COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE THE COUNCIL COMMITTEE ON FINANCE - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, May 6, 1998 9:38 a.m. - - - BILL NO. 980228 - An ordinance authorizing the Mayor, on behalf of the City to file an application with the United States Department of Housing and Urban Development ("HUD") for a Community Development Block Grant ("CDBG"), as required by Section 104 of Title 1 of the Housing and Community Development Act of 1974, Public Law 93-383, as amended, including all understandings and assurances contained therein, and designating the Mayor and the Director of Office and Community Development ("Housing Director") as the authorized representatives of the City to act in connection with the application to provide such additional as may be required and to accept the grant under certain terms and conditions. PRESENT: COUNCILWOMAN ANNA C. VERNA, Chairwoman COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DAVID COHEN COUNCILMAN JAMES F. KENNEY COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN MARIAN TASCO COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN HAPPY FERNANDEZ - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 COMM. ON FINANCE - BILL NO. 980228 I N D E X John Kromer. . . . . . . . . . . . . . . . . . 4 Director of Housing, City of Philadelphia Dainette Mintz, OHCD Director of Special Needs 10 Kevin Brooks, Assistant Director . . . . . . . 14 Development and Training Office of Housing and Community Development Michael Bell, Director . . . . . . . . . . . . 19 Minority and Women's Business Enterprise Development, Redevelopment Authority Steven Mullin, Director Commerce . . . . . . . 22 City of Philadelphia Maceo Cummings, Executive Vice President . . . 56 Philadelphia Housing Development Corporation Noel Eisenstat . . . . . . . . . . . . . . . . 81 William Hankowsky. . . . . . . . . . . . . . . 93 Blaine Bonham, Vice President of Programs. . . 150 Pennsylvania Horticultural Society Lee Capkin, Executive Director of Housing. . . 157 Consortium for Disabled Individuals. Vivian VanStory, President . . . . . . . . . . 162 Community Land Trust Corporation Vincent Mason, Vice President. . . . . . . . . 162 Community Land Trust Corporation Bertha Barksdale, ACORN. . . . . . . . . . . . 167 Felipe Alvarez, HACE Business District Mgr. 170 Jeff Brown, President, AFSCME Local 1971 . . . 176 Pete Matthews, President, District Council 33 190 Lionel Drain, Community Developer, Mantua. . . 235 3 COMM. ON FINANCE - BILL NO. 980228 P R O C E E D I N G S
Good morning. This is the public hearing of the Committee on Finance. I would ask the clerk to please read Bill No. 980228.
Bill No. 980228, an ordinance authorizing the Mayor, on behalf of the City to file an application with the United States Department of Housing and Urban Development ("HUD") for a Community Development Block Grant ("CDBG"), as required by Section 104 of Title 1 of the Housing and Community Development Act of 1974, Public Law 93-383, as amended, including all understandings and assurances contained therein, and designating the Mayor and the Director of Office and Community Development ("Housing Director") as the authorized representatives of the City to act in connection with the application to provide such additional as may be required and to accept the grant under certain terms and conditions.
Mr. Kromer, before you start your testimony, I would like to invite Mr. Eisenstat and also Mr. Mullin to the table so 4 COMM. ON FINANCE - BILL NO. 980228 that we could hear all of your testimonies, and then we could proceed with our questioning. Good morning. Please identify yourself for the record, and proceed with your testimony.
Good morning, Councilwoman Verna and members of the Finance Committee. I am John Kromer, Director of Housing for the City of Philadelphia, and I'm pleased to testify here on behalf -- in support of Bill No. 980028. I have submitted copies of my written testimony, but I wanted to go quickly to emphasize a few highlights and make a few comments about this upcoming fiscal year. I do want to say that again this year, in order to meet our filing deadlines with the U.S. Department of Housing and Urban Development, I would like to request that the Finance Committee vote this bill out of committee with a favorable recommendation and with a request to suspend the rules to allow first reading at the next Council meeting. This is an exciting time for Philadelphia's Community Development Block Grant Program for Philadelphia neighborhoods, and I 5 COMM. ON FINANCE - BILL NO. 980228 really owe a lot of thanks to this Finance Committee and this Council for the progress that we've been making. Two weeks ago, the first houses in 6 the Cecil B. Moore Home Ownership Zone were 7 selected by buyers. And we have buyers -- some of 8 them moderate-income buyers -- for the first time 9 in our program heading towards settlement on 10 houses in the Cecil B. Moore area. 11 We have the nation's largest housing 12 counseling and settlement assistance program. And 13 sometime during the coming fiscal year, we will 14 have helped 10,000 households become first-time 15 home buyers. That will be a national record and a 16 real boost to Philadelphia's real estate sales 17 housing market. 18 I'd like to have three individuals make 19 presentations very briefly, a couple minutes 20 apiece, on special areas of activity in which we've been engaged this year first. But first, I wanted to also distribute some information about the funding picture that we face. The Community Development Block Grant allocation this year is approximately $68 million, 6 COMM. ON FINANCE - BILL NO. 980228 with home funding in the amount of approximately $13 million. And that's a very substantial resource. But as you can see from this chart, the resource has been cut in the past three years by relatively small percentages, but the percentages add up overall. And, of course, the cost of hammers and nails continues to see. This situation means that we've got to be as cost-efficient as we possibly can be, that we have to support our core programs -- housing counseling, the home ownership zone, moderate rehab, the Community Development Corporation, sales housing and rental development, and so on. And that is the basic thrust of this program. First I'd like to call on Belinda Mayo to briefly present some information about the employment and training and job-readiness activity that we are supporting.
Good morning. My name is Belinda Mayo. And I'm Assistant Director for Community Development, at the Office of Housing and Community Development. OHCD has continued to work for the School District nonprofit community-based 7 COMM. ON FINANCE - BILL NO. 980228 organizations and the private sector to identify job opportunities and to develop training and skills development programs that prepare low-income unskilled and unemployed residents for employment. Of particular interest -- there's a chart attached to my remarks that shows the programs that we're currently involved in and will be involved in the Year 24. Of particular interest is a new initiative that will facilitate a partnership between Community College of Philadelphia, communities and schools, OHCD, and American Airlines. American Airlines will establish an American Airlines travel academy that will provide training to high school juniors and seniors in the hospitalities and tourism industry. Through the Philadelphia School District's Small Learning Communities Programs, students will divide their learning experience between a basic academic curriculum and a specialized curriculum that will prepare them for opportunities in the hospitality and tourism industry. 8 COMM. ON FINANCE - BILL NO. 980228 In addition, Community College of Philadelphia will provide training facilities and instruction on related technical skills. Graduates of the program will complete the program as high school graduates and with up to college credits from CCP. These graduates 8 will be uniquely prepared to compete in the 9 hospitality and tourism job market at a time when 10 the City's experienced a growth in the industry 11 that brought $3 billion of resources to 12 Philadelphia in 1996. 13 Also during 1997, OHCD began a 14 collaboration with the Private Industry Council, 15 the Department of Public Welfare, and the Mayor's 16 Office of Planning and Policy to identify the 17 training and employment needs of welfare recipients affected by changes in public assistance regulations under the new temporary Aid to Needy Families program. As a result, resources are being coordinated in a way that leverages CDBG dollars and that fills funding gaps in program. The Year 24 proposed allocation of CDBG funds for the job training and education, more 9 COMM. ON FINANCE - BILL NO. 980228 than $750,000, is included as a resource in the City's Greater Philadelphia Works Program to be funded by the State's federally-funded Welfare-to-Work Program. Finally, in the area of job development, during Year 24, OHCD proposes to continue to support the work of the Greater Philadelphia First Corporation in identifying job opportunities in the private sector. The focus has been to work with potential employers to identify the human resource needs over the next five years. Greater Philadelphia First Corporation has been successful in this approach in the data-intensive and precision manufacturing industry. Working with corporate partners, GPF has helped to identify over 1,000 future job opportunities in the data-intensive field, develop training programs, and is currently identifying training providers. During Year 24, GPF will take the same approach in the hospitality and tourism industry, and particularly in the hotel industry, in light of the plans for the development of five new 10 COMM. ON FINANCE - BILL NO. 980228 hotels in Philadelphia by the year 2000. So, as you see, OHCD has continued to work closely with partners to make sure that we have a prepared work force in Philadelphia that can take advantage of economic opportunities that will become available over the next few years. We've tried to focus on programs on welfare recipients and chronically unemployed individuals, and we've met some obstacles but have been very successful in our partnerships.
Thank you. Next I'd like to call on Dainette Mintz to briefly describe some of our special needs housing initiatives.
I'm sorry, you're going to have to speak closer into the microphone. Thank you.
My name is Dainette Mintz. And I'm the Director of Special Needs Housing, at OHCD. OHCD special needs housing activities include the funding of transitional and permanent 11 COMM. ON FINANCE - BILL NO. 980228 housing for a variety of special-needs populations, which include the homeless, persons with substance-abuse problems, and mentally ill and mentally disabled persons.
Excuse me, I'm sorry. Members of the committee cannot hear you. Just pull the microphone closer to you.
The special needs populations include the homeless, persons with substance abuse, mentally ill and mentally disabled persons, persons with AIDS, disabled persons, and the elderly. OHCD provides development financing to special-needs housing projects selected through a competitive RFP process overseen by the Redevelopment Authority. Funding is provided to the Homeless Prevention Program whose goal is eviction prevention through delinquent rent, mortgage, and utility assistance, and the provision of job placement assistance, to reduce the threat of homelessness. 12 COMM. ON FINANCE - BILL NO. 980228 Funding is also provided to the Health Department's Office of Health and Mental Retardation to support assisted housing for persons with mental illness. And OHCD also funds the Philadelphia Transitional Housing Program, which is administered by the Tenants Rental Assistance Corporation and the Philadelphia Health Management Corporation to provide housing counseling, case management, and rental assistance to homeless households. Funding is also provided to support Dignity Housing's program of counseling for formerly-homeless persons residing in housing rehabilitated by Dignity. OHCD is also the grantee for Housing Opportunities for Persons with AIDS ("HOPWA"), funding for the nine-county Philadelphia region, and supports the following activities with the HOPWA: rental assistance, emergency assistance to prevent homeless, operating costs for community- based and other residences, information and referral, resource identification, and supportive services. 13 COMM. ON FINANCE - BILL NO. 980228 Funding is also provided to increase housing accessibility for disabled people and funds the Adaptive Modification Program, which modifies to make fully accessible the residences of homeowner and renter-occupied disabled households. Funding is also provided to support the Pennsylvania SIDS Center and fund technical assistance through the Urban Affairs Coalition and for the operations of special-needs housing projects. We also provide technical assistance to organizations developing or providing assistance to persons with disabilities or to elderly persons. OHCD also acts as the administrator and the packager of a competitive federal McKinney Homeless Continuum of Care Program, which funds local nonprofit organizations through a consolidated application. And OHCD serves as the agency that receives the funds and contracts with the agencies.
Thank you kindly. 14 COMM. ON FINANCE - BILL NO. 980228 Finally, I'd like to ask for a brief presentation from Kevin Brooks of the Office of Housing and Community Development, and Michael Bell of the Redevelopment Authority, confirming -- concerning employment and training issues associated with our development ventures.
Good morning. My name is Kevin Brooks, and I work as the Assistant Director for Employment and Training in the Office of Housing and --
Do you have copies of your testimony to be distributed?
Yes, ma'am. Unfortunately, the handouts are not my written testimony. Unfortunately, I didn't bring prepared written testimony for distribution. But we'll be happy to -- these are handouts that are being circulated now that address some of the construction employment 15 COMM. ON FINANCE - BILL NO. 980228 activities overseen by our office. My name is Kevin Brooks. I'm the Assistant Director for Development and Training, in the Office of Housing and Community Development. And my department is responsible for coordinating affirmative action and employment and contracting policy on behalf of OHCD, where our funds are spent. We work very closely with the Redevelopment Authority of the City of Philadelphia, and you'll hear from Michael Bell, who is the MBE/WBE Director for the Redevelopment Authority, shortly. We also work with PAC, the Philadelphia Housing Development Corporation, the Commerce Department, and PIDC. Our focus is on construction-related activities. We address employment and subcontracting on housing projects and commercial development projects in the City of Philadelphia. We perform oversight responsibilities, either directly administering the activities; or through our relationships with delegate agencies, outlay policies that they would adhere to. I'd briefly like to explain to you the 16 COMM. ON FINANCE - BILL NO. 980228 trends that exist right now in subcontracting and employment activities. And I think the handout that you have in front of you will help clarify for you that information. The first sheet you have in front of you is a listing of the subcontracting allocations by Councilmatic District for the first -- for the quarter, the last quarter, between January and March. We provide a quarterly report that shows the distribution of subcontracting by race and gender and location. And that's the most recent quarterly report we have. The second summary report you have summarizes the general contracts awarded. And you'll see there's a slight increase in the number of general contracts awarded to minorities over the past quarter. And you'll also notice a continuing trend of about percent subcontracting to MBEs. 21 This shows that there is a slight increase, as I 22 said, in the general contracting and in the 23 subcontracting activity on housing and commercial 24 projects. So that's one of our responsibilities. 25 The second responsibility we have is 17 COMM. ON FINANCE - BILL NO. 980228 working closer with PIDC to help ensure that Council's concerns and the City's concerns regarding minority participation on major commercial projects are achieved. And it's my understanding that PIDC will be holding hearings on these projects in the next couple weeks, and my office will be providing materials that address the subcontracting employment on these projects. Finally, I'd like to just highlight a couple of areas that we've identified where there's room for improvement; one being the area of professional services on development projects. When perspective developers want to do business in the City of Philadelphia, we have to do a better job of communicating to them the need to have a diverse professional team on projects here in the City of Philadelphia to allow more opportunities for minority and women in professional service. The second area that I would highlight is the number and the diversity of skilled tradespersons on construction projects, both housing and commercial projects. We just have to 18 COMM. ON FINANCE - BILL NO. 980228 do a better job of getting more skilled minorities and women on construction projects. Now I'd like to turn it over to Michael Bell, who will highlight some of the specific accomplishments on RDA-administered activities.
Okay. I have a handout, and I don't know if it was distributed.
Mr. Bell, before you start your testimony, can we just look at your first sheet, please (addressing Mr. Brooks).
In the 4th District, is that for an enterprise zone, why are there so many more in one district, and there's practical zero -- you have 31 contracts in the 4th District, and I see that other districts have absolutely zero. Can you please explain that?
This is a quarterly report, and it's for this period -- for this quarter. And it's some of the most recent information we have on contracts, both general contracts and subcontracts for that period of time. 19 COMM. ON FINANCE - BILL NO. 980228 Overall, there will be a distribution of general contracts and subcontracts awarded. But what you have is a snapshot of one quarter, the period between January and March 31st.
We provide a completed list on a quarterly basis, and I'll be happy to provide our quarterly 1029-A report to you.
My name is Michael Bell. And I'm the Director of Minority and Women's Business Enterprise Development for the Redevelopment Authority. And what I have to present to you today is just a summary of employment statistics and subcontracting statistics on Redevelopment Authority-sponsored projects. On an 8 1/2-by-14 sheet here, we have the projects, and we also have employment by Councilmatic district. So for 1997, during the year, we had a total of 753 Philadelphia residents working on RDA-sponsored projects, and we do have 20 COMM. ON FINANCE - BILL NO. 980228 a breakdown by City Council districts. We have derived this information from Section 3 reports that are submitted by the general contractors on these projects and also by the subcontractors. And we are going to try to increase these numbers this year -- we get the reports very early -- and then summarize where the employees are coming from on these projects. So for all these projects, they're in alphabetical order with the numbers of Council Districts from 1 to 10 totals on your right-hand side. On the second page, we have from -- what we do is we complete neighborhoods benefit strategy summaries, and we have the total employees that worked on these projects from which we have reports. And there were 1722 total employees that worked on RDA-sponsored projects during 1997; 720 minority, 17 female -- which that is a sore point; and 985 non-minority employees by project zip code and also by surrounding zip codes. We try to emphasize, wherever a project is being completed, that a general contractor 21 COMM. ON FINANCE - BILL NO. 980228 would solicit employees from the immediate zip code and also from the surrounding zip codes on a project. Also, you have a sheet which will company that and will talk about the contracts that were awarded to Philadelphia-based firms, minority-, and women-owned businesses in specific areas and the percentages. And these are projects for which we have completed neighborhood benefit strategy summaries. And we try to work according to the executive order that was signed by Mayor Rendell to try to keep 50 percent of what a total contract value is within the Philadelphia limits. And I think we reached that on one or two projects. I would say Aspen Olive Apartments and the Cecil B. Moore Village, and Station House Apartments were all very good projects in terms of the number of Philadelphia-based contractors that were hired and also employees. So when you look at the total neighborhood benefit strategy summaries, these are the goals that we are trying to have this year. We have a number of projects going on now and 22 COMM. ON FINANCE - BILL NO. 980228 which we'll talk to contractors early, not just in terms of minority- and female-businesses, but also suppliers and employees.
Thank you. Thank you very much for your testimony, Mr. Bell.
Thank you. Mr. Eisenstat and Mr. Mullin. (Mr. Eisenstat and Mr. Mullin come forward.)
Good morning, Mr. Eisenstat. Do you have any testimony to present today?
I'm available for questions, but I do not have any testimony to present today.
Good morning, Councilwoman Verna and the committee. My name is Steven Mullin. I'm the Director of Commerce for the City of Philadelphia. And I would like to offer brief 23 COMM. ON FINANCE - BILL NO. 980228 testimony in conjunction with John Kromer's testimony related to the economic development component of the CDBG Year Fiscal Year '99 5 Consolidated Plan. 6 Today -- I will also note that various 7 of my colleagues from the Commerce Department and 8 from PIDC and PCDC are also here today and will be 9 happy to join me in answering any questions you 10 may have. 11 But in terms of a very brief overview, 12 I would like to note that we in the Commerce 13 Department and in the City's "Economic Development 14 Division," I will call it, the Philadelphia's 15 neighborhoods do play a very pivotal role in the 16 City's economy. And most of the City's economic 17 activity takes place in the neighborhoods, and the 18 funding used if the block grant is strongly 19 directed in that direction. 20 The City's approach to neighborhood 21 economic development encompasses three basic 22 goals: 23 First, assisting small businesses in 24 the neighborhood; Second, investing in the neighborhood 24 COMM. ON FINANCE - BILL NO. 980228 physical infrastructure, including housing, to improve the business environment near residential areas; and Third, fostering the growth of community economic skills and capacities, particularly within CDCs. These goals are reflected in a broad array of neighborhood programs, initiatives, and accomplishments in this past year and what we are looking for in this block grant year. To help meet these goals, for example, we will be expanding this year our targeted CDC support efforts in lower Germantown and East and North Philadelphia. And we will be continuing our basic lending and grant programs that are carried out and administered by, first, the Commerce Department and various programs by PCDC and PIDC. The Small Business Lending Facade and improvement Program are implemented by PCDC. And in this upcoming year, we anticipate funding the Small Business Revolving Loan Program at $1,900,000 the facade program will be funded at $250,000, and the Housing Contractors' program will provide approximately $1 million in lending. 25 COMM. ON FINANCE - BILL NO. 980228 PCDC will provide support for, in addition, the Small Business Support Center, the Old Philadelphia Company Store Job Training Program and our Micro Loan Program. These are typically funded from non-CDBG sources, but they are used in conjunction with the CDBG funding for PCDC. PCDC will continue to operate the Neighborhood Commercial Revitalization Program, providing an array of support to 38 commercial areas. And this year, we are proposing four new commercial to add to the list -- Fifth Street, below the Boulevard; the 100 to 700 blocks of West Gerard Avenue; East Girard Avenue in Fishtown; and South Street west from Broad Street west. Our major commercial and industrial lending programs are administered by PIDC. These include the CDBG Mortgage Loan Program, the Neighborhood Development Fund, and the Section 108 Loan Program. 2 million this year will be used to support the Mortgage Loan and Neighborhood Development Programs. And toward the end of this coming year, we anticipate drawing down Section 26 COMM. ON FINANCE - BILL NO. 980228 108 funds to assist larger-scale development projects in support of our hotel development initiatives and to support neighborhood lending programs. We anticipate the loans to range, in general, from $250,000 to $5,000, with certain exceptions on particular programs. The loans will be utilized to support an array of development needs, including, but not limited to, acquisition, site preparation, construction, infrastructure improvements, machinery and equipment.
The primary goals of these Section 108 loans will be to create permanent jobs for residents of Philadelphia, to stimulate private investment, and to generate tax retables for the City. While the creation of jobs for low- and moderate-income Philadelphians will be the key criteria of these loans, the expansion of goods and services in our neighborhoods and the elimination of blight will be the alternative criteria. The projects approved for the Section 25 108 loans will be appropriate to the City's 27 COMM. ON FINANCE - BILL NO. 980228 overall economic development strategy, as presented in the economic stimulus component of the five-year plan. At Commerce, we will continue to provide neighborhood development and planning grants to nonprofit community-based organizations, and we will also expand our targeted neighborhood service grants. We will provide support for organizations in the American Street and West Parkside Enterprise Zones in Germantown, West Philadelphia, South Philadelphia, Frankford, and Central North Philadelphia, and Eastern Philadelphia. At this time, I would like to thank the Council for the opportunity to share this brief overview. And, as I mentioned, my colleagues and I will be more than happy to address any questions you may have. Thank you.
Thank you. Mr. Kromer, is there anyone else that you want to testify at this point in time?
Thank you. Then I 28 COMM. ON FINANCE - BILL NO. 980228 guess it's time for a question-and-answer period. Mr. Kromer, on of the plan, it refers to the neighborhood-based home ownership reduction and states that in Year 24, OHCD intends to fund the development projects selected through Year RFP process for which the planning and 8 acquisition activities have been completed. 9 Would you please provide us with a full 10 list of all of those proposals that were selected 11 through the Year 22 RFP and which of those 12 proposals are now ready to proceed in the Year 13 24. 14 If they are not ready to proceed, can 15 we be told what the holdup is? 16
Yes. I have a list 17 identifying all of the sales housing development 18 ventures that were selected through that RFP 19 process and can provide further information. 20 Some of these measures were funded for 21 planning and acquisition activities, which are now 22 completed or substantially completed and will be funded for development during Year 14, and that was the purpose of the reference. You'll see through the handout that a 29 COMM. ON FINANCE - BILL NO. 980228 number of the projects are currently under construction or scheduled for construction this summer. Others are in the midst of plan review at the Redevelopment Authority. And in some cases, there are acquisition issue that have to be addressed in order to complete pre-development and move to development. In two instances, a list at the bottom of that chart, there was a change in the developer due to the withdrawal of the developer that had been selected previously.
Please explain to me the home ownership rehabilitation plan that is referenced on of your plan. I know that there is up to $25,000 per property available. Is this a grant, or is it a loan program?
The Home Ownership Rehabilitation Program, known as the "HRP," is administered by Redevelopment Authority and was developed several years ago as a result of some discussions about the need to deal with vacant properties that are in reasonably good condition that we'd like to turn around faster so that they 30 COMM. ON FINANCE - BILL NO. 980228 don't remain vacant and become more expensive to rehabilitate and take longer to fix up. The intent of the program, which was designed by the Office of Housing and Community Development and the Redevelopment Authority staff and with the participation of others, was to create a very simple mechanism in which a city subsidy, which, in effect, is a grant, which, I believe, is structured as a self-amortizing loan, with no --
In the -- Noel Eisenstat can elaborate if need be, but all of our development subsidies are structured as self-amortizing loans in which no interest or principle payments are due for the life of the long as long as the venture is maintained as affordable housing for income-eligible people. And that's the structure of this grant, which is in the amount of up to $25,000. That subsidy is combined with a rehab loan used to fix up a short-term vacant house for home ownership.
Can you tell this 31 COMM. ON FINANCE - BILL NO. 980228 committee how many such properties were renovated in the Year and the Year 23, and how many 4 properties can be done with the additional $3 5 million requested in Year 24? 6
Since the inception of the 7 program in the Year 22, a pipeline of 243 cases 8 has been established. Of that amount, 119 houses 9 have been completed, and another 54 are under 10 construction, with an additional 25 awaiting 11 construction start. 12 Although that's aggregate amount, the 13 program is fairly new and has increased in volume 14 every year. 15 I think the Year 24 could be a good 16 year for HRP because a lot of the Year 22 and 23 17 cases are cases left over from the old PRP case 18 load and are not, strictly speaking, the houses 19 that we or other groups that have committed 20 themselves to finishing up the PRP pipeline would 21 have chosen ordinarily. 22 Now there are a number of groups that have substantial experience with the program and are going to be able to pick their own houses, having completed the commitment to the PRP 32 COMM. ON FINANCE - BILL NO. 980228 pipeline. And I think we can increase production again during the Year as a result. 4
On of the 5 plan, it refers to the Troubled Buildings Program, 6 which is operated in conjunction with L&I. 7 Can you tell us how many such buildings 8 were treated in the Year 23? And is L&I using all 9 of the money that is available for this program? 10
The Office of Housing and 11 Community Development had proposed in prior years 12 a troubled buildings line item in the budget that 13 was intended to provide development subsidy 14 funding to address situations in which a 15 deteriorated rental property in danger of being 16 closed, due to a bankruptcy action or L&I 17 citation, could be rescued so that tenants would 18 not be displaced and the building could be 19 recovered and brought back to its stability. 20 Our experience was that that line item 21 generated a lot of proposals which really were not 22 the kinds of proposals that we would have liked to 23 have seen. And so, several years ago, we 24 discontinued that line item in the budget and, instead, supported a process in which we've worked 33 COMM. ON FINANCE - BILL NO. 980228 with the Department of Licenses and Inspections and the Law Department to coordinate our activities. I guess the best current example of that coordination is the Manheim Gardens venture of several hundred units in the lower Germantown area partially occupied in a bankruptcy proceeding, a complicated case and a potential for workout being managed by the Law Department, in coordination with us. The Redevelopment Authority has participated in the review of alternative development proposals for Manheim Gardens, and prior to any commitment of City funding, has evaluated these proposals and communicated with the developers in the Law Department so that we are trying to get the best deal that we can for any dollars that we may commit. So we really rejected the approach of putting forth a troubled buildings line item and offering to spend money and, instead, committed to working with other City agencies, primarily Law and L&I, to address these issues in a coordinated fashion as they come up. And that approach has 34 COMM. ON FINANCE - BILL NO. 980228 proven more successful.
Your budget detail shows a cut of $500,000 in the Emergency Repair Program through L&I for rental buildings. Can you tell us why? And what is the difference between this and the Troubled Building Program?
The Emergency Repair line item is funding that has been made available to L&I to address the need for emergency heater repairs in rental properties. The rental properties that are repaired through this program are abated for a heating emergency. They are not troubled buildings in danger of being shut down, per se, but they need a heater or they need some heater work and it's not getting done by the owner or the manager. And so L&I abates the heating problem to prevent displacement. But in these situations, there's not the multitude of problems that we experienced with the Manheim Gardens or other troubled-buildings- type situation. The Department of L&I had not kept pace 35 COMM. ON FINANCE - BILL NO. 980228 with spending funding that had been allocated in the Years and 23. And the amount that's 4 proposed in the Year 24 will be combined with 5 unspent Year 23 funding and, we expect, will be 6 sufficient to fund L&I at capacity, to continue 7 this activity all year. 8
Yes, it is. 11 For the owner-occupied buildings, we 12 have the basic systems repair program and the 13 heater hotline operated by PHDC. 14
I hear very little 15 about that program these days. 16
I would like to 19 hear what they say a little later. 20 I don't want to dominate this hearing. 21 I'm sure that several of the Councilmembers have 22 other questions, and I will get back to mine. The Chair recognizes Councilman Nutter.
Thank you, Madame Chair. 36 COMM. ON FINANCE - BILL NO. 980228 Mr. Mullin, let me ask you a couple questions about your testimony. At the bottom of the first page, your testimony reads, "In recognition of these two simple facts, the City has targeted neighborhood economic development as Philadelphia's number-one priority." And just for the record, I think I'd like to get a better explanation for the basis of that particular statement. How is that measured.
Okay. I'm not sure whether I want to say "compared to what," but I will note that our Economic Development and Economic Stimulus Program focuses on neighborhood economic development, not only in the direct employment in the neighborhoods, but also focuses on trying to make sure that neighborhood residents have access to jobs throughout the City.
Do you measure that in dollars spent in neighborhoods? Do you measure that in the number of jobs created in neighborhoods? Do you measure that in development 37 COMM. ON FINANCE - BILL NO. 980228 projects in neighborhood? Do you measure that in the amount of rehabilitation of either homes or businesses or commercial corridors in neighborhoods? I mean, what is the measure?
I would take the category "all of the above." We don't -- in the Commerce Department, we don't measure the houses directly, as they do at OHCD, but all of those areas, the number of developments, the rehabilitation of commercial projects or buildings or businesses. The retention of businesses, and the employment -- not only directly in neighborhood but, again, for employment for neighborhood residents.
Okay. Well, I guess the only reason I'm confused is -- well, maybe we have a number of number-one priorities in the City. But I thought the number-one priority was the hotel and tourism industry. That's the one that seems to get the primary focus, that's the one that seems to get all the money. Do you want to tell me about how many 38 COMM. ON FINANCE - BILL NO. 980228 HUD 108 loans were granted in the neighborhood areas as compared to everywhere else, or in Center City?
I don't necessarily see them as mutually exclusive. The targeting of a particular industry to invest in is also, as you know, the Administration considers that a source of employment for neighborhoods and can be seen as an integral component of the overall neighborhood economic development throughout the City. We do have HUD 108 loans, for example, that go to businesses and to projects that are not in Center City, even though the largest dollar amounts are for projects in Center City, that is true.
Okay. And if one of the engines driving Center City investment and development is hotel and tourism -- and that's fine, I guess something has to drive the engine down here -- then tell me what is the engine driving the economy of West Philadelphia, and 39 COMM. ON FINANCE - BILL NO. 980228 what's the targeted industry that we're going after to get people employed or jobs developed in West Philadelphia.
Right. I want to answer that in three components: One is the employment-based businesses, whether they be industrial or service-sectors businesses that are not located in the Center City area, and there are thousands of those. We do look at retention and attraction of businesses there, and certain of these funds are directed towards trying to promote that business activity. In addition, we are looking at and we spend funds and time and effort to try to help develop the economic development skill bases of not-for-profit organizations and community development corporations throughout the City so that they can work hand-in-hand with us and 40 COMM. ON FINANCE - BILL NO. 980228 actually see if we can -- more than working hand-in-hand with us, see if we can assist them in helping generate economic activity in the sub markets throughout the City. The third area is job -- job -- well, employment recruitment, job training, and other efforts that part of these funds are used in conjunction with the Private Industry Council with the new Greater Philadelphia Works Program and in other areas there that we are looking for assistance to try to help the -- to try to help the employability and the employment for individuals in these other areas, whether that is directly in the neighborhood or jobs or employment that they can reach through transportation.
Well, I greatly appreciate the response, but I take it from the response that the answer is that there is no 20 targeted industry that we are going after similar to hotel and tourism. I mean, let's take as a granted that hotel and tourism is not the industry that's driving the engine of activity in West Philadelphia or Southwest Philadelphia or South 41 COMM. ON FINANCE - BILL NO. 980228 Philadelphia, is that right?
There's not a lot of hotels being built in West Philly.
Not a lot of hotels, but residents of West Philadelphia probably will have increased employment opportunity through those, and they'll bring the money back into the neighborhood that --
Well, this is the refined trickle-back theory. This is not trickle-down; this is trickle-back. You get a job somewhere, you take your money from your job in some other neighborhood, and the you run in back to your neighborhood, and that makes everything better. Is that our theory?
I'm not sure that that's necessarily new. I think that the income generated by individuals in neighborhood is what supports the neighborhood services. And that's -- and I'm not saying that that's the only --
And then they fix 42 COMM. ON FINANCE - BILL NO. 980228 up the neighborhoods themselves, is that what they do?
They create demand for services. I'M not saying it's the only thing, and I'm not saying it -- it works one hundred percent to solve everything, but it is an important component.
All right. Well, on of your testimony, at the top of the page, you talk about investing in neighborhood physical infrastructure, including housing to improve the business environment near residential areas. Could you tell me about these neighborhood physical infrastructure improvements that have been made out in our commercial/residential areas? What investments does the Commerce Department make to improve the physical infrastructure in residential areas?
The two ways that we -- 43 COMM. ON FINANCE - BILL NO. 980228 that the Commerce Department is involved in the economic development, one is through block grant funding for neighborhood capital projects, and the second is through City capital funding, which we try to coordinate as much as possible. And one thing that I would note to give an example, with block grant funding, the recently-opened parking facility or parking lot at Fifth and Indiana tried to help the commercial corridor along North Fifth Street would be one example of CDBG dollars going to infrastructure in a neighborhood to hopefully make the ability of that neighborhood commercial strip stronger in servicing the people of the area.
What are the top industries for the City and not just our neighborhoods? What are the top three industries that we're trying to attract to Philadelphia?
Are we trying to be known as any particular hub of service or industry in the country? Or are we just taking whoever comes and we're glad that they come?
Well, as you've mentioned, 44 COMM. ON FINANCE - BILL NO. 980228 certainly, we are trying to capitalize on what we consider to be an underutilized asset of Philadelphia as a location for a tourist and convention city and still investing in that industry. The second industry that we are going to -- say when I say "we," it is really the entire metropolitan area, but the pharmaceutical and health-care industry, even though the latter is going through significant change, it is still a huge engine for both investment and employment throughout the area. Service-sector industries, including telecommunications and communication information technology, are also broadly-defined areas -- broadly-defined industries that we are trying to figure out ways and that we are trying to promote for the City of Philadelphia.
And lastly in this area, there was a story in the paper on Sunday that talked about the Philadelphia region as a major financial services center; although in the D-2 graphic, the City of Philadelphia was barely visible on the chart. 45 COMM. ON FINANCE - BILL NO. 980228 Are there reasons why these kinds of companies -- GMAC Commercial Mortgage or MBNA, or any of these entities -- choose not to be in Philadelphia versus wherever else they might be? Don't they employ large numbers of people? And people who work at those kinds of companies make a fairly decent amount of money versus somebody who might -- and if you're unemployed, I guess a job beats no job every day. But if we had our druthers, wouldn't we want to have more people working in those kinds of industries than in hotel rooms?
All else equal, I believe the very strongly that the answer is yes, although I don't mind that people work in hotel rooms either.
Well, they work wherever they want to work. I rather work they work than not work. What I want to know is what are we doing to -- we're obviously trying to get the one.
Aggressively. What are we doing about everybody else? 46 COMM. ON FINANCE - BILL NO. 980228
Okay. Well, in terms of the -- I can give you one example in terms of the financial services industry. And I saw that article too, and we are very much aware that there is a very strong regional financial services industry here, which includes money management. And you're familiar, with your background, both money management, mutual funds, investment banking, and commercial banking, which has seen a lot of air play lately as that industry restructures. There are a couple of things that we are working on right now because I can tell you that there are certain things in our tax code that make locating inside Philadelphia for certain types of financial services industries very, very uncompetitive to locating outside of Philadelphia. We are working with the Law Department and the Revenue Department to identify those things. And, by the way, I'm not talking -- we will always hear people say the wage tax or business privilege tax, and it's -- I won't say that those aren't in part factors because we -- this administration recognizes that, yes, they 47 COMM. ON FINANCE - BILL NO. 980228 are. But even the way that they are applied, the way that we apply business privilege tax, what we count as net income, with financial service industries, including many of the ones that essentially accumulate money from other people, invest it, and then return some type of return to the investors, we tax those extra here in the City of Philadelphia.
I understand you, and I don't mean to cut you off. I'm pretty much aware of what the problems are. What I want to know is if somebody's doing something about it and that it may actually happen even in my lifetime.
And I hope it happens in mine, too, yes. In terms of the financial -- again, in terms of the financial services industry, we are working very closely with the Law Department and the Revenue Department to identify some of those cases where we just have these little burrs that are -- that seem nothing to us, but they're huge out there.
Okay, gotcha. 48 COMM. ON FINANCE - BILL NO. 980228 The last thing in this area is, do we have a written policy that either a potential developer or someone that has a project or even a member of City Council might be able to see with regard to the use of HUD 108 loans and TIFs and all of those various incentives that we try to utilize to either keep or attract new businesses here? I'm becoming concerned, and I've raised this before. I think Mr. Hankowsky has provided, from time to time, a listing of all the various deals and what we think they might do long term. The flip side of that is, in the TIF deals, for instance, we give up a fair amount of potential tax revenue. And I understand the argument "You might not have had it if you didn't do this anyway." But the City is increasingly being chopped up into either TIF districts, special services districts. And now, out of the brain trust in Harrisburg, we are being told about, I believe, Keystone Opportunity Zones, which I have very little information on. I heard a little bit about it, but would like to get more data. 49 COMM. ON FINANCE - BILL NO. 980228 Is there any concern by the Administration that in our efforts -- in our, at times, desperate efforts to do anything we possibly can to have anybody here for any reason, that we will have no one paying any taxes for long periods of time?
I think the answer is no 9 to that, that we do not think that we're -- that we are close to --
Yeah. As part of it is, as we talked with the Mayor and PIDC and so on, how are we strategizing, and what areas might we want to use various types of incentives? That's one, and that isn't something where we have it codified and said, "If you have XYZ, then you can 50 COMM. ON FINANCE - BILL NO. 980228 apply for this." And in some of our other programs, like the HUD 108 loans for the loan pools, we actually do have the written procedures. We have gotten those in CDBG mortgage programs and others like that where we have regulations. You know, they've been approved by HUD, and we've been using them for some time. Or they're new regulations on sort of what is eligible. They're generally broad-based type of eligibility as opposed to this type of business only, but there are ones where we --
Yeah, I understand that. But what I'm concerned about is, is somebody keeping a running total somewhere, does somebody have a board somewhere, you know? Or has someone decided that each and every year, we will do X-amount, and we'll only do X-amount because we're not going to mortgage the future, or we're not going to have ourselves do HUD 1078 loans into the year 2020. That's what I'm concerned about.
Yeah, I think that every one of my colleagues, the Mayor on down -- and I'm 51 COMM. ON FINANCE - BILL NO. 980228 not counting him as a colleague, but all my colleagues and the Mayor, we are very conscious of how much of the 108 are talking about. And we have a statutory -- or a HUD-imposed limit on that and we recognize that, and also with the tax increment financing. It was also consciously talked about, last year, the extension of three-year to ten-year tax abatement for the conversion of commercial industrial institutional properties into apartments. Part of what shaped -- and I think you were involved in some of that or had input on that. Part of the what shaped that was how much are we talking about, what parts of the tax base are we talking about.
So my short answer is, I think we are extremely conscious of that. But there isn't -- to my knowledge, there isn't a single number where we say once we hit 500 million or something, that's too much.
I think the policy is, if we think it helps the deal, or if it serves 52 COMM. ON FINANCE - BILL NO. 980228 as a further inducement, you can get one. I think that's the policy.
The only thing that I would -- I think that there's a cost benefit calculus that's done there too, because there are a lot of deals that come in, or a lot of projects proposed, where they say, you know, and let's use a TIF and let's use a TIF. So before it even gets up to any level here, there's a level where PIDC will say, No, that is not appropriate for a TIF.
All right. Lastly, if you can get me any information additional information that you may have on these Keystone Opportunity Zones, I would be very interested in getting it prior to anyone's attempt to create one.
Madame Chair, I have other questions, but I know you have questions too, so I yield back.
At this time, I will recognize Councilwoman Blackwell. 53 COMM. ON FINANCE - BILL NO. 980228
Thank you. Mr. Kromer, in your testimony, you mentioned a relationship with the Health Department and OMH and Mental Health and Mental Retardation for Assisted Housing. Does that put you in a position to have any kind of relationship with CDH, does housing have any relationship with that department?
The answer is no at this point, although we've had some discussions with Commissioner Richman about the possibility for linking our resources. To date, we've collaborated with the Health Department and various affiliates of the Health Department on special needs ventures that involve particular services to mentally ill people, for example, but that's all been Community-Development-Block-Grant-related.
Thank you. Mr. Kromer, can you tell us how much is allocated for the basic system repairs?
Yes. The allocation is 54 COMM. ON FINANCE - BILL NO. 980228 shown on . And it shows the division, at the very top of that chart, between the three tiers of the program, Tier I being the emergency repair hotline, item 1 on that page. And then under item 3, the Tier II and Tier III categories. In past years, as you'll see the overall funding --.
I'm sorry. Would you mind explaining what the tiers are -- Tier I, Tier II, and III.
Yes. The tiers represent various levels of repair needs. And Tier I is the most basic one and involves activities such as heater repair, just addressing a crisis that requires a contractor to fix or replace a heater primarily, or to deal with other immediate emergency. Tier II is a level that -- and Tier I is limited to one category -- plumbing only or heating only. Tier II is a category that is intended to support repair needs that require more than one trade -- plumbing and heating, plumbing and electrical. And, of course, the cost of the 55 COMM. ON FINANCE - BILL NO. 980228 repair per unit goes up. And Tier III is reserved for the most expensive repair work that is required, where the roof may be in danger of collapse and the heater needs to be replaced and the weatherization needs to be done. Although the funding for emergency repairs and other related activities has increased slightly. You'll see the Year amount of $18.4 11 million compared to our proposed 19.3 million. 12 PHDC, with our support, has made some 13 changes in the basic systems prepare program, and 14 Maceo Cummings can elaborate if that would be 15 helpful. 16 But PHDC was finding that a lot of the 17 Tier I cases were cases that, months later or a 18 year later or two years later, required a return 19 visit from the PHDC. People called the hotline 20 they got the heater replaced, but there was an 21 electrical problem and so there was a callback a 22 short time later, the electrical contractor came 23 out. So we could say to you, we do two Tier I cases during that year. In fact, it was one 56 COMM. ON FINANCE - BILL NO. 980228 house; we came back twice. And so PHDC reasonably suggested that we build up the Tier II category and try to anticipate, look more closely at the total need of the house, and try to address that through Tier II. That's the reason for the increased funding for Tier II that's shown here, an increase of about percent. 11
I would like to get some information on how many of our constituents were serviced through the system repairs during the last year. (Maceo Cummings comes forward.)
My name is Maceo Cummings. I'm the Executive Vice President of the Philadelphia Housing Development Corporation. The Philadelphia Housing Development Corporation, as you have heard, administers the 57 COMM. ON FINANCE - BILL NO. 980228 Basic Systems Repair Program. And during -- and I can actually give you up through the end of April of this year, we have completed close to 4,000 units of service. That does not mean that, obviously, there were quite a few numbers where we had to go out and inspect and they were not emergencies or they did not -- they were not eligible. But from working the Tier I, Tier II and Tier III levels, including weatherization, we were above 4,000 units of service.
If a senior calls and says that they have no heat or there is something wrong with their heater, how long does it take for repair or replacement of the heater?
We usually try to respond within for 48 hours. We also have a 19 nonprofit corporation that works with us, ECA, 20 where they will do repairs to heaters. 21 So we try to refer the repair -- what 22 we would believe a repair to a heater as to ECA. 23 If it's a replacement, we do the replacement. 24 Typically, we're 24 to 48 hours.
You respond within 58 COMM. ON FINANCE - BILL NO. 980228 hours? 3
And how long does 5 take before the repair or replacement takes place? 6
All right, thank 9 you. 10 Does anybody have any questions of Mr. 11 Cummings? Councilman Nutter. 12
Yeah. Actually, 13 for all three individuals at the table. 14 Having to do with the CDBG budget. On 15 pages 220 and 221, and we'll wait until Mr. 16 Eisenstat gets here. Has he disappeared from the 17 room? 18
Is Mr. Eisenstat 19 in the room? 20 UNIDENTIFIED PERSON: He's outside. 21
If I'm reading this 22 correctly, it appears that $30,948,000 out of the 23 $78,268,000 in CDBG funds are categorized in 24 either annual operating costs or general administration, is that correct? 59 COMM. ON FINANCE - BILL NO. 980228
That's correct. These categories -- annual operating costs, and as you can see, that's broken down into program delivery, the category on , and the general administration's on .
Right. So those number seem to add up or actually divide such that nearly 40 percent of our CDBG allocation from the federal government is used for annual operating costs and general administration, is that correct?
Okay. And when CDCs get money from us, is there a particular breakdown of operation costs or general administration that is either a mandate or a requirement for those funds?
No. All of the development funding is awarded for development only, and we have no awards to CDCs for operating costs, although we do fund neighborhood advisory committees, which are a separate line item.
Well, I guess, you know, when you think about this program and who it 60 COMM. ON FINANCE - BILL NO. 980228 is for, it might lead the somewhat naive person to think that most of the money is going to the very low, low and moderate-income population for which it is granted and is the basis for the calculation by the federal government.
And that is correct. Most of the money is going to that population, not only because of federal mandate but because of a City Council mandate that requires us to structure the plan in that way.
But you don't find 40 percent admin costs to be unusual or high or out of whack? Or are we leading the nation in low administration costs, or are we in the middle of the pack? I mean --
They're very substantial, and let me be clear. I'm sure you're familiar with the distinction between program delivery and general administration. Program delivery involves specific costs that are staff costs and other administrative costs that relate to producing a unit of housing or a unit of repair, the cost of inspectors and others associated with those 61 COMM. ON FINANCE - BILL NO. 980228 specific tasks, as opposed to general administration -- my salary and people like me who are in purely administrative positions. And the cost is substantial. Let me be clear. We could reduce these costs very dramatically if we changed the nature of our program and provided a lot more funding to developers to do housing anywhere, to do any kind of housing, and reduced our underwriting. Or if we --
How does that change how does that change your admin costs? You'd farm more of it out?
Sure. We could get rid of the people that scrutinize the low-income housing tax credit proposals and coordinate with PHFA to get as much tax credit financing as we can. We could do away with the housing counseling contracts. There are 27 of them. And with the contract administration, which we are committed to because we support the idea of community and nonprofit -- community-based and nonprofit groups delivering programs and services. We don't have to fund 30 housing 62 COMM. ON FINANCE - BILL NO. 980228 counseling agencies throughout the City.
I don't think anyone would even venture to think that we should somehow cut services to people. I'm just asking you a very simple question about the size of the administration costs versus the total grant. And it just struck me as -- that it might be somewhat high. And knowing that you would never accept a grantee having such high admin costs, I'm just asking the question.
This is a level of admin, both program delivery and general admin, that is comparable to that of other large cities around the country. And I think you'd find that we're actually more cost-efficient than other cities. Our product is certainly superior. I don't know of a another city that is dependent on the federal and State funding, that has a performance that we have in some key areas -- housing counseling, home ownership zone, moderate rehab, Title lending, and title property acquisition. And that's been studied. We've got a better project, and we're paying for that in 63 COMM. ON FINANCE - BILL NO. 980228 staffing it appropriately to deliver that product.
But at the same time, Mr. Kromer, I don't think you want to completely leave the record that the only way to cut admin costs is to cut program delivery. Don't you at least want to throw out the possibility that some of these administrative costs, if there was a change in policy internal to the government, that some of these -- I mean, your admin costs are people, they are bodies. They are salaries.
That some of those could either be offset by additional City funding, or those folks could be paid from another pot of money as opposed to CDBG funds? Don't you want to at least throw out that possibility?
There's no question of that, but -- and I would love to have more City funding. But I don't think it makes sense. Given the other properties that you and the Mayor have 64 COMM. ON FINANCE - BILL NO. 980228 to deal with, and I would not propose that. The Community Development Block Grant is a limited resource, but it's a substantial resource, and I think we could make very effective use of that. I think that there's plenty of room for administrative cost cutting, and I've tried to lead the way in cutting administrative costs. Several years ago, when the decline in HUD funding began, I eliminated a deputy director position, the Deputy Director for Special Projects. John Palen (ph.) filled that position. The next year, I eliminated another deputy director position; that was the Deputy Director for Operations. Carlos Acosta filled that position. There is no position of that type at OHCD. The next year, I eliminated the executive secretary position assigned to me that was vacant. I reassigned the Assistant to the Director, Teresa Mulligan, to the Commerce Department. This month, I terminated funding for 65 COMM. ON FINANCE - BILL NO. 980228 the Deputy Director of Operations position at the Philadelphia Housing Development Corporation. I was the only cabinet member or commissioner that recommended to the task force that was studying the compensation levels for department heads that there be no increase in compensation, and they concurred, and there has been no increase in the compensation for our agencies. So this is not going to bring in millions of dollars, but I think it represents the kind of cost-cutting to which you're referring, and we have to be committed to it.
Well, I appreciate all of your efforts and even your sense of personal self-commitment to trying to cut costs, your enthusiasm for the recommendation of no 19 salary increases, which may or may not be shared by others affected by the recommendation. (Laughter.)
I have not heard them jumping up and down about it but you can certainly continue to do that. Let me ask you one last question, 66 COMM. ON FINANCE - BILL NO. 980228 because I never did complete understand this, and I was left to just try figure it out by reading newspaper stories. The contract with Carl Green seemed to take a fairly circuitous route somehow weaving its way through PHDC. And I any never could figure out why that was the case. Whose payroll is he on, signs his paycheck?
Maceo Cummings may be able to elaborate on some of this, but I believe the correct answer is that the Housing Authority --
Anyone who's taken an involuntary cut doesn't have to respond. (Laughter.)
Carl Green is on PHA's payroll, but I believe that the PHDC arrangement is the contingency in the event that during the three-year contract period, the Board of Commissioners of PHA determine that his services are not required by PHA, at which time he would be assigned to PHDC. But there is no Community Development Block Grant funding nor any other funding other than PHA funding that is supporting his salary. 67 COMM. ON FINANCE - BILL NO. 980228
He would be assigned to PHDC do what? If PHA didn't want him for some reason, why would PHDC want him?
Well, I think it's -- in the past, some of our staff have gone to PHA, and some PHA staff have come to the City's Housing --
Well, I understand that people float around all over the place. You know, it's a great thing to do. Mr. Green is in a singly, kind of special situation with a somewhat guaranteed contract. I don't know why, if the PHA Board made such a serious determination about his services, that he would subsequently, as the fall-back, end up at PHDC. I never heard that before. My understanding was that if the termination was for any particular reason, and specifically having anything to do with the situation in Detroit, that we would just buy him out of his contract. And I assume he goes wherever he goes with the cash. I hadn't heard about the fall-back, the PHDC scenario, so can you explain that?
I'd be glad to submit 68 COMM. ON FINANCE - BILL NO. 980228 additional written information just to be sure that I'm giving you the correct information. My feeling is that it's unlikely that the Board of Commissioners would opt to do this, but I will give you the details.
Well, I understand that, but I still don't have an answer to the other question. Who signs his paycheck, where does his check come from?
Mr. Kromer, can you tell me the reason for the reduction of approximately $450,000 from the Youth Build budget? I think that's such a wonderful, wonderful program, and I don't understand why we would be reducing the funding for it.
We've increased our support for Youth Build every year and continue to support Youth Build. I believe this reduction represents a 69 COMM. ON FINANCE - BILL NO. 980228 shift from the Year 23, in which the Youth Build line item included some development funding to line item which reflects the administrative funding only for Youth Build, with the development funding being committed under the line item under , Neighborhood-Based Home Ownership Production. Our feeling was, rather than include the development subsidy in a specific contract with Youth Build, that we should fund them for operations and continue to commit to funding at the level that we had committed to in the past, but to provide the development subsidy funding through the Redevelopment Authority, as part of our Housing Production Program.
Hasn't that program expanded into other sections of the City? I know the first section of the City being addressed by this program is South Philadelphia.
But it's my understand now that they have expanded to other areas.
So shouldn't we be giving them more money to get more youngsters to get involved?
There are three Youth Build sites in Philadelphia now. South Philadelphia continues, there's a Ludlow site in eastern North Philadelphia, and a Northwest Philadelphia site, working in West Oak Lane now and to move it to Germantown in the future. And I know there's discussion about a West Philadelphia Youth Build site as well. At this point, it's my understanding that Youth Build has not raised the matching funds that it would like to see in order to open up in West Philadelphia. But to the extent that the organization is ready to move ahead and expand again, we would like to support them. Of course, resources is always a problem, but I agree with you, the Youth Build needs to be one of our highest priorities. It's a great program, and we're regarded as the best program in the country by many people that are familiar Youth Build.
I think that 71 COMM. ON FINANCE - BILL NO. 980228 Councilwoman Fernandez feels as strongly as I do about that program, and I know that's she's really very anxious to say something, so I would recognize her at this point.
Well, actually, one of my questions related to that -- yes, again, Youth Build, I think, is one of the most excellent programs that takes young kids who've dropped out of school and gives them training and a GED; and, probably most important, rebuilds their self-esteem. The young people really feel ready to go into the job market, or some are going on to college. So I think that's a very good investment of CDBG dollars, particularly since their work involves rehabbing a house for a low-income family. But it leads to another question. And I think when Belinda Mayo, you know, had given the testimony, she -- but I thought -- for the record, I think it would be very important to get clear, why are we using housing dollars? And I think of OHCD primarily as housing, even though I know there's community development. 72 COMM. ON FINANCE - BILL NO. 980228 Why are you proposing to use housing dollars for all this job training? I can see it with Youth Build because the young people are perhaps getting trained for jobs in housing, rehab and construction. They are also actually rehabbing houses and you're using the money for that. But since there are other big pots of money through the Private Industry Council and now the new federal Philadelphia Works jobs money. Why are we taking these limited dollars out of OHCD for job training programs?
Our approach really relates to our definition of community development, which, simply put, involves fixing up the physical environment but also getting people ready to succeed in today's economy. And we work very closely with the Private Industry Council and other agencies to try to identify areas that we have interest in and programs that we think make sense. And Youth Build is a good example that, for whatever reason, can't be funded, or can't be funded as quickly or as effectively through the 73 COMM. ON FINANCE - BILL NO. 980228 Private Industry Council or other sources, either because of restrictions or the limited flexibility of the funding that's available to those agencies, or because of the timing, because we can move in more quickly and seed a program that can later be taken on by the Private Industry Council. A good example of that is the Greater Philadelphia First initiative in which we started up an approach involving Greater Philadelphia First staff interviewing employers in some of the key industries -- the precision manufacturing and the data-intensive industries -- to try to structure a training program that specifically addressed the needs of those major employers. Once that work was done at a relatively low cost, the Private Industry Council funded the training program itself. But my understanding is that it would have been difficult for the Private Industry Council to initiate the planning contract with the Greater Philadelphia First, for a relatively small amount of funding, got this rolling.
So that 250,000 was just a planning contract? 74 COMM. ON FINANCE - BILL NO. 980228 Again, I was surprised to see the GPF, you know, in the OHCD budget. So next year, it's showing 250,000.
It was some planning and start-up for these models. And it cut across three of the clusters of employment opportunity that Greater Philadelphia First had identified in its report on the economic development potential of the region.
Yeah, I remember the report. And it's good and I know it's a great idea. I was just puzzled as to why it's here when there is all of this PIC money and now the other kinds of job-training money.
The answer is that the PIC money wouldn't have been ready quickly enough to fund that, and that the process of going to the PIC's funding sources and getting that money available would have consumed time that I think would be better spent moving to implementation.
Well, I think and I am very aware of the kind of leadership you've provided at OHCD. I assume you keep a very close eye, and it's the exception rather than the 75 COMM. ON FINANCE - BILL NO. 980228 rule that, in a sense, shrinking CDBG dollars would be used for --
The good news is that the federal money for jobs and for Welfare-to-Work that was the subject of announcement a few weeks ago --
-- provides a lot of additional money and a lot of flexibility that the traditional conventional funding sources did not. So I expect, as a result, we'll see less of need to fund these initiatives through the block program.
Also, I just want to note for the record, when I looked at the overall budget, the major place where there were cuts was in the administrative costs. So despite some of the other issues raised, I think it should be noted for the record that that was a major -- you know, there weren't 76 COMM. ON FINANCE - BILL NO. 980228 that many cuts in other parts of the program, but you really are constantly trying to squeeze the administrative costs. There's one other question I had, and I forgot to write down his name, the representative from OHCD who was talking about the contracts. And the chart he gave us showing contracts by -- or subcontracting by Councilmatic district, I was puzzled and would like an explanation as to why the 10th Councilmatic District had like 1.7 million. I could understand perhaps some of the other districts, but I didn't know what kind of projects were going on up there that would account for that, unless the contractors are up there.
Councilwoman Fernandez, my name is Kevin Brooks, and I'm the Assistant Director in the Office of Housing and Community Development. In answer to your question, that's a quarterly report. And I provide a snapshot of general contracts and subcontracts for that period of time, so it's over a four-quarter period, but you have one snapshot. 77 COMM. ON FINANCE - BILL NO. 980228 And there's been request from Councilwoman Verna for a full report, and we'll provide a full report to Council on general contracting and subcontracting. So I can't specifically answer in why this quarter, there's a zero, but I suspect that over time, it averages out.
No, it wasn't a zero; it was 1.7 million in the 10th Councilmatic District, and I couldn't figure it out.
Let's see, I had one other question, and that relates to the housing preservation. Mr. Kromer, again, you know I feel strongly about investing in preserving and keeping the current stock that's livable, to keep it in good shape so people can continue to live, and so we don't have more and more abandoned and vacant houses. But I was curious as to why in the -- this is a second-quarter report. And I couldn't 78 COMM. ON FINANCE - BILL NO. 980228 find it in here of how many Tier I and Tier II and Tier III basic systems repair projects had actually been completed.
I had asked that question, and I believe he said 4,000.
There was a -- we've, for over a year, been submitting quarterly reports to Councilmembers. The most recent one showed the statistics for the period ending with the end of March 1998 and showed that Citywide, 6,013 cases had been completed in all three tiers. And -- I'm sorry 3,435 cases had been completed in all three tiers. In your district, Councilwoman Verna -- I think you asked the question -- 382 cases were completed for the year ending March 1998. But it is in the quarterly report that was distributed about a week ago, ten days ago.
Well, that's what I was looking at, the quarterly report. It's not -- the pages aren't numbered, but it only shows cumulative completed was like 500 -- oh, that was weatherization. Let me get my lines 79 COMM. ON FINANCE - BILL NO. 980228 right. The print's so small. But I guess I just wanted to know, are you on schedule in terms of the basic systems repairs? Because the figures didn't seem to make since in the second quarterly report.
I'm sorry that we don't have page numbers on the report. There's a chart that begins the section 10 on basic systems repair. I know there are lengthy lists of addresses by Council district, but that section starts with a chart titled "BSRP Tiers I, II and II, and Weatherization."
Yes, it shows the -- no. 17 It's in a binder that was circulated to Councilmembers last week.
My staff member says she has it. Why don't we check it back.
I just wanted to -- 'cause, again, that's such an important program. I just wanted to make sure -- 80 COMM. ON FINANCE - BILL NO. 980228
-- at this stage that production is really -- nor repairs are really moving ahead on schedule .
The numbers are down because of this change from Tier I to Tier II. Rather than visiting the same house twice and counting it as two units, because we fixed the heater and then we got a call about the roof, PHDC is going once. So it means, in that case, the production drops by half, but the value of the program as increased, as a result.
Are there any other questions? The Chair recognizes Councilman Nutter.
Thank you, Councilwoman. Mr. Kromer, let's go back for a moment to pages 220 and 221. And I see that Mr. Eisenstat has returned. In the program delivery category, it 81 COMM. ON FINANCE - BILL NO. 980228 appears that the Redevelopment Authority gets $8.6 million, is that correct?
Proposing a reduction to approximately $8.3 million in the Year 24, that's right.
That's 8-3-8-0, right? And in the general administration category, it is -- it looks like a total of 2.870?
That number is hard to estimate on any given year. It depends on the nature of the other work that the Authority has in general from an administrative -- from an administrative standpoint, I would explain that 82 COMM. ON FINANCE - BILL NO. 980228 generally for calculations, this represents somewhere around 80 percent of the Authority's budget.
This is a difficult -- this is a difficult question to answer. Let me explain what some of our other sources of revenues are and then explain that they are somewhat -- they change from year to year. And depending on the amount of work within a given year, you won't know that until the work is completed. In general, I would say that this is about 80 percent of the Authority's core work.
8-0. There's a series of other functions that the Authority undertakes on behalf of the City, and those are billed back directly on other funding contracts and agreements. 83 COMM. ON FINANCE - BILL NO. 980228 In addition, some of the CDBG administrative dollars are, in fact, used to pay for the administration of those other activities that are not reflected in the plan. And the examples of those would primarily go to the administration of the various site improvement activities utilizing City capital dollars.
All right, but the totals, for this discussion, are $11,250,000. 11 And you're saying that that represent about 80 percent of your budget.
I'm not too sure how you're -- when you take the two numbers and add them up, that's correct. And I do appreciate it that --
I was very good in fundamental addition but I got 8.38 and 2.870.
And you're saying that's about 80 percent of your total budget?
In any given year, it 84 COMM. ON FINANCE - BILL NO. 980228 could be as high as 80 to 90 percent. I don't have that number today because that number fluctuates based on what other work is taken.
All right. But with that in mind, I mean, your total budget is somewhere in the -- maybe 13, 14, it could be as high as $15 million, but the bulk of the -- the overwhelming majority of your funding comes right out of this book.
We submitted an annual budget to the Office of Housing and Community Development for a funding of everything and -- I don't know if -- I mean, we don't submit an annual budget to City Council; we submit an annual budget, as the primary funding agency, to OHCD. Our contract, prepared by the Law Department, is reviewed by numerous City officials, both in OHCD and in the Law Department, which includes our budget. I'd be happy to share with you a line-by-line budget of the Authority. 85 COMM. ON FINANCE - BILL NO. 980228
I mean, given the level of funding that comes out of this, it would seem to me that it would be most helpful.
Given the amount of contact that we have with the Redevelopment Authority, your budget should be a part of this budget, and not just two lines.
I'd be happy to forward you the budget detail and the process and the nature of the contracts that create the budget.
All right. It appears on , there's an item here, $300,000 in CDBG is being money used to maintain RDA-owned sites. Can you explain that, please?
Yes. The Department of Housing and Urban Development requires the City to show that it's taking responsibility for land that was acquired with HUD funding in the past but has not yet been conveyed. And that land includes some parcels that were acquired during the 1990s, but also a 86 COMM. ON FINANCE - BILL NO. 980228 substantial number of parcels that were acquired during the 1970s and possibly earlier that were associated with urban renewal plans were never funded by the federal government, and we are required to use a portion of our block grant funding for maintaining those parcels.
If I could further explain, that's a line item that is generally known, or has been known over the years, but has euphemistically been changed, but was previously known as "Urban Renewal Liability." That number was originally, in the early 1990s, at about $750,000 a year. Those dollars primarily, as John explained, but I could explain in further detail, go to the upkeep, maintenance and demolition of properties that were primarily acquired in the Redevelopment Authority's inventory as far back as the 1960s. It, for example, pays for the maintenance staff to provide the cleaning and upkeep of properties in Eastwick during the summertime, something we could spend four or five times more on, as well as the emergency demolition and other demolition of RDA-owned properties that 87 COMM. ON FINANCE - BILL NO. 980228 have been in inventory for a substantial number of years.
Tell me about, on , this item number 3, acquisition, It's $2 million in acquisition funds available. Is this for Citywide use?
Yes. And this is primarily for the rental and sales housing development ventures that had been funded in the past years and are to be funded in the Year 24. The primary acquisition area is the Cecil B. Moore area, and a lot of this acquisition is associated with the Home Ownership Zone activities going on there. However, to the extent that we have tax credit rental ventures and sales housing development ventures going on in other parts of the City, the acquisition expense would come from this line item. In addition, where we have a commitment to a specific program -- Philadelphia Neighborhood Housing Services for example -- any eminent domain activity required to support that program would come from this line item. 88 COMM. ON FINANCE - BILL NO. 980228
And lastly in this area, how much money is available for Act 94 and other condemnation procedures?
The funding for Act 94 and other condemnation would come from this line item.
Well, given the level of acquisition requests that you must get -- I know a fair number of them come directly from my office, and I figure other people are doing a 14 few things around here -- you can't be getting 15 ready to tell us that $2 million is enough. 16
Not at all, not at all. Again, it's a problem of resources. It would be great to have more funding for acquisition. Eminent domain costs a lot, and it requires money to be paid for the fair-market value of the properties, and it requires a level of staffing to manage the details of this process, which takes a couple of dozen steps.
Here we go back to those administrative costs again. 89 COMM. ON FINANCE - BILL NO. 980228
Absolutely. And that's the crux of the matter. Let me say, though, in 1992, I could not have sat here and looked you in the eye and talked with you seriously about eminent domain. You could not be serious about Redevelopment Authority and eminent domain. I mean, it could not be done predictably. Now the Authority routinely requires and disposes of well over a thousand properties a year. And so that capacity has increased very substantially. If we had more resources, the Authority has the capacity to do a lot more. But we're constrained.
Well, since you're pursuing these dollars in the 108 program, have you -- and we had a Section 108 discussion a little earlier -- have you tried to seek more funding from that particular source?
We could use 108 dollars. But as a practical matter, we've simply funded the development costs, the development subsidy funding through 108 freeing up more money for the 90 COMM. ON FINANCE - BILL NO. 980228 acquisition line item. So it's a -- we come up against the same problem.
Lastly, I think about two years ago, possibly in a Finance Committee hearing or in some subsequent hearings, Mr. Kromer and Mr. Eisenstat, you were at the table and had made various commitments regarding acquisition disposition process -- legal issues, charts, the bodies, who does what, how it gets done, what we are required to do and the like. And if my memory serves me correctly, I think we've received some information, certainly nowhere near all the information that had been requested at that time. And I think we're at least two years old in those requests. Now, I guess I would just have to say to you directly, one, I would like the information. But, two, if you're not going to provide it all or if we're not going to have a full detail discussion about it, either in a public hearing or in some private hearing, I'd rather appreciate it if you'd just tell us that 91 COMM. ON FINANCE - BILL NO. 980228 you're not going to do it or you can't do it, rather than continue to play this game.
I recall that at last year's hearing, a number of questions were raised and a number of requests were made for information. And I believe that we've supplied all the information that was requested, and I don't know of an instance in which we did not do that.
Well, we can have some further discussion of that off the record. I don't think we have all the information.
We'd be glad to follow up. To my knowledge, Councilman Nutter, we have followed up on every request by Council.
Nor do I think it was supplied in the fashion that it was requested, but we can discuss that later.
Mr. Hankowsky, would you please approach the witness table. (Mr. Hankowsky comes forward.)
Gentlemen, you 92 COMM. ON FINANCE - BILL NO. 980228 will stay with us the remainder of the day?
Thank you, Madame Chair. Mr. Hankowsky, you, I think, were here for the discussion about the use and the public policy issues around HUD 108 loans, TIFs, and the prospect of the latest thing out of the Ridge administration, the Keystone Opportunity Zones. And in an exchange between myself and Mr. Mullin, we had some discussion about how these programs and incentives get used, what the longer-term impact is beyond any particular administration but their aggressive present use and what that mean for the long-term future of the City. One, do you have any particular perspective on that? Two, are you, as usually the prime mover of many of those programs and projects, I think you'll be coming back to us soon to talk about some more of them. Is there any work going 93 COMM. ON FINANCE - BILL NO. 980228 on in this regard in terms of developing policy and looking at or better monitoring how we utilize these programs?
I will actually first apologize. I actually was not physically present during the question and responses that Steve Mullin gave you. I stepped out for a short meeting and came back.
Well, why don't we get Mr. Mullin back, and we'll do it again.
Sorry. I think have the gist of it. And if I don't, you'll, as always, correct me. I think on the 108 side, we've got basically two -- and I'm now talking about the economic development side. Mr. Kromer, I think, spoke about how 108's been used on the housing side. But on the economic development side, we basically have two pools of funds that we use. 94 COMM. ON FINANCE - BILL NO. 980228 One, in fact, is called "the pool," which we established a couple years back whereby we remain the only city in the country that HUD has been comfortable enough to give the capacity to do what is called "delegated underwriting," such that we actually draw the dollars down, have them in place, can underwrite a loan, and loan it to a company, and don't have to go through what is an unpredictable process with HUD in terms of how long they're going to take to approve a particular transaction. The pool has guidelines. And, again, not to let -- I think, in past hearings on the community development budget -- in the last several years, we have talked a little bit about that. And I think maybe in the initial year, we did the pools, shared them, and I'm happy to provide further copies or update. Councilman, I'm also happy to provide you -- I think recently I provided you some information on exactly the status of the pool. But it, basically, a program that deals with fixed-asset financing, certain kinds of clients with certain kinds of projects, and 95 COMM. ON FINANCE - BILL NO. 980228 certain loan amounts and certain underwriting criteria. In terms of how do we decide we're using it in transaction A versus transaction B, at the current time, PIDC administers in some way -- because the notion of how we administer loan programs varies by the program -- separate loan 9 programs. I wish it weren't that case, but the 10 feds have programs, the State has programs, the 11 (unintelligible) had a program, so we try to make 12 sure we get everything the City has a right to go 13 after. 14 So we generally, when a client comes 15 in, look at what they're trying to do versus the 16 kinds of programs that are available, and match 17 the need with the resources from the client 18 perspective as well as from our perspective. 19 What I mean by "from our perspective" 20 is that there are instances where we don't have 21 very much of one kind of money, or we try to 22 maximize the use of State money, for example. 23 So for the fourth year in a row, Philadelphia, through PIDC, did more Pennsylvania Industrial Development Authority loans than any 96 COMM. ON FINANCE - BILL NO. 980228 other county in the Commonwealth, and we want to make it a fifth year in a row. So the more money we bring down the turnpike, we think, the better. So we try to do that first and look at what I would tend to call "our own resources," local resources last, so that we try to maximize bringing in dollars. That's how the pool work. The second way we use the 108s is what we call "stand-alones." These are transactions we apply to HUD one at a time. They are transactions that one, break the 5 million per transaction limit of the pool. So by their very nature, we can't do them out of the pool. There are projects that would not meet the pool standards of underwriting. What I mean by that is the pool, for example, you have to basically be an established business. If you're developing a new hotel, it doesn't count in our delegated underwriting. We need to show HUD that project before we can do it. So in one case, we're on the stand-alone basis by the nature of the pool rules. Why do we use the 108? Basically, the 108's there and the TIF's there. We're part of 97 COMM. ON FINANCE - BILL NO. 980228 the overall policy of developing at least 2,000 more hotel rooms by the year 2000, a policy that the City Administration wanted to do. We've talked about this in the past too, and we went off on a journey to try to make that happen and see what resources we could bring to bear to make that happen.
I hate to interrupt you. And having nothing to do with the decision to go after 2,000 more hotel rooms, because that decision was made, and fine. Can you tell me about any other meetings, discussions or decisions where so definite a target was made about doing anything else for any other type of business or industry?
'Cause a clear decision was made for whatever reason that we have to have more hotels, we've got to have 2,000 more hotel rooms. And the only way to have 2,000 more hotel rooms is to build 5 to 10 new hotels. 98 COMM. ON FINANCE - BILL NO. 980228
Right? Other than, I guess, most recently the Kvaerner deal at the ship yard.
Tell me about another type of process where we have said we have to have eight to ten more of X, because that's what we want, and we're going to break down every possible barrier or jump through every possible hoop to have that.
Right. I don't want to say I can't think of another, because it would -- it might -- if I spent long enough, I might. But, as you mentioned, the Kvaerner transaction. But before it was called Kvaerner, the that we were going to have a closed ship yard and we were going to go out and search the world and find somebody to try to build, you know, hopefully, try to build ships in Philadelphia, you know, that was an enunciated goal from basically 1992 on. There have been other situations where 99 COMM. ON FINANCE - BILL NO. 980228 the public has said, We want to develop an area or whatever. I think the family entertainment project at Penns Landing where, again, we want to get somebody to do a project that looks like this and go off and try to find somebody to do it is an example. The counter -- to some extent, the other side of it is when we're dealing -- in the majority of instances, we're -- we're dealing with companies making decisions about what they want to do; and us then working to make that decision happen in Philadelphia. I'm not sure we could have said we want -- this is just to use an example that is relevant to the question. You know, we want to build bank operation centers. I mean, if no bank wants to build one, I'm not sure we can induce it. But then to the degree PNC said we want to build one, we want to have it happen here. So that it's -- and so we have been -- and so we try to position ourselves, whether it be by having industrial parks available so that we can respond to somebody that needs a site, whether it's by having financing tools available so that 100 COMM. ON FINANCE - BILL NO. 980228 we can respond to the financing needs companies have, and then be in a position to corral, lasso that economic activity in Philadelphia. I think that the hotel example is one where, because of the Convention Center and because we sort of created a base of business, a base of justification to go after it. And either you're going build a convention hotel next to the Convention Center or you're not. I mean, you're not going to build it in King of Prussia. That was a situation where we wanted to build on an opportunity that we had previously -- meaning when we had voted to do the Convention Center -- previously decided to do and build off of it. But I agree with you. I mean, understand what's implicit in question.
Right, if there aren't any other examples, we don't have to search the universe.
Earlier discussion 101 COMM. ON FINANCE - BILL NO. 980228 and talk about TIFs and Keystone zones.
Which have been either of the hotel deals; or, going back to your question, the ship yard transaction.
We are also now looking at, and are anticipated, a couple of community-based stand-alones in areas where between ourselves and the community and others, there's been a decision, let's try to make something happen at Cecil B. Moore Avenue. Or hopefully soon now, thanks to your intervention, we might actually be looking at doing one in West Parkside on a stand-alone. On the TIF question -- and, again, correctly so, as you've asked in the past, we have used the TIF mechanism, one, against this hotel policy; and, two, in a couple of specific 102 COMM. ON FINANCE - BILL NO. 980228 instances where we're trying -- where we had PNC or SmithKline Kvaerner, and then, of course, we have a couple that will be before Council later this month. But the question of what is our -- when will we use TIFs and when will we not. There is not a firm written policy that answers that. I mean, we're responding to large projects. And I've thought some, but I'm not going to tell you we've moved far on this, that we probably do need to do that because it becomes a tool that, you know, to be blunt, once the developers see it, they say, Give me one of those, and we've been saying no a lot.
I mean, I don't want you to think we say yes all the time. We say no 19 clearly more than say yes, to date. But I think, out of fairness to everybody, people -- if would be helpful if there was sort of the what are the rules of the game.
I mean, maybe we'd get less calls, and they'd know that we'd say no if 103 COMM. ON FINANCE - BILL NO. 980228 they called. On the opportunity zone question, Keystone Opportunity Zones, as I said, I was -- unfortunately, I had to step out and didn't hear Mr. Mullin's response, so I hope I'm being consistent. But the legislation's out there. My understanding, as of this morning, is that, you know, this legislature, they'll wrap it up when come back in June, that Philadelphia has every intent to pursue the program, that work has begun to think about what kinds of sites and what kinds of areas, presuming the bill will look generally the way it's moving through the legislature, it might make sense. And I believe, in fact, the Mayor's interested in a meeting shortly with Council to just begin a discussion about, okay, here's the current thought process, let's talk about it as we work spring through summer into fall, when currently (unintelligible), applications are due.
And just briefly, is it my understanding that in these new Keystone Zones, the business would be exempt from virtually 104 COMM. ON FINANCE - BILL NO. 980228 all taxes? I mean, what's exempt?
Again, subject to final passage, these zones are modeled, cloned from a program that exists in the state of Michigan labeled "Renaissance Zones." The legislature -- well, the Governor, he proposed the legislation -- is proposing zones. There will be Statewide, and then there 10 could be subzones within a zone where there would 11 be no State corporate taxes, no City business 12 taxes -- or municipal, obviously -- no real estate taxes, and there would be no income or wage or local income taxes, wage tax, for residents of the zone, not employees of the zone. I mean, it would be like a suburbanite, you know, the indice (sic) of paying an income or wage tax is residence, not where you work.
But basically the company would be, that's right, would not pay any of those company-related taxes -- real estate, State or local business -- for, I think it's twelve years. I believe it's ten or twelve years would be the length of the zone. That's right, 105 COMM. ON FINANCE - BILL NO. 980228 that's the proposal.
And is there any requirement based on current legislation that the company stay in the zone for any amount of time?
Those kinds of questions are a little bit unclear at the moment, answers to those questions. The legislation presumes the promulgation of rules and regulations by the Department of Community and Economic Development, in Harrisburg, which I have to answer some of those questions. What happens about staying, what happens when an existing business moves from someplace else in the Commonwealth in?
Oh, I'm making it simply -- yeah, any -- including within the locality?
And so there's -- the 106 COMM. ON FINANCE - BILL NO. 980228 discussion is that there would be requirements that you,, quote/unquote,, create blank-percent new jobs, blank-percent new investment. But a lot of that, as I best understand it, is to be further refined in the regulations. But it will raise many of the, quote/unquote, classic economic development questions, policy questions.
Well -- this will be my last thing, Madame Chair. I thought in your initial explanation of this that legislation is soon to be passed. Did I understand you to say that the Mayor plans to have some discussion about this prior to application or --
No, no, no. I think he wants to engage this body and others but clearly before application.
Okay. Well, I would only ask -- I mean, I'm sure that that will happen, but I'd like to ask you and the Commerce Director, as you obviously better understand this 107 COMM. ON FINANCE - BILL NO. 980228 than at least myself, I'd like somebody to write down some kind of an analysis on paper on this that explains what someone believes are the true benefits to the City of Philadelphia to be engaged in this. I mean, I just -- I mean, what do we ultimately get out of it? I understand that the business is to come here and, I guess, people get jobs, but I really would like to see some kind of cost benefit analysis .
And a public policy analysis of why we think we should proceed down this path.
Right. And my understanding is that, in fact, that analogous dialogue is, in part, happening in the legislature.
Thank you. 108 COMM. ON FINANCE - BILL NO. 980228 Are there any other questions to ask, Mr. Hankowsky?
Mr. Hankowsky, you have frequent communication with corporations of all kinds in the City in connection with your work?
And you sort of have a series of responsibilities to the City to try to bring businesses here fundamentally in order to increase the job availabilities to Philadelphia residents?
I'm intrigued. Do you get into situations like this. Rohm and Haas, a great Philadelphian institution, many jobs in the Philadelphia area, also has plants near Philadelphia, as well as, I guess, throughout the world.
Just outside the City limits. And it's been there for quite some time, a very important part of their operation. And in addition to the great chemical things they do and, you know, the development of all kinds of paints of very special initiative --
-- they have to have the place cleaned doing what those -- a number of us have despaired many times, they kind of privatized that work many years ago, before labor organizations and people general understood it. And the company they hired to do the cleaning and the custodial work is another great Philadelphia institution, Aramark.
And the company employed -- and what Rohm and Haas did, was they contracted with Aramark for the cleaning services. And we liked it a lot because they employed 32 people, all of whom were 110 COMM. ON FINANCE - BILL NO. 980228 Philadelphians. Overwhelmingly, they were minority, heavily Latino, a few Black employees, but heavily Latino employees. The three-year contract expired in December of 1997. It was two big Philadelphia institutions, you know, providing Philadelphia jobs. Suddenly, Rohm and Haas decided to put the new contract out to bid, and they decided the lowest bidder wasn't, for some reason, acceptable. But the second-lowest bidder was a South Jersey company employing people in South Jersey. And Rohm and Haas figured out they'd save $300,000 by switching from Aramark, a Philadelphia institution employing Philadelphians, to the South Philadelphia Jersey company employing minimum-wage people. In fact, the wage rate was cut by $4 an hour, and all health benefits were lost. The Aramark workers were represented by a union, national, that has a big Philadelphia presence. It represents our Gas Works union, it represents the custodial and maintenance employees 111 COMM. ON FINANCE - BILL NO. 980228 at the School District, and it also represented janitors in our main offices in Philadelphia, and also, this union, represented the workers whose employer technically was Aramark, although the only work they did was at the Rohm and Haas Bristol plant. So in one fell swoop, Philadelphia got 32 more unemployed families, very few of whom have been able to get jobs yet because the, you know, job availability for custodial workers is much more limited than for technical or professional workers. Now, wouldn't your department have a real role to play in that, to try to bring about a change? The contract, incidently -- and I understand these are contracts in the field of janitorial and custodial services -- always seems to provide a 30-day cancellation notice; either party can serve notice, no reason has to be given. I attended a stockholders meeting on Monday morning, here in Philadelphia, of Rohm and Haas, their annual meeting, to speak on behalf -- and my plea was a simple one: 112 COMM. ON FINANCE - BILL NO. 980228 You have saved $300,000 for the company, but I suspect it's going to cost the City of Philadelphia, you know, maybe times, many 5 times to deal with 32 increased unemployed 6 Philadelphians. 7 Now, wouldn't it be within the scope of 8 your concerns to deal with companies? We have 9 certain problems in trying to pass ordinances that 10 say the City of Philadelphia should only hire 11 Philadelphians in many areas in dealing with 12 companies, but the company could adopt such a 13 policy. I mean, they're not a government and they 14 have greater freedom. 15 But doesn't that one act of eliminating 16 those 32 jobs has probably, whatever gains your 17 department, the Commerce Department, feels they 18 may have made over the last five years, that one 19 act of taking business away from the Philadelphia 20 corporation Aramark and putting 32 low-income minority workers -- eliminating them from employment. Somehow we're going to have to pick up, you know, the health benefits. We're not going to let them starve so we're going to pick up all kinds of expenses. 113 COMM. ON FINANCE - BILL NO. 980228 Don't want you think that would be within the realm of the work you do? That's the reason I wanted to know about your relations with these corporations. Could you and your office intercede and explain how many millions of dollars it would save, you know, if they just reinstated the contract? I can tell you that when Rohm and Haas learned that there were going to be representatives of the public speaking out against this, they hastily arranged a meeting Monday morning, very early in the morning, with the union, to say, Let's begin talking again.
And when I raised this issue at this open annual meeting, and there were others that also raised this issue -- and I didn't deal with the humanitarian reasons, I mentioned them. Obviously, it's a great tragedy to these 32 families, 'cause after many years, they had worked up to a decent -- a half-decent wage salary. But shouldn't Philadelphia play a role in it? It certainly impacts upon us very heavily.
I think the simple answer is yes. I mean, other than you asking me 114 COMM. ON FINANCE - BILL NO. 980228 this question this morning, it's the first I've heard of it.
Well, incidently, Rohm and Haas said they were excellent workers. They had no complaint, they spoke of Aramark as a company, in providing these kinds of services, it is doing outstanding work. They have Aramark in two other plants where the contracts have not yet expired.
But we're very concerned about what may happen. The company saves 300,000, but it may cost the City, I estimate, to million, maybe even more, to deal with all of the problems of 32 additional unemployed Philadelphians on top of those we already have in the face of our trying to get jobs for people, you know, that are leaving the welfare roll. And it just seemed to me that government has a responsibility. And from a financial point of view, it's very costly to us.
Right, yeah. I mean, this instance was in Bristol, though. Is that -- 115 COMM. ON FINANCE - BILL NO. 980228
Was the facts that these people were laid off from employment in Bristol? Is that what you said?
They worked in Bristol. They were all employed in Bristol, they were all Philadelphians.
Because, you know, it's the same problem of people in Philadelphia, and they had managed to solve the transportation problem that often plagues Philadelphians, you know, when they get jobs available in the suburban areas. But because this was well established, this contract had originally been set forth 11 years ago.
And in the course of that time, the wages and the working conditions 116 COMM. ON FINANCE - BILL NO. 980228 had worked up to at least a minimally good wage, about $10 an hour.
Kind of the same wages that the unionized shops get, that unionized buildings pay their janitors and custodial services.
Right. But the simple answer is yes. And, as you know, there's an ordinance that provides a notification process if a company is phasing out jobs in Philadelphia. And those notices go to the Commerce Department and they are responded to, and whether at our level, in a number of instances. The Mayor has personally intervened in terms of job loss, companies rearranging opportunities to try to --
Well, it's -- this isn't any of that. It's just a technical problem.
That they're Aramark employees working totally for the Bristol plant of Rohm and Haas.
And where they state 117 COMM. ON FINANCE - BILL NO. 980228 -- and, you know, I urge you to call their officials 'cause you can verify these statements. But at the annual meeting, the Chief Executive Officer got up and said, Yes, this company did excellent work, Aramark, and in the furnishings, they had no complaint. He said a little proudly, "We didn't pick the lowest bidder." My understanding is that they picked the one next to the lowest bidder. And the savings, they estimated, were $300,000 yearly.
And I had to point out from a -- you know, we thanked them because Rohm and Haas is one of our very good employers.
And they contribute, you know, we know, to Kvaerner Ship Yard, they're contributing $4 million worth of paint.
You know, they think it's good business because they're anxious to sell. You know, they have a new paint on the outside of ships that's supposed to be much 118 COMM. ON FINANCE - BILL NO. 980228 longer-wearing.
And so they were anxious, from a business point of view, to get people to know their paint, and they took advantage of the Kvaerner situation, but it's very helpful of making a gift of $4 million worth of paint for the first three ships that the Kvaerner Ship Yard builds.
They're going to do all the painting for free, they're going to supply the paint for free.
I'd like to urge, and then following up Councilman Nutter's question, I would like to see if you can develop a plan because I'm sure this kind of thing happens elsewhere. Sometimes they're organized, sometimes they're not organized. And we learned of it only because it's an organized group --
-- that we work with. And I thought it so important to arrange to 119 COMM. ON FINANCE - BILL NO. 980228 get a proxy to be able to attend their stockholders' meeting.
But it seems to me that that's a great area of job development. If we could get Philadelphia corporations to increase their hiring because they can legally, you know, factor that into what they do, and I would think they'd want to help the Philadelphia company Aramark, you know, because it does excellent work. So I raise with you, I would like to suggest that as you reply to Councilman Nutter's questions, that you prepare in writing a plan to kind of deal with this kind of situation. I think it offers a great possibility for increasing the number of jobs available to residents.
Yeah. I think working with the Commerce Department and the Private Industry Council, they tend to be actually the agencies that respond to those 'cause --
All right. And I 120 COMM. ON FINANCE - BILL NO. 980228 understand there may be questions quickly. And I tried to indicate that this City Council adopted a resolution -- Madame Chair, you'll recollect -- at the end of March, urging Rohm and Haas to bring back, you know, to restore the contract.
Councilman Cohen. I don't mean to interrupt you, but Councilman Longstreth asked to be recognized.
Go right ahead. I always recognize junior members. (Laughter.)
I'd like to simply ask for permission to go down to attend the service for the police and firemen who have died during the year, and would like to be listed as voting for the bills that are before us today.
Thank you. Councilman Cohen. 121 COMM. ON FINANCE - BILL NO. 980228
No, that's all I have. I do have a question of the OHCD people with respect to the labor matter that has been before them over a period of a number of months. The offices, you know, the workers at the OHCD, whether there's any up to date, those --
Mr. Kromer, before you -- Councilman Ortiz, did you want to ask questions of Mr. Hankowsky?
Well, all three of them, but I'll let Dave finish, and then I'll -- I'll wait.
My question is, could we have an update? Can we get some good news that maybe we've restored some labor peace somewhere?
I was glad to have an opportunity to meet with you last week at some 122 COMM. ON FINANCE - BILL NO. 980228 length to talk over the issues.
And I do appreciate the time that you devoted to that. I did what you had asked and reviewed the issues. And I think that, although there's no 8 good news today, that the prospects for resolution 9 are reasonably good. I didn't know at the time that we had met that a mediation session is scheduled for this Friday, the 8th. And this session, I think, will be the first in which we'll really be able to engage with the recently-appointed State mediator and get into issues. I know that union representatives are scheduled to testify today, and I would be glad to respond to any testimony that they may have, which, I believe, will be forthcoming shortly.
All right. Thank you. We'll hear from -- I understand the union representatives are scheduled to testify at o'clock today?
Well, they're on the schedule. I don't know what time they're 123 COMM. ON FINANCE - BILL NO. 980228 coming in. The Chair recognizes Councilman Ortiz.
Thank you, Madame Chairwoman. Steve and John and. . . I'm going to read from here, and I want to follow up on A statement that I heard Councilman Nutter make as I came in. And my staff has been during the hearing, and I want to excuse myself for being late, but I had other things outside of Council. It says disproportionate needs of racial groups is, according to HUD definitions, for the purposes of the consolidated plan, a disproportionately greater need exists when the percentage of persons in the category of need who are members of a particular racial or ethnic group is at least 10 percentage points higher than the persons of the category as a whole. By this definition, Latino households in Philadelphia exhibit disproportionately greater housing needs. Latinos are disproportionately represented in the extremely-low and low-income categories -- 60 percent of Latinos, compared to 30 percent of the general population. 124 COMM. ON FINANCE - BILL NO. 980228 Small Latino renters households have a disproportionately higher incidence of housing problems -- 84 percent compared to 74 percent of the general population. And large Latino households have a disproportionately higher incidence of housing problems -- 83 percent compared to 67 percent. The three tables on the following page, the greater incidence of poverty and housing are, among some Latinos, is an area of concern for the City of Philadelphia, as well it should be. Although we represent actually 10 percent of the City's population, Latinos make up one of the fastest-growing populations in the City. And I know that we have been doing some housing work, as you well note here. And we have done work with some of the CDCs that we have developed over the years. It's taken us around ten years, twelve years work to develop these CDCs to the point which they're at. But job development, which, if you're going to have housing and you don't develop the jobs and you do not develop the economy, the housing will be destroyed within a generation or 125 COMM. ON FINANCE - BILL NO. 980228 less. And in essence, we'll be throwing money down a hole. And Michael was talking about data, in essence. And I want you to give us what has been the impact of the efforts that we've had in terms of job creation in the neighborhood. And how have you measured that, if you have it? And I think Bill Hankowsky here can begin to address that problem.
Let me start out by saying clearly that a lot needs to be done, but I think we've accomplished a lot. The need is still there and needs to be addressed fully.
I agree. I think we have established some housing programs. I mean, obviously, the need is huge, and we need to be able to do that. But housing programs, without the job development, and that's what I've been bending Mullin's ear now for years, in terms of developing a cultural commercial zone in the barrio. Because I cannot see us putting housing in and not having job development. And it's nice, you know, I was reading 126 COMM. ON FINANCE - BILL NO. 980228 Steven Mullin's testimony about, you know, investment in facade programs and so on, and that's nice, that's nice. I think the leap is here, and we want the money to fix up the facade of the streets and so on. But we're spending huge amounts of money in attracting businesses to the City -- Kvaerner, which is one. We are putting in at least 50 million, that I know of, and more money to attract Kvaerner. We have -- we're giving an incredible amount of tax breaks to different developers in different areas. What is our attitude in terms of developing the same sort of mindset in terms of neighborhood development? And my question has been so far is, what has been the impact of our efforts? Because I don't see the -- I don't see the joblessness rate going down in North Philadelphia, I don't see it, and that includes east of Broad and west of Broad. I don't see the jobless rate going down in North Philadelphia. So if we have a job creation program going on, and now we're going to have a 127 COMM. ON FINANCE - BILL NO. 980228 Welfare-to-Work Program going on, what has been the impact of that job creation program to date and how have we measured that? And if we're going to measure also the impact of individuals who, from the City and the neighborhoods, who are working in all of these Center City projects that we have had?
Just a couple of things. And these don't address the core issue, but I feel they're important in terms of the Community Development Block Grant Program. We've tried to fund job-creating development ventures where we think they make sense. And the substantial commitment to the Gateway Plaza that APM is currently developing a full city block of retail is an example of that. There aren't a wealth of ventures like that, but those that make sense, that we think are feasible, we think --
I'm sorry. We try to support neighborhood development ventures that create jobs that make 128 COMM. ON FINANCE - BILL NO. 980228 sense. And we think one good example of that is the Gateway Plaza development that APM is constructing now. It's going to create some neighborhood jobs for neighborhood people. And the Commerce Department and PIDC support more of those. In addition, and I realize this doesn't address the core issue you're raising, but I did want to mention it. We have a lot more affordable housing construction going on now, thanks to the success of --
I understand that we have affordable housing construction -- how many -- because I've been --
And very soon, we'll have two schools being built east of Broad -- Hunter and Julio (unintelligible). But the employment and the participation, let's say, of businesses, like, for instances, Latino contractors in the overall participation of the construction in those areas is minimal. And I think of African-Americans contractors, the participation of African- 129 COMM. ON FINANCE - BILL NO. 980228 Americans has been minimal. So -- and the job creation, the job -- if anything it's seasonal, and I don't think -- I would like to see the percentages in terms of ethnic groups in those jobs of Latinos and African-Americans and women along those lines because I don't think the numbers are very big.
Mm-hmm. That's the point I wanted to make because we have a neighborhood benefits strategy and a reporting system in place, and there was a presentation earlier by Kevin Brooks and Michael Bell. We can give you that report. A lot more has been done. I think you were at the press conference a couple of years ago, where APM and the Electricians Union announced that apprenticeships for electricians were being created as a result of the construction there. Earlier in this decade, we couldn't even report to you --
But we haven't finished. You're still -- I don't know what -- how you're measuring it and if you have any data along those lines.
The only data that I have relates to the specific construction-related employment in the development ventures that we're supporting. It seems to me that in addition to the broad economic issues, the economy of Philadelphia and its neighborhoods, the bigger -- the core of the problem is job-readiness, the public school systems and the training programs that we can make 131 COMM. ON FINANCE - BILL NO. 980228 available to the neighborhood residents. Our community and schools program has a substantial Latino enrollment from all over the public school system. And that's the kind of use that we try to make of our funding, where we can do something to what the schools --
In essence, what you're saying is that we've been involved in job development over ten years, whatever it is, how many years, and we have no data right now to say we have created these many permanent jobs in these neighborhoods. We don't have that data available.
We do have the data, but it's not going to show, as I expect you can guess, that we've turned the neighborhood around or we've turned the neighborhood economy around, it will not show that. But we do have the data, and we will provide that.
Because my staff told me that one of the examples of neighborhood economic development that was used was the parking lot on Fifth and Indiana. Well, I'm very grateful for that, you 132 COMM. ON FINANCE - BILL NO. 980228 know, but it took 16, years to get a 25-car parking lot. And I don't see that -- if we had been -- if the parking lot was tied into an overall plan of economic development of the whole area, that to bring in other stuff, it would be very good. But right, it is really obsolete because it -- the need is greater than cars, 10 and the need is greater than the small little 11 parking lot that is there. 12 And so that's what I'm trying to bring 13 up. If we're going to have a plan, if we've got 14 commercial corridors, I would like -- I've been 15 telling this to Bill and to Steven and to you for 16 a long time. 17 Why don't we just sit down and put down 18 and get together the plan that we've been talking 19 about for the Fifth Street Lehigh front, all the 20 way up area, in terms of economic development because in the long run, and coming from the liberal hearings here in City Council, it is going to be the business people that make the difference in terms of that -- not the social agencies and so on but the business people. 133 COMM. ON FINANCE - BILL NO. 980228 So what I'm trying to say is, can we just get seriously going during the next year or so and prepare something along those lines? So that we don't have to do a 25-parking lot and say that this is a great event.
Yes. Just for clarifications, the parking lot was a response to a question specifically about infrastructure. But your point is very clear. And, as you're aware, we have squared a neighborhood strategic plan for the community development corporations in east and north Philadelphia as well as some areas west of Broad. The Empowerment Zone Strategic Plan, I believe, was intended to be that kind of consolidated document. But, again, I understand your point, and we're not where we need to be.
I don't see anything coming out of the empowerment zone. I mean, I really don't. There's a lot of money, a lot of talk about process and so on, very few jobs, very few jobs, you know. And what I'm talking about is if we're 134 COMM. ON FINANCE - BILL NO. 980228 going to be talking about -- that we have an economic stimulus fund, I would like to see how much of that economic stimulus money is going to be invested in neighborhood economic and job development. And I don't know if -- Madame Chair, I don't know if they have testified as to how much of that economic stimulus percentage-wise is going to be dedicated to economic neighborhood development vis-a-vis the Kvaerners and the other aspects and so on. And if you have any data along those lines, I would appreciate it you giving it to the Chair.
My answer is yes, we can provide that. And in my testimony for the City's general fund budget, I identified the break-out of the proposed stimulus funding in neighborhood housing and business retention, but I --
Excuse me just a second. The stenographer can't hear you. Mr. Mullin.
I'm pointing the wrong 135 COMM. ON FINANCE - BILL NO. 980228 way, I'm sorry. Steve Mullin. And in my general fund testimony, I outlined the proposed allocations for the stimulus funds. And I would also like to note that I'd be very happy to continue to meet with Councilman Ortiz about this planning. Where we do keep information on employment is through any of the projects or programs where we have any type of financing assistance. We do keep measures of employment both initially and throughout the project. The one thing to remember, though, and that is the number of jobs perhaps at a specific location, but over time, those could be different individuals. And some of those individuals could be from Camden, some of those individuals could be from South Philadelphia. In other words, if they say there are jobs here and there are 24 jobs 2 years from 21 now, we don't know necessarily know exactly where 22 those people are. 23 In addition, we do keep track with PIC 24 and with the programs that Councilwoman Fernandez asked about. With the block grant job training 136 COMM. ON FINANCE - BILL NO. 980228 programs, we do keep track of how many people get placed and how many people are continued on jobs 4 or 12 months out. But, again, that might be an 5 individual, and that job might be anywhere in the 6 metropolitan area. So there's a little but of a mismatch when we're talking about the data, which always makes it puzzling. We do look at the very top level of the data, the information that we'll see every quarter coming out in the newspaper from the Bureau of Labor Statistics, which publishes the employment statistics for the City, for jobs in the City, regardless of where you live. That's our -- that is our first basis of information for employment, but that does not include sole proprietorships, that does not include a variety of other types of employment. So we know that's not perfect. In addition, the Bureau of Labor Statistics and the Department of Commerce collect information -- collect statistics that they, by their own admission, recognize is not very -- is not very, very strong in terms of the detail because it's -- their sampling abilities -- they 137 COMM. ON FINANCE - BILL NO. 980228 can't get to this, and that is employment by residence; in other words, how many people who are residents of Philadelphia are employed, regardless of where they're employed. And that data is not available as frequently as the job data, but it is also -- there are some significant errors on that. We try it -- the big picture is to try to take a look at those numbers. In other words, what's the story with the employment of our residents, what's the story of employment in establishments inside Philadelphia?
Well, I'm glad that you're looking at that, but I'm interested in even more detail. I'm interested in bringing it down by ethnic group and by available geographical areas and so on. And Kathy brought this chart to me about monies and contractor summary. I'd like to see in terms of these contractors, Mr. Kromer and Steve, you know, how many of these contracts have gone to Latino contractors, you know, and so on, along the lines. And what is the percentage of those in this type of sheet here. 138 COMM. ON FINANCE - BILL NO. 980228
Would you identify yourself for the record, please. (Kevin Brooks comes forward.)
Kevin Brooks. I work in the Office of Housing and Community Development, Councilman Ortiz. And we provided testimony earlier that summarized some of the subcontracting and employment activities, both on housing projects. And I apologize we didn't provide a full report, but we can provide you a full report that shows not only the breakdown of minority contractors -- Latinos versus other minority groups -- but also by location and the zip codes. We have moved pretty far ahead, and I'm trying to demonstrate that Philadelphia residents are benefitting from our projects. And we have the ability now to sort by location, by race and gender, and we produce a report that does that. And we have also produced ad hoc reports that --
Could you make that available to the Chair? And she will make it available to -- 139 COMM. ON FINANCE - BILL NO. 980228
In addition, we have recently been working with Congreso de Latinos Unidos on specific construction-related apprenticeship training programs. So our office, as graduates of this apprenticeship training program emerge, will be looking to place them on housing and on development projects, as well as downtown commercial development projects.
Mr. Mullin, wouldn't 32 additional jobs in the Latino community be a big feather in the cap of your department, maybe rival the number of Latino positions you've secured? And I'll let you fill in the period of time.
Any number, I think, would 140 COMM. ON FINANCE - BILL NO. 980228 be considered very positive. And any time there are dollars spent and they can be provided for Philadelphia residents and Latino residents, I would say that that would be something that we would like to try to promote.
Well, do you see a role for yourself in the situation I raised with the Rohm and Haas and Aramark situation?
Yeah. I agree with Bill 11 Hankowsky's testimony, that certain of that -- just the practical logistics of finding out about that type of activity. Rohm and Haas must have 6,00 contracts, they are one of 30,000 firms in Philadelphia. And we do try to -- we, PIDC, and PCDC do try to make contacts among firms and --
Yeah, and those sort of things, we would certainly -- I mean, all the way up to, as Bill mentioned, when the -- when we get a warn letter from a company talking about eliminating positions, even though that's pretty much the last thing they do, so it's a foregone 141 COMM. ON FINANCE - BILL NO. 980228 conclusion. Oftentimes, we will, with the Mayor, sit down with the company and see, isn't there any other thing that you can potentially do? Is there any other way -- can we help with unions, can we help with trying to find job-training funds or on-the-job training funds or other types of things to try to prevent this. So those are the things that we do very much like to, one, get information from. And the story that you gave here, I just want you to know, there's probably .00000001 of what's going on out there, so we're constantly trying to do an outreach with business firms, with lawyers, with accountants as to where these things are happening so we can potentially play a role.
Well, the one thing I would suggest in general is a much closer relationship with the labor movement 'cause it seems to me that there is an intensive relationship with the corporate world. And I'm not opposed to that -- I think that's good and even enlarge that. But, simultaneously, you ought to be 142 COMM. ON FINANCE - BILL NO. 980228 enlarging your information because it's the unions that will know first about threats.
And I think you're right. Generally, some companies tend to not want the City to know about what they're doing --
-- until they're in a position where they're compelled to do so.
But I would like to see aggressive action, particularly since they're both Philadelphia corporations. And I recommend you do that. You might want to contact Aramark first --
-- since they were the company. And we understand they're very anxious also to have a renewal of the contract.
I will do that, and I do want to note for the record -- and this anecdotal, but I would say that at least half of the time that we hear about situations like this, it is through the labor -- the labor union or the 143 COMM. ON FINANCE - BILL NO. 980228 bargaining unit who will contact us. And when I say "us," it's the Mayor, the Mayor's Office, Commerce Department, PIDC, PCDC. So our communications on that side -- and you're exactly right, that's sometimes -- what's where you hear the earliest bits of news in some cases. And we consider that a valuable connection.
Can we just agree, then, that we're going to sit down and look at the economic stimulus fund that is there, see how it applies to neighborhoods and so on, and develop some very concrete plans to invest some of that money in the job creation in those areas. So, I mean, to go beyond just the PCDC facade-building and so on to real aspects of real investment.
Councilman Ortiz's position, I think, would represent a very strong position of most of the Councilmembers. 144 COMM. ON FINANCE - BILL NO. 980228
Thank you, gentlemen. Mr. Mullin, you will stay the remainder of the day?
Just a couple of questions. I apologize for being late. I had a school appointment this morning. I have -- could you tell me how the stimulus money is determined, how you determine whether you use Community Development Block Grant money or stimulus money in a community. I have a sheet here that has housing and commercial projects contracting economic benefit by Councilmatic District, and I see a zero-balance for the 9th Councilmatic District. I'd like to know what that means. What are you telling us here? And also, I want to know about the stimulus money and how that money is appropriated, how you determine it's appropriated.
Okay. Councilwoman Tasco, I'm not sure what data you're looking at there. 145 COMM. ON FINANCE - BILL NO. 980228 And I'd also, with regard to the stimulus program for the housing allocation, I think John Kromer can address how he determines which --
But what we call neighborhood economic development and the business retention -- oh, thank you.
Business retention and neighborhood economic development. I think the best way to characterize how we look at what funds -- what funds can we potentially put together for a particular project or for a business, we will literally, literally, sit down and take it if it a business looking to expand. For example, what type of -- what are they looking at? Are they looking at -- are they looking at building a building, expanding a building, buying - purchasing equipment or machinery. Do they need working capital loans? Are they planning to staff up maybe 20 new employees? All of these are signals to us of what type of financial assistance we might be able to 146 COMM. ON FINANCE - BILL NO. 980228 provide. We also, obviously, ask what type of equity do you have, or what type of other funding might you have, what are your relationships with commercial banks or other commercial lenders? And we'll try to mix something where we will try to use the more appropriate, in terms of our funding -- and by the way, our funding, when you're talking about PIDC, includes State loan and finance programs since PIDC administers that. So we sort of sit back here with -- in a sense, one tap of this, one tap of this, one tap of this. And what we try to do is use the funds. If there's a specific thing for machinery, for example, we would like to use a loan fund that specifically goes to machinery so that we're not using something that's more flexible when we can't use that. Now, there are some times -- for example, huge dollar amounts in the block grant are obviously restricted by employment, potentially location, and other criteria. And there might be certain things that we cannot fund with block grant dollars. 147 COMM. ON FINANCE - BILL NO. 980228 And so that's the type of thing that we might look at stimulus funds for a loan or neighborhood development fund loans or even a Section 108 loan, those type of things.
Okay. Is this your -- you're going to answer about this and subcontracting economic benefits?
Kevin Brooks. Councilwoman Tasco, I apologize. This is my infamous summary. A number of Councilpersons have asked about this report. This is information drawn from a quarterly report that we submit that shows where contracts have been awarded. It lists the name, the dollar amount, and location of a general contract. This is housing-related construction information. And I just gleaned the information from our quarterly report. And there's been a request to have the full report. It's done every quarter, so there's four quarters. So maybe in this period, there was no activity to be reported in that Councilmatic District. But our experience has been that it 148 COMM. ON FINANCE - BILL NO. 980228 really does level out because we do activities all over the City. And I will be providing a full report, maybe for the entire year last year, of where contracts -- who contracts are awarded to by race and gender, dollar amounts and location, zip code as well. And that's going to be forthcoming.
One question to the -- it's a throwback to the Director of Commerce. Do you know whether that project on Limekiln Turnpike, just west of Ogontz Avenue, that business incubator -- they're also going to have a health center. It's on the 6100 block of Limekiln Turnpike. Congressman Foglietta, shortly before he became the ambassador, had gotten a federal grant, I think, of a million and a quarter, or something in that area, to take over what had been a church and its building that the church didn't have enough money for. And then the church turned in the direction, I think, of establishing that. I know that there's work ongoing on it. I spoke to the minister who seems to be in charge, and I had an impression that there were 149 COMM. ON FINANCE - BILL NO. 980228 funds from the City, or that at least there were funds being administered by the City, but he did not know precisely where the funds were coming from.
Right. I can -- it's my understanding -- I know that in the category -- in the classification named giving of self partnership on that, and I will find out --
Well, with the Chair's permission, could we get that report?
That would be fine. Thank you. I would ask, if there are any Councilmembers that still have questions, that they hold them, if they have questions of anybody from the Administration. We do have witnesses that have been waiting since before 9 o'clock, and many of them have to leave. So at this point in time, I would like to start our list of witnesses. Is there anyone here from Philadelphia Green? 150 COMM. ON FINANCE - BILL NO. 980228 (Blaine Bonham comes forward.)
Good afternoon. Please identify yourself for the record and proceed with your testimony.
Good afternoon, Madame Chair and members of Council. I am Blaine Bonham, Vice President of Programs for the Pennsylvania Horticultural Society. And its Philadelphia Green program is a budget item in the City's Year 11 application to HUD for our work in communities. 12 The CDBG funding provides us with a 13 great ability to leverage City support to attract 14 a whole wide range of public and private 15 investments. 16 I want to give you some of the few 17 brief highlights from our activities this past 18 year. This year, we are helping to develop close 19 to 100 new greening projects, and it's close to 20 200 existing sites make improvements. 21 Our Garden Tenders Project started in 22 the fall of 1995. It's completing its seventh 23 class of neighbor groups. And, to date, 99 groups 24 of residents have produced 52 new green spaces. And this program is both a training program and a 151 COMM. ON FINANCE - BILL NO. 980228 screening program for people who are committed to improving their neighborhood. " It has converted vacant lots while working with Bell 8 Arbor, which is the nonprofit tree farm that was 9 established at 11th and Washington Streets, where 10 they are buying and also sharing trees with 11 neighborhoods in other parts of the City. 12 The southwest CDC has developed six 13 lots. They've been trained by us, and now they 14 are holding their own workshops, getting their own 15 resources, and they are a part of a large Citywide 16 network. 17 Our Tree Tenders Program has, over the 18 past 4 years, passed through 71 groups, including 19 700 people who now tend 8,000 trees and have 20 planted 1500. And what's interesting to note about this is that these groups, once they have been trained, have been able to raise almost a quarter of a million dollars in public and private sources other than ours and OHCD. They've gone to federal 152 COMM. ON FINANCE - BILL NO. 980228 and State for funding and also to private sources. So the money that we're investing in training has been leveraged to attract funding from a wide range of sources. With the School District Service Learning Program, Tree Tenders is training teachers, and the City's actually paying teachers to come learn about how to work with school children on environmental projects and lessons centered around trees and the urban environment. On another project, in Port Richmond, a supplemental environmental project, which was the result of a suit against Conrail for environmental degradation, and almost $250,000 was awarded to the Port Richmond community through us, with the efforts of the Pennsylvania Environmental Council. And now we're working with the residents in the business district. Over the next year, we will be planting 350 street trees and 150 trees in open spaces in the neighborhood. And the Port Richmond CDC is really thrilled that it has brought a ground swell of community interest and commitment. 153 COMM. ON FINANCE - BILL NO. 980228 The Parks Program that we are now working with, in close cooperation with the Department of Recreation, has resulted in some very dramatic changes in some of the community parks. Malcolm X Park, at 52nd and Pine, has made notable progress. Its main focus is to address the terrible appearance in the years of deferred maintenance and vandalism. It's a newly-formed group of residents, business people, churches, and schools that also includes the Mercy Hospital and the 52nd Street Revitalization Project and the Partnership CDC in West Philadelphia. Part of the focus not only is to improve the physical appearance, but now there is a whole range of programming that's taking place in that park. We are conducting art classes with the Mural Arts Program. And schools like the Huey School are using it as a focus. There was recently an Arbor Day event there, and a thousand kids came out on that day to celebrate Arbor Day in the park. At Elmwood Park, in southwest Philadelphia, they've gotten a really good start. 154 COMM.
ON FINANCE - BILL NO. 980228 It's been a really neglected park, and one of its serious problems is drainage -- you probably know about that. In fact, some of the area residents swear that they have lake-front property at some times of the year. But because of our working with them and the Department of Recreation, a large nature remediation project is underway, and it's going to take care of the drainage problem in that park. It's a very strong, committed group. We're building -- we're working with them to build a stronger coalition, become incorporated. And they also told me that they wanted to express their grateful thanks to Councilwoman Verna for her support, so I don't want to be remiss in doing. And that there have been a number of programs with local schools like Patterson and the Archdiocese schools. In Carol Park, in West Philadelphia, they have a stellar start to their efforts. This is a really a committed group of mothers and grandmothers who are working with the enthusiastic schools, the Carol Park Community Council, and 155 COMM. ON FINANCE - BILL NO. 980228 they too are very grateful for the support from Councilman Nutter for his help in getting them extra funds to improve the park. As a result of all of this park work, we recently received a grant from the Lila Wallace Reader's Digest Fund, in New York, because they're looking at our Parks Program in Philadelphia as a national model. So, hopefully, with funding that we can attract over the next year through Lila Wallace, we're going to be able to expand this program in Philadelphia. Last year, I talked to you about the new Kensington Open Space Management Program. And as a result of the progress we've made there, we worked closely with Councilwoman Fernandez, with Barbara Kaplan from the City Planning Commission, John Kromer, and the Pennsylvania Environmental Council. And recently the Horticultural Society received a grant from the William Penn Foundation to conduct a vacant land reuse study for Philadelphia. We will be looking at a large geographic area in North Philadelphia, east of Broad Street, from Spring Garden Street to Lehigh, 156 COMM. ON FINANCE - BILL NO. 980228 and Broad Street to the river, as an experimental pilot area to take the new Kensington project and expand it to that whole area and identify appropriate resources needed, the appropriate roles of the CDCs of the City and of the private sector, and with the hope of producing a model that then can then be used throughout the City to help it manage its land. And other parts of that grant include working with the City Administration to take the recommendations that the City Planning Commission produced in their 1990 report to -- how to change the systems and the procedures and the policies of the City so that the City can manage its vacant land in a more effective manner and support communities. And then, lastly, we are going to be working with the City to help them look at the financing mechanisms to enable the City to entertain dealing with vacant land in such a massive way. I think it's been recognized that the vacant land problem is one of the big issues facing communities. And CDCs and neighborhood 157 COMM. ON FINANCE - BILL NO. 980228 groups continue to clamor for solutions for this. And I will be glad to keep Council abreast as this continues and develops over the next year.
We thank you for coming in to testify today, and we certainly want to thank you for your patience. And I personally want to thank you for all of the wonderful work that your organization does.
Dr. Lee Kaplan -- Capkin. (Dr. Lee Capkin comes forward.)
Councilwoman Verna and members of the Finance Committee, my name's Lee Capkin, and I am the Executive Director of Housing Consortium for Disabled Individuals. 158 COMM. ON FINANCE - BILL NO. 980228 I have prepared a full written statement, which was given to you, I think, in sufficient copies for all to have. Therefore, I will basically just summarize some major points. We're here today as HCDI to indicate our basic support for the consolidated plan for Year 24, as prepared by OHCD. We've been very pleased with the progress that has been made over the past year and some of the continuing efforts for the coming year to bring housing counseling services for people with disabilities into a broader arena, giving them a choice of obtaining these services in the neighborhoods where they live or coming to a specialized agency such as HCDI. We've also been pleased about the accomplishments of the Disabled in Action Partnership Agreement, which was a landmark agreement between disability groups and the City to generally work on improving the housing situation of people with disabilities. One of the most outstanding pieces of that, which would be known in your Council districts would be the doubling of the funding for 159 COMM. ON FINANCE - BILL NO. 980228 the Adaptive Modifications Program during the past year. The funding is scheduled to continue at its high level for this year. And for that, we're very grateful. The housing situation of the disabled community will not improve, however, without sufficient information being available and sufficient assistance. And if this material and knowledge is not available, you, as Councilmembers, will continue to get very large numbers of contacts, visits, and calls from unsatisfied disabled people about their housing situation. OHCD intends to continue its Technical Assistance Program on the issues of housing and disability this year. For the past ten years, HCDI has had the pleasure of being able to be the provider of those services. And we're very much interested in being able to do that in response to the OHCD's request for proposal. We have gained experience in all of the City's key neighborhoods and in working with many of the CDCs in West Philadelphia, South Philly, 160 COMM. ON FINANCE - BILL NO. 980228 Kensington, Frankford, and the greater parts of North Philadelphia. And we are sufficiently linked to most of the disability groups in the City. When the decisions are being made on the provision of these technical assistance services, we would appreciate the consideration of Councilmembers in reviewing the experience of groups involved. And it is our hope that we'll be able to continue providing these services. They will help people with disabilities in understanding about fair housing, understanding how to apply for and receive appropriate housing services, and how developers can work with the disabled community in creating housing that works both for disabled people and for all of the neighborhood revitalization plans in Philadelphia. The one final area that I'd like to talk about is the fact that we know full well that housing for people with disabilities also depends on raising their incomes and having people with disability become part of the jobs picture. And one of the things that you will see in our testimony is that, as the Mayor's plan for 161 COMM. ON FINANCE - BILL NO. 980228 welfare to work becomes a reality, we want to see people with disabilities being given adequate consideration in that picture. To that us, that means adherence to ADA policies in the selection of job training sites, groups that will provide employment training, social service agencies that will be involved in providing supportive services in relation to work.
And, generally, throughout the whole administration of this program, we want to see people with disabilities and ADA policies benefit so that disabled people will not be relegated to traditional disability employment, which has served them so poorly in the past. In conclusion, I just want to thank City Council again for the opportunity to come down and testify on the plan, and to indicate the willingness of our office to work with you on a regular basis. We have frequent contacts with various Members of City Council, and we attempt to assist your constituents in whatever way we can. And we only hope to be able to continue doing that in the 162 COMM. ON FINANCE - BILL NO. 980228 coming year. Thanks very much.
Thank you very much, Doctor, and a copy of your written testimony will be given to the stenographer so that it will be in the transcript of the testimony today. Thank you.
Vivian VanStory. (Vivian VanStory and Vincent Mason come forward.)
Good afternoon. Please identify yours for the record.
Good afternoon. My name is Vivian VanStory, President of Community Land Trust Corporation.
Good afternoon, Chairperson and City Council. My name is Vincent Mason, Vice President of Community Land Trust Corporation.
And this is the Community Land Trust financial report. This financial request of Community Land Trust Corporation's strategic economic plan for the fiscal year of 1998. The Community Land Trust Corporation ("CTC") is a multipurpose 163 COMM. ON FINANCE - BILL NO. 980228 corporation incorporated to stabilize the community in economic growth. The Community Land Trust Corporation's primary objective in a comprehensive fashion is the plan and design of the public outdoor environment of North Central Philadelphia, but not limited. It will provide an opportunity to promote the economic and social well-being of this area. The Community Land Trust Corporation wishes to provide local job training and employment for the community. This is a self-help program. The Community Land Trust Corporation is a nonprofit organization. We realized that we can help with the funds that we are requesting today within a strategic plan. We envision a new rehab building for our office, which would include the components of the organization. It will include the preservation of community parks, vacant lots, and other open spaces. It will supply services to the community in the area of housing and rehab, to make funds available to residents of the community, building new houses where needed. Our first phase of the rehabilitation 164 COMM. ON FINANCE - BILL NO. 980228 of housing will be the 18000 block of West Master Street, which is 80 percent homeowner-occupied. In rehabbing the houses that are vacant, it will only enhance the continual new construction in the area. We would like to address environmental issues such as pollution, health, crime, and safety, forming partnerships with experts to educate and advise. We would like to create recreational facilities. The Community Land Trust Corporation conducted a survey in 1990 that determined that there are no outdoor recreational facilities in the census tracts 140 and 147. The outdoor living room effect would expose residents to creative art in a depressed area. We are requesting and -- we are requesting $4.5 million for housing, which would include our office space. We are also requesting $2.5 million to educate residents on horticultural safe and healthy environment. This will allow us to create a safe haven for the community members. We, the Community Land Trust 165 COMM. ON FINANCE - BILL NO. 980228 Corporation, await your decision and your request. Seriously, Vivian VanStory. And we thank you for the opportunity here to testify on behalf of the community that exists in a depressed area of North Central Philadelphia, which is now called the "Empowerment Zone," which we, the community, have not seen any money towards our self on revitalization. It's only been directed to the businesses that exist there.
Well, I think that's the first step that you should take.
I think that you should have a vision as to what you would like to see happen.
Oh, yes, I have met with them in previous years, yes, I have.
You have met with 166 COMM. ON FINANCE - BILL NO. 980228 them?
But that's something that you're going to have to do personally.
Mm-hmm, mm-hmm. Well, I was told by HUD to testify here, by HUD.
I appreciate your coming in, but I think it's absolutely essential that you speak with your District Councilperson.
Clarisse Williams. Is Clarisse Williams here? 167 COMM. ON FINANCE - BILL NO. 980228 (Not present.)
Diane Grimes, from Dixon House? Is there anyone here from Dixon House? (No one from Dixon House present at this time.)
Do we have someone here from ACORN? UNIDENTIFIED PERSON: Yes.
Please approach the witness table. (Bertha Barksdale comes forward.)
Good afternoon. Please identify yourself for the record, and proceed with your testimony.
Hi, good afternoon. I'm a representative from ACORN, and my name is Miss Bertha Barksdale. And I thank you for having me.
I'm sure you're familiar with ACORN and its issues. The issue that today concerns me is more money allocated for 168 COMM. ON FINANCE - BILL NO. 980228 low-income people to obtain homes. Home ownership would be giving them a foundation, a history, a home, being able to use this home to obtain other homes for family descendant. Home ownership for low-income people would improve the community, giving them strength that renters otherwise would not have. There is no American dream for us low-income Philadelphians. ACORN is part of the coalition effort fighting get Bill No. 970586 passed, to increase the income above the federal poverty line of 16,450. That wage is 7.90 an hour, plus benefits. Our neighborhoods are actually fading away. Houses are now becoming defensive lots. We need to attract new business, creating more jobs. As you see, the people here today have all stressed the fact that we need more money for these issues. If we don't get them, there will be lots an lots of homelessness an joblessness. You think it's something now, but in the future, the poverty level would be lower (sic) than it is, and it's a tremendous factor that -- that's extremely depressing. It really makes me sick. 169 COMM. ON FINANCE - BILL NO. 980228 If we don't get money, where will we be, what would our future be? How will we live? I had one woman follow me, asking me for $2; they no longer ask for 50 cents. This work-to-welfare (sic) issue, okay, the Mayor, he has things going on. I hope there are enough. The adequacy level, if it isn't enough, it's going to be terrible, worse than you've ever seen. It's scary. It scares me. And I hope it scares you enough to take this issue and the fact that we want this bill 13 passed. This bill stands for new jobs. Are you familiar with the bill? I'm sure --
Yes. What it stands for, the raising of the living wage here? We need that, we need that passed. Please consider it. Thank you.
Miss Barksdale, I think your groups has done a very 170 COMM. ON FINANCE - BILL NO. 980228 good job in lobbying the bill, and I think there's some amendments being discussed, but I think the coalition has been very active in making sure all Members of Council know about the bill. It's coming up soon, I think -- next week.
Our next witness is Len Lombardo, from the carpenters union. Is Len here? (Len Lombardo is not present at this time.)
Good morning. My name is Felipe Alvarez. I'm the Business District Manager for the Hispanic Association of Contractors and Enterprises. I'm here today on behalf of the residents, businesses and community organizations surrounding the Fifth Street and Lehigh Avenue business district to request your support for, as the Fifth and Lehigh Main Street Program. This nationally successful approach to commercial redevelopment was started out in July 171 COMM. ON FINANCE - BILL NO. 980228 as a demonstration project fully funded by the Pennsylvania Department of Community and Economic Development. The Local Initiative Support Corporation has also committed to support cost of the technical assistance of experts in community development from the National Main Street Center. We are requesting the City to help us expand our resources in order to do a better job of coordinating the many private and public programs available to increase jobs in our community. The report that's being distributed outlines most of the key points of the program. While it is being distributed, I would like to acquaint you with the neighborhood surrounding the Fifth and Lehigh Business District. El CENTRO de ORO is home to the greatest concentration of Latino businesses as well as social, cultural and community organizations, not just in the city, but in the Delaware Valley. The business district is located in the Fairhill Neighborhood of North Philadelphia, Census Tract 176. Several recent studies of the neighborhood have confirmed a growing Latino 172 COMM. ON FINANCE - BILL NO. 980228 population, both in size and poverty. From 1980 to 1990, the population of the neighborhood increased percent as compared to the Citywide 5 decline of 6 percent. 6 in 1990. 9. Roughly 7 out of 10 residents of this neighborhood claim Hispanic ancestry. From 1970 to 1990, the percentage of the labor force unemployed increased to 220 percent, as compared to 150 percent for the entire City. Despite the social and economic problems faced by most inner city business districts, El CENTRO de ORO is currently economically sound and culturally rich. The new energy generated by the fastest-growing youngest segment of the general population as created a unique and festive "barrio," a Latino city within a city. That, in 173 COMM. ON FINANCE - BILL NO. 980228 turn, is attracting other Hispanics as they immigrate in increasing numbers. In addition to bilingual merchants and professionals, the multi-cultural and Latino organizations that have a strong commitment in this district by locating their institutions in the neighborhoods and sponsoring many of the events throughout the year. , the leading social services agency in the Latino community, is moving its headquarters of the expanding Hispanic organization to our district. HACE's own program in the revitalization of the HACE Mall, 1 of 15 vacant properties in 1982 has generated well over $100,000 in real estate taxes. Our key tenants alone, such as Esperanza Health Center, Health Partners, the District Office of Avon Products, and the West Kensington Boys and Girls Club, are not only providing valuable services to the area residents, but are creating hundreds of jobs in our community. The primary purpose of our funding 174 COMM. ON FINANCE - BILL NO. 980228 request is to hire staff to help me -- right now, I'm the only staff -- coordinate the diverse needs of the many community stakeholders in order to further develop the ethnic characteristic of the district, while diversifying our base of mainstream businesses and shoppers. I appreciate the opportunity to testify in front of this committee, and I'm now available to answer any questions that you may have on this program.
Mr. Alvarez, are you aware of what is recommended in the --
We are requesting a $50,000 fund from the City. We are also having funded from the State Department of Community and Economic Development, and we're asking -- from that point, we're asking to provide us money for 175 COMM. ON FINANCE - BILL NO. 980228 facade improvement as well as some property improvement. Basically, our request from the City is to be able to hire a community organizer and a staff assistant.
Okay. Just to clarify the record, you have made requests, and these requests.
Is being proposed, and we would like to -- this is a brand new funding request for the Council, and I'd like to make myself available if you have any questions about the purpose of our program.
Thank you. And attached are some examples of the work we've done for the community.
Thank you very much. 176 COMM. ON FINANCE - BILL NO. 980228 Jeff Brown. (Jeff Brown comes forward.)
Good afternoon. Please identify yourself for the record, and proceed with your testimony.
Good afternoon, Councilwomen. My name is Jeff Brown, and I'm President of AFSCME Local 1971, District Council 33. Our local union represents workers at the Philadelphia Housing Development Corporation, at the Office of Housing and Community Development, and at the Redevelopment Authority. These workers will administer and implement the Community Development Block Grant Year Consolidated Plan that City Council is 18 being asked to approve today. 19 The people at Local 1971 represents 20 that these three agencies include clerical, 21 technical, and supervisory employees. Their job 22 titles range from clerk-typist to housing rehab 23 inspector to neighborhood program coordinator to 24 architect to rehab financial supervisor, to many others. 177 COMM. ON FINANCE - BILL NO. 980228 Most of these employees have dedicated their careers to preserving and expanding housing opportunities for low- and moderate-income residents of our City's neighborhoods. All of these employees must live in the City, and many live in neighborhoods targeted for housing and community development programs included in the Year Plan. They are, therefore, directly 10 affected by the Year 24 Plan, both as City workers 11 and as residents. 12 I'm here today to raise two issues 13 encompassed by the Year 24 Plan which critically 14 affect members of my local at OHCD and PHDC. 15 The first is the fact that 34 employees 16 in the OHCD nonprofessional bargaining unit are 17 the last remaining City workers that do not have a 18 collective bargaining agreement, which should have 19 begun on July 1, 1996. 20 The second stems from OHCD's reduction 21 of annual operating costs, which were a result in 22 the layoff of 16 additional employees that PHDC 23 see this year after the layoff of 22 PHDC 24 employees last year, in Year 23. Under the heading of the Year 24 178 COMM. ON FINANCE - BILL NO. 980228 administrative cost reduction, OHCD claims, quote, wage increases that occurred in December 1997 will substantially increase Year administrative 5 expenses for City development agencies. 6 That statement is so ludicrous with 7 respect to OHCD's bargaining unit, that it appears 8 to be intentionally misleading. 9 As we've pointed out to City 10 Councilmembers individually, OHCD bargaining unit 11 employees have not received any increase in 12 December of 1997. And to date, they have not yet 13 received the City-Council-approved 3 percent wage 14 increase. 15 Out of the 85 employees that work for 16 OHCD, Local 1971 represents a small 17 nonprofessional bargaining unit of 34 employees. 18 Eighty percent of the bargaining unit are women, 19 while 76 percent are minority. 20 Although the union began collective 21 bargaining negotiations in November 1995 for the 22 contract due to expire on June 30, 1996, which was 23 prior to District Council 33, our parent body, we 24 alone, among all City unions, do not yet have a collective bargaining agreement. 179 COMM. ON FINANCE - BILL NO. 980228 That's because OHCD has taken intransigent positions demanding that the union weaken contract language crucial to our members who are not civil-service employees. The concessions that OHCD is demanding are in addition to the ones that Local 1971, along with District Council 33, made in 1992. However, no other District Council 33 bargaining unit made or was even asked to make similar additional concessions during the 1996 negotiations. In order to force the union to agree their demands, OHCD will not provide the bargaining unit employees with the 3 percent increase that all other non-uniformed union-represented City employees have received, effective December 15, 1997 -- even though it was approved by City Council as part of OHCD CDBG Year budget.
20 Even if the OHCD bargaining unit 21 employees had received the 3 percent wage 22 increase, we estimate that, on an annual basis, 23 although the wage increase would have been five and a half months into the year, December 15, 1997, it would equal only $29,724. 180 COMM. ON FINANCE - BILL NO. 98 percent, less than percent of the housing agencies' total annual operating costs of $28,220,000. How can any honest person claim that that tiny percentage is substantial? Regardless, Local 1971 will not give into OHCD's unreasonable demands, we will not make concessions that other non-uniformed union-represented City employees did not have to make in order to obtain the wage increase that other City employees have all received. That simply not fair. We have asked, and we continue to ask, for the support of City Council in obtaining the wage increase that it approved, that it approved, for CDBG Year and its assistance in obtaining a 22 fair and a just contract. 6 percent, or $1,233,000. 181 COMM. ON FINANCE - BILL NO. 980228 OHCD is calling for a reduction in the program delivery and/or general administration of the three development agencies that must administer the Year Plan. 97 reduction at 8 PHDC. 9 We've been informed by both OHCD and 10 the Redevelopment Authority that they can absorb 11 the reductions without laying off employees. 12 However, PHDC, which had suffered a layoff of 22 13 employees in CDBG Year 23, has notified the union 14 that the reduction will cause an operating 15 deficit, which will force PHDC to lay off an 16 additional 16 employees. 17 It should be noted that among the CDBG 18 Year 24 goals of the three-year strategic plan is 19 the goal of advancing employment and training 20 opportunities to help stabilize the City's 21 employment base and create or low- and 22 moderate-income jobs. 23 Throughout the plan, there are 24 countless references to the high priority of creating and retaining such jobs and how the City 182 COMM. ON FINANCE - BILL NO. 980228 has made advancing employment and training opportunities one of the primary goals in its housing and community development plan. In fact, PHDC itself is funded to operate a job center to provide employment and training referral services. Yet, passage of this plan will result in the loss of low- and 9 moderate-income jobs for Philadelphia residents. 10 I believe that it is counterproductive 11 and the complete opposite of OHCD's stated 12 priority to lay off employees currently working in 13 good jobs, who administer programs that improve 14 the housing and community infrastructure. But 15 that's exactly what this Year 24 Plan proposes to 16 do, and that defies logic. The Year 24 Plans assigns PHDC many functions, which are integral to the success of the Plan. PHDC acts as developer and undertakes projects directed by OHCD such new home ownership projects in Cecil B. Moore and North Philadelphia, and Sears Street in South Philadelphia. PHDC manages the Home Start Program, which involves the rehabilitation of homes for sale to income-eligible first-time home buyers. 183 COMM. ON FINANCE - BILL NO. 980228 It plays a significant role in the rehabbing of PHA row houses. " In fact, PHDC will receive one million more in the Year funding for the BSRP Program. 12 Why, then, is OHCD proposing to reduce 13 its budget, thereby forcing the layoff of an 14 additional 16 employees who must inspect and 15 administer these plans. 16 For your information, the employees who 17 will be laid off include people in the positions 18 of Clerk-Typist I, making $20,362 a year; 19 Maintenance Mechanic I, earning $25,405 a year; 20 Housing Rehab Inspector I, getting $29,631 a year. 21 These employees and their families fall 22 within the low- and moderate-income eligibility 23 guidelines for CDBG programs, along with living in 24 the neighborhood. And where does OHCD think that these 184 COMM. ON FINANCE - BILL NO.
980228 people go home to at night, to the Main Line or to New Jersey? If they did, they would lose their jobs. Let me remind the committee that all of the employees in these three housing agencies are Philadelphia residents. By city charter and board policy as a condition of employment, all of the employees in these housings agencies are required to live in the City of Philadelphia. As a result, they must pay all Philadelphia taxes, as City residents, at City rates. They also spend the bulk of their housing agency paychecks on rent or mortgages, shopping, transportation, and entertainment in Philadelphia's neighborhoods where they live. Isn't that what the CDBG Year Plan 18 is attempting to encourage? What it says it wants 19 to strengthen the neighborhood economy? 20 Yet, once again, these employees seem 21 to be exempt from any consideration for job 22 retention. We're not asking that these employees 23 get make-work jobs. No, we feel they should 24 retain the productive jobs that they currently hold, that are necessary to improve the affordable 185 COMM. ON FINANCE - BILL NO. 980228 housing and community development plan and make the Year Plan a success. 4 Whether 16 or 60 employees are 5 scheduled to be laid off, these statistics 6 represent human beings and people's lives. 7 Housing agency workers whose jobs are eliminated 8 have families to whom they're responsible. 9 When they lose their jobs, their whole 10 lives change. They regress from productive 11 members of society to burdens of society. They no 12 longer pay the full amount of City taxes, but 13 become dependent on programs that cost tax 14 dollars, including unemployment compensation, 15 Medicaid, food stamps, and even welfare. 16 At a time when the Mayor's attempting 17 to find jobs for 15,000 people coming off the 18 welfare rolls, it's illogical to lay off 19 productive workers and increase the number of 20 people competing for those very scarce jobs. 21 To me, as a concerned citizen and a 22 union leader, layoffs are a tragedy and they 23 should be a tragedy to you, as public officials, 24 as well. Layoffs represent a failure of our society to provide meaningful productive work for 186 COMM. ON FINANCE - BILL NO. 980228 our citizens. City Council is frequently confronted with downsizing and plant closings and mergers in the private sector, and there's little you can do but lament the loss of jobs. In the housing agencies, however, you have the power to reverse the situation and to keep the residents working in productive jobs. And what happens to the work the laid-off employees were doing? Don't forget, it takes people to make the Year programs 13 function. The housing agencies have a legal 14 obligation to ensure that all funds provided to 15 outside entities are spent properly and in 16 accordance with all federal, State, and local 17 requirements. 18 There must be a sufficient number of 19 employees to provide professional and technical 20 oversight by the housing agencies. Therefore, it 21 makes no sense for OHCD not to even consider those 22 employees who work for the housing agencies worthy 23 enough to retain the types of jobs that the plan 24 claims to want to retain and create for other citizens. 187 COMM. ON FINANCE - BILL NO. 980228 I've seen in the past how layoffs and staff reductions result in decreased housing productivity. Layoffs cause an enormous amount of disruption. They require an inordinate amount of time to be spent on such bureaucratic functions as reorganization. The question of who will be laid off next causes a great deal of insecurity among the remaining employees. All of the disruption, which can continue for months, reduces the time and energy that could be spent on housing production. Let me just mention that the union has not objected the PHDC's having the head of the Philadelphia Housing Authority on the contract.
However, we do strenuously object to the layoff of the little people to do the work that PHDC is mandated to perform. In discussions with City Councilpeople, it was recommended that the union indicate where funding would go come from in order to avoid layoffs. Well, I'd like to suggest that we take a look at the Year proposal to subsidize the 24 City's Commerce Department to the tune of $668,000, finance to the tune of $45,000, and the 188 COMM. ON FINANCE - BILL NO. 980228 Law Department for $308,000, and the City Planning Commission in the amount of $339,000. That amount totals $1,363,000, which is more than enough to cover PHDC's budget deficit. I believe that the City should use part of its general fund budget surplus to fully fund these City departments so that employees at PHDC who are primarily funded with CDBG monies do not have to be laid off. And why is the Housing Director ignoring City Council's request to provide the pay increase to OHCD bargaining unit employees? It's my understanding that OHCD is presenting the CDBG Year consolidated plan to City Council because 16 it's legally required to obtain City authorization 17 to apply for CDBG and other funding. 18 Well, as part of last year's CDBG Year 19 23 budget, City Council approved the 3 percent 20 wage increase that OHCD bargaining unit employees 21 should have received effective December 15, 1997. 22 I'm also aware, and I do appreciate the 23 fact that the City Council President has requested 24 that OHCD provide its bargaining unit employees with the approved 3 percent wage increase 189 COMM. ON FINANCE - BILL NO. 980228 retroactive to December 15, 1997. However, the Housing Director has not yet done so. How can this be? How can the Housing Director continue to ignore the instructions of the elected legislative body of this City? If he can continue to ignore City Council and do whatever he wants, why are we even here today bothering to obtain City Council approval of the Year Plan? 11 In conclusion, OHCD is asking that City 12 Council approve the CDBG Year 24 plan and budget, 13 which inaccurately refers to 3 percent wage 14 increases as substantial, even though they're less 15 than percent of the total operating cost, and 16 proposes to create and retain jobs for low- and 17 moderate-income neighborhood residents while its 18 passage will result in the layoff of low- and 19 moderate-income neighborhood residents who happen 20 to currently work for the housing agencies 21 administer the plan. 22 That's not merely unjust and a 23 travesty, but a complete contradiction of OHCD's 24 stated priorities, as well. 25 On behalf of the affected employees of 190 1 COMM. ON FINANCE - BILL NO. 980228 Local 1971 and District Council 33, we request that City Council require that OHCD provide its bargaining union employees with the approved 3 percent increase retroactive to December 15, 1997, and negotiate a fair and just contract with Local 1971. We also ask that City Council prevent the layoffs of employees at PHDC. If it is necessary to defer action on the CDBG year consolidated plan to accomplish the above, we implore City Council to do so. We of Local 1971 and District Council 33 thank you and City Council for your support. )
Mr. Matthews please identify yourself for the record, and proceed with your testimony.
Yes, Pete Matthews, President of District Council 33. I'm sorry I was a little late. I heard Jeff's speech, and I wholeheartedly agree. And, you know, not to repeat Jeff, what I can't understand is why this contract isn't settled. We had four other contracts, they were settled. 191 COMM. ON FINANCE - BILL NO. 980228 And I would just hope that this is not some sort of personal vendetta against Jeff, who is a fiery union leader. It seems to be that some of these administrators basically don't like him because he fights for his members. But I can't understand why this is happening. I mean, this contract should be settled. It's not a lot of money. I just don't understand what's going on. And if you want good labor relationships in this city, I don't know why this would happen. So I would implore Council to do whatever it can to get this contract settled, and immediately give them the money that's due. We can probably work on some other things, but to get that money for -- those wages for those members. 'Cause this makes no sense. We're going into the year 2000, and I think going into the year 2000, I think we ought to get some of these things straightened out now. In fact, this is the last contract to be straightened out because, as you know, we're not satisfied with some of the things that have happened to us in the past, and we're prepared to 192 COMM. ON FINANCE - BILL NO. 980228 deal with that if we have to. And this is not going to help the City's situation at all. If we come into, I believe -- what is your membership, Jeff? How many members is there?
It's 34 members. And, you know, I think should be looked into. I mean, what is this, some kind of vendetta? I mean, 'cause the man works hard for his members. So we would implore City Council, you know, to do what they have to do and, you know, also to understand. You know, just like our officers come up for elections -- and, you know, this is not a threat to anybody here. You know, other people come up for elections too, and we're very political now in District Council 33, and we're going to remember a lot of things that happened to us. As I said, we're very political. These members deserve this money, there's no doubt about it. I mean, if we deserve ours, they definitely deserve theirs, so we're 193 COMM. ON FINANCE - BILL NO. 980228 talking about 34 members here, you know. So let's, you know, get on the ball and get this settled and give these people a decent contract. Thank you. (Applause.)
Mr. Kromer, is there an arbitrator, to my understanding, that's assigned to this?
Yes, there is. And this is -- it really speaks to your point, Mr. Matthews. There is a State-appointed mediator who has been engaged to work with both parties. The idea of engaging a mediator was the union's proposal. I think it was a good proposal. It was made last year, and the State appointed a mediator. We worked together with that mediator. I think the experience was generally good. We had 17 sessions with the mediator. During the most recent sessions, the mediator expressed some criticism of the conduct of Mr. Brown. And shortly after that time, the mediator was removed. We didn't ask that he be removed, he didn't ask that he be removed. Did Jeff or the union ask that he be removed? I don't 194 COMM. ON FINANCE - BILL NO. 980228 know, but he's gone after sessions. Now we have a new mediator. We've just begun working with a new mediator. We think she'll be fair, that we can accomplish a lot with this mediator. And we want to do that. As I indicated previously, we have a session coming up on Friday. We take that very seriously, and we want to go forward with that. But Jeff really has to make two decisions. One is whether he wants to go forward with the mediation, which he recommended, and we support it, we like that recommendation; or not. And he's here to say, apparently, no, he does not want to do that; he wants City Council to play a role that Council has not played in other labor negotiations. Secondly, Jeff really has to decide whether, in this situation, he's going to be like SEPTA and TWU, or like SEPTA and UTU. We've got some basic issues to negotiate and we've got to negotiate them. And I've got to speak with you and with my staff and the staff of the City's housing agencies whom I support and respect as a person in 195 COMM. ON FINANCE - BILL NO. 980228 this room who has the highest legal responsibility to the federal government and to our neighborhoods to implement an effective program. And that's the perspective I've got to take. If I came here today with the 1988 plan for Philadelphia's Community Development Program, you'd send me out the door. By that same token, I'm not willing to concede that contract terms that were established in the 1980s are appropriate for 1998. Everything that each side has described as an issue is an issue that we have to resolve together. We are committed to the economic terms of the contact, we have always been committed. However, we have also been very clear other issues that we had other issues that needed to be negotiated and that we wanted to negotiate those issues. The Mayor has supported this approach. We have coordinated this approach with the City's top labor relations personnel, and we have made our approach clear to the union from the start, as we have made clear our commitment to the economic terms of contract. 196 COMM. ON FINANCE - BILL NO. 980228 Some people have suggested that we release the 3 percent pay increase and that we implement that. Well, we tried something similar twice before, and it didn't work. We released the so-called signing bonus of $1100 as a good-faith effort, expecting that that would be a catalyst to lead to some progress in negotiations. We didn't achieve the progress in the negotiations. We approved have Veterans' Day holiday without any substantial movement in the union. I don't really know of any effective labor relations negotiator who gives away the economics of the contract and then expects to negotiate an appropriate agreement. It just doesn't make sense. We've got to work together. I'm committed to doing that. I think Friday's session can be very productive, and I think that we can conclude discussion on the major issues on Friday if we're both committed to doing that. And to do that, we've got to negotiate. Councilman Cohen I thanked earlier for the time that he devoted to listening to my position the other day and expressing my point of 197 COMM. ON FINANCE - BILL NO.
980228 view and challenging me to think over the contract terms again and our position again. And I did do that. And since Jeff has gotten into quite a bit of detail on the issues, I wanted to take this opportunity to give you a preview of the approach that we will propose to the mediator, which the union had recommended, on Friday just so that you'll have some advance notice of the approach that we intend to take based on my thinking after our meeting. We proposed a four-part approach to deal with major issues that have been on the table. This doesn't address all of the issues, and it is not four proposals; it is a single proposal with four parts. And it addresses the implementation of the 3 percent, new job classifications that the union has requested. C. 33 contract, which consists of merit and a 10 percent seniority credit. 198 COMM. ON FINANCE - BILL NO. 980228 And then, finally, we think that the layoff language that the mediator herself has drafted is a sensible approach to changing the layoff language. And with one moderate revision, we propose adoption of that language. Those four components of the proposal really would clear the table of some very substantive issues and, I think, enable to us move ahead. And so I wanted you to have that in advance.
Thank you, Mr. Kromer. The Chair recognizes Councilman Cohen.
No. 20 I just have great difficulty in understanding Mr. Kromer's position. And in addition, I am terribly disturbed by the notion of layoffs. I can't tell you how many hearings we've had here where the Mayor and all of his 199 COMM. ON FINANCE - BILL NO. 980228 people have proudly proclaimed that Philadelphia has a no-layoff policy. He keeps telling us time and time again, We accomplished whatever they did through privatization, City Councilman Cohen, see, other Councilmembers, we did it without a single layoff. And, suddenly, I'm confronted with this layoff question, which is separate entirely from the 3 percent. The 3 percent payoff has been agreed to. All that's happening is you're not paying. It it's like going to the bank where you have a small checking account and saying, "I want my money," and they say, "Well, before we give you back your money, you know, we have other things in mind we want you to do." And I would think that that would be outrageous. I would say, "Well, that's my money. You can't have any conditions attached to giving me back my money." I think that's the situation with the 3 percent. I think the money should have been paid when it was due. (Applause.)
And I don't see that 200 COMM. ON FINANCE - BILL NO. 980228 as an issue to be debated about. There may be other issues -- I'm not up to date, and I don't want to be involved in mediating. The discussion I had with you on Friday was aimed at dealing with something that in the 30 years since I first came into Council till now, I've never seen happen, where a contract with the union by the City has been agreed to. And then suddenly months after things were supposed to happen, we're still talking about making it happen. And so I think they're entitled to that money, no matter what happens in mediation. (Applause.)
I assume the question of these potential layoffs is before you because I think the whole City government has a responsibility in seeing to it that there are no 20 layoffs of City employees. (Applause.)
Maybe there's a technical difference between civil service and non-civil-service, but we haven't made the distinction. All the non-civil-service employees 201 COMM. ON FINANCE - BILL NO. 980228 have been blanketed in by the Mayor in all of his speeches to us here in City Council. They have all been protected as far as the layoff situation. I don't know what brings this about or why it does, but I have to tell you, I kind of share District Council 33's President, Pete Matthews, that there's something not being put on the table that is responsible for what I think is a very wrong anti-labor, anti-union position by a City agency. (Applause.)
Now, none of this, Madame Chair, none of this is a surprise to Mr. Kromer. He's heard me express these views in public, he's heard me express them in private when we had meetings on the budget that his office was presenting for City Council's consideration. That was the basis of our meeting on Friday. This subject came up incidently to it because I don't think we can deal with the budget problem until we resolve the labor problem. Now, in an unusual amount of conciliation from my point, 'cause I'm not known 202 COMM. ON FINANCE - BILL NO. 980228 particularly as a conciliator, there was a resolution before us to act, you know, and to condemn publicly the action of OHCD. We withdrew that resolution from action before City Council because we were led to believe that actions were being taken by others, the City Council President, people in the City Solicitor's Office, and elsewhere to deal with this situation. But I think, unless this question of the 3 percent, the other matters, I think properly belong in mediation, but I don't think that 3 percent belongs anywhere except in the pockets of the people. (Applause.)
So, Madame Chair, I think if we don't get an answer by the end of the week, that City Council ought to put back on the agenda, as a top order of priority, that resolution that was before us. We have tried, in the interest of good relations, to deal with it in some other way. But in view of the intransigence of Mr. Kromer, I think we're being left with no other option. Because it's a question of good faith. 203 COMM. ON FINANCE - BILL NO. 980228 Why should these people be punished, be kept from the 3 percent, and we're told it is a big sum, and you know it's not a big sum -- it's a tiny sum, it's less that one 1/10th of 1 percent. It doesn't even amount to 1/10th of 1 percent of the budget. So it's not a significant figure at all. But even if it were, it's money that belongs to them and not to the OHCD. Thank you, Madame Chair. (Standing ovation.)
Just one small comment. All of your comments overlook the fact that collective bargaining is a two-way street. I need, for the benefit of Philadelphia's economy and its neighborhoods, to negotiate a fair contract for OHCD and for Local 1971. I'm committed to doing that.
But that -- the 3 percent has already been negotiated. That we don't seem to get through. I agree. I said that other matters like the layoffs belong in mediation. Because, I'll tell you, I will not 204 COMM. ON FINANCE - BILL NO. 980228 accept a policy that these people are different from all other people who work for City government. (Applause.)
Neither the Mayor nor I committed to implementing a pay raise without a conclusion of negotiations, and we did not commit to that.
You mean you're not covered by the Citywide negotiations?
We're absolutely committed to that, but we never committed to implement it without concluding the contract negotiations. As I said, no one supports a negotiation position of giving the money away and then trying to negotiate the (unintelligible). No 20 one would support that.
I know, but you can't money that belongs to other people and withhold it from them as a threat in a different negotiation. That 3 percent is not subject to negotiations. 205 COMM. ON FINANCE - BILL NO. 980228
It's already been agreed to, and you have no right -- legal or otherwise -- to withhold the money from them. That belongs to them. (Applause.)
Either Mr. Kromer, Madame Chair, I've got to say we either have a government in Philadelphia that keeps the faith with working people, or we've got to do everything necessary to make the present Administration follow fair labor policies. You're -- (Applause.)
Madame Chair, can I respond to a few of the statements that John Kromer had made? First of all, yes, the union had suggested mediation. And if you're aware of collective bargaining, you can use mediation, you don't have to use mediation. You can be using it on one track and do other things on another track. There is nothing that says if you call in 206 COMM. ON FINANCE - BILL NO. 980228 a mediator that that mediator has to be gospel or what the mediator suggests. There is nothing that says that you can't agree to other things aside from the mediator. And if both parties don't want to agree, then whatever the mediator has to say doesn't really mean anything. There was a proposal that they had made at one point to have fact-finding, which is permitted under the law. We said to them, rather than go through fact-finding, we're willing to do that, but let's go to binding arbitration and have an arbitrator -- like the 111, the police and fire arbitrations -- to resolve the contract. 'Cause the fact-finder can come up with their facts, and then either side can ignore it. Why waste the additional time and money? So when they proposed fact-finding, we responded to them that we were willing to have a neutral come in and arbitrate, but leave that as a binding arbitration. They rejected that. The mediator -- and I'm not going to get into any personal things here, but there are other people who -- 207 COMM. ON FINANCE - BILL NO. 980228
No, please don't, because we're not going to mediate the contract here. Just be very general, please.
Okay. I'm not getting in anything, as I said, about the mediator, but it was a common agreement. The mediator -- there was no problem with -- both ourselves and the mediator had no problem with the previous mediator leaving the mediation and someone else coming on. I had wanted to point that out. In addition, John Kromer, if he's been to one of those sessions or two of those sessions -- and we've been having them since '95 -- it's a whole lot. He does not show up at the sessions. He leaves -- and he doesn't have to, I understand that. But he leaves it up to people that have their own way of doing things and their own agendas, and I don't know if they always get back to John on what happens in those negotiations. In addition, let me point out that -- he mentioned that they gave Veterans' Day without getting anything substantial. We negotiated for Veterans' Day, we negotiated, and he knows that. If he were going to be honest, he would know that 208 COMM. ON FINANCE - BILL NO. 980228 Pat Herron (ph.) sat in Pat Herron's office and worked out something on negotiating on Veterans' Day because we were going to have a picket line up if they made us work. We had spoken to Pete Matthews about it, and he suggested that I get together with Pat Herron, and we did. We negotiated that; it was not given out of the goodness of John Kromer's heart. In addition to that, there is nothing that we are asking for -- and all we're asking for is to retain what we have. And what we have is the same language, almost verbatim at the PHDC contract and almost identical with the Redevelopment Authority contract. We're not asking for more; we're asking for what those others agencies that have already negotiated contracts with CDBG money what they already have. John also says that the promotion language they're talking about is the same as District Council's 33 contract. He's never seen District Council 33's contract 'cause it doesn't deal with promotion language. They have a 209 COMM. ON FINANCE - BILL NO. 980228 civil-service system; we do not. We don't have a civil-service system. (Applause.)
We will not leave their interpretation of merit that has been challenged and lost in arbitration because they don't consider the merit of employees, we will not accept their determination as to what merit is. We don't have civil service, se don't have an objective way of determining that. John also says, Oh, there's a meeting coming up, there's another negotiation. I've heard this time and time again. Yeah, we've had meetings. And what happens is, we go into the meetings, and their position has not changed. Or their position -- we were -- it's really interesting that he handed something out in writing today 'cause since December of last year, we haven't gotten anything in writing from them. I sent them a letter last month saying, Give us your comprehensive proposal in writing 'cause we are not sure what you have on the table. We've given them ours in writing and we've given them whatever were the revised changes. 210 COMM. ON FINANCE - BILL NO. 980228 And we've made a lot of revisions and we've made a lot of compromises, but until right now -- and I haven't had a chance to look at this -- there was nothing given in writing by them. So, you know, things are not always as John Kromer says. (Applause.)
Councilman Cohen, do you have any further questions? You're light's still on.
I just don't understand the 3 percent holdup. I can understand there can be differences between management and labor that have to be negotiated. And, as the Chair said, we don't negotiate contracts, but what we're trying to enforce is a commitment already made by the City with respect to that wage increase, and there's no 20 reason, no reason at all, why that wage increase can't be made in the very next paycheck -- (Applause.)
-- while the negotiations continue on. (Applause.) 211 COMM. ON FINANCE - BILL NO. 980228
Good faith -- Madame Chair, just one moment. Good-faith negotiations on these other issues can't -- there's no way of achieving it as long as you take the position that we're going to hold their money as a penalty to use against them to force a concession on their part which they might not be willing to concede in good-faith bargaining. You're holding them hostage, and it makes no sense whatsoever. (Applause.)
With all due respect, could I just note for the record, if the tables were reversed, I think union people would be quite upset if their leadership negotiated a contract on all the terms of employment and working conditions and said we'll wait till later to reach some agreement on the money part of the package. There are two parts, in my understanding, to labor negotiates -- the money 212 COMM. ON FINANCE - BILL NO. 980228 package, and the terms and conditions of employment. So, again, for the record, I think we have to be clear, that's my understanding of contract negotiations. The two are inextricably linked, and you need an agreement on the whole package.
The Chair recognizes Councilwoman Blackwell. (Booing by audience members.)
Thank you, Madame Chair. Good afternoon, Mr. Brown and Mr. Matthews. Based on these four points then as of Friday, there's an opportunity to again deal with the wage increase. All of these issues will be on the table on Friday, is that clear? So that we have an opportunity?
'Cause I've talked with both sides. And, quite frankly, I've kind of heard the same thing from both sides. And 213 COMM. ON FINANCE - BILL NO. 980228 it's been a while, it's been a while, I know, and things have gone on. And it's trying when things don't change. In fact, I talked with Mr. Kromer as recently as yesterday and I've talked with Jeff Brown, and he said the same thing about mediators and that sort of thing over the past several months. So then on Friday, what will happen? Can we hope to have a settlement that would deal with all of these issues?
If we can reach an agreement on the proposal that I distributed or something like it, we can go ahead with what is described in that proposal and negotiate the other issues, the other outstanding issues separately, but go forward with everything that is described in that handout, and that is what I'd like to do. I realize that Local 1971 will probably want to have some time to consider this, talk it over, and so on. We have a couple of days to do that, and I expect there should be more discussion with the mediator. But my hope is that we would resolve 214 COMM. ON FINANCE - BILL NO. 980228 all of these issues in a package on Friday.
Yeah. As I said, we haven't gotten anything in writing from them since December. For them to come here now in front of City Council and say, Oh, these are what we're going to propose, we have other thing on the table, number one. Number two, the items that I -- I haven't even taken a look at this because I've just gotten it right now. But, again, the items that we're taking about, they're proposing things regarding promotion language, and we haven't had a grievance on promotion language in over a decade. They're proposing changes among temporary appointments, and I didn't want to get into this detail, but since he handed the things out, I, you know I'm going. They're talking about excluding people -- temporary employees from the bargaining unit. This is a bargaining unit of 34 -- how many people do they want to exclude? OHCD has 85 or 90 people. We're only a small part -- we only represent a small part of 215 COMM. ON FINANCE - BILL NO. 980228 OHCD anyway, and we can -- we do have grievances on their exempt employees doing our work anyway, you know. And they also want to decrease retiree health benefits, things that nobody in District Council 33 had to agree to last time. And, remember, in '92, we made significant concessions, and we were willing to go along with District Council 33 and make those concessions. We don't know why, when we haven't had grievances over certain language issues, now they're coming back and asking for non -- some people, they say it's economic; other people, they say, it's non-economic of the issues. I don't know exactly what their issues are, and I don't know what's going to happen on Friday till we actually get to the table on Friday and find out. But just 'cause they hand something out. It doesn't mean that's what we're going to be -- that's what we're going to accept. We have to review it, we have to determine what is best for our members, because the position that they have taken -- (Applause.) 216 COMM. ON FINANCE - BILL NO. 980228
The position that they have taken -- had taken up to this point -- and as I said, I haven't looked at this language yet. Our members, these people that are residents of the neighborhoods, that are your constituents in Council, that are low- and moderate-income people, they deserve much, much better than that. And OHCD wasn't going to give it to 'em.
Mr. Kromer, are you going to be at the scheduled meeting on Friday? You will personally be there?
I learned yesterday that I have to be away on Friday. A member of my family passed away, and I will be at a memorial service. So I will be out on Friday.
Why have the meeting Friday? Why not just have it Monday or Tuesday?
I think we can go ahead Friday, and I think that we go ahead on Friday, as we had planned. And I will keep in contact during the meeting, if necessary, so that we can do that. I don't think there will be or needs to be any communication problem. 217 COMM. ON FINANCE - BILL NO. 980228
Is it your understanding, Mr. Kromer, as well as Jeff's or Pete Matthews', that there are proposed give-backs that no other City employees in other unions have been asked to deal with or to consider?
Absolutely, absolutely. Nobody in District Council 33, to my knowledge, had to revise their promotion language, nobody had to give back on their layoff language, nobody had to give back on their retiree health benefits, and nobody had to give back on the provision of temporary -- or the ability to appoint temporary people outside the bargaining unit. Those are the four issues that I understand that OHCD still has on the table, the four non-economic issues. They may be the only four issues. But those things -- nobody else in District Council 33 had to give back those items. And that's what we're saying, it is not fair to 218 COMM. ON FINANCE - BILL NO. 980228 request or to demand and to hold, as Councilman Cohen said, the 3 percent -- hold these people hostage for the 3 percent to give back, when nobody else was even asked to give back in District Council 33. It's not fair. (Applause.)
The Local 1971 OHCD contract is substantially different from the D.C. 33, for whatever reason, and I'm sure we would agree or disagree on the use of the term "give-back." But our position has been, from the start, we need to negotiate some changes in contract language, and that's all that we're taking about now.
I'm certain that I speak for myself, and I know that the Chair and other members of the committee, when I say that that we are willing to play any part that we can in being helpful. It's very frustrating and disparaging that these things go on so long, without progress. I was saying yesterday that it reminds 219 COMM. ON FINANCE - BILL NO. 980228 me of the SEPTA strike. Here we're still working under old contracts, and it's very difficult for people to plan when they don't know what tomorrow brings. So, certainly, we want to be available in any way we can and to be helpful in any way that you deem proper to help expedite things. So, you know, we kind of feel guilty that here we're all in the City, and we haven't been able to make a difference thus far. Thank you, Madame Chair.
Thank you, Madame Chair. Mr. Kromer, just a couple quick questions. Is it true that in the Year budget, 19 there was a 3 percent wage increase that was 20 approved as a part of the Year 23 Plan? 21
And what is the reason that the approved and, I assume, allocated and authorized funds were not given to the 220 COMM. ON FINANCE - BILL NO. 980228 employees?
Let me be clear, Councilman. We proposed, and Council authorized funding for developers in the Year Plan also. 6 Some of that funding has not been released to 7 developers. 8 And the same principle is at work here. 9 It's the principle -- let me -- 10
Mr. Kromer, I don't 11 want to talk about developers, I don't care about 12 developers. 13 (Applause.) 14
So the same 15 principle doesn't apply to developers that applies 16 to our public employees. Do not go there. We 17 want to talk about the employees. 18 (Applause.) 19
Why wasn't the 20 approved, authorized, allocated funds given to the 21 employees? 22
The raise was not 23 implemented because we did not have a signed contract.
Well, let me ask 221 COMM. ON FINANCE - BILL NO. 980228 this question: Are the people getting paid?
We have a signed existing contract which -- and we're working under those terms, but we do not have a new contract.
So your position is that even though raise dollars have been approved, allocated, and authorized, and even though the people are on the payroll today, and whenever their pay periods are, whether it was last week or this coming Friday or whatever, since you don't have a new contract, you will not authorize the payment of the funds? Is that your position?
And we did not propose anything different to Council in Year 23.
So -- I mean that's -- I guess that's the leverage that you try to hold over them in terms of dealing with the contract; that unless you agree to a contract, you 222 COMM. ON FINANCE - BILL NO. 980228 don't get your raise? I mean, is that the way this goes?
That is my understanding of the term "negotiation." And we are negotiating a fair contract for both parties.
But we didn't have a negotiation about the 3 percent when we went over the Year 23 Plan, right? You didn't have that negotiated at --
All right. So when you came in in Year and said, We plan to have a 15 3 percent raise, do you recall that your testimony 16 was that it was subject to a new signed contract? 17 Is that your testimony? 18
I don't recall any 19 discussions of that whatsoever. 20 But it has always been our position 21 that we negotiate a contract and we execute a 22 contract. And that is our intent now. 23
Well, my last question is-- I mean, all of this obviously comes up because we're now at Year 24, and you have to 223 COMM. ON FINANCE - BILL NO. 980228 make an application to HUD for the next round of funding. When is the application due?
We intend to submit it next month, subject to City Council's approval.
Well, there's no 10 deadline. But the sooner it gets submitted, the sooner we can receive the funding and move the program ahead.
And I may have missed some of the earlier discussion when I was in the hallway. There's a meeting coming up on May 8th? This is the much-discussed mediation session?
Okay. And did I hear you make a statement earlier that you thought that things were going to be concluded soon?
I distributed a summary of the proposed approach, which OHCD will present at that session, which, I feel, would resolve four 224 COMM. ON FINANCE - BILL NO. 980228 very significant issues and could resolve them on that day.
All right. Madame Chair, unfortunately, I'm going to have to go back down the hall to finish another piece of business, and I'm not sure whether this discussion is going to go back and forth. I have to say, though, that at the moment, having gotten a lot of information about this and having talked to a lot of people, I haven't necessarily heard anything from the OHCD side that's given me any greater comfort, and I'm not necessarily sure that we're exactly in a position to deal with the Year Program and 16 budget, under these particular circumstances. 17 (Applause.) 18
So -- I mean, I'm 19 sure that other members have other questions. I 20 am not going to leave a vote, and I will only be 21 down the hall, and I'm not sure where this 22 ultimately ends up. 23 But I think we need to reconsider what 24 we've been asked to do today and what the implications are of all that, given the request 225 COMM. ON FINANCE - BILL NO. 980228 for a suspension of the rules, advertising issues, Council sessions being scheduled, not being scheduled. And now we learn of a no-deadline situation on this particular application. I'd like to see this issue resolved for both sides in a fair and equitable contract. I don't plan to be at the negotiating table, but I am uncomfortable, under these circumstances, taking an action that seems to place one side in a much more superior position than the other side. And I don't particularly appreciate if we did the Year and there were apparently some 14 strings attached that we were not told about. I 15 don't like that. 16 (Applause.) 17
So having possibly 18 created a little further confusion, knowing this 19 will not conclude in the next few minutes, I'm 20 going to excuse myself. I shall return. 21 (Applause.). 22
What I hear from Mr. Kromer is that he hopes that Friday morning will 226 COMM. ON FINANCE - BILL NO. 980228 be the beginning of another 17-session mediation course, maybe even exceeding the sessions and 4 on to 19 or 20. 5 I don't -- and that's not the direction 6 this ought to take. And item 1 on salary 7 increases should not be on the agenda. There is 8 enough to negotiate on that. That negotiation was 9 done in connection with the Citywide contract in 10 which it was agreed that all City workers, without 11 distinction, were to get that 3 percent increase. 12 And I don't understand -- I just can't understand 13 why it appears as No. 1 on the negotiation. 14 In other words, Madame Chair, I'm 15 charging that OHCD -- and I didn't want to say 16 that -- in my judgment, is not negotiating in good 17 faith. (Applause.)
Is somebody going to respond? As I said, I think we're getting into negotiating a contract, and that's not our job or our responsibility.
Well, Madame Chair, I have to disagree. When an agency of the City government takes something that's already been 227 COMM. ON FINANCE - BILL NO. 980228 negotiated and agreed upon --
-- and then uses that against them, I say that's wrong.
I don't think Mr. Kromer said that that was negotiated. And I hate to tell you, Councilman, but I don't think that people in City Council got the bonus or the 3 percent. So, Mr. Kromer, will you please answer? We're going to conclude this. I think -- who's going to answer the comments made by Councilman Cohen?
I intend to and would like, with the support of Jeff Brown and Local 1971, to resolve these four substantive issues on Friday. I'm sure they will be characterized in different ways, but -- and there may be recommendations for changes that will be discussed 228 COMM. ON FINANCE - BILL NO. 980228 on Friday. But if we can resolve them, then we'll be well on our way to --
Now, Mr. Kromer, if they're not resolved by Friday, are you willing to meet with them one day next week to work toward the end this entire issue?
I'll do whatever is needed to resolve this, but to go through a constructive negotiation between both parties.
Can I make a closing statement? You know, I listened really intently, and you have to understand, the clock is ticking here. Now, I'm -- maybe this is my personal opinion on this. But from what I understand, the City's working because of the union. I mean, all the P.R. that they put out about America's Mayor and how everything's going with the City, and you know, it did it off the back of the workers, and we accept that. But the clock is clicking to the year 2000. And if this the kind of negotiations that we're going to expect in the year 2000, well, 229 COMM. ON FINANCE - BILL NO. 980228 they're really getting us prepared for it 'cause this is wrong, this is wrong. These people should have that money, there's no need for that. This is 34 members of a local which District City Council 33 strongly supports. And if goes past Friday the only way we can look at this is it's a threat to District Council 33 what's going to happen in the year 2000. And I could tell you, we are going to be absolutely prepared for that. And we want to send this message out to all the Councilpeople, all elected officials that -- you know, I stand with Jeff Brown, and I understand his position in not giving anything back because that is strongly my position going into the year 2000. And District Council 33, under no 19 circumstances, will give anything back. If they said we made this city, they got it off the workers' backs, well, we're going to accept that. And we're going to go into our future negotiations, as Jeff is doing right now, saying that we won't give anything back. And I stand fully behind Jeff with this. He's supposed to 230 COMM. ON FINANCE - BILL NO. 980228 have that, he negotiated strongly for it. And now -- now one issue that comes up, if they can't come to agreement on something that I normally wouldn't do, but Jeff seems to be comfortable with that, why don't they go to binding arbitration. He has absolutely no problem with that, why don't they go to binding arbitration and then let a mutual party decide. That should be the question in the back of everybody's minds. Whey doesn't management go along with that? And, Jeff, you're willing to do that, right?
So Jeff is willing to do that, so that should be -- why -- why won't they do that? What is the answer to that? Why won't you do that? Why won't you agree upon that, upon binding arbitration?
We've agreed to Local 1971's recommendation regarding the mediation process. And we think the process has yielded some constructive results, and can -- we'd like to see it through to a conclusion. And I think we can reach a conclusion on some substantive points 231 COMM. ON FINANCE - BILL NO. 980228 on Friday. I don't want to abandon that process which you have proposed and which we support.
I certainly commend all of you who are here for having this discussion. Certainly, Councilman Cohen and I were at an affair, I guess, maybe a week ago or two weeks ago, with Mr. Matthews, and he said the exact same things in terms of give-backs at his union hall. And so we understand that he is sincere and committed to this as well as Mr. Brown. And we're hopeful that we can, with Mr. Kromer, negotiate some kind of a settlement, to be as close to it as we can be, to help the party helping him to resolve this. It's really gone on far too long.
Councilwoman, I think we have all indicated our willingness to help in whatever way we can. And, again, I would say to Mr. Kromer, I know you're indicated that you cannot be at the 232 COMM. ON FINANCE - BILL NO. 980228 willing Friday. If there's not a conclusion to this is Friday, I would like your commitment that you will certainly personally meet with the mediator and whomever one day next week, because I think this has been going on for much too long, and it has to be resolved one way or another.
Because Mr. Kromer has had this position, with the precise words, for months. And he intends to keep it. Because what he wants is to be able to make all of the important decisions affecting their lives without union intervention. That's 233 COMM. ON FINANCE - BILL NO. 980228 what this is all about. (Applause.)
He's going to stall and stall and stall and making pretty and making nice while he holds their money in his pocket. And it's outrageous. And we should not be giving him any leeway whatever. He violated that union contract, a 3 percent increase was agreed upon. It is not on the negotiation table. What they're talking about -- you have the union which is saying, We're not giving back. And if they do, I can tell you, it will take a long time before they do. You have Mr. Kromer saying, Well, if we make progress, but what he means "If I frighten the union badly enough and scare them enough and threaten enough layoffs, maybe they'll come around and accept my point of view." And that's dirty union-busting. That's all it is. (Applause.)
And I don't think we ought to make it appear that we've arrived at any 234 COMM. ON FINANCE - BILL NO. 980228 kind of agreement -- we haven't. Because he hasn't said one thing that indicates that he's willing to recognize the rights of the union in this situation. If he had the slightest good faith, he'd immediately pay them off, then go into negotiations and let negotiating take place. (Applause.)
Our next witness is Lionel Drain. Is Lionel Drain still in the audience? (Lionel Drain comes forward.)
Excuse me, Mr. Drain. We're still trying to have a hearing. I would suggest that you leave quietly. Thank you. Mr. Drain, please identify yourself for 235 COMM. ON FINANCE - BILL NO. 980228 the record, and proceed with your testimony.
Mr. Drain, you're going to have to pull that microphone closer to you, please.
Mr. Drain, just a minute, please. Please proceed. Thank you.
I'll start over. My name is Lionel Drain, L-I-O-N-E-L, D-R-A-I-N. I am a community developer in the Mantua section of Philadelphia. And I'm here on behalf of Mantua. There is a development that is in the process at 40th and Aspen Street, which we are interested in being the developer, or a partnership in developing that particular lot. We had just gotten information on that, and we need the Council's help -- we need the Council's help in order to be a CDC for that site.
Have you been in communication with the District Councilperson?
Yes, I have. Just 236 COMM. ON FINANCE - BILL NO. 980228 recently, yes. But we also have -- we also have just found that L&I has been going around in our community just recently in the past week, putting red tags on abandoned houses to be demolished. And we are also trying to start a new program where we will go right behind them and acquire these lots so that we can start the paperwork to have X-amount of houses built on those lots. Rather than have a lot sit for five, ten, fifteen, twenty years before we do anything, we want to start immediately on the lots in which the houses were sitting on.
I believe this is in Councilwoman Blackwell's district, and I know that if you work with her, she will do everything possible to form a partnership with you so that much of what you're talking about could be accomplished. The Chair recognizes Councilwoman Blackwell.
Thank you, Madame Chair. 237 COMM. ON FINANCE - BILL NO. 980228 Lionel Drain is from the area in Mantua where Tim Spencer once lived. And what they're doing -- we have various organizations in Mantua, but he wants to be part of a CDC effort on new ventures that come in, one new one that's in question now. And that's what his interest is. And, certainly, we support him. He works with all the people down there, and he's kind of assumed this leadership mantle since we lost Tim Spencer and those who come after him, Charles Underhill and others. And we respect his leadership and certainly look forward to -- in fact, we invited him here today so that he could get on the record stating they want to be a new CDC in Mantua. Thank you, Madame Chair.
Thank you very much, Mr. Drain, for coming in. Is there anyone else to testify on this bill? (No response.)
I believe that concludes our list of witnesses. We will just 238 COMM. ON FINANCE - BILL NO. 980228 wait for two of the members of the committee to return to the chambers so that we can go into the public meeting. There were other witness scheduled to testify. However, I believe, the hour got late and many of them had to leave. We will give the stenographer written testimony from a couple of the groups, namely -- who did we have?
Madame Chair, the Walnut Hill Community Development Corporation and Northwest Counseling Services, and the full testimony of Dr. Capkin.
All right. This concludes the public hearing on Bill No. 980228. We will now go into our public meeting - - -
Madame Chair, I move that Bill No. 980228 be reported out of this committee with a favorable recommendation, and a further recommendation that the rules of Council be suspended so as to permit first reading at our next session. 239 COMM. ON FINANCE - BILL NO. 980228 (Duly seconded.)
It's been properly move and seconded that Bill No. 980228 be reported out of committee with a favorable recommendation; and further, that a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. All those in favor will signify by saying aye. Those opposed? The ayes have it, the motion is carried. This concludes the public meeting of the Finance Committee. Thank you all very much. Oh, and, you know, Mr. Kromer, I just have to tell you, I remember years ago, as I'm sure my beloved colleague Councilman Cohen will remember, when we had people hanging from the rafters here during these hearings, and they would last perhaps three or four days. I want to commend you. Apparently, you have been out in the community, you have explained to area residents and community people what the budget was all about. And I think if they were 240 COMM. ON FINANCE - BILL NO. 980228 unhappy, I think we would have had people hanging from the rafters again. So I think you're to be commended. I think that you've done a great job in communicating with people regarding Year 7 budget, and I know it's a very difficult job and I 8 want to thank you for it. 9 I just can't believe it. This is the 10 first time in my memory that we've had so few 11 people come in to testify. 12
Madame Chair, I've 13 come to understand that all the people who used to 14 be in the rafters and came to protest are now 15 working. 16 (Laughter.) 17
So they have no 18 interest in coming to these hearings. 19
One comment. This is our last full fiscal year 241 COMM. ON FINANCE - BILL NO. 980228 funding during this Administration. I'm sure you'll hear a lot of speeches about what's been accomplished. But, really, there's no cabinet member or commissioner who owes more to Council than I do for your support. We've never, ever had a sustained community development approach up until now, because of your support. And that to me is why it's all the more important that we resolve this issue with the union, which is not fundamentally going to change the program. The people that you saw are committed, capable people whom I respect and who all of the exempt staff respect. And I meant what say I said -- I will see this through to a conclusion. We need to negotiate, but I understand the need to conclude this.
I also think, Mr. Kromer, that you're going to have to get personally involved in this. I think that's a must, and it's something that you should do.
And, Madame 242 COMM. ON FINANCE - BILL NO. 980228 Chairwoman, I agree with all that was said. Certainly, I talked to the some of my CDCs last evening, and they said they had been in communication with Mr. Kromer and they had worked out various issue. So I too am supportive of your statements and thank everyone from the department who works with us to try to get housing done. Thank you.
Thank you. (Adjourned at 2:25 p.m.) - - - 243 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Wednesday, May 6, 1998. Were reported and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE ON FINANCE BILL NO. 980228 __________________________________, JOSEPHINE CARDILLO, RPR