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Minutes

Committee Hearing, May 25, 2005

Philadelphia City Council Committee HearingsMay 25, 2005

People mentioned

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Organizations mentioned

Councilman Kenney

Okay.

Ms. Reed

Sorry for the confusion.

Council President Verna

The 86 Whole - 5/25/05 question has now been answered. Thank you.

Councilman Kenney

Can I proceed with a couple, just a couple other items, relative to...

Council President Verna

Councilman Kenney.

Councilman Kenney

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?

Mr. Solvibile

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.

Councilman Kenney

Not to make a profit.

Mr. Solvibile

Yes. 87 Whole - 5/25/05

Councilman Kenney

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?

Mr. Solvibile

You -- You -- You still -- You have to inspect to see that it's still safe.

Councilman Kenney

Right.

Mr. Solvibile

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.

Councilman Kenney

Right.

Mr. Solvibile

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

Councilman Kenney

And that's 9 amounted to an increase from 170 to 650 a 10 sign face?

Councilman Kenney

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?

Mr. Solvibile

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.

Councilman Kenney

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.

Ms. Kammerdeiner

Councilman, if I may add on that, the taxes are directed toward providing additional revenue that can be --

Councilman Kenney

Taxes, not -- Talking about fees.

Ms. Kammerdeiner

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.

Councilman Kenney

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?

Mr. Solvibile

Our people make inspections, Councilman.

Councilman Kenney

Do they climb up the pole and check it?

Mr. Solvibile

No, not at all. Not 91 Whole - 5/25/05 at all. They would not be expected to climb up the pole.

Councilman Kenney

Well, I don't expect that they would, but how do they determine that it's safe?

Mr. Solvibile

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.

Councilman Kenney

Is any of this money being related to the enforcement of the 92 Whole - 5/25/05 illegal signs?

Councilman Kenney

And is that fair to the legal sign owner? If I have a legal sign --

Mr. Solvibile

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.

Councilman Kenney

All right. Thank you, Madam President.

Council President Verna

Thank you. The Chair recognizes Councilwoman Tasco.

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

Mr. Perry

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 --

Councilwoman Tasco

What was illegal?

Mr. Perry

It was -- It was -- 94 Whole - 5/25/05

Councilwoman Tasco

The disparity in the rate?

Mr. Perry

That's correct. The disparity in the rate was determined to be illegal.

Councilwoman Tasco

So what did you do about that?

Mr. Perry

Well, nothing happened for several years. And when we started crafting --

Councilwoman Tasco

The -- The -- The... A ruling was that the disparity was illegal, not the fact that you could collect the fee.

Mr. Perry

The -- The... We could still collect the fee.

Councilwoman Tasco

Right.

Mr. Perry

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.

Councilwoman Tasco

Was the $100 $100 a month or $100 a year?

Mr. Perry

It was $100 per year.

Councilwoman Tasco

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?

Mr. Perry

No, but we were charging them $25 a year.

Councilwoman Tasco

But you couldn't -- you didn't think you could charge them a hundred dollars? They make a hundred dollars in ten minutes.

Mr. Perry

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...

Councilwoman Tasco

Now are we talking about billboards on a mom and pop store or a sign?

Mr. Perry

No. I'm talking the sign. Let me use a Wawa, for example.

Councilwoman Tasco

Well, we're talking about billboards now.

Mr. Perry

No; we're --

Councilwoman Tasco

Is there a difference between a sign and a billboard?

Mr. Perry

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.

Councilwoman Tasco

Okay. Now, to me, that's a sign it's not a billboard.

Mr. Perry

Billboard is kind of a colloquialism.

Councilwoman Tasco

All right. So what are we -- what are we regulating here?

Mr. Perry

We are regulating non-accessory signs which are commonly known as billboards.

Councilwoman Tasco

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?

Mr. Perry

That is an accessory sign.

Councilwoman Tasco

Okay.

Mr. Perry

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

Councilwoman Tasco

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.

Mr. Solvibile

There's -- There's...

Councilwoman Tasco

What are you going to do about them?

Mr. Solvibile

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.

Councilwoman Tasco

Are they considered legal?

Mr. Solvibile

No. They're mostly --

Councilwoman Tasco

They're all illegal.

Mr. Solvibile

Unless proven otherwise, we believe they're all illegal.

Councilwoman Tasco

Have you done anything about removing those signs in the years past?

Mr. Solvibile

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.

Councilwoman Tasco

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?

Mr. Solvibile

The eight sheet. I believe so. I -- I...

Councilwoman Tasco

No. Will they or won't they?

Mr. Solvibile

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.

Councilwoman Tasco

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.

Mr. Solvibile

If they don't take them down, we will. That's part of what we're doing.

Councilwoman Tasco

Will this new enforcement unit take them down?

Councilwoman Tasco

Let me ask you a question --

Mr. Solvibile

Well, not the unit itself, but we'll go about hiring someone to do it, yes.

Councilwoman Tasco

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?

Mr. Solvibile

Who will what?

Councilwoman Tasco

Who will pay?

Mr. Solvibile

Who will pay.

Councilwoman Tasco

Who will pay.

Mr. Solvibile

If you -- If you're a non-accessory billboard --

Councilwoman Tasco

Mm-hmm.

Mr. Solvibile

-- if you're on a -- along the highway on a pole in the air, and you have two faces --

Councilwoman Tasco

Mm-hmm.

Mr. Solvibile

-- let's say the face where the camera is --

Councilwoman Tasco

Mm-hmm.

Mr. Solvibile

-- the sign where the camera is --

Councilwoman Tasco

Mm-hmm.

Mr. Solvibile

-- and the one to the left of that --

Councilwoman Tasco

Right.

Mr. Solvibile

-- that would be $650 a sign face.

Councilwoman Tasco

Mm-hmm. 103 Whole - 5/25/05

Mr. Solvibile

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 --

Councilwoman Tasco

Per year? Per month?

Mr. Solvibile

Per year.

Councilwoman Tasco

Per year. What were you talking about the structure?

Mr. Solvibile

I considered the structure the -- the -- the pole, the steel that holds the sign face up in the air. I consider that the structure.

Councilwoman Tasco

Okay. So, does the person who own the structure is the company.

Councilwoman Tasco

Are they advertising companies?

Mr. Solvibile

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.

Councilwoman Tasco

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?

Mr. Solvibile

The sign company. The sign company. Let's say --

Councilwoman Tasco

The company that owns the structure.

Mr. Solvibile

The -- The -- The -- The company that owns the sign company, let's say it's a, b, c company...

Councilwoman Tasco

Right.

Mr. Solvibile

... owns the outdoor advertising --

Councilwoman Tasco

Right.

Mr. Solvibile

-- sign that's there. They would charge Wawa to advertise Wawa on their -- And that's the way that would work.

Ms. Kammerdeiner

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 --

Councilwoman Tasco

So the 451 is for the --

Ms. Kammerdeiner

-- and that's separate --

Councilwoman Tasco

-- advertiser, "X," "Y," "Z" mayonnaise company --

Ms. Kammerdeiner

Whoever is --

Councilwoman Tasco

-- to pay the $650?

Ms. Kammerdeiner

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.

Councilwoman Tasco

So the advertiser pays. 106 Whole - 5/25/05

Ms. Kammerdeiner

That's correct.

Councilwoman Tasco

Okay. So let's go. Have we got to 53 yet?

Ms. Kammerdeiner

I think that's what much of the discussion has been about, even though the testimony has not been presented.

Councilwoman Tasco

So now who pays in Bill 53?

Mr. Solvibile

The owner a, b, c sign company.

Councilwoman Tasco

They paid the $650.

Mr. Solvibile

Per sign face, yes.

Councilwoman Tasco

Per sign face. Okay. All right. Okay. Thank you.

Mr. Solvibile

Thank you, Councilwoman.

Council President Verna

Thank you. The Chair recognizes Councilwoman Brown.

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?

Ms. Kammerdeiner

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.

Councilwoman Brown

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

Ms. Kammerdeiner

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.

Councilwoman Brown

How often does communication happen between the two departments on this issue?

Ms. Kammerdeiner

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.

Councilwoman Brown

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.

Ms. Kammerdeiner

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.

Mr. Solvibile

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.

Ms. Kammerdeiner

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.

Councilwoman Brown

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.

Ms. Kammerdeiner

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 --

Councilwoman Brown

Sure.

Ms. Kammerdeiner

-- about what it is that we're going to be cross checking --

Councilwoman Brown

Sure.

Ms. Kammerdeiner

-- 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.

Councilwoman Brown

Thank you for your testimony. Thank you, Madam President, Madam Chair.

Councilwoman Blackwell

Point of information, Councilwoman Tasco.

Councilwoman Tasco

Talking about taxes, these owners of the eight sheets, do we collect any tax from them at all?

Ms. Kammerdeiner

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.

Councilwoman Tasco

L & I knows. You know who they are, right?

Mr. Solvibile

I -- I -- I -- I would have to do some -- Dave, do you -- you --

Mr. Perry

The name of the company 112 Whole - 5/25/05 is Chesapeake Outdoor Advertising, is the name of the company.

Councilwoman Tasco

So... And we've never gone after them for taxes? Do you ever turn the information over to revenue about this --

Ms. Kammerdeiner

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.

Councilwoman Tasco

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?

Mr. Perry

We have an inventory of nine -- nine companies that are doing business as billboard advertisers.

Councilwoman Tasco

Okay. And how 113 Whole - 5/25/05 many of these eight sheets do we have? How many of those?

Councilwoman Tasco

900 eight sheet billboards in the City?

Mr. Solvibile

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.

Councilwoman Tasco

So how many -- Out of the nine billboard owners, how many billboards do we have up?

Mr. Solvibile

There's roughly... Out of the nine there's roughly, as we testified earlier, roughly 4700 in the City of Philadelphia.

Councilwoman Tasco

4700 billboards?

Mr. Solvibile

Billboards.

Councilwoman Tasco

Billboard faces?

Mr. Solvibile

Bill -- Bill faces, yes. 4700. 114 Whole - 5/25/05

Mr. Solvibile

4411 is the exact number, Councilwoman.

Councilwoman Tasco

Is that how you calculated the $4 million that's in the revenue estimate?

Mr. Solvibile

We -- We calculated based upon the number of legal signs in the City that --

Councilwoman Tasco

Of this 4711, how many are legal?

Mr. Solvibile

Roughly 2800.

Councilwoman Tasco

2800 are legal?

Mr. Solvibile

Yes, ma'am.

Councilwoman Tasco

Okay.

Mr. Solvibile

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.

Councilwoman Tasco

Would you, please? Thank you.

Councilwoman Blackwell

You're 115 Whole - 5/25/05 welcome. Councilman Cohen, you're next.

Councilman Cohen

Thank you.

Councilwoman Blackwell

You're welcome.

Councilman Cohen

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.

Mr. Solvibile

That's the direction we want to go in, yes.

Councilman Cohen

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.

Mr. Solvibile

I -- I -- I would have to defer to the Law Department. I know that --

Councilman Cohen

Could you do that and get us an answer?

Mr. Solvibile

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 --

Councilman Cohen

Right.

Mr. Solvibile

-- 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

Councilman Cohen

Well, why can't you enforce it now?

Mr. Solvibile

Right now there's --