The 86 Whole - 5/25/05 question has now been answered. Thank you.
Can I proceed with a couple, just a couple other items, relative to...
It's my understanding that law requires that any fees that the City imposes need to match the cost of the carrying out of what the fee is paying for. So that fees, for example, unlike taxes, are not instituted to make a profit but to simply cover the cost of what the City needs to spend to do its duty or do its enforcement or do its activity; is that correct?
The license that you charge or the fee you charge for the permit or the license has to cover the cost. You're not to make a profit, that's correct.
What is the cost of enforcing or the enforcement of a legal billboard? What is it that the people in the billboard unit or anywhere else in L & I need to do when a billboard is legal. People... Again, let's go back. I don't want to get into the subjective issue of whether you like them or not, but if they're in legal status, what does anyone in the billboard enforcement unit have to do with that sign that incurs a cost?
You -- You -- You still -- You have to inspect to see that it's still safe.
You have to... You have to get the paperwork and make sure that it's still the correct size, that they haven't changed the sign.
Keep in mind that a zoning permit's approved for a ten by -- I'll keep it simple -- a 10 x 10 sign. And then somebody puts a 10 x 20 sign up. We also 88 Whole - 5/25/05 need to be aware that the only thing approved is the x 10 sign. 4 So, there's still ongoing paperwork, 5 inspections, processing of paperwork dealing 6 with problems the sign company may have. 7 That's ongoing. 8
And that's 9 amounted to an increase from 170 to 650 a 10 sign face?
And you have that you're able to document that and delineate each individual service or activity that's done by employees relating to legal signs?
Dave, do you want to handle that? Yes, but we did... To answer your question, we went through and determined at the bottom line what it would cost us to enforce this ordinance.
Because we've been led to believe that these revenue enhancements are related to other services that would be put back into the budget, not 89 Whole - 5/25/05 necessarily this particular activity of L & I. And if that's the case, then I'd see the justification for the fees, if it's not going towards the L & I activity. If it's going to bring back other services that the Mayor cut out, relative to other departments, I don't see how that the fee would be legal.
Councilman, if I may add on that, the taxes are directed toward providing additional revenue that can be --
I understand that. The fees have to sustain the services that are provided. But when you say additional services that would be put back into the budget, I think that relates to the taxes.
I'm talking about fees. I want to know how the fee that 90 Whole - 5/25/05 would have been recommended to be -- to be raised here relates to... And I like to see it kind of laid out in writing... how it relates to the actual activities of your employees, as it relates to legal signs in the City. And let me say again for the record: You can like signs, you can hate them, you could care nothing about them either way. We're not talking about their appropriateness. We're talking about a legal sign that exists in the City that now L & I is saying to us, we need to raise the fee to this number because this is the services or the activity that we need to engage in in order to keep that sign safe. Do our people climb up the pole, and... What do we do when we inspect a sign?
No, not at all. Not 91 Whole - 5/25/05 at all. They would not be expected to climb up the pole.
Well, I don't expect that they would, but how do they determine that it's safe?
Well, they -- you -- you -- you observe them. Just like a dangerous building. They observe them from the outside. We don't encourage to go inside the building. We -- We -- We -- You observe and you look and see if there's failure in the structure in the steel. You -- You -- You -- You just -- Your observations as an inspector and then also keep in mind that part of this fee is going to go towards the study of the engineering studies that we get from the sign companies for each sign structure. So... But we can give you a breakdown of the costs and how we arrived at it. That's not a problem.
Is any of this money being related to the enforcement of the 92 Whole - 5/25/05 illegal signs?
And is that fair to the legal sign owner? If I have a legal sign --
It's the same companies, usually, that have legal and illegal signs, as a whole. It's... say... I don't want to say a name but whatever -- If it's company wide, they might have a hundred signs, and some are legal and some are illegal. And I think that's universal throughout.
Thank you. The Chair recognizes Councilwoman Tasco.
I have a lot of questions here because I'm just not -- I'm really confused about what we're doing here. You talked about a court case, and we lost a court case when Bennett Levin was here. Could you go over that with me again? 93 Whole - 5/25/05
Dave Perry, chief code official. The court case that we were talking about involved in 1992 the fees for all signs were in the ordinance to be $175 per sign face. I mean, for sign structure. I'm sorry. It included both accessory and non-accessory signs. The administration at that time felt that it would be a burden on small businesses, mom and pop type stores, to have them pay the $175. So they arbitrarily, and without benefit of counsel, started charging the mom and pop stores $25 for an accessory sign, but kept the fee at 175 for the billboards which are non-accessory. That two-tiered fee schedule, which did not have benefit of an ordinance, was -- was -- went to court. And it was determined that it was illegal. So, sign --
That's correct. The disparity in the rate was determined to be illegal.
Well, nothing happened for several years. And when we started crafting --
The -- The -- The... A ruling was that the disparity was illegal, not the fact that you could collect the fee.
So, what happened was, we -- we kept billing the accessory sign owners, the mom and pop stores, the $25. And then we asked the billboard installers to voluntarily pay a $100 per sign structure fee. So they began paying it on a voluntary basis, rather than through 95 Whole - 5/25/05 ordinance.
So, you couldn't ask the mom and pops, who are making, like, hand over fast from chewing gum, potato chips, a hundred dollars a year for a sign?
But you couldn't -- you didn't think you could charge them a hundred dollars? They make a hundred dollars in ten minutes.
No. The idea became that if -- if you're a legally opened business, and we had an initiative that's been going on for several years, is try to eliminate certain licenses that we feel are burdensome on -- on -- on -- on businesses. And a typical mom and pop store may have a license for their food license, a scale license. They were in the past 96 Whole - 5/25/05 required to have a license for their parking lot, a license for their sign. So in the course of a year, they're getting multiple bills for multiple things. And the complaints were that they were being over regulated. So...
Now are we talking about billboards on a mom and pop store or a sign?
Is there a difference between a sign and a billboard?
There is a difference between a... The way that the code is written, that the legal definition, there's a difference between an accessory sign and a non-accessory sign. An accessory sign relates to the activities that are occurring within the building. So, for instance, Wawa can put a 97 Whole - 5/25/05 Wawa sign up because it's a Wawa store. If Wawa decided to put up a large sign up at the corner that advertised Makers Mark Bourbon, we'd have a problem with that.
Okay. Now, to me, that's a sign it's not a billboard.
All right. So what are we -- what are we regulating here?
We are regulating non-accessory signs which are commonly known as billboards.
Well, when Wawa applies for a sign to put up on its store to advertise Wawa, is that a billboard or is it a sign?
And with this ordinance, they would no longer have to -- have to maintain a separate sign license and wouldn't have to pay the fee. 98 Whole - 5/25/05
All right. Now, let's go to the -- to the eight sheets. What's happening with them? Tell me what are you going to do about these eight sheets that are basically in neighborhoods and have come under some scrutiny in years past, relative to smoking. That's just how I look at them.
There's 900 of them in the City. We sent the owner -- And the owner's name escapes me right now, of the eight sheets -- a violation notice telling -- telling them to remove the eight sheets. They have since filed an appeal. And I believe it's going to go in front of the Zoning Board of Adjustment. And we've been working closely on this with the Law Department. And I'm not at all sure. We're trying now to decide how we'll go about having a hearing. There's some that want to have a 99 Whole - 5/25/05 series of hearings, 200 a day, 200 different locations; and there's some like myself that want to have one hearing for all the locations.
Have you done anything about removing those signs in the years past?
No. But where we're going now, we are going to... We have ordered them to remove them themself, to make them legal or remove them. They have appealed that. And as soon as we win, which we will, we will -- they'll either remove them or we will charge them for the cost to do it.
Okay. So, if 100 Whole - 5/25/05 you don't win, are they subjected to this cost? Would they be a part of the billboard legislation?
It's a sign. I -- I -- I -- I think that the eight sheets, Councilwoman... I think the eight sheets are very, very improbable that they'll be ever legalized. They would have to go to get a zoning hearing in the community. And I -- I can't fathom any community that would go and support that that sign be there. So, I -- I don't see them ever being able to legalize them, to answer your question. In our -- In our mind they were never going to be legalized because they would never get by the zoning aspects of it.
So they're on the side of a building. They are illegal. 101 Whole - 5/25/05 We haven't done anything in the years to take them down. So, what will you do to enforce their coming down, if they are still on the wall, and you have won your hearing.
If they don't take them down, we will. That's part of what we're doing.
Well, not the unit itself, but we'll go about hiring someone to do it, yes.
What about... I just want to be clear on what we are being asked to charge for. What... If I'm looking at a billboard... Those are billboards up there (Indicating). Am I paying -- Is the charge -- Is the fee on the face of the billboard? What are -- What are we asking the companies to pay for and who will make -- 102 Whole - 5/25/05 who will pay?
-- if you're on a -- along the highway on a pole in the air, and you have two faces --
If there was only one sign where the camera is, it would be 650. So, it's how many faces you have. I -- I -- I -- I -- I've never really remembered seeing a sign with three faces on it, but it's going to be -- Each face will be $650 is what --
I considered the structure the -- the -- the pole, the steel that holds the sign face up in the air. I consider that the structure.
Okay. So, does the person who own the structure is the company.
I... Yeah, they -- 104 Whole - 5/25/05 They own... I'm sure they own it, yes. Either that or the landlord owns it, and they pay rent to put the sign there. I'm not contractually sure how that works.
So when they put a advertisement on that structure, they have to pay the $650 or does the person who is advertising pay the $650?
The -- The -- The -- The company that owns the sign company, let's say it's a, b, c company...
-- sign that's there. They would charge Wawa to advertise Wawa on their -- And that's the way that would work.
Councilwoman, 105 Whole - 5/25/05 under Bill 451, the tax bill, the company that would be placing the ad would be subject to or liable for paying the outdoor advertising tax. So that there are two different bills before you --
Whoever is placing the advertisement there would be responsible for paying the tax. The tax would be collected by the person who owned the billboard or the structure but -- and then remitted to the City, but the payer would be the company that was placing the advertisement.
I think that's what much of the discussion has been about, even though the testimony has not been presented.
Thank you. The Chair recognizes Councilwoman Brown.
Thank you, 107 Whole - 5/25/05 Madam President. Good afternoon. I'd like to go back to Councilman Cohen's line of questioning, wherein the question was posed the amount of taxes that are collected. And I believe the response was, we have to wait to see what L & I provides before a judgment can be made on the level or amount of taxes collected. Is that accurate?
Well... Yes. We only know at this point the largest firms. In order to give you a clear picture of what the tax status is of all of those involved, I would like to get from L & I an updated list of the firms involved, so we can do the tax status check, and tell you whether or not the firms as a group, as an industry, are tax compliant or not, and what the total amount of tax paid by that group would be.
What in-house procedures do you have in place that allow the two departments to talk to each other on this issue, I mean from a technological standpoint. 108 Whole - 5/25/05
Well, this is a small number of firms, so we would probably just be getting a list, either an e-mail list or -- or -- or a file from L & I, so that we could then check our records.
How often does communication happen between the two departments on this issue?
Well, we're increasing that communication as L & I installs a new system. We're talking about doing some of these things on an electronic basis instead of manual. In the past it's been largely manual.
My observation is that tightening and fine tuning of the electronic communication would remove us at a different place with regards to the collection of taxes for those who are not paying up.
One of the things that we've been talking about, and I believe Bill 53 -- 453 that's before you, would actually require is that before L & I issues 109 Whole - 5/25/05 a license or a renewal, that they would be verifying the tax status of the company that was seeking that license. That's something that we haven't done on a regular ongoing basis in the past, and we would be establishing an electronic link in order to do that. There have been a couple of efforts at that in the past but nothing on a formal and ongoing basis.
Also, we have in place a business privilege license which part -- to get that license, you need to also go to Revenue to get a tax I.D. number before we'll issue it. So that, we -- You know, we -- You know, to do business you need that license. So, that's a communication we have daily.
And that is actually done -- can be done via the internet now. And both the tax I.D. number and the business privilege license are issued as a result of that one link through the internet.
So am I hearing that given the revelations that the 110 Whole - 5/25/05 Commissioner spoke of during budget hearings that the department has, in moving towards formalizing standard operating procedures around this issue.
Well, it really gives us an opportunity in Revenue to match our files with theirs. When we weren't able to have systems talk to one another, we were relegated to manual operations. As we each advance in our system capabilities, we'll be able to do more and more of these things electronically. But we do have to remember that we'll have to establish the rules --
-- about what it is that we're going to be cross checking --
-- and how that information is going to be used, in part because the revenue data is subject to business confidentiality requirements, and things like that. So, basically, what we'll be doing 111 Whole - 5/25/05 is indicating they are in compliance or, no, they're not in compliance; they need to see us, as opposed to a full detail on what the issues are, in terms of the tax.
Thank you for your testimony. Thank you, Madam President, Madam Chair.
Talking about taxes, these owners of the eight sheets, do we collect any tax from them at all?
I don't know who they are. That's one of the things we are going to be doing, in terms of doing a tax status check for you. I -- I -- I don't know.
I -- I -- I -- I would have to do some -- Dave, do you -- you --
The name of the company 112 Whole - 5/25/05 is Chesapeake Outdoor Advertising, is the name of the company.
So... And we've never gone after them for taxes? Do you ever turn the information over to revenue about this --
I can't tell you today, and actually because of confidentiality wouldn't be able to give you explicit information about a specific vendor. But to the extent that our checks will find that they are or are not in compliance, if they're not in compliance, we will pursue them.
Can I ask one more question -- someone else's light's on -- and I'll be finished. How many... How many companies own billboards in the City who have licenses to do billboards?
We have an inventory of nine -- nine companies that are doing business as billboard advertisers.
Okay. And how 113 Whole - 5/25/05 many of these eight sheets do we have? How many of those?
Yes. 900 eight sheets in the City of Philadelphia, and that's give or take one or two. It's not meant to be an exact count. We estimate that to be the number.
So how many -- Out of the nine billboard owners, how many billboards do we have up?
There's roughly... Out of the nine there's roughly, as we testified earlier, roughly 4700 in the City of Philadelphia.
Is that how you calculated the $4 million that's in the revenue estimate?
We -- We calculated based upon the number of legal signs in the City that --
We -- We have a sign face estimate here that we -- we didn't bring a lot of copies of it. It was meant to serve as a cheat sheet for us, which we're willing, if you want to make copies of, we're willing to share with everybody.
You're 115 Whole - 5/25/05 welcome. Councilman Cohen, you're next.
Before, Commissioner, you stated in response to a question that if something's not legal, we tell them to stop doing it or we'll take care of it. They either get rid of it or we do; is that right.
Yes. Well, tell me: Is that the direction you followed with billboard companies? Because there's a Supreme Court decision involving signs near or on Conrail property down in... It's visible from FDR Park in South Philly. It's in South Philly, where the Supreme Court of Pennsylvania ruled two years ago -- maybe a little less or a little more than that -- that the signs were clearly illegal. 116 Whole - 5/25/05 And the City has done nothing about causing the signs to come down, saying you can not do it because the other side has filed a suit in equity, permitting the other side, meaning the billboard companies, to relitigate the whole issue, while the billboard companies are making signs desecrating that whole site.
I -- I -- I would have to defer to the Law Department. I know that --
The enforcement unit of the Law Department has been working on that. What I'm saying -- To answer that question that you quoted me on --
-- was going forward, you know, with this bill, and -- and the revenues generated by it. We will be able to enforce, if the sign companies won't. There's an enforcement piece in there for us to be able to -- 117 Whole - 5/25/05