Committee Hearing, March 7, 2000

That's what we have to do, right?

I think I actually missed your question.

But we're basically back to the checkbook and we're balancing checkbook.

That's right. 43 Bill Nos. 79, 90, 82, 83, 84, 85

So Mr. Matthews and Mr. Cronin and everyone else in here have people that are smart enough to figure this out. So we know what's in the budget and we know what's not in the budget. They knew there was a deficit before. That's why the Administration said before -- and believe me, I don't think it was morally right. I'm not playing to the crowd, but I came from a labor background. But what happens is, they have people who study, they know it's in the budget and they know what's projected. We know what's projected. So if someone promises a president of a district council something, how many times can they get you? Once, only once. Hopefully, that won't happen. We've got to go on here and we've got to do other things. As much as I expected Mr. Cronin to come the other day to say that, I expect Mr. Matthews to do his job, too. Because if I was in that district council, I wouldn't vote for either of them if they did the opposite. That's the beauty of this whole process. But as long as the number crunchers realize what we're doing, and as long as we can get our own people like these young people here to study the numbers to make sure they're not 44 Bill Nos. 79, 90, 82, 83, 84, 85 lying to us because those people that aren't capable to study the numbers hire people that can. So nobody's fooling anybody. We know what's in the budget. Pete knows what's in the budget. They deserve a good contract. And that's all I'll say on that. (Applause.)

My last question, Madam President. Someone said this a long time ago. We're not making sausage here. This stuff comes in looking one way, as Councilwoman Tasco just told you, and comes out looking another way because that's what the process is all about. Now, I know you're sitting there and beads of sweat are coming down your head saying "What is this guy asking me?" That's why I let you off the hook a little because you're only the point man here. You're doing your job, just like they're all doing their job. They're concerned about their job. So that money will be there. We could sit down for the rest of the year and figure out why we can't do something, but we can't actually jump ahead to the day Pete's contracts up and say, "You know what, the Administration screwed them again. They 45 Bill Nos. 79, 90, 82, 83, 84, 85 did it again." That's not going to happen. (Applause.)

Let me tell you why that won't happen. Let me give you the most important advice why that won't happen, because the guys sitting on the second floor only one his office by 1.4 votes a polling place, 1.4 votes. That's me and my wife going deciding we don't want to vote for someone. And that's you and your wife, and him and his wife, and so on and so forth. So anybody that wants to do this job after -- you got him four years. The guy wants to do eight years. I would love to negotiate your contract with terms on your side, on your side. So as far as I'm concerned, and that's just my opinion --

I think the Mayor has said he's committed to having fair contracts.

But Councilman Nutter's questions are very fair. And because it looks unfair to these people sitting here with their banners going "You say there's really no money, but where does the money come from?" I know you understand. And I don't know why I understand finally; by osmosis, where this all 46 Bill Nos. 79, 90, 82, 83, 84, 85 comes from. It's not real money, folks. But it's your money. It's the tax money you take down. They never take that money and hand it to Mr. Dubow. John Street never touches that money. Anne Verna never touches that money. God's Sake, they don't let me near that money. (Laughter.)

You know why? Because that money is not real money. They move it around. The bankers see the money. Believe me, there's money somewhere. Now, Nutter, he's smart enough to figure out where that money is. And if it's hidden, Michael knows where it is. And that's a compliment, Councilman Nutter. There's money there and there's going to be money there. Because if there's not, you guys get screwed again and what happens? You don't vote for this guy for Mayor in four years. He's not Mayor in 4 years, it's that simple, right? Thank you. (Applause.)

The Chair recognizes Councilman Kenney.

Thank you, Madam 47 Bill Nos. 79, 90, 82, 83, 84, 85 President. Mr. Dubow, I want to return a moment to the issue of revenue neutrality which was raised by Councilman Nutter. Is it the Administration position for the record that any subsidy, potential public subsidy for the construction of new stadia will be in fact revenue neutral as it relates to the operating budget and to the five-year plan?

That's the Administration's intention, yes.

Now, is it the Administration's position for the record that any public subsidies spent on the construction of new stadia will in fact be absolutely revenue neutral?

That's our position.

So in other words, there will be no additional General Fund dollars outside the computation of wage tax and other tax revenues that relate to the construction and maintenance of the two teams in the facilities in the City and that we will not be spending additional general fund dollars over and above that neutrality?

Outside of the revenues generated by the new stadiums.

Thank you very much. 48 Bill Nos. 79, 90, 82, 83, 84, 85 I just wanted to make sure I got that on the record. Thank you.

Thank you. The Chair recognizes Councilman Rizzo.

Thank you, Madam President. Mr. Dubow, the follow-up on the question, where is the money coming from, can you explain to me -- right now we don't know where the Eagles facility is going to be or do we know where the Phillies stadium is going to be located. In the event that those stadiums aren't built on land presently owned by the City of Philadelphia and we have to buy an Acme facility or the tea warehouse in South Philadelphia, where does the money come from?

I guess it would depend on how the deal was structured. It would most likely, I guess, rolled into bond issue and then we'd be paying debt service on it.

Can we afford to do that?

It would go back to the same analysis of looking at the revenues generated from the new stadiums. 49 Bill Nos. 79, 90, 82, 83, 84, 85

Can we afford that?

We would look at the numbers to make sure we could afford it.

At this point, don't you think we should know what those numbers are?

We haven't gotten into negotiating a stadiums deal, which I think is part of the reason this hearing is on a practice facility and not on the stadiums in general because we're not far enough along in that process to answer questions like that.

Thank you, Madam President.

You're welcome. Again, we are here today to consider the practice facility, not the stadiums. I've given everybody latitude so that everybody could have their voice heard. But as I said, from here on, we simply talk about the practice facility. At this time, the Chair recognizes Councilman Goode.

Thank you, Madam President. I hope you will give me a little bit of 50 Bill Nos. 79, 90, 82, 83, 84, 85 latitude also.

Since everyone was given that latitude, I would certainly afford it to you.

Mr. Dubow, let's talk about revenue neutral. Is it or is it not true that not only has this City spent hundreds of millions of dollars on the last several years on economic development projects, but they plan to spend hundreds of millions of dollars over the next several years?

The City spends a substantial amount of money on economic development projects, yes.

So we can simplify, getting back to Councilman Mariano's questioning, I think he was along the right path. Let's discuss some of the economic development financing. There is several million dollars in a practice facility right now from the economic stimulus program. Can you tell me the source of those funds?

It's economic stimulus dollars that came from the General Fund.

But how did it come 51 Bill Nos. 79, 90, 82, 83, 84, 85 from the General Fund, out of what sources? There was attach link (ph) sale and the sale of port proceeds; is that correct?

I'm not sure.

For the record, having been on the other side of this, it's sale port proceeds and attach link sale created a pot of money up to $100 million, some of which went to the School District, others which went to an economic stimulus program. Could that money have been used for labor contracts? (Applause.)

That money, could have gone to the General Fund, yes.

So we don't want to go down that path again, but other money that was spent, particularly on hotel development, HUD 108 funds, could you explain where HUD 108 funds come from?

I'd actually rather have someone from the City's Economic Development side talk about that because I don't know the details.

Let me save some 52 Bill Nos. 79, 90, 82, 83, 84, 85 time. Having been on the other side again in the executive branch HUD 108 funds are funds that are borrowed against future community development block grant funds, secured against future community development block grant funds. Could those dollars been borrowed from the federal government for labor contracts?

Again, I don't know.

The answer to that question is no. On the first source of funding, the economic stimulus funds, some funds could have been used for labor contracts depending upon how the money flows into the General Fund. Other money which is borrowed, whether it's from federal government or whether it's from other private sources cannot be used for labor contracts. Rather than just the term revenue neutral, can we as we begin to discuss this project talk about how we make it revenue neutral in terms of packaging and financially?

Yes. As we go along with the project.

Thank you, Madam Chair. No further questions. 53 Bill Nos. 79, 90, 82, 83, 84, 85

Thank you. Are there any other questions or comments from Members of Council? The Chair recognizes Councilman Ortiz.

All the money for the debt service comes from the General Fund?

That's correct.

A lot of monies that we may spend on either the practice facility or the stadiums later on will go and will be produced by issuing a bond; is that correct?

That's correct.

And those bonds will have to be -- and the debt service from that will have to be paid from the General Fund?

That's correct.

And since we don't have any idea how much it's going to cost, because we don't have any idea -- last night there were 400 people in South Philadelphia complaining about citing and what that might mean. Since we have no 23 idea what it might cost in terms of where this place might be at, those two stadiums, the cost can go much higher than we anticipate right now; isn't that 54 Bill Nos. 79, 90, 82, 83, 84, 85 so?

We don't have a deal.

That's exactly it. You cannot make any predictions. So you cannot make any predictions as to how much money from the General Fund will be needed in order to be able to finance any deal that we may come to; is that true?

Well, what I've said is that it's too early to look, to be able to project either the revenues or the expenditures, but that the Administration's position is that the revenues that this will generate will be able to pay for those expenditures. That's the approach we're going to take in the deal.

But we don't have an idea in terms of expenditures.

Councilman Ortiz, I just don't think we're being fair to Mr. Dubow. We're talking about stadiums.

Thank you, Madam Chair. That's all.

Thank you. Are there any other questions or comments from Members of the Committee? 55 Bill Nos. 79, 90, 82, 83, 84, 85 Hearing none, this Committee will stand in recess until tomorrow, Wednesday, March the 8th at noontime. Thank you.

The School District hearing that was supposed to follow will be recessed until Wednesday at 2:00 p.m. Thank you. (Adjourned at 11:20 a.m.) - - - 56 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of March 7, 2000, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE OF THE WHOLE ___________________________ Lisa C. Bradley, RPR and Notary Public