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Committee Hearing, March 20, 2002 (part 1)

Minutes from Philadelphia City Council Committee Hearings, Mar 20, 2002

People mentioned

Names our system found in this transcript. Automatically extracted, so it can include anyone named in the record, not only officials or parties.

Councilman Cohen

Move it up closer, 587 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY really close.

Mr. Doosey

Is that better (indicating)?

Councilman Cohen

You're beginning to improve. Just don't be afraid of it. Bring it very close to you.

Mr. Doosey

I can't get much closer, sir.

Councilman Nutter

There's a whole lot of room there. (Laughter.)

Mr. Doosey

It's per my discussion with Joan Stern, who is bond counsel for the school district.

Councilman Nutter

Ms. Stern is known to many of us, and she is an excellent bond lawyer. What is your knowledge and understanding of Ms. Stern's understanding of what the state legislature is going to do or not going to do? What are we relying upon to know that the state legislature is going to take that particular action on March 26th?

Mr. Doosey

Frankly, I do not think that I nor Ms. Stern, if she were here, could give 588 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY anyone any guarantees or assurances.

Councilman Nutter

Then let me ask this question. Suppose the legislature does not take that particular action on that day or some number of days, if not a month or so later, and you float bonds and now have bondholders, and that on June 28, 2002, the City Solicitor is not able to provide the letter certifying that the General Assembly has taken the necessary action to either provide relief from Act 46 or alleviate any double counting concern that the City has. What do you do at that point? Because we know that the millage rates will not shift in accordance with Section 2 of Bill 020033 or 32. What happens then?

Mr. Doosey

Well, I think from a practical matter I cannot close on the bond transaction until that certification from the City Solicitor is in hand.

Councilman Nutter

So your position now is regardless of what we do, whether we do this now, whether we do it later, until you have the certification from the City Solicitor or until all of us know, because I'm assuming we're all going to 589 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY know at the same time, that the necessary relief has taken place, you can't close on the deal?

Mr. Doosey

That's correct.

Councilman Nutter

So then you're saying that as a result of that, until the legislature takes whatever action is necessary, you can't borrow the $300 million?

Mr. Doosey

That's correct because at the moment the school district is precluded from doing deficit financing at all and the Act 46 relief is part and parcel of the same proposed bill that also opens up the deficit window for the school district.

Councilman Nutter

Then let me ask this question. Why don't we just wait and see whether the necessary action is taken? You're not going to run out of money. You're going to get the $45 million in '02 anyway. And at that point in time you don't need the money on May 15th because you now have enough money to operate until June 10th.

Mr. Doosey

Until June 10th. But the only thing that throws that timing off is it is a minimum of 35 days from start to finish to close on the bond. Again, I believe I answered previously in 590 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY the beginning of this particular piece of testimony that to delay an action in this body for two weeks does back up the time frame on the bonds, but still leaves just enough time to close the transaction.

Councilman Nutter

Based on what you just said, if Bill 020040 passed immediately and you received the $45 million, you know for a fact that you're guaranteed to be in business at least until June 10th.

Mr. Doosey

That's correct.

Councilman Nutter

If you back that up 35 days, that takes you to May 5th; right?

Councilman Nutter

In which case you don't actually need final authorization on this part of the transaction until May 5th; isn't that right?

Mr. Doosey

Well, from a practical standpoint, I would need it a little bit earlier than that simply because --

Councilman Nutter

May 1st.

Mr. Doosey

May 1st. I would be engaging underwriters to interest them.

Councilman Nutter

And you'd need about a week or so? 591 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY

Mr. Doosey

Correct.

Councilman Nutter

So if you get the $45 million now, you actually don't need action on the millage transfer bills until May 1st; right?

Mr. Doosey

For ballpark dates, yes, that's correct.

Councilman Nutter

So we don't have to do this right now; right?

Mr. Doosey

We don't have to? Could you clarify what you're proposing?

Councilman Nutter

We don't have to move on Bills 32 and 33 right now based on the scenario that we just had a discussion about; isn't that correct?

Mr. Doosey

Are you defining "right now" as today, sir?

Councilman Nutter

Today, tomorrow, Friday, one day next week. You have until May 1st if you get the $45 million in the FY '02 appropriation from Bill 020040. If you get that $45 million, you don't need action on the millage transfer bills, give or take a day, until May 1st.

Mr. Doosey

We're fighting over a week. I agree with you. Yes. We're fighting over seven 592 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY days. I agree with you.

Councilman Nutter

Which seven days are you talking about?

Mr. Doosey

I'm much more comfortable with a late April date. You're suggesting May 1st.

Councilman Nutter

I took May 1st based on you run out of money June 10th. 35 days from June 10th is back to May 5th. You said you needed a week before that. I'm willing to give you May 1st. Maybe the actual date is April 27th.

Mr. Doosey

The only distinction I would make, though, is I would not only need for the $45 million an appropriation in this body. I would actually need cash transfer by the City.

Councilman Nutter

I'm sorry?

Mr. Doosey

Not only would I need for the 45 million, which is the one-time grant for fiscal year '02, not only would I need action in this body to appropriate it, I would need transfer of funds by the City.

Councilman Nutter

I mean, Mr. Doosey, as you well know, if we approve a bill on a Thursday, it can be signed that day. Then you'll go have the pleasure of dealing with Mr. Dubow, 593 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY Ms. Davis and all the folks over there. We don't write checks here. But I'm sure for this transaction you could probably get like an overnight transfer of funds electronically through the Federal Reserve system; right?

Mr. Doosey

The question that the City has raised, though, which is also one that Mr. Kenney raised previously, is the actual transfer of funds -- no, I'm sorry. I'm confusing '02 and '03. Yes. I'm sorry.

Councilman Nutter

Okay. So we can agree here that if you get authorization and transmittal of the $45 million on a fairly ASAP basis, you do not need Bills 32 and 33 to be approved by this body until sometime in late April; is that correct?

Mr. Doosey

That is correct.

Councilman Nutter

Okay. Thank you.

Mr. Doosey

Can I make one correction to yesterday's testimony while I'm here, please?

Council President Verna

Yes, please.

Mr. Doosey

Yesterday there was some discussion at length over Latin and the elimination 594 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY of a Latin program. I was factually incorrect. It is not high school Latin for eight positions that were proposed as a reduction in the budget. It is middle school and elementary Latin. High school Latin has not been proposed to be changed next year whatsoever. I'm just correcting the testimony.

Councilman Nutter

Isn't it a little easier to learn Latin in your early grades as opposed to high school?

Mr. Doosey

I'm sorry. What was that question, Mr. Nutter?

Councilman Nutter

Isn't it a little easier to learn Latin in your early years than it is in high school?

Mr. Doosey

Speaking for myself, I had enough trouble in high school.

Councilman Nutter

Exactly. Many of us have had that situation.

Councilman Cohen

Yes.

Councilman Nutter

I think for all the language arts it is clearly easier to learn and understand them as early as possible as opposed to a later possible time. 595 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY I mean, what's the educational reason that you would do that?

Mr. Doosey

It's a recommendation that the finance department made to the academic side of the house and they accepted.

Councilman Ortiz

Point of order.

Councilman Nutter

I'm sorry. Say that again.

Mr. Doosey

It's a recommendation that the finance department made based on programs that have the lowest impact to the lowest number of students. And it was discussed with the academic side of the house at the School District of Philadelphia.

Councilman Ortiz

Councilman Nutter, if I may. Madam President, if I may.

Council President Verna

Councilman Ortiz.

Councilman Ortiz

It seems that accountants are making public educational policy. He says the finance department recommends and they make -- the accountants are making --

Mr. Doosey

It's a proposal, sir. COUNCIL ORTIZ: -- pedagogical 596 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY decisions?

Mr. Doosey

It's a proposal based on my professional expertise. I do not hold myself out as an academic professional.

Councilman Ortiz

But you're not making it as a pedagogical concept; right? You're making it because it saves money.

Mr. Doosey

That is correct.

Councilman Ortiz

I thought you were in the business of educating?

Mr. Doosey

The school district is in the business of educating. My personal function within the school district is finance and accounting.

Councilman Ortiz

By eliminating educational programs.

Mr. Doosey

That's your statement, sir.

Councilman Ortiz

No, that's what you just said, you're eliminating educational programs.

Mr. Doosey

I am recommending the elimination of eight teachers in middle school and elementary school Latin. That is the extent of the programmatical changes that were included in the budget documentation. 597 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY

Councilman Ortiz

Again, you're making public policy educational decisions based on economics.

Mr. Doosey

I'm making a recommendation, sir. That's all I can say. The recommendation is frankly free to be overruled by the academic side of the house.

Councilman Nutter

Let me just, at least for myself, Mr. Doosey, say you're going to try to do your job at the best level that you can. But, I mean, this situation is somewhat akin to the finance and accounting office of the health care systems determining how long someone should stay in the hospital. I mean, they're not making a medical decision. They're making a financial decision. And I understand that you've got to look for cost savings wherever you can. And if you say that the education side of the house agreed with that particular proposal, then our next stop should be with the educational side of the house as to why anybody would recommend the curtailing of language arts in the early grades as opposed to the later grades. I mean, we don't necessarily have to 598 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY have an educational debate with you about it. But there is some similarity to I think that particular analogy.

Mr. Doosey

And frankly, as a parent, I would share your concerns if the number of programmatical recommendations or changes in the budget detail that I presented was larger. But since this is the only item on there, I have a different view.

Councilman Nutter

I understand. Thank you, Madam Chair.

Councilman Rizzo

Point of information.

Council President Verna

The Chair recognizes Councilman Rizzo.

Councilman Rizzo

Mr. Doosey, a minute ago you said you're an accountant, not a lawyer.

Mr. Doosey

That's correct.

Councilman Rizzo

Now, I assumed your recommendation -- and I'm trying to make sure I'm clear here -- that you made a recommendation to eliminate certain --

Council President Verna

Latin.

Councilman Rizzo

Latin.

Mr. Doosey

One program. Correct. 599 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY

Councilman Rizzo

You made a recommendation. And your obligation is to look at different programs, make a recommendation to the academic side. That obviously was -- your recommendation was accepted; is that correct?

Mr. Doosey

Yes. It was proposed. It's subject to additional changes. This is the preliminary budget.

Councilman Rizzo

I'm trying to be helpful here. You made a recommendation. The recommendation is accepted. You're off the hook. Your job is to make recommendations, and if the academic people say you're correct, then it isn't really your decision.

Mr. Doosey

Correct.

Councilman Rizzo

You made a recommendation, and if certain things get axed based on your recommendation, it's the academic side of the house that makes that happen; is that right?

Mr. Doosey

That's correct. It's the academic officer that's responsible for academics, just as I'm responsible for finance operation.

Councilman Rizzo

But you are also -- 600 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY and we talked yesterday with the reform commission about various programs that need to be looked at, which they claim they're going to look at. But you've already started to look at some of the programs at the district and make -- and questioning those. And ones that you've already questioned, some action on the academic side of the district, they've already started to make some decisions on those programs. Is that what I'm understanding?

Mr. Doosey

The functions that I referenced yesterday were actually on the business side of the house, not the academic side of the house. When I made reference to the fact that we're in the process of going through function by function, they would be more along the lines of purchasing, transportation, print shop, et cetera.

Councilman Rizzo

But if you saw something, you have a responsibility to question.

Mr. Doosey

I have a responsibility to flag it, yes.

Councilman Rizzo

Exactly. And I think that it's appropriate that you do that. And if the academic people buy in, then that's the way business 601 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY is conducted. Very good. Thank you, Madam Chair.

Council President Verna

I think it would be safe to say that there aren't too many youngsters in grade school that were taking Latin.

Mr. Doosey

No. That's part of the rationalization.

Council President Verna

Thank you. The Chair recognizes Councilman Kenney.

Councilman Kenney

Thank you, Madam President. I would request that Secretary Kahn take the witness table again. I would like to get a few issues clear for the record prior to the public testimony. (Ms. Kahn came forward.)

Council President Verna

I would just like to remind my colleagues that we do have students here and they have to leave before 77:00.

Councilman Kenney

I understand. This is important for the record.

Council President Verna

I understand. I understand. We're just being pressured for time, which I think is unfair.

Councilman Kenney

It seems the way of 602 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY the world in this place the last two years, doesn't it?

Council President Verna

Councilman Kenney.

Councilman Kenney

Thank you very much, Madame President. Secretary, just a few issues.

Council President Verna

I'm sorry. We must have silence. Thank you.

Councilman Kenney

Thank you, Madam President. Madam Secretary, I just want to make sure we understand for the record that it's clear that what the administration is asking this council to do is a number of things. One of the first and most routine things we're being asked to do in the course of this Committee of the Whole is to approve legislation which would reauthorize the collection of certain taxes that the City does on an annualized basis and it's been done as a matter of custom for many years and they're basically very innocuous bills that we approve every year.

Ms. Kahn

That's correct. And there 603 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY are two ordinances in that regard.

Councilman Kenney

The other issues that we're being asked to do is re-approve a $45 million allocation or transfer ordinance to the school district which we authorized I guess last year on a 17-0 vote and the Mayor, for reasons of not having it protected due to Act 46 requirements, vetoed the bill and basically sent it back. We're being asked to reauthorize that 45.

Ms. Kahn

That is correct, with the same condition that there be the appropriate legislative exemption for those funds.

Councilman Kenney

So unless there's an amendment basically carving out that $45 million from Act 46, we won't be spending that money again.

Ms. Kahn

He makes the same commitment.

Councilman Kenney

Thirdly, and also as part of the Mayor's proposed 2003 budget, there's a $20 million item in there basically as a grant to the school district which we anticipate moving forward in perpetuity.

Ms. Kahn

As part of the budget. Correct.

Councilman Kenney

As part of the 604 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY budget, not part of what we're dealing with here.

Councilman Kenney

And the final thing we're being asked to do, which is I guess the most controversial and the most complicated, is two bills which would change the millage, the millage on the real estate taxes, which results in a $25 million shift basically from the City side of the real estate tax revenues to the school district side of the real estate tax revenues. And the purpose of that $25 million would be to incur a deficit financing, a bond issue of $300 million or whatever the $25 million would enable the SRC to borrow.

Ms. Kahn

That is what we have stated, that that would be the purpose. But as I also indicated on the record in response to another question, there is nothing in the legislation that dedicates those funds for that purpose.

Councilman Kenney

But that's the intention.

Councilman Kenney

And we are now also embarked on an effort to have the State, based on 605 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY Governor Schweiker's promise or commitment, to put up $75 million additionally for the school district out of the legislature; is that correct?

Councilman Kenney

Whether or not we receive the $75 million from the legislature in this budget process, it is the intention of the SRC and/or the administration, whoever makes that decision, to move toward, to spend the $45 million that we've committed to in the past and to also go ahead and borrow $300 million in deficit financing money, which would translate into a 30-year borrowing, amounting to an approximately $750 million payment over 30 years by the taxpayers of the City of Philadelphia.

Ms. Kahn

As part of the agreement that also triggered the support for the $75 million, the deficit financing was part of that package.

Councilman Kenney

Whether or not we get the $75 million, it is the intention of the SRC and the administration to move forward and to borrow the $300 million in deficit financing anyway.

Ms. Kahn

The timing of the actions, as we had understood them, was such that it would be 606 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY necessary to take the action. But again, I do want to point out -- and this is a secondary issue -- but that there is also protection in the millage ordinances in front of you that there not be a double counting provision either.

Councilman Kenney

Right. But whether or not we get the 75 million from the State, it's every best intention of the Governor, of the Mayor, of some many leaders of the legislature to get this done. If it does not get done, the $75 million additional, we will proceed to borrow $300 million, based on the $25 million debt service provided by the millage change, to move forward and borrow that money; is that correct?

Ms. Kahn

We believe that we need to proceed with that action.

Councilman Kenney

So, in other words, the schools will remain open despite the fact that there's the lack of $75 million and potentially the lack of a long-term solution to the statewide funding crisis for education. We will move forward, borrow that money, encumber the taxpayer and keep the schools open as long as they can stay open based 607 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY on money we borrow.

Ms. Kahn

Without the $75 million, it is a considerably shorter bridge.

Councilman Kenney

But we're going to do it anyway.

Ms. Kahn

We believe that we did not see an alternative and that that was the best alternative available to us.

Councilman Kenney

Knowing that, and the legislature knowing that, what leverage do you believe -- with the exception of people's word and best efforts, what leverage do you think that the City has once the legislature knows and the Governor knows that the schools are not going to close for a period of a year and a half to two years?

Ms. Kahn

Well, first of all, I think that the best leverage we have is honoring the commitments and taking the best efforts we have to honor those commitments as best we possibly can. I think that the "leverage," if we want to use that word, the importance, the extreme significance of this issue is what we have always had. In the end, we do not and nobody else controls that legislative body. 608 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY

Councilman Kenney

So the scenario exists potentially that we will give $45 million to the school district, an additional $20 million in perpetuity through this 2003 proposed capital budget, we will borrow $300 million, indebting the taxpayer to a $750 million nut over the course of 30 years, and we have no guarantee that the State is going to come up with the $75 million or with a long-term funding solution for the School District of Philadelphia or for any other district throughout the State of Pennsylvania. We're still going to embark down that road.

Ms. Kahn

Supporting the kids in the best possible way that we can is what --

Councilman Kenney

I didn't talk about supporting kids because, see, if we're going to go -- Councilman Cohen, could you just move back. I'm talking to the back of your head, which I don't mind, but it's a little distracting. No one is talking about not caring about the kids. Every time we get into a discussion of a difficult financial question, we go back to caring about the kids. There's not a person in this room 25 that doesn't care about the kids in this room or the 609 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY kids in that district or the kids in every other school in the City.

Ms. Kahn

I agree with that.

Councilman Kenney

The bottom line is, is that we potentially in a year and a half to two years, without State help, are going to hit a financial wall again. But the difference between now and then is we'll be $750 million worse off than we were today.

Ms. Kahn

I think that there are other differences as well.

Councilman Kenney

Is that a major difference? Is that a major difference?

Ms. Kahn

That is a major difference. I would also say that if we are successful and there is statewide funding reform and there is significantly more revenues, those bonds could be paid off in a much shorter period of time.

Councilman Kenney

There's no doubt about it. And if we have cold winters for the next couple years, the Gas Works will bail themselves out of their problem. I mean, there's a lot of if's. And I'm not saying that the if's shouldn't be pursued. All 610 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY I'm saying is it is extremely naive and very short-sighted to send this City down this fiscal path with no, and I mean no guarantee or no even assumption that that 75 million or that statewide tax reform or that statewide funding formula is going to change in any way, shape or form. We are simply, from our perspective, with what we know right now, with the information that we have, we are encumbering the taxpayer of Philadelphia for $750 million over 30 years and we are going to potentially in a year and a half to two years hit a fiscal wall again without any guarantee of reform. Is that a fair statement?

Ms. Kahn

We've already testified that there are no guarantees in any of this, but that the environment -- and to ignore this fact is I think a mistake -- that the environment has changed significantly.

Councilman Kenney

Where?

Ms. Kahn

Throughout the Commonwealth of Pennsylvania with all of the other school districts who are experiencing these very, very serious, both educational and financial problems. 611 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY And I think that it would be a mistake to ignore that.

Councilman Kenney

That may be the case. But the one thing for sure, the one thing that is definitely for sure is that the taxpayers of this city will spend $750 million over 30 years on a promise and on a hope that this is going to happen. And I think that may be a bit naive. Thank you.

Council President Verna

The Chair recognizes Councilwoman Tasco.

Councilwoman Tasco

Maybe I'm not clear. I thought Mr. Doosey said that we couldn't float the $300 million without the permission from the State. Is that what he said?

Ms. Kahn

That is correct. There needs to be legislative authorization.

Councilman Kenney

Right now, we can only borrow 10 years out. The State needs to give us approval to borrow 30 years.

Council President Verna

Permission for 30 years.

Councilman Kenney

But, you know, the State will do that because we're not borrowing their 612 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY money. We're borrowing our money. They'll let us borrow 50 years out. What do they care? I mean, I don't think there's any indication on that legislation being approved that the State is any closer to providing $75 million or a long-term solution to this problem.

Councilwoman Tasco

And just to add to the concern that you raised about the rest of the state, which is the problem in trying to get the $75 million for Philadelphia because other representatives across the state are looking at their districts, which their concern lowers the effort to get the 75 million for Philadelphia because state representatives are saying -- and I saw it on television -- they want to help Philadelphia, but they can't do it at the expense of their students. So without having some leverage, I agree with Jim. I mean, we can borrow the money and it lets them off the hook and they go and fund the other state districts.

Councilman Kenney

And we come back again, with all due respect, and excuse me for the interruption, we'll be back again here in two years. 613 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY But the difference is the problems will be more severe and we'll be more in debt. Then what happens? I think we need to face this problem now, don't borrow this money until we get the 75 and some promise of long-term reform or we're just throwing good money after bad.

Councilwoman Tasco

Madam President, I'm finished.

Council President Verna

You're finished?

Councilwoman Tasco

Yes. I just wanted a clarification.

Council President Verna

Thank you. The Chair recognizes Councilman Cohen.

Councilman Cohen

Wouldn't it be accurate, Ms. Kahn, to describe the City's efforts as being based on a hope and a prayer and nothing more?

Ms. Kahn

No. I think that they're based on very well thought out, very hard work, less than perfect solution because we do not live in this perfect world, but a lot of thought, a lot of research, a lot of effort to craft the best possible 614 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY solution under extraordinarily difficult circumstances.

Councilman Cohen

I guess I left out one important word: Faith. And I guess those folks who have not had much experience with the political system can have much more faith in it than those that have lived our life in the political system. And I say that because any plan designed to produce failure at the state level could not have been more perfectly planned than the plan that was put forth by Governor Schweiker in which he said I'm going to try to get the votes of the rural districts to give Philadelphia 75 million more each year and I'm going to do it by making each district representative have to explain to his people why his own district is hardly going to get any increase, but Philadelphia, the place they love to categorize as the headquarters for all sin and unhealthy practice of every kind, they're going to get $75 million. I think the whole plan at the state level was devised to ensure the fact that the legislature would never produce the $75 million for Philadelphia. How can any representative, Democrat 615 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY or Republican, vote to give Philadelphia all that money compared to a tiny 1 percent increase in that rural district's education budget?

Ms. Kahn

I believe that all of the concerns that have been expressed by the other representatives and other communities are very well taken. We have told them that on the record. And I believe that when it comes time for crafting the final state budget, they will have to address that issue.

Councilman Cohen

If it's something that has to be drunk to get that kind of faith, I hope you have enough of supplies to give it to all the representatives that have to vote on the bill 16 because it's a sure way to political suicide to shortchange your own district in favor of giving much more funds to the City of Philadelphia, which has been depicted for years and years as a place of sin and evil, as a place where money just gets thrown around and wasted. I just think it's such a practically impossible scenario to believe in that I'm stunned by the way in which it's being supported by the administration. 616 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY

Ms. Kahn

I think we've been commenting on that for a long time now. And we missed you, Councilman. So we're glad that you're here. Like you, I think I have been appalled over the years about the way that, one, as you put it, our city has been mischaracterized and our school district, as well as have the city support for public education has been undervalued and misrepresented. I think our kids have been done a tremendous disservice. We all feel that. We all believe that. But we have this very imperfect system in which we operate, and we need to be able to work out the best possible arrangements that we can within the parameters of that situation. And throughout all of this, throughout all of the years that we've been working on this, I haven't heard and I think none of us have heard what the alternative would be to this approach. So we crafted the best possible solution that we thought that we could, given the set of circumstances that we had. And it had to be something that could be acceptable to us and something that would be acceptable to the Governor's office. 617 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY

Councilman Cohen

What would the plan be if the scenario is as Councilman Kenney so clearly set forth? Suppose we're back two years from now. Your hope and prayer and faith with the state legislature has not established any more money for Philadelphia of consequence and we're back again. Is it your belief, is it the administration's belief that the City has the ability to finance the schools by itself?

Ms. Kahn

Obviously not. That's why we're in this situation that we're in now because the City does not, has not and will not.

Councilman Cohen

Then what do we do two years hence?

Ms. Kahn

Come up with a new approach. And none of us really wants to be here in that situation, which is why we have to do everything that we can in the intervening time during this period to take our absolute best efforts so that that doesn't happen.

Councilman Cohen

But if we know this isn't the time when it's possible to talk about a permanent solution because politically the situation 618 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY is going to be changed, there's going to be a different Governor, Democrat or Republican, beginning in January.

Councilman Cohen

There are going to be different members of the House and the Senate at the state level beginning with the month of December. Their term begins a month earlier than the Governor's term does. We can understand why it's difficult now to arrive at a permanent solution. Why would this be a time to undertake this very heavy and onerous bond debt for the next 30 years? Doesn't it make sense to say this isn't the time to make any long-term plans?

Ms. Kahn

Because the cash situation wouldn't allow us to do otherwise. We had to address the issue now.

Councilman Cohen

The State has much greater resources than the City has, hasn't it?

Ms. Kahn

Certainly, it does. And the state is putting far more into, one, on the ongoing operation of the public schools, and two, into this particular deal.

Councilman Cohen

Why isn't the Mayor 619 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY pushing that lawsuit that united community groups, that united the City of Philadelphia to compel the State to meet its constitutional obligations?

Ms. Kahn

There's no action that's been taken on the part of the City administration that jeopardizes our ability to pursue that lawsuit at the right time.

Councilman Cohen

At the right time? What could be more of a right time than a time of urgent need such as now, when you say in your previous testimony that people have developed their understanding of needs greater, and therefore, there's a greater likelihood of success?

Ms. Kahn

Because pursuit of that lawsuit right now would have jeopardized our ability to get any kind of a hearing, whether it's on the part of the General Assembly or the Governor's office. It's just a fact that we may not like, but it is a fact.

Councilman Cohen

It may be that this body may vote for insanity because apparently the Mayor is a very charismatic figure who somehow may be able to produce nine votes at some time. But I think that will be a terrible mistake. I think it 620 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY belies the whole concept of the legislature's responsibility and ability to handle finances for the City. But it makes absolutely no sense in a time of uncertainty to undertake this very onerous financial burden for the citizens of Philadelphia at a time when we need so many things in the City that we can supply because of lack of finances. Thank you, Madam President.

Council President Verna

You're welcome. Are there any other questions or comments by members of the committee? I beg your pardon?

Councilman Cohen

I would like to have whatever he's called --

Council President Verna

Councilman.

Councilman Cohen

-- the finance officer.

Council President Verna

Councilman, would you be very brief.

Councilman Cohen

Yes.

Council President Verna

Because, as I indicated, we do have the students here and they 621 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY must take the bus back before o'clock. 3

Councilman Cohen

Yes. 4

Council President Verna

Mr. Doosey. 5

Councilman Cohen

Mr. Doosey, so that 6 the record is clear, will you tell us what caused 7 you to make the recommendation to eliminate the teaching of Latin in the middle and elementary schools so that eight Latin teachers can be cut from the staff? MR. Doosey: First, for clarification, they would be reassigned to other teaching duties if they're so certified. My decision -- my recommendation was based upon the relatively small number of students and the fact that it was an enrichment program. It was not for credit in the middle and elementary schools.

Councilman Cohen

You were not concerned with how the rest of the country is going to look at the results of that, that Philadelphia is so poor that it no longer can afford to teach Latin to students who desire it because I understand that was a volunteer choice by students; right? MR. Doosey: That is correct. It's an enrichment program. 622 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY

Councilman Cohen

So we're going to cut down on the number of options given to students? MR. Doosey: That was the one recommendation that I made, sir.

Councilman Cohen

And you feel that that shows the reform character and the advance of programs of the School Reform Commission? MR. Doosey: Sir, my recommendations go to senior management as recommendations only and the decisions are made at that level. I implement policy. I don't make it.

Councilman Cohen

Well, if you are in a position to make a proposal and that proposal gets accepted, whether you would like to feel it or not, you are engaged in changing the whole pedagogical approach in the City of Philadelphia. And what you're doing is portraying before the world that Philadelphia, instead of moving forward and increasing the options for its students, is contracting. MR. Doosey: Sir, with all due respect, I'm facing a financial situation where I'm in a deficit position. So when I take a look at what the school district currently operates, yes, 623 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY unfortunately there was a decision that I recommended that a program be changed. This is the sole program. That is correct. It was in the context of the deficit situation that the school district finds itself in.

Councilman Cohen

Were you interviewed for the position you now hold by the reform control commission or any member thereof? MR. Doosey: Yes, sir.

Councilman Cohen

And did the question come up of what your position would be with respect to whether certain options can be afforded by the City of Philadelphia? Did you express the same view that you would examine them and feel free to make recommendations? MR. Doosey: I'm sorry. I don't understand the question. Would I? Could you restate it for me?

Councilman Cohen

The question is when you were interviewed, did any questions come up with respect to how you would determine your financial recommendations? MR. Doosey: Yes, it was -- did anything come up? I still think I don't understand. 624 3/20/02 - CONTINUING FY '03 SCHOOL BUDGET TESTIMONY You mean as far as how I would approach my position?

Councilman Cohen

Did you have any feeling that you were there for the purpose of enlarging the arena of education, of making it an educational system we could be more proud of, or that wasn't part of the equation of consideration for your choice? MR. Doosey: The discussions for my position centered more around my competency as far as an accountant and a controller and also as far as my ability to improve the control environment and efficiency of the school district.

Councilman Cohen

And your opinion is to make recommendations based solely on finances, no 17 matter what its impact would be on the educational environment? MR. Doosey: With all due respect, sir, my responsibilities relate to finance. I can't express an opinion on anything other than finance. I'm still having difficulty understanding the context of the question.