Philadelphia City Council votes on controversial nonprofit contracting bill

One of the City Council’s top Democrats is introducing a controversial bill this week that would change the way the city works with nonprofits, despite a last-minute lobbying campaign against it and fierce opposition from some city charities.

Majority Leader Katherine Gilmore Richardson is authoring legislation that would end the city’s practice of hiring nonprofits to do city work without going through the regular competitive bidding process.

She called the change a necessary change that would provide greater transparency in government spending after revelations that the city’s Office of Homeless Services had contracted with nonprofits for which it had insufficient funding.

But nonprofit leaders expressed concern that the change could hurt their bottom line. On Wednesday, just a day before the Council was scheduled to vote on the bill at its last meeting before the summer break, some Council members were inundated with calls regarding the legislation in question.

” READ MORE: Overspending at the Office of Homeless Services could trigger a change in Philadelphia’s contracting process

At least four members have talked to Gilmore Richardson’s office about delaying the bill until the council returns in the fall, according to two sources who asked not to be identified because they were not authorized to discuss internal deliberations.

Gilmore Richardson, however, said she persists. Her office confirmed Wednesday that it intends to begin work on the bill on Thursday and will introduce accompanying legislation to establish a task force to examine how the city contracts with nonprofit organizations.

In an email to fellow council members Wednesday, Gilmore Richardson said her goal is to ensure the city’s contracting process is fair to all organizations, regardless of whether they have a prior affiliation with the city agency.

“I know change is difficult, but it is necessary,” she wrote in an email her office shared with The Inquirer. “If we want to create fair accountability policies and improve the way we do business, we must ensure a level playing field for all.”

Gilmore Richardson noted that she met twice with dozens of leaders from the city’s nonprofit sector to hear their concerns and opinions.

During one such conversation this week, some leaders pressed Gilmore Richardson to delay the bill so they could try to find a compromise in the summer.

“There may be some ways to improve the bill if you want to target the Office of Homeless Services or some part of the contracts,” said Andy Toy, policy director at the Philadelphia Association of Community Development Corporations. “Maybe we can change it and improve it. “But as things stand, a lot of people think it’s a bad idea.”

” READ MORE: The Philadelphia City Council is introducing a controversial contract bill that is opposed by Mayor Parker’s administration

Many of their concerns come down to resources.

Cherie Brummans, president and CEO of the Alliance of Community Service Providers, which represents dozens of mental and behavioral health providers contracted with the city, said many city nonprofits do not have the staff or capacity to conduct the city’s typical tender procedures – the process of obtaining city contracts.

She said forcing them to do so would disadvantage smaller organizations – even those that have long-standing relationships with the city.

“Our suppliers will have to devote a significant part of their employees’ time to administrative activities [request for proposals] process,” she said. “This will increase overhead costs.”

A campaign to delay the bill’s passage is facing opposition from members of Mayor Cherelle L. Parker’s administration. When the Council’s Finance Committee considered the bill last week, 11 administration officials gave testimony saying the change would significantly burden the city’s operations and make it more difficult for agencies to respond to emergencies.

The bill passed unanimously out of committee.

Gilmore Richardson publicly admitted to opposing the legislation and said she made changes based on feedback from the nonprofit organization.

At one meeting last week, nonprofit leaders said they couldn’t plan budgets for the coming fiscal year without knowing whether their contracts with the city would be renewed. Gilmore Richardson amended the law so that it does not come into force until July 2025.

In her message to other Council members, she stated that the introduction of legislation to create the task force was also based on the recommendations of representatives of non-profit organizations.

“My sole goal in this job,” she wrote, “is to overall improve the way the city does business and to ensure that fair, transparent and accountable procedures are in place that allow all organizations – regardless of size or affiliation – to have the opportunity to provide services high-quality.”