September 7 — 6:00 am, 2018

Board of Education holds first committee meeting on facilities and finance

The tone was definitely different from School Reform Commission meetings. Board members asked hard questions of city officials about plans for new "opportunity zones" and the impact on school revenue.

School board members and co-chairs of the Finance & Facilities Committee Lee Huang and Leticia Egea-Hinton.

The Board of Education held its first committee meeting on school buildings and the budget, setting a tone that stood out against the backdrop of the School Reform Commission meetings that were replaced. Gone is the strict three-minute rule for speakers and the taboo against board members engaging with members of the public who offer criticism.

Members of the Finance & Facilities Committee seemed happy to get down to the work of improving the image of the District’s governance by turning the page on how the board interacts with the public. The relatively informal meetings of the four committees are just the start, giving the public the opportunity to critique decisions that the board is considering before final votes are taken at a formal action meeting. The SRC typically heard public commentary on the same day as the vote, leading to complaints that the comments were not taken seriously.

“One of the big changes between the five-member SRC and the nine-member school board is the ability to have committees and to have information and discussion take place in a public setting prior to votes in public meetings,” said committee co-chair Lee Huang. “We want to ensure that access and transparency and discourse are part of this committee structure.”

At the meeting, District staff presented information on how to access public budget documents online and updates on the District’s efforts to improve the physical conditions of schools, including the removal of lead, mold, and asbestos.

Leticia Egea-Hinton, co-chair of the committee, said the agenda items were selected based on feedback from school board listening sessions during the summer. She was surprised to hear that one of the most popular demands was more information about the District’s budget.

School buildings needing work

Danielle Floyd, chief operating officer for the District, presented updates on the District’s renovation work that was conducted over the summer, which focused on removing mold and asbestos, stabilizing lead paint, and creating new modernized classrooms for elementary school students.

“We’re really focused on providing safe, comfortable, healthy, and welcoming learning environments for our students,” Floyd said. “We want to provide high-quality customer service and are looking to provide information in a timely manner to our school communities.”

The lead paint and plaster stabilization work, paid for in part by a $7.6 million state grant arranged by Gov. Wolf, is well underway, but it will continue for 12-18 more months. Work in six schools that started over the summer is winding down, with 37 schools to go. The grand scope of the projects includes 330,000 square feet of space in classrooms used by more than 30,000 students.

The classroom renovation projects are also underway for work on 160 elementary school rooms in 11 schools. The District replaced two HVAC systems at Muñoz-Marin and J.B. Kelley, where the highest-profile mold outbreaks occurred last summer.

Floyd will also put forth a proposal at the next school board meeting on Sept. 20 to contract an “on-call asbestos abatement service that we could use throughout the year.”

There were also a number of demands from the public – teachers and parents alike – for the District to air-condition every school. Floyd acknowledged that the District might be able to afford the air conditioners themselves, but said it would cost roughly $1 million per building to expand the electrical capacity at more than 100 schools that had insufficient electrical systems to run such units.

Jerry Roseman, an environmental scientist for the Philadelphia Federation of Teachers, said the whole project would pay for itself over the long term because so many of the mold outbreaks are caused by excess humidity that would be eliminated by air-conditioning the buildings.

Floyd said the focus now is on replacing central air-conditioning units at schools where they are failing, as was done at Muñoz-Marin. The District is also gradually making electrical capacity upgrades.

Roseman is also a part of the Philly Healthy Schools Coalition, a group of parents, activists, unions, and nonprofits that seeks more transparency from the District and community involvement on such public health concerns in schools as lead, mold, and asbestos. He said the coalition has been working productively with the District to rewrite the protocol for clean-up and community involvement as part of the lead stabilization work. But Roseman would like those things to become standard for all projects, not just lead stabilization.

“We have the opportunity to speak with building occupants and parents about what they see as the most pressing needs for their schools,” Roseman said. “Something that’s often missing from the dialogue here is that people in the buildings know a lot about what those buildings need.”

Laurie Mazer, a member of the coalition, said she first got involved in facilities issues as a member of Parents United pushing for change at Jackson Elementary, where her children attend school.

“But you start to realize that you can’t just advocate for your own kid and your kid’s school,” Mazer said. “None of the conditions that our kids are exposed to and none of these heat issues are surprising. We’ve known this. Lead poisoning in children should not be a surprise to us — we’ve always known the buildings have lead.

“I want to ask the board, respectfully, to help us as stakeholders to get more of a seat at the table on these issues — not just around lead. There’s a lived experience from teachers and students that could be useful if we were fully transparent. … At Jackson, we have a leaky roof. All that lead stabilization is amazing, but the roof still leaks. So the paint will peel, and we will have to do the stabilization all over again.”

Keystone Opportunity Zones

Attendees also heard a presentation from the city’s Commerce Department on an inevitably controversial policy that would provide sweeping tax abatements to certain properties, while requiring the property owners to send a payment to the School District.

Sylvie Gallier Howard of the city’s Commerce Department presented the plan to implement Keystone Opportunity Zones (KOZ). It’s a program first started in 1999, similar to a federal program, that provides tax exemptions to developers who buy and develop “blighted, vacant, and highly underutilized properties and land.” These properties are individually selected by the city.

The program is essentially the much-derided 10-year tax abatement in Philadelphia on steroids. Instead of just being exempt from property taxes, these developers are also exempt from the city’s net profits tax, business income and receipts tax, use and occupancy tax, and the hotel tax. It simultaneously exempts developers from the state’s corporate tax, the personal income tax, the sales tax, the corporate stock tax, the bank shares tax, and the mutual thrift tax (imposed on savings and loan institutions as opposed to commercial banks).

The District would receive a Payment in Lieu of Taxes (PILOT) from each property owner, equal to 110 percent of the school property tax. Currently, the District gets 55 percent of property tax collections and the city gets the rest. Under the KOZ owners are only excused from paying the city.

“The School District will collect more property taxes on KOZ parcels than it does today, because KOZ parcels are mostly underutilized, so they pay little taxes today,” said Gallier Howard. “The Commerce Department gets involved as well to carefully select the parcels, and these are deemed to require subsidy in order to be developed.”

The school board will be asked to vote on the proposal to implement these zones at its next action meeting on Sept. 20.

But Joyce Wilkerson, the board’s president, had already reviewed the large properties — and parcels of smaller properties — that Commerce selected, and she was not impressed by the way the program was being used, though the list is still being revised by Commerce.

“A lot them were in some of the fastest-growing areas of the city, where I already see developers building with no public assistance, and I’m hard-pressed to understand how those properties would meet almost any of the criteria that you have identified here,” Wilkerson told Gallier Howard, specifically mentioning dozens of properties listed in Fishtown, one of the city’s most rapidly gentrifying areas.

“We’ve now done a whole scoring criteria and many of those parcels in Fishtown are being removed from the list,” said Gallier Howard.

When Wilkerson asked whether that means that no property would be on the list if it did not meet the scoring criteria, Gallier Howard responded, “Essentially.” When pressed further, she said: “That is absolutely our intent.”

But Gallier Howard then specified that “preference” is given to “large parcels,” specifically those with the “capacity for significant development.” So small businesses are not likely to benefit.

Because the KOZs were pitched as a mechanism for “job creation,” Wilkerson wanted assurance that they would not be used for the large-scale residential development that has become so common in the city in recent years and has been much maligned for driving up rent and pricing working-class people out of their homes.

Gallier Howard said Commerce seeks to avoid that and wanted to put it in writing, but the state-run program would not allow the city to further restrict the funding. So there remains a “possibility” that developers will use the properties for luxury apartment complexes, like those that have used the city’s already-existing 10-year abatement on property taxes.

Co-chair Lee Huang explained that, because his consulting firm has clients who usee KOZs — not to mention being a favorite contractor of the Mayor’s Office — he will have to recuse himself on the vote and any private discussion of the matter.

Eyebrows were raised after Gallier Howard gave a list of examples of the properties identified, which included the Frankford Arsenal Complex in Northeast Philadelphia, a group of buildings surrounded by a gate, towering trees, and wide-open green lawns.

Franklin Towne Charter High School, which acts as its own landlord, owns multiple buildings in the complex. It also has several prominent political patrons in the local Democratic Party connected to the building trades unions run by John Dougherty — some of the city’s biggest beneficiaries of tax breaks for developers.

“When we go around the city, a lot of what I hear from people is the whole tax-abatement structure of the city is just not fair,” Wilkerson said, addressing Uri Monson, the District’s chief financial officer. “We’re being asked to fund schools without money, and yet the city’s turning around and giving more abatements to large developers. What does this give us, over and above what people are entitled to under the city’s current 10-year abatement program?”

Monson was explicit that he could only answer hypothetically and would not give his personal opinion.

“If you believe that these particular properties would not be developed otherwise, then we’re actually not losing anything,” Monson said. “If you believe that something would happen without intervention, then we’re effectively giving away what we would already get naturally.”

School board member Wayne Walker, who also is on the committee, chimed in.

“As you put it: if you believe,” Walker said. “What would your office need, Mr. Monson, to give this committee adequate information from which we can make a decision?”

He wanted Monson to analyze the actual impacts of creating these zones, instead of just relying on Commerce. But Monson declined, saying that “we don’t have the capacity” and it’s “really not our role.”

School board member Angela McIver, who was present in the audience, asked whether Gallier Howard could explain the argument against tax abatements, which has proven popular with working Philadelphians but had not yet been represented at the meeting.

“Folks who are opposed tend to believe that abatements are not necessary to spur development — that it will happen on its own, and there are definitely places where that’s true,” Gallier Howard said.

But she said the city had proof that they did, in fact, work. She listed several anecdotal examples where the KOZ was used on properties that were later developed, such as the Navy Yard. She said “we believe” developments on these sites would not have happened otherwise. The Navy Yard is in South Philadelphia near the stadiums, an area with rapidly rising property values.

“There is a difference between the forest and the trees,” said Lynda Rubin, a retired school counselor who spent four decades in the District and is a member of the Alliance for Philadelphia Public Schools, which acts as a watchdog over District operations. “Sometimes we in the schools don’t understand the forest that you guys are seeing. But I also think that when you’re so based in the overall process, you’re only seeing the forest and you forget about the individual trees.”

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