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Minutes

Committee Hearing, March 6, 2006

Philadelphia City Council Committee HearingsMar 6, 2006

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON FINANCE - - - Monday, March 6, 2006 11:30 a.m. - - - Room 400, City Hall Philadelphia, Pennsylvania - - - BILL NO. 060011 - PGW Capital Budget Amendment BILL NO. 050661 - FY '06 Capital Loan Authorization - - - PRESENT: JANNIE L. BLACKWELL, Chair BLONDELL REYNOLDS BROWN MARIAN B. TASCO FRANK DiCICCO W. WILSON GOOD, JR. JUAN F. RAMOS - - - V A R A L L O Incorporated Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 BILL NO. 060011 - 3/6/06

Councilwoman Blackwell

This is the Committee on Finance. We are here to hear testimony on Bill Nos. 060011 and 050661. We will ask the Clerk to please read the title of the PGW Capital Budget Amendment, Bill No. 060011.

The Clerk

Bill No. 060011, and Ordinance amending Bill No. 050792 entitled, "An Ordinance Approving the Fiscal year 2006 Capital Budget providing for expenditures for the capital purposes of the Philadelphia Gas Works, subject to certain constraints and conditions, and acknowledging receipt of the Forecast of Capital Budgets for Fiscal Years 2007 through 2011" by approving a revised Capital Budget for Fiscal Year 2006 and by extending the timeline related to line item transfers.

Councilwoman Blackwell

Thank you very much. The Chair notes that we have a quorum. To my left, Councilwoman Marian Tasco; to her left, Council W. Wilson Goode; to his left, Councilwoman Blondell Reynolds 3 BILL NO. 060011 - 3/6/06 Brown. We also have to my right Councilman Juan Ramos, and we also have Councilman Frank DiCicco here. Good morning again. Please identify yourself, for the record, and begin your testimony.

Ms. Janet Parrish

Thank you, Madam Chairwoman. I am Janet Parrish, the Executive Director of the Philadelphia Gas Commission.

Mr. Craig White

Thank you, Madam Chairwoman. I am Craig White, Acting Chief Operating Officer for Philadelphia Gas Works.

Councilwoman Blackwell

Thank you. Thank you all.

Mr. Parrish

My testimony this morning has been submitted in writing on behalf of the Gas Commission. I won't read that or reiterate it at length. The bill before you does reflect recommendations by the Philadelphia Gas Commission adopted at various meetings in November and December 2005. Copies of those orders are attached to my testimony. 4 BILL NO. 060011 - 3/6/06 In brief, we are urging approval of three amendments to the Fiscal Year 2006 Capital Budget ordinance for the Philadelphia Gas Works. There are two new line items to be added to the budget and one recommendation that pertains to a short extension on the time frame within which the Gas Commission and PGW can perform year-end budget reconciliations via the line item transfer mechanism that Council has delegated the authority to us. I can speak to more detail to either line item, if you would like. But, in the absence of that, I would be happy to answer any questions. And we simply ask that the committee report this bill out favorably, with a suspension of the Rules so that first reading can occur at the next session of Council.

Councilwoman Blackwell

Thank you very much. Councilman Goode.

Councilman Goode

Thank you, Madam Chair. Quick question sort of unrelated to 5 BILL NO. 060011 - 3/6/06 the amendment. PGW floats its capital bonds. Where are the bond proceeds held afterwards, particularly as it relates to this matter? There is a capital improvement fund, a sinking fund, that is held by the city on behalf of PGW. And that is where all the bond proceeds go that fund PGW's Capital Program.

Councilman Goode

So it goes into the city treasury?

Ms. Parrish

It is related to the city treasury. It is held separately because of this separation of the General Fund for the city, and not commingle that, of course, with the revenue bonds held strictly and paid strictly out of PGW revenues. All the debt service, of course, is paid solely out of PGW revenues.

Councilman Goode

Do you know specifically where these bond proceeds will be housed? I am sorry, off the top of my head -- I'm not sure if Mr. White does. But Mr. Bogdanovich, who I believe is not with us 6 BILL NO. 050661 - 3/6/06 today, from PGW certainly could answer that question.

Councilman Goode

Could you forward that information through the Chair, and also who makes that decision?

Ms. Parrish

Of course.

Councilman Goode

Thank you.

Councilwoman Blackwell

Thank you very much. Are there further questions from members of this committee? Thank you. We will now ask the clerk to read the title of Bill No. 050661, the Fiscal Year '06 Capital Loan Authorization.

The Clerk

Bill No. 050661, An Ordinance authorizing the creation of a loan or loans to provide funds for and towards various capital municipal purposes; authorizing the Mayor, City Controller, and City Solicitor, or a majority of them, to sell bonds at public or private negotiated sale, setting forth the capital purposes and the amounts for which the proceeds of the loan or loans will be expended, including 7 BILL NO. 050661 - 3/6/06 reimbursement of city capital expenditures.

Councilwoman Blackwell

Thank you very much. We regret that the fire alarm may have held up some of our city folks. We do see Mr. Tustin, who is here. And we invite him. We have the Vince Jannetti also coming, and Clarena Tolson. But we certainly invite you up to give testimony and to take all the heat involved in the issue. Come forward. Mr. Tustin, please identify yourself for the record and begin your testimony.

Mr. Rick Tustin

Good morning. My name is Richard Tustin, and I am Director for the city's Capital Program Office. I'm, basically, here to give supporting testimony to the Finance Director. And I know he has testimony, I believe, prepared. I was hoping to wait until he completed his so I could then give the supporting testimony. I don't know whether my testimony will make sense without his prior to mine. 8 BILL NO. 050661 - 3/6/06

Councilwoman Blackwell

We do have a copy of his testimony. It includes topics of fuel tank replacements, City Hall exterior restoration, Police facilities, Fire facilities, Library facilities, and Fairmount Park.

Mr. Tustin

I would be more than happy to speak on those issues.

Councilwoman Blackwell

Fine. Thank you.

Mr. Tustin

Should I proceed?

Councilwoman Blackwell

Yes, please proceed. And to members of the committee, you do have this testimony in your packet.

Mr. Tustin

Good morning, Councilwoman Blackwell, members of the Finance Committee. As I said, my name is Richard Tustin, I am the Director of the city's Capital Program Office. I am here today to provide you with a snapshot of the many FY '06 planned capital projects which have not been able to move 9 BILL NO. 050661 - 3/6/06 forward due to the lack of authorization and the effects not having a loan authorization will have on the operations of city departments and the City of Philadelphia and the citizens of Philadelphia. Fuel tank replacements. The Pennsylvania Department of Environmental Protection has mandated that the city conduct remedial work on gasoline and fuel tanks at 27 of our sites, including 7 police and 10 fire stations. 7 sites, including the 3rd, 4th Police District, the 39th Police District, the 22nd, 23rd Police District must be completed by June 30 of 2006. An additional five sites, including other police and fire stations, will be funded through the FY '06 loan authorization. Without FY '06 funds, most of this work cannot proceed. Should a tank fail, the city will have to immediately close that facility or face a fine of up to $10,000 per tank per day at the facility until the conditions have been 10 BILL NO. 050661 - 3/6/06 rectified. City Hall exterior restoration. This project is presently focusing on the southern portion of the building. I am sure we have all looked at the north face of the building and the west face of the building, and you can see the difference from what it was to what it is now. When we bid this work, we only had sufficient funds to complete one-third of the area along the south face of the building, but felt confident that the FY '06 authorization would be approved in time to fund the balance of the contract. If additional funds are not available by August of 2006, this project will shut down. The continuing problems of roof leaks, rusting of cast iron, rotting of windows, and disintegration of the stone work and statutes will only worsen and, in the long run, cost the city more to correct. You may have noticed that we have had to take some protective measures around the building. Especially on the south side, 11 BILL NO. 050661 - 3/6/06 you will notice some netting up at the roof line, as well as some metal strapping. We have had to do this on portions of the stone work to temporarily hold it in place for safety reasons. Delaying this work will only worsen these conditions. I have a couple of examples of some metal cresting cast iron work that has actually fallen from the building over the past couple of years. I would be more than happy to show it to you, if you would like.

Councilwoman Blackwell

Yes. And while you are doing that, we invite Mr. Jannetti and Ms. Tolson to the witness table.

Mr. Tustin

The samples that I just gave to Mr. Christmas are pieces that have fallen off the roof already. And we have had to take measures to protect this. That ball is about 50 pounds, and it is at the roof line, which over 800 feet. COUNCILMAN DiCICCO: That looks like a bocce ball. 12 BILL NO. 050661 - 3/6/06

Mr. Tustin

Should that fall on somebody and hit the ground, forgetting about the person, it will probably go through the sidewalk and cause some substantial damage. Our concern, more than anything else, is life and safety. And if any of those issues were to fall and hit somebody, the city would be in terrible trouble. The next area would be police facilities. The roofs at Police District 12 and 18, the Accident Investigation Unit, the 13 Police Academy gym, have all exceeded their 14 useful life and frequently leak. 15 The problems have and will continue 16 to accelerate, if replacements are not undertaken within the next year. Leaks create interior damage and cause further habitability concerns related to environmental issues; such as, mold and mildew. Without an FY '06 loan authorization, this work will not be done. Fire facilities. The boilers at Engine 35 is leaking now. The boilers at Engine 25, 46, 55 are all over 40 years old. 13 BILL NO. 050661 - 3/6/06 Failure to replies these boilers could render the stations again uninhabitable. I said it better that time. Aged boilers can fail at any time, thus creating emergency conditions at these critical facilities. Although the design has been initiated for the work, construction cannot begin until funds have been authorized. The roofs at Engines 1, 2, 9, and 50 have exceeded their useful life and frequently fail. The problems have and will continue to accelerate, if the roofs are not replaced within the next year. And, as stated earlier, leaks can lead to interior and environmental issues, if not corrected. Cooling coils at the Fire Administration Building have exceeded their effective life and are in need of replacement. Failure of these coils will render the HVAC system unusable and cause the building or portions thereof to be uninhabitable. Note that these projects are also 14 BILL NO. 050661 - 3/6/06 currently in design; but, without FY '06 loan authorization, the work will not get done. Library facilities. Boilers and HVAC systems at Bustleton, McPhearson Square, Northeast Regional, as well as the cooling tower as Cecil B. Moore, require replacement. Roof replacements are required at the Welsh Road branch and the Chestnut Hill branch, as well as the replacement of the steps to McPhearson Square branch. Without FY '06 funds, these projects cannot proceed. Failure of these systems will more than likely require closing these facilities. Fairmount Park. Martin Luther King Junior Drive, some of us remember it as West River Drive, has become a regional recreation park as an extension of the trail system from Center City, past the Art Museum, to East Falls. Unfortunately, trail users have also experienced muggings and recently even a rape due to poor lighting and security. As the trail use becomes more intense in popularity, and popularity 15 BILL NO. 050661 - 3/6/06 increases, crime is likely to rise, causing concern for the recreational public. Without FY '06 funds, the construction of new lighting and security enhancements, which, again, is already in the works as far as design of these trails, will not go forward and will stop. As I stated at the beginning of my testimony, this is only a sampling of projects, albeit the most critical, which desperately need to move forward. I sincerely hope Council will consider these issues when they vote to move the FY '06 authorization ordinance forward. Thank you very much.

Councilwoman Blackwell

Thank you very much. Councilwoman Tasco has a question. She is happy to wait until all the testimony is provided. Mr. Jannetti, do you have any testimony?

Mr. Vince Jannetti

I don't have any prepared testimony, Councilwoman. 16 BILL NO. 050661 - 3/6/06

Councilwoman Blackwell

Thank you. Commissioner Tolson.

Ms. Tolson

Good morning.

Councilwoman Blackwell

Good morning. And we do have a copy of your testimony. We are happy to have you make it.

Ms. Clarena Tolson

Good morning to the members of this committee. I am Clarena Tolson, Commissioner of the Streets Department, and I am here today to present testimony on behalf of the department's Capital Budget funding request. The funding request is critical to our department's ability to fulfill its mission of clean and safe streets. Major projects for roadway resurfacing and reconstruction, bridge reconstruction, and improvements to traffic controls and street lighting will be significantly reduced or delayed. Without adequate funding, these projects would be in jeopardy. As such, our ability to maintain the safety of our infrastructure would be severely compromised. 17 BILL NO. 050661 - 3/6/06 The department is dependent on capital funding for both its street resurfacing and reconstruction programs. Resurfacing and reconstruction will cease in the fall of 2006, if the department does not receive the requested funding. The South Street Bridge is one of the department's largest and most critical public works projects, and failure to provide funding would delay the needed reconstruction of that bridge. The bridge is a major thoroughfare and is in dire need of replacement. If the structure is not replaced in a timely manner, we will be forced to consider closing the bridge as it continues to deteriorate, since we will be unable to mitigate through normal or routine maintenance. The department continues to move forward on improvements to our traffic control system to improve vehicular and pedestrian safety. We will not be able to install school flashers beyond July 2006. This is a 18 BILL NO. 050661 - 3/6/06 high priority for the city's School Safety Task Force and has significant impact on the safety of our school children throughout the city. The Streets Department and its employees continue to work diligently in the delivery of services to our citizens and neighborhoods and to improve the quality of life in our city by providing clean and safe streets. The Capital Program is a critical component of the department's ability to provide these services. Therefore, we request your favorable consideration to authorizing the loan request. Thank you so much.

Councilwoman Blackwell

Thank you, Commissioner. Councilwoman Tasco.

Councilwoman Tasco

Thank you. Good morning. On of the bill, you have outlined in Section 2 the appropriations for each department. You have $5,067,000 for 19 BILL NO. 050661 - 3/6/06 transit. What does that cover?

Mr. Jannetti

Let me get that for you. Councilwoman, this $5 million is primarily for SEPTA improvements that concern SEPTA. It is Broad Street Subway signal modernization; the escalator/elevator program at Pattison station and Olney Transportation Center, amongst others; Fernrock roof replacement; the Market-Frankford Elevated reconstruction program; the Market Street Elevated streetscape.

Councilwoman Tasco

Why are we doing SEPTA capital improvements?

Mr. Jannetti

These are funds that the city provides SEPTA through the Capital Budget.

Councilwoman Tasco

Now, I notice you had the Streets Department here to talk about their needs. Where is the Recreation Department? And you don't talk about it in the testimony. What is the money used for? You talk about the park. Didn't mention 20 BILL NO. 050661 - 3/6/06 Recreation. And I want to know what museum will benefit from that, if the museum -- there is a proposal to spend $150 million for capital improvement, and some of the museums are included. What museum would this be?

Mr. Tustin

Council person, I know there was some additional talk of some funding for museum purposes over and above the original submitted Capital Budget. I am prepared to talk about the funding that the Capital Program Office oversees on behalf of the Recreation Department, which includes all the ITEF funds, as you know, for the individual Council people, as well as their primary lines. Now, there are lines in the Recreation capital budget for cultural facilities. But, to be honest with you, I would like to get back to you with a definitive answer to that question. And I don't know that right now.

Councilwoman Tasco

Also, how much 21 BILL NO. 050661 - 3/6/06 is appropriated in this budget, do you know? Do Council districts get certain appropriation out of these capital funds to determine which rec facilities or whatever facilities we want to appropriate this money to? How much is in this?

Mr. Tustin

It is my understand the budget as submitted was $5 million for ITEF. I think that's --

Councilwoman Tasco

$5 million?

Mr. Tustin

4 million out of the Recreation line and 1 million out of the MDO line.

Councilwoman Tasco

MDO?

Mr. Tustin

Managing Director's Office. As you know, normally the funding comes from two sources; one is recreation, the other is MDO. That allows each Council person the ability to spend some of their ITEF on nonrecreation-type projects. Streetscaping, lighting in streets, things like that comes out of the MDO portion of that allotment. 22 BILL NO. 050661 - 3/6/06

Councilwoman Tasco

So that's about $400,000? $500,000 per district?

Mr. Tustin

Correct.

Councilwoman Tasco

Is that going to be designated to the districts or will that money be spent by the Capital Improvement Office?

Mr. Tustin

My understanding, Councilwoman, is that 500,000 would be designated to the individual districts as ITEF.

Councilwoman Tasco

Now, tell me about economic and community development.

Mr. Tustin

That usually is handled through the Commerce Department, so we are going to have to get somebody from commerce to answer those questions. As you may or may not know, the Capital Program Office does not manage the projects for Commerce, Aviation, Water, Streets. So, they need to answer those questions directly. I don't have those questions. 23 BILL NO. 050661 - 3/6/06

Councilwoman Tasco

Well, you all knew we were going to be a little senile from two years ago on this stuff. We weren't going to remember the testimony when you originally gave it on this request, this budget item. Which is a 2005 item?

Mr. Tustin

I don't have that in front of me, but I would be more than happy -- if you have it --

Councilwoman Tasco

We should have had the representatives from the department here so they can answer our questions, because this is an old, old bill.

Mr. Jannetti

We have just asked them to come over, Councilwoman. We have just asked someone from Commerce to come over.

Councilwoman Blackwell

It is always helpful if we have details for big numbers. Of course you all know that. And it has already been requested that we hold this bill. And, so, probably maybe on Thursday morning. We will hold this bill until Thursday morning at 9:00, and maybe then you 24 BILL NO. 050661 - 3/6/06 can get information to us and also have the other departments involved in this to come and be prepared to provide detail.

Mr. Jannetti

Okay.

Councilwoman Blackwell

Councilman Goode.

Councilman Goode

Thank you, Madam Chair. Good morning Mr. Jannetti. Has it been determined yet which institution would hold the bond proceeds?

Mr. Jannetti

Councilman, the bond proceeds, these are general obligation capital proceeds. They would be in con cash with -- these would be principally in Wachovia and PNC Bank.

Councilman Goode

Is that an agreement that's already in writing or is that just general practice?

Mr. Jannetti

That's the bank that we use for these funds.

Councilman Goode

Why is that?

Mr. Jannetti

Because we do have some type of -- I'm not sure if it is a 25 BILL NO. 050661 - 3/6/06 contract or an agreement with the institutions for these funds.

Councilman Goode

I made a request of the City Treasurer, I will make the same request to you; that we, essentially, prequalify all of our institutions that are already authorized for whether they can handle this trust and custodial work. I'm not satisfied that only Wachovia and PNC can handle these accounts. Essentially, they are not managing the money; they are just holding the money for investment managers. Is that correct?

Mr. Jannetti

Yes, sir, that is correct.

Councilman Goode

And what is the status of Wachovia's trust and custodial business? My understanding is they have sold it or are in the process of selling it?

Mr. Jannetti

The custodial business has been sold to U.S. Bank, the custodial side. That's on the bond side. But these funds are -- these funds are --

Councilman Goode

Go with the cash BILL NO. 050661 - 3/6/06 accounts?

Mr. Jannetti

Yes, part of con cash. It is not part of the business that's at U.S. Bank.

Councilman Goode

Thank you.

Councilwoman Blackwell

Councilwoman Reynolds Brown.

Councilwoman Brown

Thank you. Commissioner Tolson, good morning. I am looking at your testimony, of your testimony, wherein you give very brief discussion to the installation of the school flashers.

Councilwoman Brown

And I am at a serious disadvantage because I don't have my notes from months ago when we had telephone conversations around what was happening with the School Safety Task Force on this issue. So help me understand, where is this federal allocation in the mix of things? Is it at the school district? Is it with the city? Because it was my understanding that was going to be matched by the city. 27 BILL NO. 050661 - 3/6/06 And help me with this, so that we can get those school flashers up and started.

Ms. Tolson

The School District's money was $1 million. That is nearly spent.

Councilwoman Brown

That is spent.

Ms. Tolson

Not all spent; that is nearly spent. We probably have less than a handful of schools to do with that money. And then we will be using additional city monies through the Capital Program to do additional flashers. That's the comment I make here about probably -- we will probably have -- use our money by summertime, by July. We will use that up. There is additional funds that come from our Congressman, Congressman Fattah. That money is still going through a process of getting put on our TIP, being authorized for us to use in this way.

Councilwoman Brown

Define that for me. When you get getting put on our TIP, what is that?

Ms. Tolson

Right. That means 28 BILL NO. 050661 - 3/6/06 making it eligible for us to spend. Though it has been designated as something that's to come to the City of Philadelphia, it is still -- there is a process wherein federal funds, how they come to the city and how we are able to access it.

Councilwoman Brown

What's the status of that, do you know?

Ms. Tolson

I'm not sure of the exact status. I can find that out for you. But it will be some time before that money becomes available.

Councilwoman Brown

When you say, "some time," that means what? A year from now, months from now? 17

Ms. Tolson

Yes, a year, 18 months. 18

Councilwoman Brown

Is that typical, when the city is in position to receive federal dollars?

Councilwoman Brown

So there is no 23 nudging we can do from our end, since we know for sure that those dollars have been allocated strictly for the -- 29 BILL NO. 050661 - 3/6/06

Ms. Tolson

Yes, Councilwoman, actually, there is. And we are asking for some support on the federal level to help address this. And we are asking for support in the local level to help get it through the process faster, in terms of the review and approval for us to access the monies.

Councilwoman Brown

So is that a role for Council? Is that a role for the Mayor's Office? Or who?

Ms. Tolson

I will define that for you further and share that with you, how you can possibly help.

Councilwoman Brown

How many can we expect to see in place -- first of all, how many remain on the list? Or is that list a rolling list, it is always being added to?

Ms. Tolson

Yes. There are very few schools that remain on the list that have applied, very few. But we are also wanting to go past those that have applied and try to get more to -- 30 BILL NO. 050661 - 3/6/06

Councilwoman Brown

Take advantage of that.

Ms. Tolson

Absolutely. Right.

Councilwoman Brown

So how many more do you expect to see in place by July '06?

Ms. Tolson

By July '06, we should probably have another, I want to say, 15; 10 to 20. 11

Councilwoman Brown

You told me 12 this figure once before. What's the per-unit 13 cost for the installation? 14

Ms. Tolson

About 20, 25 thousand 15 dollars.

Councilwoman Brown

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

Councilwoman Blackwell

Thank you very much. Councilman Goode.

Councilman Goode

Thank you, Madam Chair. Mr. Jannetti, a couple of other questions. For the $150 million bond issue that's being proposed, has that bond issue 31 BILL NO. 050661 - 3/6/06 been structured yet?

Mr. Jannetti

No, sir.

Councilman Goode

It has not. So there will be time to prequalify what institutions can hold that money, if necessary?

Mr. Jannetti

Yes. Yes, sir. Yes. I was just going to say, we have a long road to go. But, yes.

Councilman Goode

Second question. And to the extent that U.S. Bank -- because my understanding is that U.S. Bank bought Wachovia's trust and custody business. And then my understanding, as of Friday, is the deal didn't fully go through yet. At whatever point the deal goes through, where they are to receive money -- because they have not received any prior bond proceeds yet; is that correct?

Mr. Jannetti

U.S. Bank would not have the bond proceeds; that would be with -- in con cash with Wachovia and PNC. The U.S. Bank would be on the debt service payments for the bonds. So when we go 32 BILL NO. 050661 - 3/6/06 to make a debt service payment on any day, funds would go to those folks.

Councilman Goode

I am actually not referring to these particular bond issues; I am referring to whatever proceeds that Wachovia was holding.

Mr. Jannetti

The proceeds, the bond proceeds, would still be in con cash in the capital fund, and would be with whatever money -- you know, it would be managed with whatever money manager manages those funds, investing on our behalf.

Councilman Goode

Let me be a little more specific, then. In 2005, on average, Wachovia held 1.3 billion in investment and trust accounts.

Mr. Jannetti

Yes, sir.

Councilman Goode

If U.S. Bank buys that business, does that money then go to U.S. Bank?

Mr. Jannetti

No, sir. They bought the corporate trust business. They bought the work on the bond -- the debt service payment side. 33 BILL NO. 050661 - 3/6/06 The funds you are speaking about are the tax revenues for General Fund, all funds in the Capital Program. And, you know, airport and water, that's still in --

Councilman Goode

So all of that is on the cash side?

Mr. Jannetti

Yes, sir.

Councilman Goode

Thank you.

Councilwoman Blackwell

Thank you, Councilman. Are there other questions from members of this committee? Councilwoman Reynolds Brown.

Councilwoman Brown

Yes. I simply want to confirm for the record that you will do the followup with me, Commissioner, regarding --

Ms. Tolson

The federal funding on the school flashers, yes.

Councilwoman Brown

Could I get a copy of that School Safety Task Force report? Is there such a report?

Ms. Tolson

There was a report last year, yes. 34 BILL NO. 050661 - 3/6/06

Councilwoman Brown

If you could see I get a copy of that. Send it to the Chair, if you will. Thank you.

Councilwoman Blackwell

Thank you. Mr. Tustin.

Mr. Tustin

Yes, Councilwoman. I wanted to respond to Councilwoman Tasco's question just a second ago concerning the money that was in the budget for FY '07 for recreation. And I can give you a breakdown. 1.7 million of it will go for Del East and Mummers Museum. 4 million of the total requested budget for Recreation is for ITEF for Council.

Councilwoman Blackwell

Would you begin again, move the mike a little closer so everybody can hear you.

Councilwoman Tasco

This is '05. You are saying this is the budget for '07?

Mr. Tustin

This is '07. I thought that's what you were referring to, the '07 budget. Or are you referring to the '06 budget? 35 BILL NO. 050661 - 3/6/06

Councilwoman Tasco

'06.

Mr. Tustin

My mistake.

Councilwoman Tasco

Isn't this June 16, '05, isn't this for the '06 budget?

Mr. Jannetti

This is for the -- yes, Councilwoman, it is the '06 loan authorization.

Councilwoman Tasco

We did not approve this to go on the ballot for this year?

Mr. Jannetti

That is correct.

Councilwoman Tasco

That is what we are talking about. This is '05, but it was for '06.

Councilwoman Tasco

So that's why I was asking about our minds being refreshed regarding these expenditures. The money in the '05 budget, was that money spent, appropriated to the district Council people, the '05 money?

Mr. Tustin

The '05 funding was appropriated. $5 million of ITEF was appropriated to Council people. That's 36 BILL NO. 050661 - 3/6/06 400,000 per district from Recreation and 100,000 from the Managing Director's Office.

Councilwoman Tasco

So that '05 money we can spend.

Mr. Tustin

'05, $500,000 of the '05 funding, you can spend. And, in fact, we have shown on each one of your spreadsheets for your use to spend in your Council district.

Councilwoman Tasco

What happened to the amended? We amended the '05 budget for us to get 1.2 million, I believe.

Mr. Tustin

Correct.

Councilwoman Tasco

And the Mayor signed it. So what's wrong with the ability to spend that money?

Mr. Tustin

We have not been given authorization from the Administration to spend any more than 500,000 of that 1.2 million per Council district. I know there has been ongoing discussions between the Mayor's Office and City Council, Council President Verna, concerning that $7 million. 37 BILL NO. 050661 - 3/6/06 I do not know what any conclusions have been on that funding as of right now, but I know that $7 million has been a point of issue.

Councilwoman Tasco

Is the money sitting someplace? Have you all spent any of that money.

Mr. Tustin

No, we have not spent any of that money.

Councilwoman Tasco

So the money is still waiting for us to be spent. Mr. Jannetti you seemed interested there.

Mr. Jannetti

No, Councilwoman. The truth of the matter is, the '05 authorization has not even been funded yet. But the funds are still -- the authorization is still there, is what I am trying to say.

Councilwoman Tasco

For the 1.2 million per district?

Mr. Jannetti

Yes. Whatever the breakdown.

Councilwoman Tasco

But you have been told not to spend the money? 38 BILL NO. 050661 - 3/6/06

Mr. Tustin

700 of that 1.2 million, correct.

Councilwoman Tasco

But the money is there?

Mr. Tustin

Correct.

Councilwoman Tasco

Is there any reason we can't?

Mr. Tustin

That is an issue I know has been in discussion between the Administration and Council President's office. I do not know the reason behind that, but I do know there is ongoing discussion.

Councilwoman Tasco

And, so, this bill dated June 16, '05, is for the '06 budget?

Mr. Jannetti

Yes, ma'am.

Councilwoman Tasco

And that's $5 million?

Mr. Tustin

Correct.

Councilwoman Tasco

And you need to get this on the ballot --

Mr. Tustin

Correct.

Councilwoman Tasco

-- this year in 39 BILL NO. 050661 - 3/6/06 order to have the appropriation to spend this money?

Mr. Tustin

Yes, ma'am.

Councilwoman Tasco

Thank you.

Councilwoman Blackwell

Thank you. Are there further questions from members of this committee? That will end the stated part of our deliberations. (Public hearing adjourned.) - - - 40 COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC MEETING of the COMMITTEE ON FINANCE - - - Monday, March 6, 2006 - - - Public Meeting conducted by the Committee on Finance, held in Room 400, City Hall, Philadelphia, Pennsylvania, on the above date, to consider action on the following: BILLS 060011, 050661 - - - PRESENT: JANNIE L. BLACKWELL, Chair BLONDELL REYNOLDS BROWN MARIAN B. TASCO FRANK DiCICCO W. WILSON GOOD, JR. JUAN F. RAMOS - - - 41 PUBLIC MEETING - 3/6/06

Councilwoman Blackwell

We will now enter into our stated meeting. The Chair recognizes Councilwoman Tasco with regard to Bill No. 060011, which is the bill dealing with PGW Capital Budget.

Councilwoman Tasco

Madam Chair, I move that Bill No. 060011 be reported out of committee with a favorable recommendation and a request for the suspension of the Rules. (Duly seconded.)

Councilwoman Blackwell

It has been moved and seconded that Bill No. 060011 be reported out of committee with a favorable recommendation, and furthermore that the Rules of Council be suspended so as to permit first reading at our next session of Council. All in favor will say aye. Opposed? The ayes have it, and so the bill 21 passes. With regard to Bill No. 050661, the Capital Loan Fiscal Year '06 Loan Authorization, this bill will be held until Thursday, the 9th, at 9:00 a.m., where we will 42 PUBLIC MEETING - 3/6/06 hear further information and receive further testimony. We also ask that all of those who are involved in this be present so that, if this committee has any questions, they may be answered at that time. As you know, it is our Council day, so we don't have a lot of time. We hope that everyone will come prepared with answers to the questions that were raised and with representatives from Commerce Department and anyone else who may be involved and included in this discussion. Thank you very much. This hearing is recessed until Thursday, March 9, 9:00 a.m. (Public Meeting adjourned.) - - - 43 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 Monday, March 6, 2006, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COMMITTEE ON FINANCE _________________________ DEBRA A. WHITEHEAD