Rebuild, explained

Photo: Steve Belkowitz/Parks & Recreation

You’ve probably seen it in the headlines. You’ve probably scratched your head a bit. (We did too, at first.) But fret not: PW spoke with city officials and read everything that’s been already written about the city’s massive, half-billion dollar initiative known as Rebuild, and we’re here to break it down for you.

Rebuild. Explain it to me like I’m 5. And quickly, please.

Over the next seven years, the city plans to spend $500 million to improve the city’s ailing parks, playgrounds, libraries, recreation facilities and other sites of community infrastructure. Rebuild is the brainchild of Mayor Jim Kenney. It makes up one key part of his administration’s anti-poverty agenda along with universal pre-K and community schools, with emphasis on the city’s historically disinvested neighborhoods.

I get the gist. Just catch me up to speed on where we’re at now.

After months of negotiations, City Council came to an agreement over labor provisions with the Kenney administration and the building trades unions, allowing the government to move forward with its first bond. The first projects will be announced by the end of the year. The end.

OK, but how is this being funded?

Rebuild will be paid for in part by Kenney’s sugar-sweetened beverage levy, better known as the soda tax, which went into effect in January. The city plans to take out $300 million in bonds, which will be paid back over time with soda tax revenues. The William Penn Foundation has made a $100 million commitment to the project, according to Kenney’s Rebuild team, and the remaining $52 million will hopefully come from city, state and philanthropic grants. Lastly, the city will set aside $8 million annually from the its capital budget, totaling $48 million over six years.

Photo: Samantha Madera/City of Philadelphia

Wait, I heard the soda tax isn’t generating as much revenue as initially projected. Will  a long-term shortfall affect the city’s ability to pay off these bonds?

“We don’t think so, but it’s really too early to tell,” said Rebuild’s executive director Nicole Westerman. The city plans to stagger its bond issuing at two-year intervals. Westerman says it will be some time before the debt begins to accumulate to an alarming level. The bond strategy is also very conservative, Westerman notes, and the city’s finance director would not issue the bonds if there was a high risk of default.

So, we’re talking about half a billion dollars here. How’s Rebuild going to spend it?

There are 406 potential city-owned sites that could see Rebuild improvements. These include parks, rec centers, libraries, playgrounds and sites with a mixture of all the above. Not all of those sites will see improvements from Rebuild, however. Most likely the initiative will impact somewhere between 150 and 200 sites, and improvements will range from cosmetic changes to the construction of new buildings.

Kenney has a six-member staff to manage Rebuild, whose salaries total more than $500,000 annually. (Those salaries are grant-funded.) The lion’s share of the half-billion dollar budget will go directly to contractors who are carrying out the improvements to city facilities. For that reason, there’s been a lot of emphasis on who’s actually performing the labor.

What has been the major drama with Rebuild so far?

During negotiations with Kenney and the labor unions, City Council’s main sticking point was workforce diversity — namely, making sure the workers on the jobsites reflect the city’s population. This was of particular concern given much of the labor would be going to the predominantly white and suburban building trades unions. But Council also tangled with the Kenney administration about power over the Rebuild projects.

So what are the diversity and project oversight agreements that have been reached?

Rebuild has promised to ensure 45 percent of the workers on Rebuild sites consist of minority laborers: 27 percent African-American, 14 percent Hispanic, 3 percent Asian. A certain number of contracts must go to minority- and women-owned businesses, as well.

Before signing off on the final legislation, council members also jockeyed for more power over the project itself.

The final agreement grants City Council two appointees (as well as the chair of the Parks and Recreation Committee) on the Rebuild oversight board. Council will also have the last word on both Rebuild’s annual budget as well as veto power on the final list of Rebuild sites selected by the administration.

How will this be any different than all the other times the building trades promise to diversify? Who’s going to enforce these agreements?

Indeed, distrust of the building trades unions runs deep. The pledge to diversify their workforce, especially for publicly funded projects, is all too familiar. Of the agreement, one diversity advocate told City&State PA that “if John Dougherty is happy with it, it’s a lousy agreement.”

However, by way of checks and balances, Rebuild will be contracting with “independent monitors.” These third-party entities will be out in the field to ensure the work being performed meets the standards of the agreement, and not just with regard to workforce diversity.

If the third-party monitor’s recommendations are not met by the contractor, Westerman says there is a clause in the legislation that will allow intervention by Kenney and/or the district council member where the project is taking place. Worst case scenario, the legislation allows the contract to be terminated if the contractor fails to meet the agreement.

Will the unions have a monopoly on all this labor?

As it stands, there are two tiers for labor contracting. Rebuild projects more valued at more than $3 million must hire through union shops. Any budget under that $3 threshold can be given to non-union contractors. The idea here is that more female- and minority-owned businesses will have a slice of the work. Some simple projects may be performed by the Philadelphia Redevelopment Authority or the Philly Parks & Recreation staff.

How will the contractors be selected?

Rebuild will be operating under a lesser-known “project user” structure, which significantly differs from the city’s traditional contracting process through its procurement office and its formerly charter-mandated “low bid” contracting policy. The project user model has been used in a few past city projects, including for terminal improvements at the Philadelphia International Airport and a $20 million bond-funded improvement to the city’s library systems, but never for a project with the budget and scope of Rebuild.

Only nonprofit organizations can apply to become Rebuild’s project users.

If selected, qualified nonprofits will then be awarded grants through Rebuild for up to $5 million. Project users then use the grant money to subcontract everything from design to construction for Rebuild projects. As PlanPhilly noted, this model could complicate diversity and inclusion goals. That’s where the third-party monitors are supposed to come in.

Westerman added that the city’s capital program may be used to finance some projects as well. In this case, contracts would be awarded through the city’s procurement office rather than the project user system.

How can companies apply for contracts through Rebuild improvements?

Usually, vendors apply through the city’s procurement office. Under Rebuild’s project user model, potential vendors can stay abreast of contracting opportunities through the Rebuild website, or by signing up for email updates. A request for proposal for nonprofit project users was issued on Monday, July 31.

Will the parks and rec centers in my neighborhood be getting any of this Rebuild love?

It’s too early to tell. The first improvement sites will be announced before the end of the year, according to Westerman and David Gould. New projects will be announced annually, meaning we won’t know the total reach of the initiative for years to come.

So who do I blame if my neighborhood park gets overlooked?

We’ll leave that question to the Mayor’s office.


Editor’s note: This article was updated on Aug. 1, at 3:00 p.m., to clarify some details about Rebuild’s funding model and additional information.

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