again. Thank you for your testimony and thank you for being here. We appreciate your testimony today. Are there any questions or comments for witnesses for this panel? The Chair now recognizes Councilmember Jones.

So I just want to thank you guys for the valuable service you provide to our constituents. In the case of Einstein, one of your favorite patients thanks you, and the way you have treated her, my mother-in- law for the record, making her feel like an extended part of the hospital family not just because she's my mother-in-law but because she's a constituent, taxpayer. And for a hospital and institutions like Temple as well to do these things, you are a good neighbor. You are an employer, taxpayer, all those good things because wage taxes count too. I just want to say in the case of Temple you have served as our mass unit to the uptick in violence --

Right.

-- and everybody knows that the doctors there are trained in emergency response, second to none in the nation. The U.S. military sends their trainee doctors to your hospital to service our servicemen around the world, so it does not fall on deaf ears that we understand the symbiotic relationship that this City has with your institutions. And I wanted to put on the record thank you.

And I appreciate your comments. But I have to add to that, that we would not be able to do it without the partnerships that we have with City Council, with the Administration, with the Commonwealth and we're very proud of what we -- I think that we can say that here in Philadelphia it doesn't matter -- you mentioned zip codes -- you can get the same care at Temple Hospital and our other institutions no matter what zip code you're from that you're going to get from Bryn Mawr or some other communities. So it's all of us together striving to make sure that it's equitable healthcare. And to your point about working and training in our emergency department, people do come and they want to do their rotations, they want to do their residency so that they can take that out into the world. And again, we couldn't do it without you.

Well, we're grateful for the partnership. Thank you.

Thank you again for your testimony. Is there anyone here to testify on Bill No. 240467 whose name has not been called? (No response.)

Okay. Seeing none, we will now proceed to Bill No. 15 240470. And I will again ask that everyone please abbreviate your testimony. We have 1, 2, 3, 4, 5, 6, 7 additional witnesses that we need to hear from today, and we need to conclude this hearing within the next 30 minutes.

Dawn Summerville. (Witnesses approached Witness table.)

Okay. Please state your name for the record and proceed with your testimony.

Good afternoon. Dawn Summerville. Good afternoon, Chairperson Gilmore Richardson and members of the Finance Committee. My name is Dawn Summerville. I am the Deputy Commerce Director. I'm here to testify on Bill No. 240470, which would authorize the City of Philadelphia to apply to the Commonwealth for the extension of the Keystone Opportunity Zone benefits for four projects, Schuylkill Yards, Eastwick project, Navy Yard and West Parkside. These sites are managed by Brandywine Realty Trust, the Philadelphia Redevelopment Authority Ensemble and PIDC respectively. KOZ is an economic development program created by the Commonwealth to stimulate investment and employment growth on vacant or underutilized properties. Businesses located in these designated zones are authorized to apply for the state and local tax credit exemptions and tax abatements for a term of up to 9 years. The KOZ program allows the 10 City to spur economic development and attract businesses that may not otherwise choose to develop or locate in Philadelphia. This state program has been a critical tool in the region's economic development toolkit, helping to offset the high cost of development in Philadelphia, attracting hundreds of millions of dollars in private investment and generating more than 10,000 local jobs in our city. In fact, much of the development Philadelphia has seen in the past 20 years on vacant industrial sites has been incentivized in part by the KOZ program. In order to keep KOZ benefits in place, the City is required to submit a KOZ extension application to the PA Department of Community and Economic Development at least 90 days prior to expiration or October 1st. The application must include a copy of City Council legislation authorizing the City to submit the application akin to previous rounds of KOZ designations and extensions. The City will require each owner to enter into a payment-in-lieu-of-taxes agreement pilot in the amount of 110 percent of what otherwise would have been the real estate tax liability for the unimproved property for the duration of the KOZ benefit. The 110 percent agreement generates revenue from the redevelopment of KOZ sites. In addition to these agreements, all KOZ beneficiaries are required to submit a career connective learning plan to ensure there are apprenticeship and workforce opportunities for Philadelphia School District students. An economic opportunity plan is also required to show evidence of equitable contract use, which may include financial investment, design construction and operations. The KOZ program provides a unique opportunity to leverage educational and workforce development opportunities for Philadelphians. The City remains committed to working with developers and businesses to ensure that we create meaningful opportunities and access for undeserved Philadelphians and their families. As a reminder, the state will not approve a KOZ extension application without Council approval, School District approval and the aforementioned City requirements that are in place. This program continues to play a vital role in Philadelphia's economic development. Thank you for the opportunity to testify. I'm happy to take questions at this time, but also like to acknowledge I'm joined by members of the Commerce Department.

Thank you. Thank you so much for your testimony and to the members of the Commerce Department who are also here with us this afternoon. Know that I did check in with all of my District colleagues related to the specific projects in their areas to ensure that they did not have any additional questions or concerns, so I thank you for working with them in advance as well and for all the work that you all have done on this particular bill. The Chair now recognizes Councilmember Jones.

Thank you, Madam Chair. Very briefly, I want to thank the Commerce Department for all the wonderful work it does. And I don't mean to give you more work, but I know you can handle it. What I think might be helpful, particularly for our newer members, is a codification of programs based on location, zone or wherever that says if I find a business interested in locating here, here's all of the different things they are eligible for. And as an alumni of the Commerce Department, I don't need that, but it might be helpful for the newer members to be able to be your cheerleader when it comes to recruiting of firms. And again, thank you and your team sincerely. You only have to look at the skyline and not just of downtown, but in neighborhoods. You know, EMSCO in my District is an office building owned and operated by a minority concern that would not be there but for Commerce. So thank you.

Thank you, Councilmember Jones, for those recommendations. We are happy to provide that information to the newer members of Council. I think that's a great idea and we're happy to make sure we get that over.

Thank you so much.

Thank you, Councilmember Jones. And thank you very much for your testimony. Is there anyone here to testify on Bill No. 240474 -- or 470 whose name has not been called? (No response.)

Anyone else here to testify on Bill No. 240470 whose name has not been called? (No response.)

Seeing none, we thank you very much for being here today. We thank you for the work of Commerce and for your testimony.

Thank you.

We will now proceed with our last bill, Bill No. 15 240494.

Mark Dodds. (Witnesses approached Witness table.)

Okay. If you could just please state your name for the record and proceed with your testimony.

Hello. Good afternoon, Councilmember Gilmore Richardson and other members of the Finance Committee and members of City Council. I am Mark Dodds, Interim Deputy Director of the Division of Housing and Community Development. I will present testimony today on behalf of the Administration on Bill No. 240494, which permits the City to apply for federal Community Development Block Grant, HOME Investment Partnership, Emergency Solutions Grant and Housing Opportunities for Persons With AIDS Funds and for state funds from the Department of Community and Economic Development. The bill refers to Exhibit A, which is the proposed Annual Action Plan 2024 to 2025, the required HUD funding application. The Annual Action Plan 2024 to 2025 details our plan for spending funds from four primary federal sources as well as from the state's Department of Community and Economic Development, the Housing Trust Fund and the Neighborhood Preservation Initiative. 9 million in ESG funds for the upcoming fiscal year. The Annual Action Plan's goals are aligned with Philadelphia's high priority housing and community development needs. These goals are to create affordable homeowner and rental housing opportunities, preserve affordable homeowner and rental housing, reduce homelessness and expand special needs housing opportunities, foster open access to all housing and community resources and programs, address economic education and income needs of people in communities, strengthen community assets and manage vacant land, also to promote fair housing and access to opportunities. While our Annual Action Plan makes strategic investments over the course of the upcoming year to address our housing needs, it is comprehensive and sustained commitment to housing as infrastructure that makes the greatest impact. Accordingly, we are especially grateful to City Council for the critical funding provided through NPI and through the City Charter change, mandating that half a percent of the City's General Fund be allocated to the Housing Trust Fund. As detailed in the Annual Action Plan, over half of our total funding will go to put people in homes and keep people in homes. This work includes the production and preservation of rental housing, mortgage foreclosure prevention and eviction prevention programs, rental assistance, home repair programs such as Basic Systems Repair and Heater Hotline. We will also continue programs that prevent homelessness and support people with special needs. These programs include rental assistance through ESG, HOME and HOPWA programs and adaptive modifications. We will continue to invest in organizations and programs that meet our residents where they are, serving them in their own communities. These include our housing counseling agencies, our Neighborhood Advisory Committees and our Neighborhood Energy Centers. We are also seeking to improve the quality of life of neighborhoods and provide job opportunities by funding local organizations to maintain vacant land. Vibrant commercial corridors are important for healthy communities. Accordingly, we invest significant resources in community and economic development. The plan includes funding for business loan programs, commercial- oriented real estate grants, corridor management support and building improvement support. The coming year will continue to be challenging and we are determined to meet that challenge. Please know that we are relying on City Council to approve this plan expeditiously because the City will forfeit its funding from HUD unless the City submits an Annual Action Plan no later than August 15, 2023 to permit expeditious transmittal of the Annual Action Plan to HUD. Suspension of the rules to permit the first reading at the next Council session is requested. I will be happy to answer any questions you or members of Council may have. Thank you for the opportunity to present this testimony.

Thank you. Thank you very much for your testimony and for the information provided, and also for ensuring that we were able to get this in on time, and you know what I mean. The Chair now recognizes Councilmember Jones.

Thank you, Madam Chair. Were you here for the Brith Sholom comments?

Yes. So help me to understand how this housing and affordable housing strategy intersects with the problems we're facing with a Brith Sholom, which is not uncommon for other parcels, affordable units and we're losing them to these kinds of circumstances. Tell me specifically in your plan, and maybe you can't do it today because we have to be out of here, but this is something that we are going to hone in on because it's a pervasive problem. It's not a one-and-done with Brith Sholom. If you could briefly articulate how the plan addresses these types of situations.

Sure. Very briefly, I would say that the plan is very, very heavy in the production and preservation of affordable housing. Much of that funding, very much appreciated like I mentioned in my testimony, is NPI funding and that will help a little bit. We understand the need is very great, but that will help a little bit of what you're talking about.

All right. So that was a good answer if I were just listening. But in specifics to Brith Sholom, what arrows would you pull out of your quiver to help solve this problem?

Yeah. I guess I would say that there are ongoing conversations, some of which with other City agencies, that it's something that's top of mine, we're committed to looking at being creative trying to find a solution there.

Then I see you're in tune. Okay. I'll stop there.

Well, thank you, Councilman Jones. But I wanted to add, you mentioned NPI. You mean Neighborhood Preservation Initiative?

Yes.

Okay. And so, then I would then offer the question relative to the bonding for NPI. And I know you may not be able to answer that question, that may be a question for Finance, but if we are going to utilize NPI as a part of the solution relative to some of the overarching concerns we have for Brith Sholom and others, then I think we have to make sure that on the finance side that the bonding is happening for NPI, that we have those dollars available. And so, is it your understanding that that will be the case and that we will be able to leverage the CDBG dollars as well in order to do what we need to do from a housing perspective?

Yeah. I mean, you bring up a good point. NPI is a critical part of this housing plan. There's no question. We also know that that funding is not set to last forever so we need to be thinking forward about additional funding and opportunities to get money to help serve our residents.

Right. And so, I just wanted to put that on the record, particularly around NPI and the bonding, right, because we've already run out of the dollars that we've already bonded for previously. And so, we will need to do another bond reauthorization in order for us to have additional spending capability. And so, I say that and put it on the record that if we are looking to pair with the CDBG dollars as well as the NPI dollars, then we need to take action. And when I say the we, that would be on the Administrative side of government and Finance in order to get that done so that we can together work to get that passed once we receive the information from the Admin. Okay. So I just wanted to put that on the record. Rob Dubow, if you're there and listening, I'm just putting that on the record for NPI. Okay. And then we'll be able to have a further discussion at another time so that we do have that spending flexibility. Okay. Thank you very much. Thank you, Councilmember Jones, for that question.

Thank you, Madam Chair.

Okay. Are there any further questions or comments for this witness? (No response.)

Okay. Seeing none, we thank you. We thank you very, very much for being here today. I understand we have some witnesses that will provide public comment. I'm respectfully requesting that you summarize your testimony as succinct as possible so that we can proceed with moving on to our public meeting.

Marguerite Byrd, Marlene Robinson, Jennifer Schumann and Andy Toy.

Okay. If you could state your name for the record and proceed with your testimony. (Witness approached Witness table.)

I think you're the last man standing, Andy, for this one.

Marguerite Byrd, Marlene Robinson, Jennifer Schumann. (No response.)

Okay. I don't believe they are still here. And so, if you can state your name for the record and proceed with a summarized version of your testimony.

Sure. I guess everybody's tired now. You're tired I'm sure. And good afternoon again, Chairperson Gilmore Richardson and City Councilmembers. My name is Andy Toy and I am still the Policy Director for the Philadelphia Association Community Development Corporations. If you were here before, you would understand.

Right.

And thank you for the opportunity to testify on Bill 22 No. 240494 to approve the adoption of the City's Annual Action Plan submission to the U.S. Department of Housing and Urban Development. We'd also like to thank the City staff at DHCD and the Commerce Department and beyond who worked so hard to finalize the plan. I'll skip through some of my other things. We have just four points that we want to raise around the plan. We are in support of it. We know that the City has developed a true appreciation for the important work that the housing counselors undertake, and we want to thank the City for increasing the budget over the last two years. Housing counselors play a critical role in eviction diversion, foreclosure prevention, first-time homebuying support as well as other issues. Now, that CDBG CARES funding previously allocated has come to an end, we need to make sure that we continue to support and sustain the housing counseling ecosystem we've built in Philadelphia. Number two, the plan represents significant new resources to support homeownership as well as rental housing production and preservation, which is critical to having a balanced approach. We also urge the City to expand support for shallow rent subsidies aimed at low-income households living in subsidized units to both add to the stability of our affordable housing supply while assisting low-income households to make ends meet. And then three, while the Administration has said its Kensington strategy would include traditional and/or permanent supportive housing resources for the unhoused suffering from opioid use disorder, it's unclear how those investments are reflected in this plan. The line items for homeless and special needs housing programs are largely flat with the exception of development financing for homelessness and special needs housing, which has been eliminated. Similarly, we do not see increased home repair funding that would be needed to help longtime homeowners in Kensington remain in their homes reflected in the plan. It would be helpful to better understand how the Administration tends to allocate these resources to accomplish its goals in Kensington. And fourth, commercial corridors are the economic lifelines of our neighborhoods. Yet many are still struggling with the new normal of the post- pandemic. We need to increase the fund the Targeted Corridor Management program funding to give our corridors a fighting chance. Similarly, we need to increase funding for the CDC Neighborhood Economic Development Support Program to better support organizations doing a range of economic development work. And lastly, as mentioned in previous testimony, we look forward to working with the City Council and the Administration to provide much- needed resources for CDC general operating support as well as to support a rapid property acquisition fund over the coming months. We would love to see that somewhere in the budget. Again, we thank the Administration for their dedication to housing and economic development for all Philadelphians and thank City Council and the Finance Committee for the opportunity to testify this afternoon.

Thank you. Thank you so much, Andy, for your testimony and for staying with us today. We thank you for your work as Policy Director and we will not give you that promotion Executive Director just yet.

Still.

Okay. All right. Thank you very, very much. Have a good day, Andy. Thanks a lot. All right. We will now proceed with Resolution No. 240027.

Crystal Yates- Gale. (Witnesses approached Witness table.)

Okay. Please state your name for the record and you can proceed with your testimony.

Good afternoon, Chairmember Gilmore Richardson and members of the Committee on Finance. I am Crystal Yates-Gale, the Deputy Managing Director of Health and Human Services. And with me today is David Holloman, the Interim Executive Director of the Office of Homeless Services. Today I'm here to testify on Resolution No. 5 240027. The mission of the Office of Homeless Services is to lead, coordinate, plan and mobilize resources to make homelessness rare, brief and non-recurring in the City in pursuit of Mayor Parker's vision to improve quality of life and effectively deliver impactful services for all Philadelphians. Philadelphia's Homeless Services system consist of more than 75 homeless housing and service providers working together with local, state and federal government entities. In 2020, the world experienced a shock to our system when the COVID pandemic arrived in our country. The Office of Homeless Services responded to the need for more housing with social distancing, additional cleaning, sanitizing and increased security. An encampment resolution on the Benjamin Franklin Parkway in 2020 created an additional strain to the housing system. And just in the past few weeks, the office has responded to the displacement of residents as a result of the closure of an apartment complex where most of the residents are seniors. A fire occurred at another large apartment complex where the Office of Homeless Services assisted. According to the U.S. Department of Housing and Urban Development between 2022 and 2023, the number of people experiencing homelessness increased by 12 percent. Since 2021, the number of people experiencing sheltered homelessness, which in layman's terms are the number of people in emergency shelters, transitional housing or safe haven programs has increased each year. Homelessness in the United States is an urgent public health issue and a humanitarian crisis. Philadelphia as the poorest large city is not immune to the impact of homelessness. Housing is a social determinant of health, and the lack of a place to call home has a negative effect on the health of the people who are experiencing being unhoused. I would also like to publicly thank the employees at the Office of Homeless Services for answering the call to work toward ending homelessness in Philadelphia. We acknowledge this is a difficult time for the agency. Currently, there are two investigations related to the overspending at the agency. One is being conducted by the Office of the Inspector General. We would be happy -- well, you already have, I'm sorry, the preliminary report. The second, a forensic financial investigation, is being conducted by a reputable accounting firm. The Office of Homeless Services also recognizes the need to evaluate all providers to ensure quality services are being offered. The boots-to-the-ground program is in its first year and will enhance the regularly scheduled and unscheduled assessments of shelters, and we are happy to answer your questions.

Thank you. Well, thank you very much for your testimony and thank you very much for your patience and for being here. I also wanted to thank our Executive Director David Holloman for being here and also Finance Director Rob Dubow for being available. And all the team members of OHS who are here, I thank you all very much for your presence. And I want to give a special thank you to the team members who have come over to the office during the number of hearings that we've held to help the individuals who need housing placement. So I want to give you all a special shout-out. You've really been helping us connect people to services and get them into the shelter system, particularly families. I know we had another case, because now what's happening is everyone calls my office or shows up to my office who needs to be placed, particularly sometimes they leave from Apple Tree and walk across the street. And so, we thank you for helping us service unhoused individuals, particularly the families that have young children. We just had another case of a pregnant mother with four children and you all helped us with that. So I just wanted to say thank you for that. I'm going to reserve the balance of all of my questions except one. It's one question that I do need to get on the record that'll be helpful for what we need to do today, the remainder of this week and next week. If you could just state for the record -- and I'm also doing this because of the time as well. We have five minutes. Can you please state for the record that the Office of Homeless Services' budget as proposed is sufficient to cover all expenses and maintain service levels for all of Fiscal Year '25?

Madam, answering that question, in all honesty the current budget as proposed if we're considering the $15.9 million, it is. And I am committed as a taxpayer also to make sure that we do that. I also want to say and put on the record that we don't know what other emergencies will come up, but for the current system for the current services it provides for the office's administration, yes.

Okay. And I just want to put on the record so I can be clear that we are seeking to work together with you all relative to the 15.9, which was the 16.1, which we now know is down to the 15.9 that we don't see reflected in the detail even if we take into consideration the City of Philadelphia Budget Office FY25 operating budget under the Office of Homeless Services Departmental summary increases and decreases of all funds. And because we just received the response back from the 20-page memo and we just had our meeting yesterday, we haven't had a chance to go through the 51 or 52 pages that we've received. But we know that we have some concern relative to even the first three that we were able to go through relative to the contract amounts relative to some providers that have subservice under different names or two or three different locations and the amounts are still not matching up. And so, I just want to put that on the record too that we are seeking to work together with you all to figure this out, but that it is our understanding as of this moment even after reviewing the departmental summary for the increases and decreases for all funds for your department that the 15.9 is still not reflected in the original FY25 proposed budget detail that you all sent to us. And so, even though in the budget and brief it states the amount, we are not seeing that amount reflected and the only thing we can do is vote on what we have. And we're trying to go through with you all what we need to do to gain clarity on the remainder of the contracts that are in question where sometimes the numbers don't match and things of that nature. I just want to put that on the record.

Affirmative. Understood. We'll speak to Rob Dubow and his team to make sure that you get the document that you requested.

Okay.

And we really appreciate your willingness to meet with us to collaborate.

Right. And so, we appreciate that and we look forward to working with you. And so, are there any other questions or comments for this witness? (No response.)

Okay. Seeing none, we thank you very, very much for being here.

Thank you.

Thank you so much. All right. Is there anyone else here to testify on any of the bills or resolution whose names have not been called? (No response.)

Okay. Seeing none, we will now move into our public meeting. We will now recess the public hearing on Resolution No. 240027 and Bill Nos. 240372, 240373, 240374, 240375, 240377, 240378, 240379, 240416, 240417, 240467, 240470 and 240494 to go into a public meeting to consider the action to be taken on these bills. Clerk, will you please call the roll to take attendance. Members that are in attendance will please indicate that you are present when your name is called.

Councilmember 14 Driscoll. 15

16 Present. 17

Councilmember 18 Ahmad. 19

20 Present. 21

Councilmember 22 Bass. 23

24 Present. 25

Councilmember Thomas.

Present.

Councilmember Jones.

Present.

Chair Gilmore Richardson.

Present. Thank you. A quorum of the Committee is present. The Chair now recognizes Councilmember Bass for a motion on the amendment to Bill No. 240379.

Thank you, Madam Chair. I offer an amendment to Bill No. 240379. A copy of the amendment has been circulated to all members of the Committee and I move that the amendment to Bill No. 23 24737 -- 240379 be approved. (Duly seconded.)

The Chair notes for the record that Councilmember Thomas seconds the motion. It has been moved and properly seconded that the amendment to Bill No. 6 240379 be approved. All those in favor of the motion will signify by stating aye. (Aye.)

Those opposed? (No response.)

The ayes have it and the motion carries. The Chair now recognizes Councilmember Bass for a motion on Bill No. 240379 as amended.

Thank you, Madam Chair. I move that Bill No. 240379 as amended be reported from this Committee with a favorable recommendation and further move that the rules of Council be suspended to permit first reading of this bill at the next session of Council. (Duly seconded.)

The Chair notes for the record that the bill has been seconded by Councilmember Thomas. It has been moved and properly seconded that Bill No. 240379 as amended be reported from this Committee with a favorable recommendation and further move that the rules of Council be suspended as to permit first reading of this bill at the next session of Council. All those in favor of the motion will signify by stating aye. (Aye.)

Those opposed? (No response.)

The ayes have it and the motion carries. The Chair now recognizes Councilmember Bass for a motion on the amendment to Bill No. 240467.

Thank you, Madam Chair. I offer an amendment to Bill No. 240469 -- 467. A copy of the amendment has been circulated to all members of the Committee. And I move that the amendment to Bill No. 240467 be approved. (Duly seconded.)

The Chair notes for the record that Councilmember Thomas seconds the motion. It has been moved and properly seconded that the amendment to Bill No. 20 240467 be approved. All those in favor of the motion will signify by stating aye. (Aye.)

Those opposed? (No response.)

The ayes have it and the motion carries. The Chair now recognizes Councilmember Bass for a motion on Bill No. 240467.

Thank you, Madam Chair. I move that Bill No. 240467 as amended be reported from this Committee with a favorable recommendation and move further that the rules of Council be suspended to permit first reading of this bill at the next session of Council. (Duly seconded.)

It has been moved and properly seconded that Bill No. 22 240467 as amended be reported from this Committee with a favorable recommendation and further move that the rules of Council be suspended as to permit first reading of this bill at the next session of Council. All those in favor of the motion will signify by stating aye. (Aye.)

Those opposed? (No response.)

The ayes have it and the motion carries. The Chair now recognizes Councilmember Bass for a motion on the amendment to Bill No. 240470.

Thank you, Madam Chair. I offer an amendment to Bill No. 240470. A copy of the amendment has been circulated to all members of the Committee, and I move that the amendment to Bill No. 23 240470 be approved. (Duly seconded.)

The Chair notes for the record that Councilmember Thomas seconds the motion. It has been moved and properly seconded that the amendment to Bill No. 6 240470 be approved. All those in favor of the motion will signify by stating aye. (Aye.)

Those opposed? (No response.)

The ayes have it and the motion carries. The Chair now recognizes Councilmember Bass for a motion on Bill No. 240470 as amended.

Thank you, Madam Chair. I move that Bill 21 No. 240470 as amended be reported from this Committee with a favorable recommendation and further move that the rules of Council be suspended to permit first reading of this bill at the next session of Council. (Duly seconded.)

It has been moved and properly seconded that Bill No. 7 240470 as amended be reported from this Committee with a favorable recommendation and further move that the rules of Council be suspended as to permit first reading of this bill at the next session of Council. All those in favor of the motion will signify by stating aye. (Aye.)

Those opposed? (No response.)

The ayes have it and the motion carries. The Chair now recognizes Councilmember Bass for a motion on Bill No. 240372.

Thank you, Madam Chair. I move that Bill No. 240372 be reported from this Committee with a favorable recommendation and further move that the rules of Council be suspended to permit first reading of this bill at the next session of Council. (Duly seconded.)

The Chair notes for the record that Councilmember Thomas seconds the motion. It has been moved and properly seconded that Bill No. 240372 be reported from this Committee with a favorable recommendation and further move that the rules of Council be suspended as to permit first reading of this bill at the next session of Council. All those in favor of the motion will signify by stating aye. (Aye.)

Those opposed? (No response.)

The ayes have it and the motion carries. The Chair now recognizes Councilmember Bass for a motion on Bill No. 240373.

Thank you, Madam Chair. I move that Bill No. 240373 be reported from this Committee with a favorable recommendation and further move that the rules of Council be suspended to permit first reading of this bill at the next session of Council. (Duly seconded.)

The Chair notes for the record that Councilmember Thomas seconds the motion. It has been moved and properly seconded that Bill No. 240373 be reported from this Committee with a favorable recommendation and further move that the rules of Council be suspended as to permit first reading of this bill at the next session of Council. All those in favor of the motion will signify by stating aye. (Aye.)