Maybe what we can do as a council is to put some language into the legislation that requires them, unless there's an extenuating circumstance, a dispute or whatever, most of the time when I find -- when I try to help someone get paid, it's because it's sitting someplace on a desk. It isn't because there's a policy. It's just that somebody says, "Well, we haven't gotten to it yet." Well, guess what? If they have to start paying interest on a delayed payment, maybe that will get their attention.
So maybe we should look at that to see what we can 207 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 do to assure that there's a flow. If the department is running shorthanded, that isn't a good thing because that's putting a burden on someone else. And maybe we need to make sure that they get an interest payment assessed to do that slow payment. That will certainly get their attention. I don't know if there's something we can do about that.
I'm pretty sure that's where Councilwoman Campbell is going with this.
Are there any other questions for this witness? (Witness comes forward.)
Would you like to testify? MR. McHUGH: Mr. Chairman, I'm 208 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 on the list to speak. My name is Ed McHugh. I'm Vice President of the Ironworkers International and I'm President of the Ironworkers District Council of Philadelphia and Vicinity. And just to expand a little bit on the question from Councilman Rizzo about whether it's an intention to do this or whether there are mitigating circumstances. What you're seeing a lot of today in the construction industry is jobs are going out for bid, they're put on a fast track, and they're going out for bid and they're being released with incomplete drawings. For instance, let's take Local 401's case. They're steel erectors, okay? Well, that steel has to be fabricated by a fabricator, and in a lot of cases, the erector is the same contractor or it's someone who the fabricator uses a lot. He gets drawings that aren't 209 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 complete. He has to fabricate that steel through his knowledge of the fabrication business and the AISC Code to be done right, properly so it will pass inspection. Now, a lot of this becomes negotiable items, and it's done, as was previously mentioned, with intent. Somewhere during the course of the job, somewhere in the chain of command, someone decides, Well, we want to change this, we want to change that. The owner decides he wants something a little fancier -- he wants to put this part over here or that part over there. This all requires change orders. Change orders are executed, they're signed on the job routinely by a representative of the executor and a representative of the subcontractor. No one puts any thought in the change order. Well, I didn't authorize that -- I being the project manager for 210 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 the prime contractor; or I, being the owner's representative, didn't authorize that change order, therefore we don't want to pay for it. And really, it's a game being played out there. And what's basically needed is just firm, uniform language to tighten up all of these loopholes in both the public and the private sector because the truth be told, it actually happens -- although the Councilman says he's seen instances in the public sector here, it's much more prevalent in the private sector. And working together with our contractor partners through our labor-management initiative, we have taken the initiative to do this previously. And across the river, we got it done statewide in the State of New Jersey with a prompt-payment law, which I believe Joe has provided a copy for everybody, if you would care to 211 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 take a look at it, that is fair from the top down, right from the developer-owner right down through the smallest tier of subcontractor. The largest general contractor's association in the State of New Jersey partnered with us in endorsing and lobbying this issue to get it through, so it's not a one-sided bill; it's fair to everybody. Whether it's a union, non-union job is not an issue. It's an issue of someone who went out there on their word, did their job, and now isn't being paid for it, you know. And, again, it puts a small contractor -- they don't have cash flow. They need to be paid for the work they did so they can pay their bills, they can pay their employees, they can pay the benefits that they have to give these people health and welfare coverage, and provide for pensions and retirement for them. 212 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 And it's just kind of a win/win. Someone talked earlier at the table about a win/win situation. The proper bill with the proper language is a win/win situation for the whole construction industry, and there's absolutely nobody in it that suffers except someone who comes in as an owner/developer or a big project manager with some intentions other than doing the right thing. They're the only ones who would suffer from this.
Thank you, Mr. McHugh. Do you have any other testimony you would like to offer? MR. McHUGH: Pardon?
Do you have other testimony that you would like to offer? MR. McHUGH: Well, the only thing I would say is, we were going to bring one of our good steel-erector contractors in with us to testify as to how this has particularly affected him 213 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 today, but he's actually giving a deposition for a lawsuit over a job that he didn't get paid on. It's kind of ironic. (Laughter.) MR. McHUGH: And, you know, along the lines of the previous bill, I would just like to say, you know, there were a lot of good points there, and anybody can look down the street and see one of our woman business enterprises reaching higher into the sky every day to make Comcast the largest job in the skyline of Philadelphia, and we're very proud of that woman's business enterprise.
Thank you. Are there any other questions for this panel? (No further questions.)
Robert 214 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 Duffy? (No response.) MR. McHUGH: Thank you.
Please state your full name for the record and then proceed with your testimony, and thank you for your patience.
Okay. I am Lonnie Stanley of the Kimmel Group. We are a minority-certified IT consultant with the City of Philadelphia. We have been doing business with the City since 1995. The majority of our contracts, we have been prime, and in some instances, we've also been a subcontractor. 215 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 I thank you, Mr. Chairman, for your time and for the other Councilpeople for being here. Thank you. I just wanted to -- actually, I received this notice really late to be here, and I apologize. I didn't get a chance to actually look at what was being proposed and am working kind of hard with daylight savings time issues. We're an IT firm so we have been busy. But I do want to speak on two things. Councilwoman Campbell mentioned a couple of questions she wanted answered directly, so that's what I would like to address. The number-one question is what is the problem? The problem is, when you are a subcontract and you're small, whether it's minority-, woman-owned or disabled, it's really moot at this point. If you're a small contractor and you're dealing with a sub that's 216 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 very large, I think the majority of the time we find is that there's profit and greed in play. And they really don't care what the small business -- whether you get paid or not, quite honestly. We've dedicated a lot of time and a lot of expertise to push them as much as we can to ask them why it's being delayed, why haven't you paid us? We continue to call and pester them. But there was one instance where it took us ten months to get paid on a project. That project, our portion was $50,000, so for 10 months, we went without $50,000 on a project when we were a subcontractor. Finally, at the end of the day, when we did receive payment, we did not receive the entire amount that we thought we were supposed to receive. There was an additional, quote/unquote, bonus of a few point that was they were awarded which we didn't receive, even though we did most of the work. 217 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 So I think Councilman Clarke had mentioned earlier that it's sort of like status quo for some of the types of things that happen, and that's part of the problem. The primes really don't care. There's really no true economic penalties if they don't pay you on time. And so, therefore, it continues. I think there was a question about whether or not we are in favor of prompt payment. Many of you up there know we are in favor of this. I think I've contacted Councilman Rizzo in the past, and the question is always asked of me about other City officials -- are you getting paid in time? I think everyone knows there's a problem. Over the years, what we have done as a small company, we've survived through the grace of God, number one; but, number two, what we were able to do is actually obtain a line of credit. Without a line of credit, we wouldn't 218 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 be here. For the first five years of my organization, when I did not receive prompt payment, I basically went into debt. We neglected to pay tax withholding. So basically, we had to deal with the IRS fund later on, and we paid all those, and we're past that. But as a small company, when you don't have the cash to pay your employees and you don't have the cash to pay their benefits and you don't have the cash to pay into here IRA plans, you do what you can. The number-one strategy was, I didn't pay myself. That only lasts for a few when you have a wife tapping you on the shoulder, so -- but we survived What procedures should there be for those that aren't paid timely? I think Councilman Rizzo touched on that. Normally, when my private-sector companies don't pay in a timely fashion, number one, I asked them for 219 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 some interest because there's money that they've been sitting on for quite some time that had I had it, I'd be getting interest from the bank.
Number two, after 60 days, I normally take my private entities to court. I don't do that with the City. Number one, the contract is quite large; and, number two, I don't know of anyone who's successfully sued the City over not being paid for a contract, so that's just not something that we do. How are we affected? We mentioned that before. There are times when we basically rob Peter to pay Paul. I have to pay my employees. If my employees aren't paid, I would no 19 longer have a business, so we do whatever we can. Over the years, we've done as much as shut down our office, turned in leases early, whatever we could do to basically bootstrap this organization. Is there a failure to enforce 220 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 any laws that are in effect today? I'm not sure. Once again, I apologize. I haven 't had a chance to take a look at any laws that are in effect, but I definitely will do that and take a look at that. Being a prime contractor, I will say that the majority of time when we don't receive prompt payment, it has been the case of maybe an invoice was sitting on someone's desk, someone lost it, someone neglected to turn it in. I will say that since 1995, both Procurement and Finance have taken major leaps, and we've been getting paid the majority of time very promptly. We now have the online system where we can track to see whether or not our invoice was submitted to the system. It will then tell you whether or not a check is being submitted. And we no longer receive checks from the City. We now receive 221 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 direct payment. So when they say the check is in the mail, it's already been in the bank. So that's a positive and that's happened over the last five years, so that's something that we say is great. But the problem is between the time that you submit your invoice to the paying department to the time that it shows up on the Internet, it's a chasm. You have no idea why it's there. Yes, Councilman?
While you're here, will my BlackBerry change the time again three weeks from now?
Okay, all right. 222 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176
The question is: Have you ever said to a client no? Have you ever said no. 5
Have you ever said no to a client that's -- I know it's probably not the smart thing to do. If someone doesn't pay you, have you ever refused to do business with them in the future? Have you ever said to them, Look, we have to end the relationship. I'd love to do business with you. I guess that's cutting off your nose to spite your face, I would assume, but have you ever -- what do you say to a person -- not the City of Philadelphia so much, but what do you say to a client that's a slow pay? Or some people, I think, build into their pricing customers that slow-pay in some cases. 223 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176
In our instance, we have told the customer that we will no longer do business with you. And normally, the relationship is to the point where we found that -- for one, this is a small organization, and they only owed us probably $4,000.
And they paid a portion of it, $2,000, and then another $2,000, and it went on for 90 days. I was finally able my to get a hold of the president of the organization, who said, Oh, my bookkeeper has been doing that as a policy, paying some payments but not paying them all. I apologize. We let him go. The check is in the mail. So we do say no. 21
That gets their attention on occasion, doesn't it, when you say, "I'm not going to work for you anymore"?
Yes, it does. 224 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176
They're going to pay, yes. It's hard to say no when you have a large contract with large entities such as the City of Philadelphia.
Right, exactly, but I'm glad to hear things are working well for you there.
Thank you. Are there any questions for this witness? (No further questions.)
Sharon 225 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 Williams? (Witness comes forward.)
Good afternoon, Councilmen and women. My name is Sharon Williams. Thank you for having me.
Okay. My name is Sharon Williams. I don't know whether this is a forum for me to talk about the lack of payment, but I'm going to take the time to do that anyway. I'm a licensed private detective, okay, and I've been licensed by the City of Philadelphia, and I work all over the State of Pennsylvania. The problem -- I really can't put my finger on it as far as lack of payment. Sometimes I think it's because people don't want to do their job. You know, I've gone to Finance on numerous occasions and asked them, you 226 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 know, where's the check? You know, I've done my work, I've done the investigation that's been, you know, handed to me. All I wan to do is, you know, get paid. And I'm told that the City doesn't have the funds or "Don't think that you're going to get rich by working here" or, you know, things that just discourage me. I'm very discouraged in that matter because I feel as though that these people are taking their job personal and keeping me from getting paid for work I've already done, so that's a part of that problem. What procedures are needed? I believe that you take the personality out of it and tell the person to do their job. Or the person who's in charge of Budget and Finance, "Listen, you know, you have a certain amount of time to put the vouchers in the system to pay these people. Why aren't they 227 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 being paid?" I think it has to start with the supervisors, you know, who have these employees working under them, because when I go to Finance and I talk to -- I believe his name is Mr. Cross, he doesn't know anything about what's going on, okay? I submitted a bill one time -- you see, I have to pay out of my pocket first. Any cases that I get, I have to submit the money first, and then I submit a bill at the end of the case. All right, I submitted a bill 16 back in August of last year 'cause I had to go out of the country on a case, and all of that money came out of my pocket. And when I submitted the bill, there was nothing said to me why I wasn't being paid. When I spoke to Finance again, they said, "Well, you didn't circle this, you didn't give me that," and that wasn't true. What happened was, 228 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 they finally told me that I need to do bring in my credit card receipt so they could see that I actually paid for the trip. The trip was already done, completed, the bills were submitted. I did submit my credit card, even though I submit all of the bills that go with that trip, it's given to them along with my voucher, so I don't know what that was all about. How does it affect my business? It affects me tremendously, okay? Since I have to put my money out first, I need to have that money back to me so I can continue to do the work, so I can continue to investigate the cases that are assigned to me. I believe that Councilman Rizzo stated that, and I agree with him, where vouchers are laying on people's desks, and they just put them aside and just forget about you. You know, if you asked them again what happened to it, they'll say, "Well, we 229 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 were told by the City Controller to hold down the costs" or "We're not going to pay you because" -- whatever, you know. So I'm being -- I'm very discouraged about not being paid. I hope that Councilpersons can do something about this because it hurts somebody who is a small-business person like myself.
You would think -- and it's just for the record, and I'm not saying this to you directly, but you would think managers within that department would get a report on a daily or a weekly basis that would show them the status of their accounts payable that this is 30 days old, this is 50 days old, this is 90 days old, and a supervisor would say to the people that are pushing the paper, You've got this, this, this, 230 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 this, this. You know, what's the status of it? I just can't imagine that it's that manual a system because it's just mind-boggling to think that a piece of paper gets pushed over for $10,000 and some is vendor waiting to be paid. I'm glad we're here for this. I leaned over to the Council lady, and I said this is really a good piece of legislation because it affects so many people that feel powerless in getting their money. And you described, being self-employed, that it's out of your kitty until you --
And the taxes are just absorbant [sic]. I mean, the City taxes for a small business like myself, if I don't get that money back, 231 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 I still got to pay taxes on that.
Well, you know, it's interesting you say that because one of the witnesses today wrote me a note and said basically the reason -- when he used the language that it costs him -- that he's not competitive because of the cost, he said it's not because he charges more; he says it's because his wage taxes his BPT, his higher business taxes, his man hour rate here and lady hour rate is higher than some of the companies in the suburban communities. They can come in here and automatically charge less because you have fixed costs that are higher than someplace out in Bucks. Montgomery, Chester, Delaware County, or across the bridge to New Jersey.
Exactly. Well, one thing I had noticed about the City, by the end of the year, they'll hurry up and mail you all your money so that, you know, by the end of the year, they 232 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 can claim it as money paid out to you, you know, for taxes purposes, okay, when I don't receive my last check until maybe the next year, but they'll hurry up and, you know, mail it to me so that they can claim the fact that they paid that for tax purposes. So I'm hoping that City Council will do something about this prompt payment. Thank you very much.
Thank you for your testimony. Are there any questions for this witness? (No further questions.)
Thank you very much. Is there anyone else to testify on this? Mr. Ali? (Witness comes forward.)
Once again, my name is Jihad Ali. I'm a member of the 233 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 Association of Unionized Contractors. And one of the things -- they asked me to come here today and testify on their behalf. Two of the contractors were recently listed in the Philadelphia Business Journal on the list of minority contractors. ) is listed as number 18, and Al Brown from Complete Ironworks is listed as 23. And one of the things, when you read the list of the attendees that were here that were supposed to speak today, a lot of them were union officials. And, you know, I have the distinct experience of having been a union member, a union contractor, and an advocate, and I also worked with developers. One of the things we have -- we're talking about different -- different -- I guess different agencies when we look at this payment thing. We're talking about the City on one 234 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 end, where people are direct contractors. On the other end, we're talking about subcontractors who are second-tier subs of contractors who are working for agencies or projects that funded by agencies. What the union guys basically, I believe, when you look at the issue of who gets hurt, it's the men. So from the union's perspective, they're here because when a contract is not paid and he doesn't pay his union fringe benefits, then the men and women working on those jobs, their health and welfare fund is not paid. And this is something that each men on the job receives at the end of the month. They receive an accounting of all the hours they worked. So if a contractor is on the job and he's not paid and the man goes to the union steward, at the end of the month, he says, Look, I didn't get my 235 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 health and welfare paid from "XYZ Contractor," then they start the process to tell that contractor to pay his fringe benefits. But I think that when you look around this room, when we don't see people here, I don't believe that the word went out to the complainants, and part of that is because now with the change in requirements of the federal government, every union has an LM2 form that they have to complete, and on each one of those forms, list their outstanding accounts receivable. And each one will identify a contractor and what he's behind by. If the staff -- if your staff can access that list and work with the unions, because we get into a -- we get into like, I guess, a privacy thing. You'd have to ask them to come and tell you their reasons, but there's a whole list. And what's really unique is if 236 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 you look at these LM forms, depending on which trade you're looking at, some unions, they might have revenues of $20 million a year. Whatever accounts receivable might be only 500,000. Other unions might have revenues of 5 million, and their account receivables could be a million. Well, that's telling me from an informed point of view that those -- and some unions could have 35 million, accounts receivable zero. Well, that's telling you they have a hammer there. They don't let anybody on. The other ones are a little more lenient, like maybe the ironworkers. It's just so -- it was a coincidence. I didn't know the ironworkers were coming. But Al Brown from Complete Ironworks, he's an ironworker. ), and he wasn't paid on a project, on a (indiscernible) project that was under 237 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 the Redevelopment Authority. So it was actually a coincidence 'cause he wasn't paid on the project. And then Lou Terrado from Terrado Construction, he wasn't paid on a project. So each of them asked me to go to the owner and talk to the owner about paying 'em. If not, then I would talk to the board because most boards, like most Councilmembers, you are concerned about people.
But in this particular instance, I went to the president of the company, and I asked him out of respect, because we had a history of protest going back for, you know, like ten years -- he knew that I would protest, he knew that I would get some men, and I'd stand up and protest. " So I kept my word 238 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 and I went to him first. I said, Look, I have an issue about two men. One man wasn't -- Lou Terrado wasn't paid for months. Al 6 Brown wasn't paid for almost a year. 7 The issue was whether it was 8 change orders or whether it was they 9 weren't paid yet. It really doesn't 10 matter to the recipient of that money 11 because they did the work, and they 12 have bills. 13 So when I went to the contractor, he paid 'em, but the end-result of that going to them, they got listed on a list where they're not called anymore for work. They both have come to me with that and said, Well, you know, even though the guy has paid us -- and this must be six or seven months where they used to be solicited all the time, now they're not solicited. So whatever you do, there's going to be -- you have to show aware that some people will retaliate against 239 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 that. But when the Councilwoman asked how are people affected? The men are not paid, taxes are not paid. But unlike any other agency, if you don't pay your federal taxes, you only have a limited amount of time, because if you don't pay 'em, the government will move against you. But in the meantime, before that action is taken, when they put a lien on you, more than likely, the unions will see that lien listed in the Federal Register, so they will take you to court, and they'll show up with -- whether you're a Hispanic, they'll up with a Hispanic attorney. They'll show up with somebody. If you're a female, they'll show up with female attorneys, somebody to take you to court to get their wages. And then as a result, your credit is hurt and then you subsequently go out of business. 240 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 And, unfortunately, you know nobody's proud -- nobody's happy to talk about their failures, but I'm here today to tell you that prior to me doing all of these other things, I was a union contractor at a union contract company. And one of the ways that -- I told you earlier in my previous testimony, when I got out of the service, I was a veteran, and I had worked in construction, but I wanted to stay in construction but I wanted the union. But then, back then, your father, Councilman Goode, was the mayor, and he had an aggressive plan for inclusion. And as a result of his plan, he wanted opportunities created. And we used to have a woman in one of the agencies at the Redevelopment Authority. Her name escapes me now. But there was a project and someone had listed me -- a 241 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 developer at the time had listed me on the contract to participate, but they never called me, but the agency sent me a notice that I was listed. I believe the name just came to me. It was Gwen Campbell for OHCD. She called me and asked me, was that true? And I said yes, it was. She said -- she held up a million dollars until they got me in a meeting. Within hours, I was meeting with the 13 corporate officials. 14 I came down to City Council 15 because they said, Well, look, we'll 16 let you in the union, but you got to 17 get somebody to help you. I came down 18 to this Council Chamber, and some 19 Councilmembers were present. 20 They were having a meeting, 21 but one of the officials from one of 22 the unions was here and he saw me, and 23 he took care of my problem and I was in 24 the union. So as I got in the union, one 242 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 of the things that affected me later on down the road, maybe about ten years later, I was on a project -- I think the Shriners Hospital.
The contract -- we were a second-tier contractor, and how that affects second-tier contractors is, if you're the owner and you hire a company, that company has a direct relationship with you. The subcontractor doesn't; he has a direct relationship with his contractor 'cause he's a second-tier sub. So he can't come to you to complain to you. He has to go to his contractor, who he has a direct contractual relationship with, so they're left out of the loop. And most contracts with subcontractors on, when we look at union, non-union, there's a clause in the contracts that say "paid when paid," like one of the previous people testified. And if you look, we ask, Well, 243 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 how do we get around that? Well, if you look -- you know, I once told my -- like I have some children like, and I remember telling my son, it's nothing that you could come up with that I haven't faced or somebody else in this family hasn't faced. Well, that's equally true on this legislative thing. There's nothing that we can come up with that this legislative body or people that have preceded you didn't face. So I was looking at some of the previous issues when I researched that case on the Bechtel decision, and one of the things I came across was the contractors improvement law, which is a State act. And that act -- there's some language in the act that says that contractors cannot include in their language where people can give away their rights, like the right to sue, the right to file liens, that kind of 244 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 stuff. And that passed legislation. Well, we need that type of language for contractors and subcontractors 'cause they need to have their rights and they need to have the avenues to pursue their rights. Earlier, one of the previous people testified and said, Well, do you think that there's a strategy? Well, that's a yes to that, because sometimes it is a strategy, because most businessman, depending on who we're talking to, from the owner's perspective, well, the strategy is, they can beat up on the little guy, because the little guy, unlike the previous person who testified, they can't go to court, because not only are you going to court for one person, if it was a person that's not paid, they have to fight the union, they have to fight the contractor, and more than likely, they have to defend their self against the Internal Revenue Service. 245 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 So their legal challenge is really steep. So -- and then, you know, when you really look at this contracting thing, most subcontractors fund the job because they're not paid until they've already been in the job 30 or 60 days, and then after an initial point, they're paid every 30 days. Well, they're funding a job so their money is at risk. Now you have, you know, an unethical developer or a contractor to come along, and he says, Well, you know? I got all this money. It's 10 percent of this money, maybe a hundred, 200,000 that's just sitting. If I can make this guy default, then I'll have all that, I'll come and I'll finish it for maybe 50 or 75, and I got all the surplus. And no matter what contractor you look at -- now, I'm familiar with a contractor out in the 52nd Street area 246 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 that's doing a project, and he's up against tremendous odds because he's trying to reorganize and get some things done, but all it takes is one of those -- somebody to get the word to that developer to hold up that payment, because if they hold up his payment, he won't be able to pay everybody underneath of him, and then he's in such a precarious situation that people will move against him, and he'll have no recourse. So one of the things I think Council has to look at, you really have to look at each different agency separately and come up with a strategy.
So if you're talking about one of these municipal authorities, what can you put in there, because they're self-governed. And if you can coordinate with some of the other agencies who have legislative authority like the Pennsylvania minority business agency up in Harrisburg or maybe some 247 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 of the other agencies that may have more leverage, then we can get this thing addressed. But there also should be, like we talked about earlier, like an advocate. Like this Council maybe should have an advocate that can keep this Council informed. You know, one thing came to me when you talked earlier, one of the people testified and they said, well -- they talked about the stadium. One thing that came out of the stadiums -- I'm not sure if you all were in Council then, but this Council had went through great lengths to get inclusion. Well, what the developer did was, he signed an agreement with an agency to provide the documentation to this Council. When this agency was called back in front of Council to answer questions about inclusion, agency said, "I'm sorry. " And because of that, you 248 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 couldn't gets the information that you authorized. So we have to be mindful. Like I said earlier, there's history here. All we have to do is be mindful. We have to get more on this issue of pay, we have to get more in touch with the complainants, because if you or your staff -- and if they don't know, I'll show 'em how. You can pull out every LM report that was submitted as of 2005. Most of them are available now. And you can get every person who potentially owes these unions, and you can get them in to tell you what some of the difficulties they may have faced. But you're definitely on the right track, because without paying people, we affect everything. We put businesses out, we eliminate that whole opportunity to provide examples for other people who can pursue a lucrative business, 'cause this is the last 249 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 frontier. When you look at construction, construction is the last frontier where you can really get ahead based on your ability and the sweat off your brow. You don't have to have a high school education, you don't have a college degree; all you have to do is have is ability. And that's really true for entry into any one of these trades, so you can go from being a high school dropout, get into one of these trades, and you can make 75 to $80,000 a year just being a member on a crew. So, you know, this Council, you really -- and like I told you all earlier, you have a tremendous task ahead of you, but nothing in this country ever began with a big effort; it started with a small group of dedicated people just like yourselves. So I think you can do it, but you just got to, you know, like they say, put 250 3/12/07 COMMERCE/ECONOMIC DEV. RES. 070176 your mind to it.
Thank you. Any questions for this witness? (No questions.)
Let me note for the record that Councilwoman Blackwell was also in attendance today. The hearing on Resolution 14 070106 is recessed to the call of the Chair. This concludes our public hearing and public meeting. Thank you to committee members. Thank you, Councilman Rizzo. This concludes our meeting. (Proceedings end at 4:45 p.m.) 251 C E R T I F I C A T E I HEREBY CERTIFY that the proceedings of the City of Philadelphia Council Committee on COMMERCE and ECONOMIC DEVELOPMENT are contained fully and accurately in the stenographic notes taken by me on Monday, March 12, 2007, and that this is a true and correct statement of same. __________________________________ JOSEPHINE CARDILLO Registered Professional Reporter (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)