Councilman, last 17 week when we were in the Committee of the 18 Whole, this is the business privilege tax 19 bill that was originally introduced last 20 September. 21 There were amendments last week that 22 changed some of the schedules in the bill, 23 and reduced the five-year cost of the bill. 24 It also eliminated the guaranteed 12-year 25 schedule of reductions and made them only 285 Whole - 5/25/05 five years of reductions and significantly lowered the cost of the bill. We made amendments in the Committee of the Whole last week on this particular bill. So it's already been amended. And at some point, if -- whenever we get to the public meeting, it would, along with all these other bills, be in a position for action by the body.
But the impact of 12 the -- Tell me if I'm right or wrong. The 13 impact of this bill would lessen the tax revenue the City would receive.
The effect of this bill would be to lessen the amount of revenues the City could expect from the present schedule of business taxes.
Councilman Nutter actually circulated what the bill would, quote unquote, cost over a five year period before we had to revisit it. But I think the question that Councilman Cohen is asking can be answered in a different way also, about whether there will be less business tax revenue as a result of this bill. And I don't think that answer is yes. I believe that answer is no. 18
All right. Is there any other discussion on this bill? (No response.)
Seeing none, we will now refer to Bill Number 050001, and that is the capital budget. MR. McPHERSON: Councilman Cohen, Bill Number 050001 is the ordinance that 287 Whole - 5/25/05 Council would be -- if Council approved, would be approving the capital program for the fiscal years 2006 through 2011.
The Chair recognizes Councilman Ramos. Your light is on, sir.
Okay. Any questions or discussions. You have amendments to offer on the capital?
Madam President, we're being handed now proposed amendments to Bill 050001. 288 Whole - 5/25/05 Where are these amendments emanating from? Are these amendments that have been generated by Council in our discussions or are these the Mayor's amendments?
Okay. I want to make sure that we're clear because, I mean, there's been a lot of discussion over -- a lot of discussion over the past number of months relative to changes in the budget, capital and operating. And we're being handed this stuff without any kind of authorship on it. And I want to make sure Council members are clear as to where these are coming from and where they're not. So I want to make it clear that these are the Mayor's proposed amendments to the capital budget. I assumed earlier when we received this marked-up copy of the operating budget, these are also the Mayor's proposed amendments to the operating budget.
I would like to have the Chair make that clear, that whatever the sergeant-at-arms is distributing, you know, is coming from the second floor, not from the fourth.
And I think it was stated by Miss Reed that she is circulating the amendments now, and you also have testimony.
My name is Diane Reed, and I'm the Budget Director of the City of Philadelphia. I appear before you --
Excuse me. 290 Whole - 5/25/05 Do you have copies of your testimony?
Give it to the Councilman, please. Do all Council members have a copy of Miss Reed's testimony? Please proceed.
I appear before you today to offer testimony on Bills Number 050001 and 050002 which propose to establish the City's fiscal year 2006 to '11 capital program and capital budget and the fiscal '06 capital budget. Today we propose modifications to add additional appropriations necessary to carry forward all unobligated funding from the fiscal '05 appropriations, and we ask 291 Whole - 5/25/05 that you treat these bills as companion bills. In this proposed amendment, all unobligated general obligation PICA and revenue bond capital appropriations have been carried forward from prior years, with few exceptions. These exceptions fall mainly into four categories: One, unspent appropriations for which projects have been completed under budget; two, aviation projects that were either funded with other sources or completed; three, water payroll costs which do not carry forward; and four, state and federal grant appropriations which did not materialize. There are a large number of projects that have been included in the carry forward budget at the direct request of City Council members. I can assure the members of Council that all the remaining funding for these projects have been included in the carry forward amendment proposed today. 292 Whole - 5/25/05 This recommendation does not include the lapsing of any unencumbered funding for projects of this nature, whether or not those projects have been completed. Other than the addition of the carry forward appropriations, there is one other proposed modification to Bill Number 050002 as introduced. The requested modification is to add a general obligation appropriation of $1 million in fiscal '06 for improvements to existing facilities. I would be happy to answer any specific questions that Council may have related to the recommended capital budget and program as presented. Thank you.
Miss Reed, is the $7 million that Council approved in '05 being carried over to '06?
Can you tell us what page it's on, so that we could... 293 Whole - 5/25/05
It's in the ITEF section. It's line number 66-A of the program and of the budget. It's a similar line in recreation, 66-A.
Pages aren't numbered. It's very difficult to find it.
You have to go to recreation and then find the line number. Sorry.
The Mayor has indicated that if we were to do the budget as he submitted, and approved the taxes which he also submitted, that he would be committed to spending the money. I would like to know from you, is that also your understanding?
My understanding is that one million of this would be used to fund a capital eligible group of employees who would work on recreation related projects out of the seven million. And it would have to be determined the fate of the other six million.
That 294 Whole - 5/25/05 wasn't my question. The Chair recognizes Councilman Nutter for a point of information.
Madam Chair, do I understand we're talking about line 66-A?
I don't know what line we're talking about because they're not numbered. Pages aren't numbered, and I can't find it.
No. I understand that. But this is in ITEF, various facilities? (Unidentified speaker, microphone off, not reportable.)
66-A is $11 million. In FY'05. I'm just trying to understand what does that represent. And the discussion that you just had with Miss Reed about a million 295 Whole - 5/25/05 dollars and a commitment to spend it, I found it difficult to follow that.
There's $7 million in that which was proposed by Council as an increase.
Yes. And we are proposing that one million of that would be used -- of this carry forward amount would be used to fund capital eligible projects.
Four of that is the previously offered amount by the administration, four million.
Miss Reed, I 296 Whole - 5/25/05 have to admit that I literally have no idea what you're talking about. I mean, I just, you know, maybe have reached the maturity level that I could say that publicly. But I just -- I have no idea what you're talking about.
Four million of this was budgeted for Councilmanic districts in '05, and the other seven is the amount that Council added.
Okay. And is that four million different than the four million in the line above, in line 66?
Okay. So then you said the administration offered four, Council added seven. And of the eleven, you're now saying a million of that is going to some capital eligible pay for employees to do what?
Okay. So now I'll get back to the original question, which 297 Whole - 5/25/05 is: What happens to the other ten million?
Well, four of that was the amount that was previously budgeted, and the balance is really six, which really needs to be determined.
Well, then, what do you mean it needs to be determined?
This is the money that was under discussion since, I guess, last year's budget was passed. Right now there is no plan on how to spend this money. The administration would need to work with Council on it to determine how to spend that money, if it's to be spent, the six million.
Why wouldn't you just divide it up, the way you have in the past? I don't understand it. What do you mean you don't know what you're going to do with it?
The Mayor had not 298 Whole - 5/25/05 intended that this money would be spent originally from '05. So, it will need to be determined what will happen with the six million. We also have at line --
At line 61, they're under 10 the Managing Director's in the Managing 11 Director's section, there is a million dollars added for Councilmanic districts, both in the program and in the budget.
Let me ask this question: If the 11 stays where it is right now, and this gets approved, what happens to it?
Well, four of it has already been budgeted to projects. Of the seven that has not been budgeted, one would be used for capital eligible recreation projects, using a special team.
And then, what are you going to do with the other six? 299 Whole - 5/25/05
That will not be spent or there would be a determination at some point.
And what are the projects that are funded with the four million dollars? Is this FY'05 money or is this carryover from FY'04?
And is the carrying over because we were not allowed to spend it or it wasn't authorized for spending or it just hasn't been designated for anything?
Okay. And it's been designated for projects already throughout the City?
Well, of the $4 million, how much is designated for projects?
That would be up to each individual Council person. We do not have 300 Whole - 5/25/05 that information with us, but we can get it back to you.
I think the question is, why hasn't any of the $4 million been spent?
It's possible that some of that has been designated. We just don't have it.
Why isn't it reflected in what's been presented to us?
It's probably because the loan authorization bill did not pass in the spring, but rather in the fall. And none of it was available for spending until January -- December, January '04, '05. These carry forward numbers are as of the end of March. So they didn't all get designated within a three-month period.
Do we have assurances from the administration that whatever we put into the budget will be spent? And I'm talking about both capital 301 Whole - 5/25/05 and operating.
On the operating side, yes. On the capital side, there is still a $6 million amount that will have to be determined. The goal really is, in moving the Council appropriation, is to keep it at the same proportionate level to the overall spending limit for the capital budget each year, rather than having it take a larger share, if it increases in the amount proposed by Council.
Should we have gotten something like nine million in '04?
In '04 Councilmanic -- the ten Councilmanic districts were budgeted for 1.2 million.
Okay. Is there any other conversation and questions, suggestions regarding the capital budget? Yes. The Chair recognizes Councilwoman Tasco.
Back to the 302 Whole - 5/25/05 improvement to existing facilities. Improvement to existing facilities, line 66. Is that $4 million programed out through 2006?
The improvement to existing facilities, line 66, ITEF.
Are you looking at the program. So, this is '06. And the proposed for the out years.
Now, what is 303 Whole - 5/25/05 that four million? Where is that from? That's money you said hasn't been spent.
And the four million we were speaking of was a different line item. There just happened to be two lines under four million, that have a $4 million component in them. Each line represents a separate budget year.
Councilwoman, the $11 million was never spent. Correct?
Some of the four million 304 Whole - 5/25/05 of it may have been spent.
Four million of the 10 eleven million, some of that may have been 11 spent. That is the loan -- is referenced -- with reference to the loan authorization that I mentioned earlier.
Well, what about improvement to existing facilities '04, seven million 850. What is that?
All of the line items in the ITEF section are City Council projects.
And that's money that was appropriated but not spent.
Okay. 305 Whole - 5/25/05 MISS REED: Each of them is a different year. '05, '04, '03, '02, and so forth.
Okay. So, let's go back to the million because I 7 don't understand the 11 million. Maybe a 8 little thick. 9 It was $11 million. Where does $4 10 million come in? Is that the four million in 11 line 66?
No, no. This is a line item that has its own characteristics, one of which was four million which was what was in the budget from the administration, an additional seven that Council added. Out of that seven --
-- the administration is now proposing to use one million for special capital eligible projects.
Okay. So the four million was proposed by the administration. 306 Whole - 5/25/05
Okay. All right. All right. Okay. So it's $11 million, none of which has been --
Some of the four may have been spent. As we said, the loan authorization was late. So, there have only been three months in which any money could have been spent.
And they are for projects that are approved by the Council, District Council members.
Okay. There are any projects -- any of this money used for any facilities determined by the administration?
Is there any discussion on the capital program? (No response.)
Seeing no 20 one, we will then consider Bill Number 050002, and that is an ordinance regarding the capital budget. Ms. Reed. We're still in the hearing.
Yes. The amendment is in the Managing Director's line which is a million dollars. Line 51, Managing Director's Office, capital projects various. That has been increased from two million two twenty-five to three million two twenty-five which is a hundred thousand dollars per Councilmanic District.
Both of them, same line in both the program and the budget, 406.
Is the amendment in a separate form or is it within the big document that's been handed out.
It's within both big documents on line 51 of the Managing Director's Office capital projects various.
Their pages are not numbered. Read the page through the Managing Director.
The amount is three million two twenty-five. It previously had been two million two twenty-five. That is the one -- That is the one amendment that can be, you know, clearly identified by changing the amount. The amount of the proposed amendment is $1 million. It has been changed from two million two hundred twenty-five thousand to three million two hundred twenty-five thousand which provides a hundred thousand per Councilmanic district.
Citywide facilities, line 51, says three million two 310 Whole - 5/25/05 hundred twenty-five.
Correct. And in our previous submission, that was two million two hundred twenty-five.
(Indicating.) Yes. The amendment is a million dollar. The change is $1 million.
So when you submitted the first budget to us, it had how much in it?
I'm trying to tell you, that's the same thing here on this sheet.
Not at line 51. You should have... My version has three million, two hundred twenty-five thousand. So, I hope you have the same as mine.
It would 311 Whole - 5/25/05 probably be helpful if you had the strikethrough or something.
All right. All right. I'm not hearing you. Thank you. I'm sorry. I'm not hearing you.
I think maybe part of the issue is... It's just a suggestion for the future. Even with this kind of document, it might be helpful if -- Normally in an amendment situation we see the strikeout. So if you had reprinted the 2.225 and then replaced it with the 3.225, that may have --
Okay. It may have been helpful. Thank you. Madam Chair, can I just... Just so we wrap up on the $11 million, and the whole floor discussion and the seven, if this bill 24 moves forward with the $7 million in it, I'm assuming the effect of that is four million 312 Whole - 5/25/05 is guaranteed, a million of the is supposed to go to pay for employees to do capital improvements, and in essence we have authorized $6 million in capital improvements under a category of improvements to existing facilities, for which there is no commitment at the moment from the administration to spend those dollars. Is that the end result of the situation?