With $500 million to spend, Council and Kenney administration clash over terms of Rebuild

It was a dramatic few months in City Hall, as City Council weighed Mayor Kenney's proposed tax on sugary drinks.

But that was only the first act.

As the second begins, tensions are already building.

Up next is a debate over the mechanics of Rebuild, a $500 million overhaul of the city's parks, recreation centers, and libraries that the soda tax will in part fund.

Some on Council are at odds with the Kenney administration's proposal, which would funnel much of the money through two nonprofit partners. Those members want the money spent in-house through the procurement and capital program offices. The setup would inherently give Council more control, which some argue is appropriate, especially for the 10 district Council members who have long managed an outsize need for improvements on a limited budget.

"Why would I diminish my ability to be able to weigh in on those decisions?" asked Councilwoman Cindy Bass, who chairs Council's parks committee and whose Northwest Philadelphia district includes some of the city's poorest neighborhoods. "I'm the person who has the knowledge and connection to the community, the person who has been sitting in those rec center advisory meetings and seeing the wires hanging from the ceiling."

The Kenney administration has pitched Rebuild, expected to be at least a five-year project, as a vehicle for broad economic and social change. Officials point to the jobs that will be created as facilities are improved or completely rebuilt, then to those facilities' being community centers that deliver essential services and strengthen neighborhoods.

In all, from 150 to 200 individual sites will see improvements, city officials said. They said individual sites will be selected with Council and community input, and the scope of work at those locations will take shape through conversations with community members about their wants and needs.

The William Penn Foundation in November pledged up to $100 million to the initiative, the largest grant in its history. The soda tax, which is also funding expanded prekindergarten and community schools, will go to pay the debt service on the project's bonds.

Council must approve the bonds — a role that gives the members huge leverage in the project's launch. The group is expected to consider the first of what will be three $100 million bonds in the coming months.

Members of the mayor's Rebuild staff stress that they want Council members to be intimately involved in Rebuild's implementation. They said they have already taken Council feedback into consideration and made changes to the sites being prioritized for the first round. But they are showing little flexibility on the overarching structure.

Under the system, the city would partner with the Fairmount Park Conservancy and the Free Library Foundation, nonprofits that would act as project managers on individual Rebuild sites.

City officials said the nonprofits would have to apply to the city and the Philadelphia Authority for Industrial Development, a quasi-governmental agency that would issue the bonds, to work on individual sites. Applications would include a proposed budget, schedule,  and contractors, and if approved the nonprofits would be tasked with hiring for and overseeing that work.

David Gould, Rebuild's deputy director of community engagement and communications, said the approach would make Rebuild more effective and efficient. He said the city's procurement process can be slow. That system also requires jobs to go to the lowest bidder, which would not give the city the flexibility it would like to hit diversity goals, he said. Lastly, he said the nonprofits have a proven track record on fund-raising and will be good partners in that area.

"This is such a big project where we are trying to do so many different things: help diversify building trades, increase capacity of minority women-owned businesses, create and strengthen community groups around these sites, and transform neighborhoods," Gould said. "It wouldn't be smart to do it all on our own."

Council President Darrell L. Clarke sees the partnership in a very different light — as privatization of the city's parks, recreation centers, and libraries.

In a memo to his Council colleagues in December, he called it "needlessly risky and maybe even irresponsible" to "entrust so much money and property to private nonprofits." In an interview, he said he did not understand why the administration picked the two partners without putting out a request for proposals so others could apply. He said the approach lacked transparency.

He also raised concerns about partnering with the Fairmount Park Conservancy. Clarke, an ex-officio member of the conservancy's board, said the group does not have a record of working on projects of this scale or of embracing diversity in its own hiring.

"Why would I support that? I would get roasted by the people I represent," he said. "It's inconsistent with the goals we have."

A spokeswoman for the conservancy said that the 24-person staff includes three people of color and that increasing diversity is a key goal. And city officials point to several projects completed by the conservancy they say are similar in size and scope to what could be a typical Rebuild job.

Gould also said the city did not issue a request for proposals because it has narrow criteria for partners, including having a large geographical focus so the city can limit the number of partners needed for all the potential Rebuild sites.

Clarke in his memo also said Rebuild funds should be used to build the city's own staff rather than the nonprofits, something city officials say isn't ideal because they would then have to lay off that staff when Rebuild runs its course. But Councilwoman Maria Quiñones-Sánchez, whose district includes parts of North Philadelphia, took the same position as Clarke, saying she is impressed with the Rebuild team the city has built so far.

"I think we have the start of a really powerful team, and we should invest in it," she said.

Not all Council members share Clarke's concerns.

Councilman Curtis Jones Jr., who represents Northwest Philadelphia and who was an early supporter of the soda tax, said he does not believe the vehicle through which the money is spent will matter, so long as Council and the administration stay engaged in the process.

After years of managing improvements to facilities in his district on a limited budget, Jones even looked favorably on giving up some of that burden.

"It's like being a parent with a whole bunch of kids and all of them want sneakers. Everybody ain't getting sneakers at the same time," he said. "What this mayor wants to do is say, 'Let me take that off of you individual Council members.' "

Others are waiting for more details to come into view. For example, the mayor's office said a Rebuild oversight board will have Council representation but has not said how many members it will include.

"I don't know who will be the person on that board that will be the liaison with Council members. What it will look like," said Councilman Kenyatta Johnson, whose district stretches from Center City to the southwest. "For me this a wait-and-see."

Gould said some of the concerns voiced in Clarke's memo stem from misunderstandings. For example, Clarke said the city planned to enter into long-term leases with the nonprofits. Gould said the leases would only run for the course of construction.

To that, Clarke said: "Put it in writing."

Though there is a divide between his and the administration's opening positions, Clarke said he was not concerned.

"I'm really not even frustrated," he said. "Because at the end of the day, until Council members are comfortable with the proposal, then I don't see us moving ahead with the borrowing."