COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON FINANCE Room 400, City Hall Philadelphia, Pennsylvania Wednesday, June 3, 2026 10:05 a.m. PRESENT: COUNCILWOMAN KATHERINE GILMORE RICHARDSON, CHAIR COUNCILWOMAN CINDY BASS, VICE-CHAIR COUNCILWOMAN NINA AHMAD COUNCILMAN CURTIS JONES, JR.
COUNCILWOMAN RUE LANDAU COUNCILMAN MARK SQUILLA COUNCILMAN JEFFREY YOUNG, JR. BILLS: 250915, 260299, 260507, 260508 260509, 260510, 260511, 260512, 260513, 260521, 260527, 260564 - - -
Good morning. Good morning. I now note that the hour has come to begin today's hearing. Clerk, will you please call the roll to take attendance. Members who are in attendance will please indicate that you are present when your name is called.
I am present. Thank you. A quorum of the committee is present and this hearing is now called to order. This is the public hearing of the Committee on Finance regarding Bill Nos. 260564, 260510, 260509, 260527, 260508, 260513, 260507, 260511, 260512, 260299 and 260521. And for the record, Bill No. 250915 is being held and will not be heard in today's committee hearing. And I wanted to make a very quick statement about Bill No. 23 250519. And let me just triple- check the bill number. Bill No. 1 250519 was introduced by Councilmember Thomas. It was listed for this hearing. That legislation would partially exempt some child care businesses from the Business Income and Receipt Tax we all know as BIRT. I wanted to ensure that we addressed some of the confusion that was noted by our Chief Clerk this morning prior to our committee hearing in the Committee of the Whole regarding Bill No. 251026, which was introduced by Councilmember Driscoll. That bill 16 would create exemptions to the BIRT tax, and that bill was not listed for a hearing today. However, over the summer, Councilmember Driscoll and Councilmember Thomas have committed to work on the legislation to sort of combine both bills to make the best bill so that we can hear that legislation potentially in the fall. And so, I'm committed to working with both Councilmember Thomas and also Councilmember Driscoll on their BIRT legislation. They have committed to continuing to do this work together, and I'm excited about the work that they will do that will positively impact our small business community here in the city of Philadelphia. So I wanted to state that for the record just in case anyone was here to provide public testimony regarding either Bill No. 250519 or Bill No. 251026 Okay. Thank you very, very much. Clerk, will you please read the titles of the bills.
Bill No. 21 260564, an ordinance authorizing encroachments in the nature of a sidewalk cafe in the vicinity of 2351 South Front Street, under certain terms and conditions. Bill No. 260510, an ordinance authorizing the City Treasurer, on behalf of the City, to enter into a provider agreement with Citizens Bank National Association for provision of payroll banking services to the City, under certain terms and conditions. Bill No. 260509, an ordinance authorizing the Commissioner of Public Property of The City of Philadelphia, on behalf of The City of Philadelphia and in cooperation with The Philadelphia Municipal Authority, to undertake a Project to promote the health, safety and welfare of the residents of The City of Philadelphia; authorizing and approving (i) a project including the refunding of bonds issued to refinance the New Youth Center Facility, (ii) one or more amendments to an existing Ground Lease, as previously amended, between The City of Philadelphia and The Philadelphia Municipal Authority, (iii) one or more amendments to an existing Prime Lease, as previously amended, between The City of Philadelphia and The Philadelphia Municipal Authority and the assignment of such amendments to a trustee and (iv) the obligation of The City of Philadelphia to pay rent under the Prime Lease, as amended, when due; approving the issuance by The Philadelphia Municipal Authority of bonds, in one or more series, from time to time, to pay the costs of such project; authorizing certain officers of The City of Philadelphia to enter into such lease amendments and to take such other actions as may be necessary or appropriate to accomplish the intent and purpose of this Ordinance; agreeing to be bound by each and every provision, covenant and agreement set forth in the Ground Lease and Prime Lease, each as amended; covenanting that The City of Philadelphia will make necessary appropriations in each of The City of Philadelphia’s fiscal years to provide for, and make, rental payments when due under the Prime Lease, as amended; all under certain terms and conditions. Bill No. 260527, an ordinance authorizing and approving the execution and delivery of a Service Agreement between The City of Philadelphia and The Philadelphia Municipal Authority relating to the financing of the acquisition of 400 North Broad Street and 1501 Callowhill Street (together with certain ancillary property rights), which premises the City has sub-leased for use as the City’s police headquarters and certain other uses; approving the issuance by the Authority of bonds, notes or other evidences of indebtedness (including reimbursement obligations related to lines or letters of credit) in one or more series to finance or refinance such acquisition costs and authorizing and approving the obligation of The City of Philadelphia to pay in full when due the Service Fee and other amounts payable under the Service Agreement; authorizing certain City officers to take certain actions required to issue such bonds, notes or other evidences of indebtedness; covenanting that The City of Philadelphia will make necessary appropriations in each of the City’s fiscal years to provide for, and will make timely payments of, the Service Fee and other amounts due under the Service Agreement; and authorizing and approving the Director of Finance of the City and other City officials to take other necessary or appropriate actions to effectuate the purposes of this ordinance; all under certain terms and conditions. Bill No.
260508, an ordinance authorizing an increase in the non-electoral indebtedness of the City within the Pennsylvania constitutional limit; authorizing the Bond Committee to sell bonds at public or private negotiated sale, to provide funds toward various capital municipal purposes; providing for appropriations to the Sinking Fund Commission for the payment of such bonds; and authorizing agreements to provide credit or payment or liquidity sources for the bonds in connection with issuance of the bonds, and certain other actions. Bill No. L. 1449, Section 4, as amended, to prevent and eliminate blight; authorizing the Director of Planning and Development and the Director of Commerce to file 24 applications to obtain other grants from the Commonwealth; authorizing the Director of Commerce to use the Section 108 Loan Guarantee Program; and authorizing the Director of Planning and Development and the Director of Commerce to enter into all understandings and assurances contained in such applications and take all necessary action to accept the grants; all under certain terms and conditions. Bill No. 260507, an ordinance amending Chapter 19-1200 of The Philadelphia Code, entitled "Parking Tax," to amend the definition of parking facility to exclude bus loading facilities from imposition of the parking tax, under certain terms and conditions. Bill No. 260511, an ordinance approving the Fiscal Year 2027 Capital Budget, providing for expenditures for the capital purposes of the Philadelphia Gas Works, including the supplying of funds in connection therewith, and acknowledging receipt of the Revised Forecast of the Capital Budgets for Fiscal Years 2028 through 2023 or 2032, all under certain terms and conditions. Bill No. 260512, an ordinance approving the amendment of the Fiscal Year 2026 Capital Budget providing for expenditures for the capital purposes of the Philadelphia Gas Works (including the supplying of funds in connection therewith) subject to certain constraints and conditions and acknowledging the receipt of the Revised Forecast of Capital Budgets for Fiscal Years 2027 through 2031, as amended. Bill No. 260299, an ordinance amending Section 9-803 of the Philadelphia Code, entitled “Fair Housing Commission,” and Section 20-304 of The Philadelphia Code, entitled “Compensation for Members of Boards, Commissions, Committees and Councils," to amend the compensation paid to members of the Fair Housing Commission and delete superfluous provisions, all under certain terms and conditions. And finally Bill No. 10 260521, an ordinance amending Title 22 of The Philadelphia Code, entitled "Public Employees Retirement Code, by modifying the circumstances when certain City of Philadelphia employees are entitled to service-connected death benefits, all under certain terms and conditions.
Thank you. Thank you very, very much. We will now call the first panel here to testify on Bill 24 No. 260564.
Will Noelle Marconi, Director of Legislative Affairs for the Department of Streets, make their way to the podium. (Witness approached witness table.)
Thank you. Thank you so much for being here again. Welcome home. Please state your name for the record and proceed with your testimony.
Good morning, Chairperson Gilmore Richardson and members of the Finance Committee. My name is Noelle Marconi, and I'm the Director of Legislative Affairs for the Department of Streets. I'm here today to offer testimony on Bill No. 260564, introduced by Councilmember Squilla. This bill authorizes 2351 Anthony Real Estate LLC, the owner, to install, own, and maintain encroachments in the nature of a sidewalk cafe at Walt's Restaurant, located at 2351 South Front Street. A total of seven tables and 28 seats for a sidewalk cafe will be located along the north sidewalk of Ritter Street, along the property line of 2351 South Front Street, and the east sidewalk of South Front Street along the property line of 2351 South Front Street, six tables and seats will be located adjacent 16 to the property line of 2351 South 17 Front Street, and one table and 18 four seats will be located adjacent 19 to the property line of 2351 South 20 Front, the Department of Streets is 21 not opposed to this proposed 22 sidewalk cafe as it will maintain 23 seven feet six inches of clear 24 unobstructed footway on both Ritter Street and South Front Street, making meeting the complete streets policy. This concludes my testimony and I'm pleased to answer any questions.
Thank you. Thank you very much for your testimony. Are there any questions or comments from the members of the committee for this witness? (No response.)
Okay. Seeing none, we thank you very much for being here today. There being no 18 additional panels for Bill No. 19 260564, we will please call any names that we have for public comment for Bill No. 260564. (No response.)
Thank you. Seeing none, we will now proceed with our next bill. Clerk, will you please call the first panel we have to testify on Bill No. 260510.
We have Jacqueline Dunn, the City Treasurer, and Shakina Clark, Deputy City Treasurer of Banking. (Witnesses approached witness table.)
Thank you. Thank you very much for being here. As you approach the witness table, please state your name for the record and proceed with your testimony. CITY TREASURER DUNN: Good morning, Chair Gilmore Richardson and members of the Committee on Finance. I'm Jackie Dunn, City Treasurer, and with me this morning is Shakina Clark, Deputy City Treasurer for Banking. I'm here to testify in favor of Bill No. 260510. This bill would provide authorization to the City Treasurer's office, on behalf of the city, to enter into an agreement with Citizens Bank for provision of payroll banking services from the period July 1, 2026 to June 30, 2027, under certain terms and conditions. This would be the first amendment of the current contract. For background, in June 2006 the city enacted legislation that required the Treasurer's Office to implement a request for a proposal process, seeking proposals from qualified institutions to provide banking services for accounts related to payroll disbursements that include payments to employees, payroll deductions, and payroll taxes. This legislation also required that no 2 contract amendment with a proposed recipient of payroll banking services be executed until it has been approved by City Council with an ordinance. In 2024, the Treasurer's Office issued a banking services RFP, which resulted in Citizens Bank ranking as the most qualified institution. Citizens Bank served as the city's payroll depository since 2017 when City Council approved the initial contract and was again recommended in 2021 through another RFP process and subsequently approved by City Council. Of the applicants for this most recent RFP, Citizens Bank had the most competitive fee proposal, provides superior service for the critical function of employee payroll and has an extensive branch network through the city, maintains an outstanding Community Reinvestment Act rating or CRA rating and regularly partners with the city on local priorities. The Administration respectfully recommends adoption of this ordinance and requests that the committee recommends the rules of Council be suspended so as to permit first reading of the bill at the next session of Council. Thank you for your consideration and the opportunity to testify. I'm happy to answer any questions.
Thank you. Thank you very much for being here. Will you be presenting testimony today as well or are you here for questions?
I figured. Okay. Thank you. We appreciate both of you very much and thank you to our City Treasurer Jacqueline Dunn and to Shakina Clark, who's our Deputy City Treasurer for Banking for the city. I wanted to first notate for the record we always do a pre-meeting before we have this hearing, and I have reviewed the community investment reporting for Citizens Bank, continue to track the numbers for residential mortgages relative to census tract, which is how they are able to track the data, but particularly in our majority-minority census tracts, but also reviewing the low, mid and high residential mortgage offerings as well as the HELOCs, which we know even from the last time and the refinancing has decreased, and also all the community involvement, including the involvement with the Enterprise Center, with LISC and a number of our community organizations that are helping small businesses who need additional assistance with loan offerings, particularly during this sort of difficult economic period. And so, I wanted to just state that for the record that I have reviewed that information, that I continue to be in discussion with the city Treasurer's Office relative to, in specific, my expectations around how we are interfacing with the community and ensuring that we are providing necessary financial literacy, education and support not only for the Philadelphia community but also for those who are seeking homeownership in every corner of this city. And I just wanted to state that for the record. The Chair now recognizes Councilmember Jones.
Thank you, Madam Chair. So I go back to the days when city employees were issued physical checks and the long lines on Fridays and Thursdays in order to get your check cashed. We have gone to a direct deposit system. What has that meant by way of profitability, by way of interest overnight that you now get as opposed to back in the day when we had physical checks? Are there any statistics on it? I would imagine it has made it more profitable for Citizens Bank. CITY TREASURER DUNN: Sure. Thank you, Councilmember. You're correct that there have been a significant shift over time away from physical paper checks to direct deposit and even products like pay cards, so otherwise electronic transfers of funds. Currently of the 27,000 approximately city employees, 96% are on direct deposit, 3% are on pay card. And so, that remaining 1% is still paper check-based. So the good news for employees is that they have immediate access to their funds once payroll is released and improved. And for our office and for Shakina's team that processes payroll, it really allows us to focus on other things because printing paper checks is very labor-intensive. Unfortunately, check fraud is quite common among financial fraud cases. And so, it helps also protect our employees and recipients of checks if we can get them onto an electronic means of payment.
Who receives -- based on a direct deposit method, do we get the benefit of those overnight interests or is it washed based on they make a direct deposit? I'm just curious. CITY TREASURER DUNN: Yeah, we've certainly had internal savings because it allows our employees to focus on other banking and treasury supports versus managing a larger inventory of paper checks, and also our partners in other departments that have to help print the checks so the Technology Office, for example. Payroll is unique because the funds, as you mentioned, go into the funding account and then immediately go out to the end recipient, in this case, our employees. And so, we've historically not received much interest or much earnings credit on the payroll accounts versus other accounts. So there hasn't really been a detrimental impact to the city in that way. But I think the big benefit to us is the ability to focus our staff, time and resources on other banking services.
And a lot of trees don't die because of the paper. CITY TREASURER DUNN: I'm sorry.
A lot of trees don't die because of the paper. CITY TREASURER DUNN: Yes.
Thank you. Thank you very much, Councilmember Jones. The Chair notates for the record the presence of Councilmember Mike Driscoll and also our Council President Kenyatta Johnson. The Chair now recognizes Councilmember Dr. Nina Ahmad.
Thank you, Madam Chair. Good morning. Quick question. In your RFP process, was there some requirement to show how these banks treat small businesses who are coming in to open accounts? This is anecdotal from constituents about not getting treated very well by big banks and having problems in getting services. So I just wondered if that was part of your RFP process and how are you keeping an eye on that, in addition to what my Chair said around making sure getting stats on how they're investing in the community? CITY TREASURER DUNN: Sure. The payroll banking services RFP is specific to payroll so the internal city needs and processes, but our office does, as you're likely aware, perform the annual lending disparity study. And so, we look at small business applications and originations for those products on a couple different factors. So that is the way that Shakina and I keep track of how our depositories are doing, not just Citizens Bank, but all of the banks that are authorized to do business with the city. Citizens performs quite well on that, but especially on the home lending side. I know J.P. Morgan and Bank of America, two other depositories on the authorized list, in the last year of federal data that was released were quite strong among our depositories in that service area.
Thank you for that. Is there a component for public engagement in this process to actually hear directly from our small businesses to kind of line up with the data you're seeing? I just wondered because it seems like somebody has to call somebody to get attention. And I just wonder how we capture that so that that is part of this process. CITY TREASURER DUNN: Sure. I think that's probably a better fit under the annual lending study process because we're looking at federal data across a broad swath, not just the banks that apply for payroll depository services, which is a more limited pool, but we are always open to refining, you know, what that annual lending study examines, especially as there are trends in the marketplace with interest rates or, for example, during the acute COVID period when payroll protection loan products were the predominant product that banks and other institutions were offering, and they were pulling away from other areas. We wanted to retool our examination so we were focusing on what was relevant. And so, I think we're happy to talk with you on that.
Thank you. Thank you so much, Councilmember Ahmad. Are there any further questions for these witnesses and for this panel? The Chair notates for the record the presence of Councilmember Jay Young. Thank you very much, Councilmember Young. Any additional questions for this panel? (No response.)
Seeing none, we thank you all so much for being here and thank you for your testimony. Is there anyone else here present to testify whose name has not been called? (No response.)
Okay. There being no 14 further panel for Bill No. 260510, we will now take public comment on Bill No. 260510. Clerk, will you please call the first set of names you have for public comment, if any.
Thank you so much for being here. Please state your name for the record and proceed with your testimony. We're on 260510. This is the banking depository bill. Mitch, I think you usually come to testify on the PGW bills. Are you giving public comment on the bank depository bills?
Excellent. Okay. Please state your name for the record and proceed with your testimony.
Thanks for the opportunity to testify. I'll be really brief. I just wanted to make Councilmembers and others present aware that there is a national boycott of Citizens Bank organized by Indivisible and a number of other organizations because of their financing of GEO Group and other for-profit companies that are providing these notorious ICE detention facilities like the one in New Jersey, where there's currently a hunger strike.
Oh, wow. Well, thank you very much for bringing that information to our attention. This is my first time hearing that, but we appreciate you being here to provide that information.
Thank you, Mitch. Thank you very much for coming in. Is there anyone else here whose name has not been called to testify on Bill No. 260510? (No response.)
Okay. Seeing none and there being no further witnesses or panels for the bill, Clerk, will you please call the first panel we have to testify on Bill Nos. 260509 and 260527?
Jacqueline Dunn, City Treasurer; and Matthew Bowman, Deputy City Treasurer for Debt. (Witnesses approached witness table.)
Thank you. Thank you so much. Please state your name for the record and proceed with your testimony. CITY TREASURER DUNN: Good morning, Jacqueline Dunn again, City Treasurer. Good morning, Chair and members of the Committee on Finance. I'm Jackie Dunn, City Treasurer. And with me this morning is Matt Bowman, the Deputy City Treasurer for Debt Management. I'm here to testify in favor of Bill Nos. 260527 and 260509. Bill 260527 would authorize the City and the Philadelphia Municipal Authority, or PMA, to issue bonds to exercise its one-time purchase option on the police headquarters building at 400 North Broad Street and the accompanying garage at 1501 Callow Hill Street. The city has been subleasing the property since late December 2019. This purchase option was built into the sublease in December 2017. The sublease provides a formula to derive the purchase price for the premises, which compares the outstanding debt to the appraised value with the city paying the greater of the two. The city is presently conducting the due diligence related to the appraised value. This bill 9 authorizes up to 225 million in bonds to be issued for the purchase, plus related cost of issuance, credit enhancement and discount. The bonds would be secured by the city's obligation under the service agreement to budget and appropriate annual amounts necessary to pay the service fee, which would be sufficient to pay the debt service on the outstanding bonds. Bill 22 260509 would provide authorization for the City and PMA to refund previously issued bonds for savings. The city has 56.4 million in PMA Series 2017 bonds outstanding, which can be refunded to reduce overall debt service costs, or funding would be pursued consistent with the city's debt management policy as a part of this transaction. The Administration respectfully recommends adoption of these ordinances and requests that the committee recommends that the rules of Council be suspended so as to permit first reading of the bills at the next session of Council. Thank you for your consideration and the opportunity to testify. I am happy to answer any questions that you may have.
Thank you. Thank you very much for being here today. Thank you for your testimony on Bill Nos. 260509 and 260527. I'm sure Matthew, you're here, our Deputy City Treasurer for debt is here for questions if necessary, but thank you both. Are there any questions from the committee for these witnesses? (No response.)
Okay. I'd like to now recognize the District Councilmember for the properties notated in the bill. Councilman Young.
Thank you, Madam Chair. Good morning and thank you for your testimony. Can you tell us what type of bond this will be? What's the source of repayment for this bond? CITY TREASURER DUNN: Sure. Approved by City Council, this would be equivalent to the city's GO tax-backed bonds to be issued through our service agreement structure and then the debt service, which is estimated to be about $15.1 million annually, would be paid through the Class 200 structure through the sinking fund.
And how much are we paying in rent for this current facility now? CITY TREASURER DUNN: It would be equivalent to the debt service, so the annual rent is approximately $15 million now.
And how long have we been renting this facility? CITY TREASURER DUNN: We've occupied the property since December '19. I believe the lease was effective in December 2017.
So we've been paying rent for nine years. For the amount of rent that we have been paying for I guess the nine years, do we get any discount on the sales price of the property? CITY TREASURER DUNN: The city's existing rent goes to amortize the loan that the developer took out to purchase the property and to retrofit it into the police headquarters facility that the city needs rate based on our specifications. So the bond that the city issues is the remaining debt that's outstanding.
So that's new information to me, that it's going to amortize the loan that the property owner purchased the property for. But I know the property owner didn't purchase the property for the benefit of the city. So why is that going towards that? CITY TREASURER DUNN: That was the original structure put in place into 2017. It was a lease to own with the city having this one-time option that comes up and expires at the end of Calendar Year 2026.
And can you tell us when the bonds for the market is going to be a competitive or is negotiated process? CITY TREASURER DUNN: So we would pursue a negotiated bond sale, which is when we do an RFI to select a bank and then the bank helps us negotiate with prospective investors to get the lowest cost of capital for the city. That's consistent with our general approach for bond issuances, given our credit quality and the complexity of transactions like the service agreement structure.
And what's the total amount of the borrowing that this legislation will authorize? CITY TREASURER DUNN: The authorization is a maximum amount of not to exceed 225 million. We estimate that we'll be borrowing approximately 201 million. So we build in a buffer. We do not believe that we will need that amount, the full amount.
So just for the record, we're going to be paying $201 million for one property in the city of Philadelphia. Just to note that for the record. What is the total cost of the borrowing? Essentially, have you looked at where I guess the estimates of where the market would be by the time we conduct the transaction and what the total cost would be? CITY TREASURER DUNN: Sure. So the decision point for the city at this time, because we have that one-time purchase option, is either to continue renting for a 10-year term and the rent resets at a higher rate, which would be approximately 29 million annually versus the million we're paying 8 now, or to issue debt to purchase 9 the property based on current 10 rates, which we hope would hold, 11 the annual debt service would 12 approximate the rent costs at about 13 15 million annually. So purchasing 14 the building would be a savings 15 relative to continuing to lease at that higher reset rate, which would start in January 27.
Okay. Would the bonds be callable? Will we be able to refinance prior to the maturity date? CITY TREASURER DUNN: Yes, we typically have a 10-year call option.
years, okay. Thank you. And can you tell us what the appraised value for the property is? CITY TREASURER DUNN: The appraised value for just 400 North Broad, we just received that yesterday, but that's 21.5 million.
21.5 10 million is the appraised value and we're paying $201 million for the property. CITY TREASURER DUNN: Yes. I think the city in 2017, it was always contemplated that the outstanding debt would be higher and would govern in that formula because the property has a unique value to the city to be able to house our municipal police force. There's less value to other buyers who don't have a municipal police force of this size.
And if this legislation were to pass, when do you expect to go to market? CITY TREASURER DUNN: Our goal would be to go to market in late July, so we would go to the rating agencies in early July and we would like to try and price the bonds at the end of July.
Thank you. Madam Chair, I just want to note that we're borrowing money for a noble cause for our Philadelphia Police headquarters, which is something that we desperately need to have in our ownership. But for the record, we just need to note that there are other public facilities in our city that the city owns that could use $200 million worth of renovations. That could help keep and maintain our city in moving forward into the future. So I just want to note that for the record that, yes, the appraised value only has value to us. This property only has value to us. And I'm sure that was contemplated when the transaction originally occurred. When the transaction originally occurred, I was a staffer and we were negotiating -- I was negotiating the EOP for this particular project. We were spending as a city -- so we've already spent money on this project. Is this not going to be the first -- the rent is not the first time the city has paid money for this project. The renovations, the outfit of this particular facility, the city paid for. And that number was equivalent to the entirety of what Rebuild was, right. So just put that for the record. So we're spending a lot of money on this property, but it's a noble cause. Our police need a state-of-the-art headquarters in order to do 21st-century policing. So that's not the issue. But I think the issue is where do we as a city prioritize our spending. So I just wanted to note that for the record. Thank you, Madam Chair.
Thank you. Thank you so much, Councilmember Young. Quickly, I need to notate for the record the presence of Councilmember Landau, who is now here for the hearing. Prior to recognizing Councilmember Jones, who has asked to be recognized and also Dr. Ahmad, help us with this because this is not making sense for us. Parse this out for us and take us on a timeline, because we're in the middle of a budget negotiation where we're being asked to do things for similar amounts of money. So walk us through this so we understand fully what is going on here and why we are in a predicament to pay almost a quarter billion dollars for one building. CITY TREASURER DUNN: Sure. In 2017, City Council passed the ordinance related to the master lease and sublease agreements, which contain in it the one-time purchase option that we're here today to recommend that the city pursue. And then in 2021, City Council amended the ordinance to allow the property to qualify for historic tax credit revenue, which the city then received back, a portion of that back.
Pardon me. We received part of it back by doing the historical designation? CITY TREASURER DUNN: Correct. Making changes to allow the property to qualify for the historic tax credits.
Received. CITY TREASURER DUNN: The city at this point has two options. The city can exercise its one-time purchase option, and the formula that was set in place in 2017 is that the city pays the higher of the outstanding debt because our rent has gone to pay down the debt that was previously issued to purchase and to retrofit the facility for the police headquarters or --
So walk me through. So the rent started at what time?
Pardon me one moment. Just state your name for the record. The mic is not on. CITY TREASURER DUNN: Matthew Bowman, Deputy Treasurer. He had indicated Fiscal Year '18 was the first year.
Then for the record, how much was the rent?
It's $15.2 million annually. So to date, through a payment that was made two days ago we're up to 131.8 million.
So $131.8 million for rent up until two days ago?
Okay. Please proceed. CITY TREASURER DUNN: Sure. So the city can continue renting the facility. And the way that the terms were set in 2017, the rent would reset if we don't exercise this purchase option to amortize the remaining debt over a 10-year period at a higher interest rate. And so, our calculation based on current interest rates would have that rent being $29 million annually versus the 15.2 that we're currently paying.
So -- CITY TREASURER DUNN: That would be a new cost that would be in the Five Year Plan that's not currently contemplated.
Received. But also, that would be a 10-year period -- CITY TREASURER DUNN: 10-year period. And at the end of the 10 years, the city would have to identify a new police headquarters facility and presumably pay an unknown amount related to that.
But with the new amount and the higher interest rate, it would be 290 million over the years, correct? 9 CITY TREASURER DUNN: 10 Approximately, yes.
Okay. So it would be approximately 290 million over the 10 years. But the option that you all are seeking to exercise would be 225 million. And the reason why this has to be done is because -- the reason why this has to be done is because we're already locked into the deal, so you have to take action on it. And what you all are seeking to do is try to get it at a lower option? CITY TREASURER DUNN: Correct. We're presented with these two decisions that the city could undertake, and we're recommending the lower cost option that would allow us to purchase the facility that the police are currently occupying.
Okay. Thank you. The Chair recognizes Councilmember Young and then Councilmember Jones.
Thank you. Just for a point of information, in the original deal there was an escalation clause which is kind of handcuffing us right now which makes us purchase this property. Because if not, then after this year the rent will almost double, right. So I just want to put that on the record too. It's not our doing here. That deal happened in 2017, right. But we have to now do something about a deal that may not have been in the best interest of the city at that time.
Thank you so much. The Chair now recognizes Councilmember Jones.
Let me boil it down to simple math for me. How much is the appraised value of the building today? CITY TREASURER DUNN: 21.5 million just for 400 North Broad property. It does not include the garage at --
Throw in the garage, how much is it? CITY TREASURER DUNN: I would have to get back to the committee on that.
So let's give it another 10 million. Because of the land, let's go with 30 million. We're going to borrow 200 and what? CITY TREASURER DUNN: We would be borrowing approximately 201 million, which is the cost of the remaining debt on the facility.
And is that because we're locked into the lease? CITY TREASURER DUNN: We are locked into the formula that was set in 2017, correct.
So somebody was smart enough -- work with me. Somebody was smart enough to say, I'm going to give you a hamburger today and charge you 10 times more over the course of the amortization of this deal. Is that what we got locked into? CITY TREASURER DUNN: We're recommending what we feel is the best option based on the two choices that are available.
All right. We got took. Somebody fell asleep in the getaway car. There's somebody down in Atlantic City that's getting ready to profit from this mightily. And just -- I know it wasn't you, I know it wasn't you. But somebody set up somebody to benefit mightily on a real estate deal, because that was the same site that was supposed to be the stadium at one point, right. And so, there was another -- I think Member Young talked about other municipal buildings. There was one that comes to mind at 46th and Market that we were going to do because it was not Center City. It would increase the value of that property and give better utility. Somebody fell asleep in the getaway car and it wasn't you. But I remember Allan Domb raising a ruckus about this, who is arguably one of the better real estate people particularly in Center City. And I just think that we got took and we are paying the price today, and it's an opportunity cost that takes away from the school district and other places like that. So I'm baffled. I'm baffled by how we got in this position. Thank you, Madam Chair.
Thank you. Thank you very much, Councilmember Jones. The Chair now recognizes Dr. Ahmad.
I am similarly baffled, but here we are today. I want to know who is the owner-landlord entity that we're dealing with? CITY TREASURER DUNN: 400 North Broad Partners is a Bart Blatstein predominantly-owned entity, and that's the current owner.
Thank you, Madam Chair. I just wanted that to be in the public record, who is going to benefit from this.
Thank you. May you repeat the answer. I'm sorry. We're trying to understand what's happening here -- CITY TREASURER DUNN: (Inaudible).
Okay. Thank you. Thank you very, very much. Are there any additional questions for these witnesses regarding Bill No. 260509 and 260527?
Chair now recognizes Councilmember Ahmad.
Apologies, Madam Chair. The other -- right now where we are versus what Councilmember Curtis Jones referred to, the property in West Philadelphia, there's no other option. Is that where we are right now? There's no other option for the police department to go elsewhere that would cost us much less? CITY TREASURER DUNN: We have two options here, to continue renting at the higher rate and then eventually determine a new site at the end of a 10-year period or to purchase this property. I'm not the best person to answer your question.
The question is can we actually consider a different property now before the years? Is there a penalty for that?
Under the 5 current documents, I don't think 6 that is an option we have. It is 7 either to pay a higher rate for 10 8 years or issue -- 9
I 10 wanted to see how locked in we are with all this. Thank you. Thank you, Madam Chair.
I think what I'm hearing is stuck between a rock and a real hard place. CITY TREASURER DUNN: We're trying to recommend the best option for the city to --
Received. Okay. Which is why the historical tax credit designation was helpful partially. But at this point and at this juncture in the road, we're in a circumstance where we have to make a determination on how best to move forward and how to be the best stewards of the city's dollars. CITY TREASURER DUNN: Correct.
I mean, at this time the information that we received I don't know if this deal was in the best interest of the city, right. And I think that's something that we as a Council need to contemplate. Unfortunately, we were dealt this hand almost 10 years ago. But we really have to look at what is in the best interest of the city here, and we have other, you know, $200 million, that would fix 27 libraries, right. So just think about that for a second. So just want to put that on the record, Madam Chair.
Thank you. Thank you very much, Councilmember Young. Is there anyone else here to testify whose name has not been called? (No response.)
Okay. Seeing none, are there any witnesses here to present public comment on Bill Nos. 260509 and 260527?
There are no 17 names for public comment for 260509 or 260527.
Okay. Thank you. There being no further witnesses for these bills, we will now proceed with the next bill. Clerk, will you please call the first panel we have to testify on Bill No. 260508.
Tavare Brown, Deputy Budget Director for Capital. (Witnesses approached witness table.)
Thank you. Thank you so much for being here. We appreciate your presence. Please state your name for the record and proceed with your testimony.
How's everybody doing. I'm Tavare Brown, Deputy Budget Director for Capital. All right. All right. Good morning, Chair Gilmore Richardson and members of the Finance Committee. My name is Tavare Brown, Deputy Budget Director for Capital. I'm joined by Matthew Bowman, Deputy City Treasurer. And we're here today to testify on Bill 1 No. 260508. This bill would authorize an increase in the non-electoral indebtedness of the city in the amount not to exceed 578 million. The total reflects both the FY27 loan authorization amount, which is 293 million and a technical fix to the existing FY22 loan authorization amount, which was approved by City Council in 2021, but was later determined to be invalid, as outlined later on in the presentation, and that was 285 million. The increase will leave the city within the Philadelphia Constitution debt limit. As of May 29, 2026, the city's legal debt limit is 19.68 billion. And the amount of debt applicable to that limit is 2,917,000,000. As a result, the city has a debt margin of about 16.8 billion. The FY27 capital budget for new general obligation bonds is approximately 28 -- I'm sorry, 281.17 million. The proposed ordinance includes the new general obligation loan amount plus an additional 4% for cost of issuance fees, bringing the total for FY27 in this loan authorization to $293 million. This bill also includes a section regarding the FY22 loan authorization, which was not advertised in the manner required by law and was subsequently determined to be invalid. At the direction of the city's bond counsel, we included a distinct section to the FY27 loan authorization as a technical fix to advertise an issue from several years ago. This will enable us to borrow the supported capital borrow to support the capital projects that were previously approved in FY22 as originally intended. The remaining 285 million in this loan authorization corresponds to the FY22 figure. If approved, the loan authorization would finance capital projects classified for the following purposes in the following aggregate amounts. So for this portion in my written testimony, I broke it out by each year, but I'll just refer to the new borrowing, which is FY27's amount. So for transit-related improvements, 11,261,000. For streets and sanitation improvements, 77,843,000. For municipal buildings, 147,520,000. For parks, recreation, and museum improvements, 41,266,000. For economic and community development capital improvements, $15,110,000, for a total of 293 million. And like I said, the rest of the portion is prior already-approved authorization. I respectfully request that Bill No. 260508 be reported out of committee with a favorable recommendation. I further request that the rules of Council be suspended so as to permit first reading at the next session of Council. The FY27 loan authorization will be amended to reflect any applicable amendments to the FY27 budget, which should be coming shortly. And this concludes my testimony and I'll be happy to answer any questions you might have at this time.
Thank you. Thank you both so much for being here. The Chair notates the presence of Councilmember Jim Harrity for the record. Are there any questions for these witnesses regarding Bill 2 No. 260508? (No response.)
Okay. Seeing no 6 questions, are there any other witnesses whose names have not been called? (No response.)
And is there anyone here to provide public comment on Bill No. 260508? (No response.)
Okay. Seeing none, we thank you so much for your testimony. We appreciate your presence here today and we thank you. We will now proceed with Bill No. 260513. Clerk, will you please call the first panel we have to testify.
Mark Dodds, Deputy Director, Division of Housing and Community Development. (Witness approached witness table.)
Thank you. Thank you very much for being here. Please state your name for the record and proceed with your testimony.
Good afternoon, Mark Dodds, Deputy Director of City of Philadelphia Division of Housing and Community Development. Good afternoon, Councilmember Gilmore Richardson, and members of the Finance Committee. I am Mark Dodds, Deputy Director of the Division of Housing and Community Development. I will present testimony on behalf of the Administration on Bill No. 260513, which permits the city to apply for Federal Community Development Block Grant (CDBG), HOME Investment Partnership or HOME, Emergency Solution Grant or ESG and Housing Opportunities for Persons with AIDS or HOPWA funds, and for state funds from the Department of Community and Economic Development or DCED. E. bond. 9 million in ESG for the upcoming fiscal year. E. housing plan. The Annual Action Plan goals are to create affordable homeowner and rental housing opportunities, preserve affordable homeowner and rental housing, reduce homelessness and expand special housing opportunities, foster open access to all housing and community development resources and programs, address economic, education and income needs of people and communities, strengthen community assets and manage vacant land, promote fair housing and access to opportunities. Approximately two-thirds of our total funding will go to putting and keeping people in homes. This work includes production and preservation of rental housing, mortgage foreclosure prevention and eviction prevention programs, rental assistance, home repair programs such as Basic Systems Repair and Heater Hotline. We will continue programs that prevent homelessness and support people with special needs. These programs include rental assistance through HOME Investment Partnership and HOPWA programs and the Adaptive Modifications Program. We remain committed to organizations and programs that meet our residents where they are, serving them in their own communities. These include our housing counseling agencies, our Neighborhood Advisory Committees or NACs, our Neighborhood Energy Centers. We will also continue expansive cleaning and greening efforts through the PHS Land Care Program. Vibrant commercial corridors are important for safe and healthy communities that help provide economic opportunity for all. Accordingly, significant resources are invested in community economic development opportunities. The plan includes funding for business loan programs, commercial- oriented real estate grants, corridor management support, and building improvement support. We are excited to launch several new initiatives in Fiscal Year 2027, including the One Philly Mortgage Program, Curbside Appeal program and a Facade Repair program. We also look forward to the continuation of many longstanding, successful programs and services, many of which I referenced earlier. Please know that we are relying on City Council to approve this plan expeditiously because the city will forfeit its funding from HUD unless the city submits an approved Annual Action Plan no 12 later than August 15, 2026 to permit expeditious transmittal of the Annual Action Plan to HUD. Suspension of the rules to permit the first reading at the next Council session is requested. In closing, the Division of Housing and Community Development is grateful to Council for its sustained commitment to housing and neighborhood infrastructure. E. initiative to address Philadelphia's housing crisis, and thank you for the opportunity to present this testimony. I'm happy to answer any questions.
Thank you. Thank you very much for your testimony. We appreciate you being here and for all the work that you do with our offices. The Chair will recognize Councilmember Jones.
Thank you. Thank you, Madam Chair. And bear with me on the math stuff. This is math day, I guess. So over the last 10 years -- I'll phrase it this way: Have we received a reduction of federal funding from HUD for various programs?
I would say over the last years it's pretty much remained level. So with that being said, it hasn't risen to meet the increasing demands that we face and it hasn't risen to help accommodate things like increased cost and salary increases and things like that.
So I would agree with that. The second thing that I would ask is, what is the percentage of the money we are requesting that will go for economic development as opposed to poverty and housing?
So I probably couldn't provide specific breakdowns right at this moment. I could get that --
I would think that -- so this plan does contain CDBG dollars for economic development activities that the Commerce Department helps administer. It is a small portion of our overall allocation.
And then finally, this is a compliment to you and the Mayor for your administration. I would say the H.O.M.E. program, because we have a responsibility to submit to HUD an annual plan on how we're going to deal with affordability when it comes to housing; is that correct?
So the H.O.M.E. program is probably in my memory the most comprehensive housing affordability plan this city has ever offered. Would you agree?
So compliments to the Mayor. Compliments to you. Because in years past, Madam Chair, how are you going to deal with gentrification, how are you going to deal with affordability for new homeowners, how are you going to deal with rent and its fluctuations. The H.O.M.E. program speaks to each and every aspect of that. And that is a job well done.
Thank you. Thank you very much, Councilmember Jones. And I echo the sentiments relative to the Tangled Title programming in particular, and also more specifically now the pre-planning relative to the Wills program. I know we have a second panel for this bill, but I just wanted to notate for the record in reviewing prior to the hearing all the testimony that was submitted, I stayed up as late as I could last night to read every single thing, I want to notate for the record that I did read the concerns from PACDC and wanted to ask about why the funding was not in the proposed budget that we received regarding the PACDC request?
And so, per the testimony that we have received in advance, they were specifically talking about the community capacity building fund, I believe, and making it a permanent multi- year program. I think that work started in a previous fiscal year or was at least addressed by another member. I think in the budget last year, but I wanted to notate that on the record while you were here that we did receive that testimony. I'm going to ask for Panel 2 to please approach the witness table, state your name for the record and proceed with your testimony. Clerk, can you just call that second panel for the record.
Garrett O'Dwyer, Policy Director, Philadelphia Association of Community Development Corporations. (Witness approached witness table.)
Okay. Thank you. Please state your name for the record and proceed with your testimony so that we can have clarity on this specific request.
Sure. Good morning, Chairperson Gilmore Richardson and members of City Council's Committee on Finance. My name is Garret O'Dwyer and I'm the Policy Director for the Philadelphia Association of Community Development Corporations. Thank you for the opportunity to offer testimony on Bill 260513, which will adopt the Annual Action Plan. We want to extend our gratitude to the city agency staff from Planning and Development, Commerce and other city offices and departments who composed the Annual Action Plan and for their tireless efforts on behalf of communities and residents of our city. PACDC is the leading voice of nonprofit community development corporations in Philadelphia. Our 60 CDC members and over 90 additional associate members are responsible for addressing key affordable housing, economic development and social service needs across the city. Our members play a central role in the equitable revitalization and stabilization of their communities and are the on-the-ground partners that the city relies on to provide services and act as catalysts for community change. It is Philadelphia's CDCs who will be determinative in achieving the goals in the Annual Action Plan before us today. I draw your attention to this fact because it underscores the importance of strategic investments in CDCs to ensure the successful implementation of city plans. This is nowhere more true than with the H.O.M.E. Initiative, which will direct unprecedented new resources to address housing needs, but requires high-capacity community partners if it's going to maximize the affordability returns on this substantial public investment. Articulating the goals in the Annual Action Plan is important, but we need commensurate support to scale the capacity and organizational infrastructure of our nonprofit partners that are actually doing the work. At the end of last year, the Community Capacity Building Fund launched to do just that. It has provided organizations with flexible funding that they can use to enhance their work in affordable housing and economic development and create innovative solutions to emerging neighborhood needs. Unfortunately, legislation that would have made the Community Capacity Building Fund a permanent multi-year program will not be heard before the summer recess. Therefore, we implore City Council to ensure that additional funding for another year is included in the city's FY27 budget, which is currently being finalized. The goals laid out in the Annual Action Plan are ambitious. Let's make sure that we provide the necessary supports to make them achievable. Thank you.
Thank you. Thank you very much for your testimony. Thank you for being here. The Chair recognizes Councilmember Jones.
And what would that needed appropriation be? It was told to me before, but put it on the record.
So in the legislation that was introduced, that would be 6.25 million last year. To begin to make the fund in earnest, there was 3.5 million appropriated.
Thank you very much, Councilmember Jones. Are there any other questions for these witnesses? The Chair now recognizes Councilmember Dr. Nina Ahmad.
Thank you, Madam Chair. I just had a question to understand the process of intersection of this money and particularly the HOME here with the H.O.M.E. that we're authorizing for the entire thing that the Mayor has done. And in that, I had put an amendment for 8.8 million for homeless issues, and that impacting those in foster care and the child welfare system. I just wanted to understand how this money intersects with that in terms of delivering those services?
Yes, that's a good question. So the H.O.M.E. bond or the local funding requires an annual program statement and budget that's approved by City Council. We've gone through that process essentially. And this is our application to HUD for federal funding. We've traditionally referred to this document as a consolidated plan. And the reason we do that is because it contains a consolidated budget that shows funding from all sources. That way Council and other interested parties can get a full picture of how we're funding these items. So HOME Investment Partnership or traditional HOME federal funds is a portion of this plan that we'll submit to HUD for approval. That funding -- typically, we spend that in two different ways, for tenant-based rental assistance and for the production and preservation of affordable housing, those large- scale multi-unit buildings. Traditionally, that's what it goes towards. The H.O.M.E. bond this year, that contains, like you mentioned, 8.8 million that will go specifically towards a wide array of homeless services as it's written in the resolution. And we're working with the Office of Homeless Services on how exactly that will be allocated. We have had cross-departmental meetings to talk about that. Right now NPI funds have supported a Shared Housing program, which is operating in conjunction with the Housing Authority. That's been very successful and I think we hope to continue that work as to spend a portion of those H.O.M.E. bond funds, which leaves a sizable balance. And I think the Office of Homeless Services could probably answer it better. But I think they're exploring options around perhaps a single SRO building that that may address some of the issues that you've raised.
Yeah, we had put in that amendment engagement with DHS clients, and that's where that rental assistance can be of much importance. We can avoid families being put into the system at all, if that is the real reason why they're in it in the first place. So I just wanted to publicly put on the record that we are looking for that type of engagement because it can go into this big morass and we don't see disaggregated data around how it's actually impacted, the issues that cause us both DHS engagement and homelessness as a whole. So maybe we'll follow up to see. I've been trying to find out how will that actually happen. And I haven't gotten an answer yet. But we'll talk further. Thank you, Madam Chair. Thank you for your testimony.
Thank you very much, Councilmember Ahmad. Are there any further questions for these panels for Bill 6 No. 260513? (No response.)
Okay. Seeing no 10 additional questions, we thank you very much for being here today and thank you for your testimony. Are there any further witnesses whose names have not been called for Bill No. 260513? (No response.)
Okay. Seeing none, is there anyone signed up for public comment for Bill No. 260513? (No response.)
Okay. Thank you. Seeing none, we appreciate you all being here today.
We're good. Thank you so much. All right. We will now proceed with our next bill. Clerk, will you please call the first panel we have to testify on Bill 10 No. 260507.
Nicola Mammes, Director of Strategic Programs in the Office of Transportation and Infrastructure Systems. (Witnesses approached witness table.)
Thank you. Thank you very much for being here. You can state your name for the record and proceed with your testimony. I was expecting Michael Carroll based on the testimony I read last night, but I'm glad that you were able to make it here with us today. And I am going to say for the record because I know Mike will either go back and watch or listen or hear, Mike, we are still waiting to hear back on that very challenging issue that we have relative to parking on the circle with PennDOT. And I'm going to put that on the record today. But please state your name for the record and proceed with your testimony.
Good morning, Chair Gilmore Richardson and members of the Committee on Finance. My name is Nicola Mammes, Director of Strategic Programs in the Office of Transportation and Infrastructure Systems or OTIS. I am here to testify on behalf of Michael Carroll, Deputy Managing Director of OTIS. He unfortunately was not able to make it today, but I am the one who's working on the project so I can certainly speak to it, in strong support of Bill No. 5 260507. This proposed legislation amends the definition of a parking facility to explicitly exclude the newly revitalized intercity bus facility, also known as the PPA Transportation Center, located at 1001 Filbert Street in Center City. To provide some context, Section 19-1201 of The Philadelphia Code currently defines a parking facility as any space where more than three motor vehicles park for a fee, triggering a 22.5 percent city tax on those transactions as of July 1, 2021, with an exemption for parking spaces used exclusively by unit owners or tenants of condominium buildings, whereas Section 12-927 specifically dictates that fees collected at intercity bus facilities cannot exceed the actual cost of providing, maintaining, and managing those services. Under the current code, this new facility is subject to the 22.5% parking tax. However, the intercity bus facility is designed with a public purpose, with all fees collected from intercity bus operations directly reinvested into managing, maintaining and operating the facility itself. This legislation creates a clean, intentional exclusion for the intercity bus facility, supporting streamlined management and ensuring the fees collected support the facility and providing high-quality customer service experience for Philadelphia residents and visitors alike. Thank you for your time today. We are available to answer any questions you may have.
Thank you. Thank you very much for your work and for your leadership on this issue. Are there any questions for this panel and for this witness? (No response.)
Okay. Chair recognizes Councilmember Mike Driscoll.
Unrelated to this specific tax, how's 10th and Filbert working out?
It's really great. We've gotten a lot of really positive feedback. Anecdotally, we've been told that it's one of the best bus stations that provides intercity bus service. The staff who work there feel that they're working there with dignity, and the passengers continue to rate it very highly for the customer service experience. So far it's going great. Really glad that we have that, especially as all these summer events are coming and we're seeing a lot of people using the station to come visit Philadelphia and also just to travel to other cities for work or other reasons. So, so far so good.
Excellent. Thank you and thank you very much for your leadership, Councilmember Driscoll. We appreciate you as our Chair so thank you so much. The Chair now recognizes Councilmember Dr. Nina Ahmad.
Thank you for your testimony. Just following up on what my colleague stated, that this is a bus station that is going to get a lot of foot traffic and people coming through, particularly as we have our FIFA events unfolding. We have a campaign going on in the city, a half a million dollar campaign around human trafficking. I just wanted to make sure that this bus station is connected, and I just wondered if you are already because the RFP has been given out to three entities we're working on. I just wanted to know if you guys are engaged in that and what are you potentially going to be doing around that issue?
Yeah, that's a great question. Thank you. So we are connected with Chatterblast. They're doing a virtual training for the staff that work at the facility to do training around human trafficking coordination and support, and also the PPA folks who manage the station have done an initial training around human trafficking before the station opens. So there's certainly engagement in that space and connected with Dr. Ugarte and Chatterblast to make sure that those folks are getting the training that's needed.
Thank you very much. I just wanted to make sure all the dots are connected.
Thank you so much, Dr. Ahmad. You've been working on that issue for a very long time. Thank you too for your leadership. Thank you. Thank you very much for your testimony. There being no 3 additional panels to testify, are there any additional witnesses here whose names have not been called? (No response.)
Okay. Seeing none, are there any witnesses here to provide public comment on 260507?
Yes, there are names for public comment. Will Tanya Moores, Jigga Mehta and Erica Chung please make their way to the podium.
On 507 -- I just wanted to say for the record I know that we talked about this with our Chief Clerk prior to the hearing. There are many individuals here or are there many individuals here to testify on the BIRT legislation? UNIDENTIFIED SPEAKER: Yes. We're going through the gas --
Okay. Hold on one second, because I have to keep the order here because we have technically two additional hearings today. And we're going to reconvene at 5 o'clock on the Committee of the Whole, which we recessed from starting at 9 o'clock. 260507 is germane to the parking tax, not the BIRT tax. And that's why I made that announcement at the beginning of the hearing. I think there was some confusion regarding which bills would be listed today and what was being held. I did notate that for the record and I did confirm that with Councilmember Driscoll and both Councilmember Thomas. So I just wanted to reaffirm that to make sure everybody understood that's where we are. Okay. Please, you wanted to say something in response to that. Please state your name first and then respond.
Sure. My name is Jigar Mehta. We had originally told people to come out to speak because we thought the bill was going to be scheduled today. And then when we recently heard that it was not, it was taken out the session, then at that point people still wanted to have their voices heard. So we're speaking now to just basically -- one, thank you --
Hold on one second. I just need to get this straight for the record. Okay. Because this is important to me not only as Chair of this committee, but also as the Majority Leader of this Council. From a process perspective, because I do not believe in wasting people's time, so I apologize that you had that information. May I ask for the record who invited or told you to come to the hearing today? So who invited you or told you to come?
So originally, there was a hearing where Councilmember Thomas said that we were going to -- made a commitment to give us a Finance Committee hearing publicly, and that was on May 6. And then from there, this was supposed to be the last hearing. And so, we were expecting to see this on the schedule. And then we had a conversation with several people within City Council, thinking that would get through. And then we were told the last minute that the bill got pulled.
Okay. I just want to say for the record, because I'm Chair of the Finance Committee, meaning that I'm in charge of the scheduling for this committee, the original bill for the Child Care BIRT was scheduled. That is Councilmember Thomas's bill that was introduced in 2025, which is why that one started with 25. Councilmember Driscoll's bill was introduced in '26, right?
'25 as well. So one was listed, one was not. In order to ensure that those bills are as strong as they can be together, right, and that they're not in conflict with each other, because the way bills are written is that you have to take it from a certain section of the code, right. We don't want them to be in conflict when we are seeking to achieve the same goal, right. And so, we are committed to working together in order to achieve the best bill possible that will best be of support for our small business community. We were not going to hear that legislation today because we are committed to working on the best bill possible for the small business community. I've spoken with both of my colleagues. The commitment is there. As Chair of Finance, I'm telling you that I will work with them. And as soon as they want it scheduled, I will send the request to the Council President for his approval and we will get it scheduled. But I just wanted to notate that for the record. I don't want anybody to think that there's anything nefarious happening here. Okay. Secondly, I'm going to respectfully request, based on the schedule that we have today, we want to hear from each of you who have come, but I will ask if you could give please an abbreviated version of your testimony because we are also in the middle of budget negotiations. Okay. Is that all right with everybody that came? And I apologize for any miscommunication that may have occurred regarding this, but I take full responsibility as Chair of the committee. Okay. Thank you very much. Please state your name for the record and proceed with your abbreviated testimony.
My name is Jigger Mehta. What we're asking for obviously is the hearing. But in that as well, we want to make sure that the analysis that's going to be provided by Revenue is transparent, that it actually reflects the group that we're talking about so the spirit of it is intact. So who we are talking about are sole proprietors and single-member LLCs that are owned by individuals. That's an important distinction. Single member LLCs can also be owned by partnerships. They can be owned -- they can take an S Corp election, they can be owned by corporations. They can be owned by trusts. We're not interested in those. Those are not in our bill. So when Revenue does provide data and starts saying that these are the people that are going to be affected, we just want to make sure that the scope is correct, that it's tied to sole proprietors and single member LLCs owned by individuals. That's it. That is the defined class that we're talking about. In addition to that, when we're talking about our belief in fiscal analysis, it is not just the city's view. What we're saying is that we should also look at what's called a multiplier effect in our communities. So when you take $30 million out of communities in Philadelphia, they're no longer able to spend that money for the 250-year celebration. Basically, what happens is that that money gets sucked out of our communities. The local grocery store doesn't get the same amount of business. You have the babysitter, the child care person who basically is not going to be able to get paid for their child care. So the impact of the BIRT exemption going away has not just affected the individual. It has affected the entire community. So we want to make sure that whatever analysis is done, that we also look at the multiplier effect, the impact on the community as well. So that's basically it. But thank you very much. And now the folks here, you know, their passion is there. They're suffering and we greatly appreciate the opportunity to speak from their heart and we look forward to the fall. And if there's anything that we can do to provide data, to provide analysis, we are prepared and ready. You need experts; we'll bring experts. But we're just asking for a fair hearing where Revenue is fully transparent with the data and it's defined with the class that we're talking about. Thank you very much.
Thank you. Thank you very much for coming in. And I can assure you as Chair of Finance, you will receive a fair hearing and we will request whatever information you all are seeking to be provided. Okay. Thank you very much. Please state your name for the record and proceed with your testimony.
Thank you so much. Good morning, Councilmembers. Thank you for the opportunity to share public comment. My name is Dr. Erica Maria Chung. I am the Communications Director at the Asian Pacific Islander Political Alliance. I'm here to read some statements that we've collected from Korean American business owners along 5th Street and East Oak Lane and Olney. We have been going out and speaking with Asian American small business owners for the past couple months to hear from them, how they're doing and how increased taxes are impacting them. And I am going to read portions of what we had gathered. This is from Song Si Mun, from owner of Asia Barber Shop. I've been in business for 30 years and things in the U.S. have never been as tough as they are now. I used to cut hair for about people a day. These days I 20 don't even get seven. I stay at the shop all day long, only to make maybe 30 or $50 a day. It's a real struggle to survive. We're supposed to pay taxes, but we can't because we are not making any money. It's just so incredibly hard for people like us to make a living. This is from the owner of Fern Rock Hardware at 5957 North 5th Street. I've been running a business in here in Philly for 30 years. The economy is terrible. It's been especially bad since Trump, starting from last year. The number of customers has dropped. There's barely anyone walking on the streets and there's no foot traffic. Over the years there's been so many new taxes, like the soda tax and the trash tax, and it's been very difficult to figure out how to stay in business. I have two more, one from a Korean restaurant owner named Kim Suk Lim from Jonggah Gym. Business is so tough these days. Prices have gone up so much. I'm actually scared to go grocery shopping. Everything is more expensive. We should be raising our prices too, but we can't bring ourselves to do it because all of our customers are struggling. I've been in business for over years. I've never 10 asked City Hall or any government 11 office for help or support because 12 I don't know how and I don't have 13 the information. Prices need to 14 stabilize. This is a nationwide 15 problem. But on top of that, 16 Philly has certain taxes other 17 states just don't have. I really 18 wish they would look into it and do 19 something about it. 20 My last one is from Kim's Restaurant, 5955 North 5th Street. I've been running my business for 16 years. My place is pretty big. But after running the business for a year and paying all the taxes, there's basically nothing left. We used to have tax break benefits before, but suddenly they cut taxes for big corporations while burdening small businesses with more taxes. It just seems so unfair. Thank you so much for the opportunity to share these stories from people who can't be here today because they're trying to run their businesses, and we really appreciate the opportunity to share. Thank you.
Thank you. Thank you very much for sharing those stories with us. And please recognize that we received that feedback and are committed to working on this issue. And I'm very proud of the leadership of Councilmember Driscoll and also Councilmember Thomas on this issue. Are there any further witnesses to give public comment today?
Yes. We have Alex Haynesworth, Leah Yeager and Patricia Rodriguez. (Witnesses approached witness table.)
Please state your name for the record and proceed with your testimony.
Thank you. My name is Alex Haynesworth. I'm a constituent from District 3. I'm here to speak about BIRT relief as well. I'm a young professional. And for the past four years, I've been a contractor for the National Museum of American History while living in Philadelphia. The work I have done is that of a standard employee. Yet I have paid for my own health insurance and only had guaranteed income for six months at a time. This year I paid $6,880 towards the BIRT tax and the mandatory estimated BIRT tax. Throughout the nonprofit sphere, these kinds of contract positions are common as a way to offload the insecurity of the funding landscape onto the workers. And now, the city is offloading their funding crisis onto me as well. That nearly $7,000 is almost eight months of rent for me or a year of private health insurance payments. It is by no means a small amount. Where are the progressive taxes? Why in such a funding crisis are corporations paying less in taxes than gig workers, freelancers, artists, Uber drivers, nannies and small businesses? How can we equitably fund the programs that this city desperately needs? By introducing progressive tax bills that will equitably share the load of the city's expenses between its citizens and corporations. I urge you all to propose a hearing for Councilmember Driscoll's bill to exempt sole proprietors from the BIRT tax as soon as possible. Thank you.
Good morning, Councilmembers. Thank you so much for hearing our testimony today. I'm the owner of a small business. It is a fitness and wellness studio here in Center City. My clients make it clear to me that --
My name is Leah Yeager. Thank you. My clients make it clear to me that our work impacts their lives positively. Additionally, I also make space for other practitioners in my field to run their small businesses from my physical space. And I really believe that small businesses are an important part of what makes Philadelphia a vibrant, interesting, colorful place to be. Even just riding my bike here, I was keenly aware of all of the businesses dotting the streets, you know, the nail salons, the restaurants, the sandwich stores, Danny's Midnight Confessions, you know. It really makes our city an interesting and wonderful place to be. And I'm a lifelong Philadelphian so I love this city. And I would love to be able to afford to continue to have a small business here. It's a precarious endeavor, undertaking a small business. That's the nature of the beast. It is also already an onerous process to organize finances, taxes, save independently for retirement, licenses and the like. So this BIRT tax, after personally coming to the third year of this iteration of my business where I felt like I was finally getting my feet on the ground, this was a smack to the back of the head. And I know that not just for me, 2,000; 3,000; 4,000; 5,000 is material for people with small businesses. And I know that we got grit, but don't make us grind for peanuts. We're not all going to make it. So I love this city. And I hope you will consider this testimony. Thank you so much.
Thank you. Thank you very much for your testimony. Please state your name for the record and proceed with your public comment.
Hi. My name is Patricia Dominguez. Thank you for listening to me. I came here a month ago when I talked and I just wanted to come back and ask again like -- well, not even ask. I'm begging if you could please consider changing the sole proprietor LLCs out of the BIRT, exempting them. I'm just two-and-a-half years into my business, and hard to get the new business off the ground. And I'm in a vicious cycle. Like, last year I didn't couldn't afford to pay my estimated, so I'm getting hit with fines and I'm paying it all. And this year, again I've got to pay for daycare. So I'm not paying my estimated so I'm going to get hit again next year with my fines. And I'm like, this is really -- we're going into summertime. And so, I'm like it's real light during the summertime, so I'm biting my nails. And, yeah, I would like so appreciate if you could reconsider it. My business also includes people that work also as 1099, they're 1099 workers. And, yeah, so we're all like feeling it.
Thank you and thank you for coming in again. Please state your name for the record and proceed with your testimony -- hold on one second. You good?