COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON APPROPRIATIONS - - - Room 401, City Hall Philadelphia, Pennsylvania May 10, 2001 8:50 a.m. - - - BILL NO. 010262 - an ordinance authorizing transfers in appropriations for fiscal Year 2001 within the General Fund from the Mayor's Office of Information Services, the Department of Licenses and Inspections, the Director of Finance, Fringe Benefits, and the Department of Revenue Sinking Fund Commission to the Mayor's Office of Information Services, the Managing Director, the Fire Department, the Department of Recreation Fairmount Park Commission, the Department of Human Services, Philadelphia Prisons, the Department of Revenue, the City Representative and the Director of Commerce and the Sheriff. - - - PRESENT: COUNCILWOMAN JOAN L. KRAJEWSKI, Chairperson COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK J. DI CICCO COUNCILMAN BRIAN J. O'NEILL COUNCILMAN ANGEL L. ORTIZ - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 (215) 561-2220 I N D E X BILL 010262 ROBERT DUBOW, City's Budget Director ........ JAMES CURATO, Director of Commerce .......... 3 P R O C E E D I N G S
Good morning. The Committee on Appropriations is now in session. Will the Clerk please read the bill?
Bill No. 010262, an ordinance authorizing transfers in appropriations for fiscal Year 2001 within the General Fund from the Mayor's Office of Information Services, the Department of Licenses and Inspections, the Director of Finance, Fringe Benefits, and the Department of Revenue Sinking Fund Commission to the Mayor's Office of Information Services, the Managing Director, the Fire Department, the Department of Recreation Fairmount Park Commission, the Department of Human Services, Philadelphia Prisons, the Department of Revenue, the City Representative and the Director of Commerce and the Sheriff.
Good morning, Councilwoman Krajewski and members of the Appropriations Committee. My name is Rob Dubow. I serve as the City's Budget Director. I appear before you today to offer testimony on Bill No. 010262. As shown in Exhibit A attached, there are a total of 11 transfers requested in the bill, including 10 4 5/10/01 - Appropriations - Bill No. 010262 involving a net change in departmental appropriations and one transfer between classes within a departmental budget, and that does not result in any net change in appropriations. The largest requested increase is 4.5 million in the Class 100 appropriation for the prison system to cover overtime expenses resulting from higher than anticipated inmate population levels. We're also requesting 3 million in Class 100 for the Fire Department to fund the first year of the new two-year interest arbitration award and the upgrade of Medic Unit 32 from a 12-hour unit to a 24-hour unit. We're requesting 2.5 million in Class 500 for the Commerce Department to cover the cost associated with the creation of the New Economy Development Alliance which will work with major corporate and educational institutions to attract entrepreneurs to Philadelphia. Those costs include start-up staffing and outfitting of office space as well as seed money that will be leveraged to raise matching funds from other sources. The Administration also requests an 5 5/10/01 - Appropriations - Bill No. 010262 increase in the Class 100 and 200 appropriations for the Sheriff's Office totaling $760,000 to cover wage increases for deputy sheriffs that's required by the new contract and overtime in mileage reimbursement costs. Other increases requested include 500,000 in Class 200 to the Department of Revenue for increases in postage costs and certified mail use. And $350,000 in Class 100 to the Fairmount Park Commission to cover unanticipated overtime usage. We're also asking for a transfer of $900,000 from the Department of Licenses and Inspections to the Managing's Director's Office. Those funds will be used to implement a lot cleaning program and they'll will be on managed by the Managing Director's Office using City employees rather than contracted services through L & I. The increases in appropriation are made possible through savings of $10 million in appropriations from the Department of Revenue Sinking Fund resulting from available debt service funds that are not needed in FY 2001 because of the postponement of new debt issuance. 6 5/10/01 - Appropriations - Bill No. 010262 Additionally, the Director of Finance Fringe Benefits line has savings of 1.6 million because there are fewer City employees than originally projected in Fiscal Year '01. The internal transfer we're requesting is $300,000 in Class 100 to Class 200 in the Mayor's Office and Information Services to cover the cost of contractual services needed to provide expertise not currently available on staff. Now, I hope comments have been helpful. And on behalf of the Administration, I respectfully request your favorable consideration of the bill and suspension of the rules to permit consideration of this ordinance on First Reading Calendar at City Council's next meeting. I'll be happy to answer any questions. And there are representatives of the departments represented in the bill who are also available to answer questions. Thank you.
Thank you. In your testimony you state that, we will proceed through a professional search to identify and select an executive director. May I ask, who is "we"? Is it the Mayor's Office? Is it the Commerce 7 5/10/01 - Appropriations - Bill No. 010262 Department or some other City agency?
I'm going to ask the Commerce Director, Jim Curato to come up and address those questions.
Good morning, Madam Chair and members of City Council. My name is James Curato, I'm City Representative and Director of Commerce. Councilwoman, the "we" is the New Economy Development Alliance, which is a new organization that this Administration wants to establish to market and promote the City for high tech businesses.
Well, Councilman, the idea behind the formation of this entity is that in order 8 5/10/01 - Appropriations - Bill No. 010262 to target, specifically target, the high tech and life science industries, we need a focused effort, which is to say that my department is responsible for all business development and growth in the City, but we wanted a more focused effort given the great upside potential for attracting high tech and life sciences businesses into Philadelphia. And frankly, in dealing with these businesses in this industry, a lot of the traditional tools and strategies that we bring to bear for business growth do not apply. We need to be a little bit more creative. We need to look at different ways to attract these businesses. So the idea was to form a new entity that would be specifically focused on high tech and life sciences business. Right now we are -- if you look at a variety of surveys that are done that rank Cities as far as their participation in this industry --
I understand that, but I thought over the last few years, and this is before your tenure, we have spoken about those things in this Council for the last six, seven years and structuring a strategy to do that and getting some of the buildings that were up and renovated and 9 5/10/01 - Appropriations - Bill No. 010262 wired so that we could attract all of these businesses. I thought we had an ongoing program directed at that new technology in place. I didn't know that whatever we were doing to attract that new technology over the last few years was not being successful, we were focused wrong. I thought we were focused -- I mean, people came into this Council asking for tax relief to wire this and do other stuff and go down the line, and we approved it. And to find out that now we haven't been focused over the last few year is sort of like, wow, what have we been doing?
Councilman, what we've tried to do over the past several years is address the issue. We've done it, but we haven't really done it in a coordinated fashion. What I think this new organization will do will be coordinate the different agencies and players that are out here right now trying to do this effort. And there are a number of them. I think the City will bring leadership and a coordination role so that we're all working together and this will be a very focused effort. The steps that have been taken thus far over the past several years have been very helpful 10 5/10/01 - Appropriations - Bill No. 010262 in getting us started, but if we're going to move from what I would characterize as the mid tier of cities who are perceived as high tech and life sciences cities --
If we're going to move from the mid tier to the upper tiers, we've got to do more and we've got to have a more focused effort.
The organization is still being formed. The Law Department is drafting documents now that would establish the corporation. We currently are envisioning a board of approximately 13 members. I believe only six have been identified thus far. The Mayor would make the final decision on board appointments. Judith Roden, the President of the University of Pennsylvania is 11 5/10/01 - Appropriations - Bill No. 010262 the Chair. And, again, additional board appointments will be announced in the coming weeks.
Will the staffing need to be filled with hires through the Civil Service process or will the people be transferred from other City agencies or will these be based on recommendations solely from a professional search?
The way we envision it, Councilwoman Krajewski, is that the executive director would be hired and there is a search firm, a local search firm that is working on that right now to find the best person for this position. Once that person is identified --
Hydrick and Struggles. Once that person is identified, we would then proceed to fill out the rest of the staff. I will not -- I will speak on behalf of the Administration, certainly not for the new executive director because that person has not been identified yet. But I think we're envisioning a relatively small staff headed by a dynamic executive director who has the 12 5/10/01 - Appropriations - Bill No. 010262 skills, background, savvy and knowledge to talk to people who are in this industry and let them know that Philadelphia is a place that they want to be.
Well, are these positions for the executive director and board required to have Council approval, you know, being filled similar to what is done with other agencies and authorities?
Would the staff positions be subject to City Council approval, Councilwoman? I would say no. We're not envisioning that they would.
They don't need Council approval like other agencies?
Correct. That's the way our plan is. They do not need City Council approval.
Well, the executive director, we're trying to find the best person 13 5/10/01 - Appropriations - Bill No. 010262 literally in the country for this position. The rest of the staff would come from the area. We'll be looking for the best people we can possibly find.
We're proposing that they be paid from a portion of the funds that we're asking for here today.
Under what authority can this Council appropriate money to pay people who are not City employees?
Kind of the same setup we have with organizations like the Defender Association where we give them funds and they hire their own employees. We don't approve Defender Association employees.
That's constitutionally mandated that we do certain things along those lines. This does not seem to me to be something that is within a constitutionally mandated function.
I'm just talking about the structure of how their employees are hired. We don't have a say in that. 14 5/10/01 - Appropriations - Bill No. 010262
I mean, we're going to take money to give to an entity that is not under purview of the City and obviously not will not come under the purview of this Council in terms of monitoring and we're supposed to be giving them money to hire people and pay people and we will appropriate that money and we will have, in essence, very little to do once we appropriate that money as to what the function of these people are and how they measure their jobs. I really -- I'd really like to see something in writing about this. I really would like to see a whole conceptual paper on this, on the authority that comes down. I'd like our Legal Department to take a look at it.
I have to agree with you, Councilman. I think we have another appropriations hearing on another date, so maybe we can continue this because I'm not satisfied with the answers either. Are there any other questions? This appropriations hearing will recess to the call of the Chair on this particular bill. And Mr. Dubow, I hope you can come back and the 15 5/10/01 - Appropriations - Bill No. 010262 Commerce Director can come back with more specific answers. We just can't give $2.5 million dollars and get no answers on it. Thank you all very much. We appreciate this. (Council adjourned at 9:05 a.m.) - - - 16 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 May 10, 2001, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON APPROPRIATIONS ___________________________ Lisa C. Bradley, RPR and Notary Public