COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE OF THE WHOLE - - - Room 400, City Hall4 Philadelphia, Pennsylvania Wednesday, April 15, 2009, 10:15 a.m.5 - - - Res. 090226 - Approval of revised Five-Year7 Financial Plan covering FY 2010 through 2014. Bill 090212 - Capital Program for six Fiscal Years 2010 to 2015, inclusive.9 Bill 090213 - FY '10 Capital Budget.10 Bill 090214 - FY '10 Operating Budget.11 COUNCILMEMBERS PRESENT: Anna C. Verna, Chair Jannie C. Blackwell14 Darrell L. Clarke Wilson W. Goode, Jr.15 Bill Green William K. Greenlee16 Curtis Jones, Jr. James F. Kenney17 Joan L. Krajewski Donna Reed Miller18 Brian J. O'Neill Blondell Reynolds-Brown19 Frank Rizzo Maria Quiñones-Sanchez20 Marian B. Tasco - - -22 V A R A L L O Incorporated23 Litigation Support Specialists 1835 Market Street, Suite 60024 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.267025 2 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Good2 morning, everyone. This is a continued3 public hearing of the Committee of the4 Whole.5 And the first department to6 testify?7 MR. McPHERSON: Is the Board of8 Pensions and Retirement.9 (Witnesses come forward.)10
Please14 identify yourself for the record and15 proceed with your testimony.16
Okay. Good morning,19 Council President Verna and members of20 City Council. My name is Gwendolyn Bell,21 and I'm Executive Director of the Board22 of Pensions and Retirement. 25 3 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 The Board of Pension and2 Retirement has submitted a budget request3 for Fiscal 2010 for $10,604,000. This is4 a decrease of $6,000 from Fiscal Year5 2009. 18 ... 22 Our goal is to continue to reduce23 overtime and improve service to24 participants. 5 For the disability process, a6 staff member has been dedicated to be the7 liaison between the Pension, Law, Risk8 Management, and the Medical Panel to9 ensure that processing time for10 disability applications are reduced. 13 New communication procedures14 have helped to reduce overpayment15 situations that previously occurred when16 the Board was not aware of an award of a17 Worker's Compensation payment. 24 An alternate has been added to25 5 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 the Medical Panel co-chairs to ensure2 that there will not be a delay in3 processing applications. The number of4 specialists working with the Medical5 Panel has been extended to areas of6 specialties where we've seen an increase7 in the nature of the disability8 applications. 12 In regard to the retirement13 seminars, the workshops have been14 continued to be attended at a capacity of15 60 persons per session. 13 In regard to technology, the14 Board of Pensions has imaged all of the15 retired invested files as well as16 incoming mail. 23 Although the Department of24 Technology has recommended that the25 7 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 current pension payroll system be2 replaced, we are currently still3 requesting information to locate the best4 Oracle-based payroll system. 10 MR. 9 percent for the fiscal year12 ending June 30, 2008. percent. While the performance has been6 disappointing, several actions taken by7 the Board have preserved value. 13 In late 2008, the Board made a14 strategic decision to conservatively15 invest the proceeds from the City's16 annual contribution in light of the17 uncertainty in the market. 25 9 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 The Board taken actions to protect the2 Fund in these turbulent times while, at3 the same time, positioning it to4 participate in an eventual rebound in the5 markets. Analysis shows -- has shown that9 the median expected earnings rate for10 public funds is 8 percent. 25 10 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Thank2 you.3 At this time, the Chair4 recognizes Councilman Goode.5
Thank you,6 Madam President.7 Good morning, Ms. Bell and8 Mr. McDonough.9 One of the most challenging10 problems we have in this city, of course,11 is the health of our pension fund, and12 your job is to protect the Fund. In13 protecting the Fund, do you view your job14 as protecting the people who will benefit15 from the Fund? In other words, let me16 describe what I'm talking about.17 Let's say there were four18 classifications: Retirees being one,19 vested workers being a second,20 non-invested workers being a third, and21 the fourth being future workers. Should22 all four classifications be treated the23 same in terms of protections?24
Okay. You're asking25 11 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 if all... You're asking if all --2
Four of those3 classifications should be treated the4 same in terms of protection.5
Yeah. This is a6 defined benefit plan, so the benefit is7 calculated based on a person's years of8 service. They would have to qualify by9 age, but it's based on years of service10 and final average compensation.11 So in regard to your question,12 they are all treated the same. And when13 the actuary [indiscernible] the reports,14 he takes into account that the active15 members and the vested members will be16 receiving a benefit at some point.17
So in18 addition to actions that the Board may19 take, do you make recommendations to the20 Administration on possible legislative21 action that should be taken?22
No, we don't because23 the benefits are determined by labor24 contracts.25 12 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
So at the end2 of the day, you're not asked for your3 advice, nor do you offer your advice.4
No, we're not asked5 for advice on how the pension benefits6 are calculated; those benefits are7 determined through labor negotiations.8
You're11 welcome.12 The Chair recognizes Councilman13 Rizzo.14
I think we're15 all concerned about the funding leveling16 of the pension right now. It's at 55; is17 that correct?18 MR. McDONOUGH: Well, that's --19
Or is it20 lower than that since the latest numbers?21 MR. McDONOUGH: The --22
The funding23 now.24 MR. McDONOUGH: -- last official25 13 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 number is 55 percent as of July 1, 2008.2 We will not have another number until3 July 1, 2009.4
So, in other5 words, there's no mathematics based on6 July? It's kind of a -- there's been a7 significant change in the market, so it8 should be -- do we anticipate that it's9 going to be obviously in worse shape,10 right?11 I mean, isn't there somebody12 that does these numbers that can13 speculate what they're going to --14 analysts where they're going to be, and15 not have to wait for an official report?16 MR. McDONOUGH: Well, I think17 it's safe to assume that it's going to be18 lower, given what's happened with the19 investments, but the actuary calculates20 the actual funding ratio.21 And I can speak to the22 investment side and the market value of23 the investments, but I can't speak for24 the liability side, which is calculated25 14 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 by the actuary.2
After the close of5 the fiscal year, June 30th, the actuary6 gets numbers probably sometime in August7 and works on it through the summer. So8 it would be early fall that he would have9 those numbers ready. I would think the10 earliest would be September.11
We're all12 concerned about what that number as going13 to be; am I correct?14
It's not16 going to be good.17 MR. McDONOUGH: Barring a18 recovery in the markets over the next,19 you know, three months of the fiscal20 year, it will be lower.21
Thank you,24 Madam Chair.25 15 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
You're2 welcome.3 Can you tell us what the cost of4 the new payroll system is and when it5 will be completed?6
Okay. We have7 estimates. And assuming the payroll8 system would take three to four years to9 implement, we've budgeted approximately10 $2 million a year for the first four11 years and a-million-5 for the last year.12 It would include implementation13 and follow-through and purchase of the14 off-the-shelf packet, so it would be15 about 9 million over five years.16
Can17 you tell us, how does the Board of18 Pensions select its money managers?19 MR. McDONOUGH: Sure. The20 majority of the opportunities are awarded21 through the public posting of an RFP22 through the City's e-contract Philly23 website. The notices of the24 opportunities are posted there for a25 16 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 minimum of 14 days. The responses are2 evaluated by the investment staff and3 their consultants and presented to the4 Board.5 The Board will then typically6 select a subset of the responses to hear7 presentations from, and then they will8 make a selection based on the9 presentations that they hear.10 There's a small subset that do11 not go through e-contract Philly because12 there's no way to compare among different13 providers, so they are brought to the14 Board one at a time, and the Board hears15 presentations and makes a decision as to16 whether they want to invest or not.17
Can18 you tell us what the performance19 standards are that you apply to your20 money managers?21 MR. McDONOUGH: Yes. The22 majority of the money managers are23 assigned a benchmark based on their24 investment style. So, for instance, a25 17 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 large-cap manager might be benchmarked at2 the S&P 500, which is the universe of3 stocks that they're picking from. Their4 performance is evaluated against that5 benchmark on a monthly basis. On a6 quarterly basis, we provide the Board7 with an in-depth analysis of their8 performance, with explanations of why9 they either outperformed or10 underperformed the benchmark.11 If a manager underperforms their12 particular benchmark over an extended13 period, we'll provide an in-depth14 analysis to the Board, with a15 recommendation as to whether to retain or16 terminate that manager.17
Thank18 you.19 Could you give us a list of your20 managers and what they were paid in 200821 and their estimated payments for 2009?22 MR. McDONOUGH: Yes. May I23 provide that to you after the meeting?24
That25 18 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 would be fine.2 Why aren't the money managers3 paid through Appropriations?4 MR. McDONOUGH: Uh... As you5 know, they're paid out of the assets of6 the Pension Fund. That's how it's been7 handled since I've been involved with the8 Fund. I imagine it would be a strain on9 the budget to pay the manager's fees out10 of the General Fund.11
Not12 the Pension Fund? Wouldn't paying13 through Appropriations more accurately14 reflect the true costs of the pension15 system?16 MR. McDONOUGH: Well, from a17 performance perspective, we report the18 performance of the Fund on a net-of-fees19 basis, so we take into account the fees20 that are paid to the investment managers.21 So I think by doing that, we're22 accurately reporting the true cost of the23 Pension Fund from an investment24 standpoint.25 19 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Okay.2 The Chair recognizes Councilman3 Jones; is he here?4 MR. McPHERSON: Yes.5
First, let me10 thank you for promptly responding to my11 letter of last year, where you detailed12 all of the answers that I asked for in an13 informative way. I even understood it;14 you didn't do it in a fancy, formal15 finance language so that a layperson16 could understand it, so I want to thank17 you publicly for that.18 A couple of things that kind of19 jump out at me. If we are determined to20 be a distressed fund, in your opinion,21 what are some of the things that we are22 open to be able to do? What would it --23 would we renegotiate payment into the24 Fund, people would not get as much25 20 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 benefit coming out of it? Can you lay2 that out for us as a body here?3 (Mr. Dubow approaches witness4 table.)5
As far as the benefit6 payment goes, we don't have any input7 into what the unions and the City agreed8 to. Once it's determined, we administer9 it. So, um, you know, those are10 something that we don't have an option of11 any consideration of.12 So you're saying can we reduce13 the amount for people --14
No, I'm15 asking you: Do you consider this a16 distressed fund?17
I don't believe we18 have anything from our actuary that19 states that we are in a distressed fund.20
And so, in24 your opinion, on the record, you don't25 21 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 consider yourself a distressed fund?2
I would have to3 check, get information from the actuary,4 because I have no information that we are5 in that category.6
Excuse9 me, Councilman. I see that Mr. Dubow10 came up to the witness table. I do11 believe he may want to add something.12
I wanted to respond13 to your question about distress. The14 determination about whether the Fund is15 distressed is made by the Pennsylvania16 Employee Retirement Commission.17
No, I was18 just asking her opinion, sir. That's19 all.20
You know, I thought24 you wanted the information.25 22 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 So that the determination is2 made by them, and it's based on a3 calculation of a number of factors,4 including your funding percent, the5 status of your budget. So they're in the6 process of reviewing that to make a7 determination.8
Again, do12 you -- don't look at him. You have --13 you're at the table now. Do you consider14 it a distressed fund from your15 professional observation and management16 of this fund?17
I -- I can't answer22 that question. I have not received any23 information --24
Okay.25 23 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
The6 Chair recognizes Councilman Kenney for a7 point of order.8
Point of9 information. Thank you, Madam Chair.10 It's a point of information.11 I have a question. Could12 someone define a distressed fund for me13 so I'll know what the term -- I kind of14 have an idea of what a distressed fund15 is. This fund isn't distressed as my16 personal fund since you're down 2017 percent and I'm down almost 40, so I may18 be more distressed than you.19 But can you identify or define20 what a distressed fund is?21 Thank you.22
Yes. There are23 actually -- according to the Pennsylvania24 Employer Retirement Commission, there are25 24 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 different levels of distress, which2 means -- and I guess the best way to say3 it is how troubled your fund is.4 And the highest level is5 severely distressed, which would be your6 fund is in severe trouble, which means7 it's poorly funded, like ours is. And8 that's what PERC is trying to determine9 now.10
As of July of 2008,14 it was 55 percent, which is the last15 official funding.16
A pension adjustment19 fund is the calculation of the20 eligibility for members to receive a21 one-time adjustment -- not a22 cost-of-living increase, but a one-time23 adjustment based on a calculation24 performed by the actuary.25 25 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 And we just made a payment in2 February, where members of the Pension3 Fund received a one-time adjustment.4 They also received one last May.5
And that6 adjustment is for retirees that have been7 retired for more than ten years?8
And there is10 a consideration before this body to11 adjust that in some way?12
And you're18 not familiar with how it would impact19 your payouts?20
There have been some21 questions about making adjustments on a22 more regular basis. Um...23
So the24 difference is, as I understand it, we25 26 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 currently use a ten-year cycle to2 determine if the market did well; and3 based on that ten-year gain or loss, we4 make that PAF distribution to members?5
Yeah. There was6 recently a change by Council that reduced7 the amount of the funded ratio, because8 based on our 55 percent, we would not9 have paid an adjustment. So that was10 eliminated. Um --11
So we went12 from a ten-year cycle, which is the13 natural cycle by which most markets are14 judged, ten years, to a five-year15 evaluation, which would put us in a kind16 of a negative situation, and our payout17 to these pensioners would not have18 happened. Is that a fair statement?19
There are two things20 that the legislation would do. One was21 actually -- the reverse would have been22 --23 (Timer bell rings.)24
It would from a25 27 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 five-year cycle to a ten-year cycle,2 which the legislation would call.3 And the second part is to4 require the Fund to hit a certain -- to5 restore the funding percent that had been6 in the legislation earlier and to require7 that the Fund be at that funding percent8 before a distribution was made.9
Based on14 information that we have about the15 market's performance, how would that16 affect pensioners if you had to make that17 payout tomorrow?18
Well, because of the19 losses that the pension -- you have to --20 the other part is, you have to exceed the21 Fund's earning assumption by at least22 percent to make the distribution.23 Since the Fund, through24 February, had lost 26 percent, it's25 28 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 unlikely that there would be any2 distribution during the smoothing period3 for five years under the current4 legislation and for longer if the5 legislation we proposed was passed.6
Just real7 quick, and I'll end.8 The payout we made to retirees,9 the last payout, was how much?10
The last payout was11 for last May and this February,12 $40,530,000.13
That was19 distributed to approximately how many20 pensioners?21
But if we24 changed this law and we had to make that25 29 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 same payout tomorrow, they would have2 gotten nothing, correct?3
Well, even if we4 don't change the law, because of what's5 happened, they would not be getting6 anything. If we do change the law, it7 would likely extend the period of time8 for which they didn't do anything until9 the Fund is at a healthier funding10 percent.11
So going into12 the future, instead of a five-year window13 of analysis, we are talking about a14 ten-year window of analysis, which would15 negatively impact the pensioners by way16 of PAF and payouts based on fund17 performance, yes?18
It would reduce the19 likelihood that payouts went out, it20 would increase the assets of the Pension21 Fund 'cause those payouts wouldn't go22 out, so the fund would be healthier.23
The Pension24 Fund would do better and perform, but the25 30 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 payouts to the intended pensioners would2 probably be less.3
Well, the payouts to4 retirees who would have gotten pension5 adjustment payments would be less. The6 Fund wouldn't be healthier, which would7 make it more likely to make payments to8 everybody over the long haul.9
You're12 welcome.13 The Chair recognizes14 Councilwoman Tasco.15
Thank you.16 In the information that you17 provide to the President relative to the18 money managers, I'd like to also know how19 many of them are women and/or African-20 American or other minorities.21 MR. McDONOUGH: Certainly.22
All right.23 Do you have a overall money manager,24 someone who's in charge of all of those25 31 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 money managers? Do you have a -- what do2 you call them?3 MR. McDONOUGH: Consultants?4
A5 consultant.6 MR. McDONOUGH: We have several7 consultants.8
You have9 several?10 MR. McDONOUGH: But we have one11 called a general consultant that oversees12 the entire plan.13
Okay. Who14 is that?15 MR. McDONOUGH: Fiduciary16 Investment Solutions Group.17
Okay. And18 are they subjected to responding to an19 RFP?20 MR. McDONOUGH: Yes.21
So they22 have to go through an RFP process to be23 selected?24 MR. McDONOUGH: Yes.25 32 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Oh, one6 other question since my time -- I have7 another question.8 In terms of the Fund performance9 or the level-of-funding ratio, how does10 that compare with other funds in other11 cities, large cities, the level of12 funding for these pension funds?13 MR. McDONOUGH: Our level of14 funding is low compared to the average15 for the very large public fund.16
What's the17 average?18 MR. McDONOUGH: In terms of the19 funding ratio?20
Mm-hmm.21 MR. McDONOUGH: I believe it's22 around 80 percent is the typical average23 funding ratio.24
Can you25 33 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 name any cities that have a 80 percent2 funding ratio?3 MR. McDONOUGH: I don't know any4 offhand, specific cities.5
Okay. Do6 you have that information?7 MR. McDONOUGH: I believe I have8 it for state plans. It's a little bit9 harder to get the information for10 specific cities, but I do have reports11 that show the funding levels for state12 pension funds?13
Okay.14 Well, their pension funds would be15 somewhat different from a local -- from a16 city, wouldn't they? Wouldn't they be17 larger?18 MR. McDONOUGH: They're19 typically larger, yes.20
Mm-hmm.21 Okay. Thank you very much.22 There are a lot of variables23 involved in that.24 MR. McDONOUGH: Correct.25 34 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
You're4 welcome.5 Councilman Kenney, you're next.6
Thank you,12 Madam Chair.13 Last year, the Pension Board14 presented testimony that it was well on15 its way to becoming a paper-free office,16 imaging all of its files. How is the17 journey going towards being paper-free?18
It's going very well.19 All of our retired files are imaged, all20 of our vested files and all of our new21 mail is now imaged.22 And as new information comes23 into the office, before it's dispersed to24 staff to act upon, it's put on the25 35 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 imaging system so that the counselors are2 able to go to the system rather than to3 have the file pulled.4 So it's going very well.5
We have in this8 budget eliminated two positions, but9 it's -- what it's done is shorten the10 period of time that the counselors have11 to spend to provide information during a12 counseling session.13
And then I14 think last year, also in a certain15 category, there was testimony that you16 went from seven to two or three positions17 last year as a result of having OCRed,18 and I think it was essentially counselors19 not having to go get files; you just20 didn't fill vacant positions in '09 as21 well.22
So how much25 36 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 staff do you have?2
And as a5 result of going paperless, how many6 positions were you able to eliminate7 through attrition?8
It's hard to9 determine if it's soley that, but I would10 say two.11
Well, you12 testified last year there were three or13 four.14
That was from last15 year to this year. In the current --16 from '09 to '10, it would be another two.17
Okay. And2 how much did it cost you to OCR all of3 the documents? Were you using current4 staff to do it?5
We're using current6 staff to -- no, we're sending out the7 documents to be imaged; they're picked up8 and returned when they're imaged.9 And we have a staff person10 that's in charge of our file room, who11 indexes all of these files, prepares them12 to be picked up, and keeps a log of them,13 and they're returned to us, so...14
If you could19 provide that to the Chair, please.20 Okay. I assume people have21 asked questions about asset managers, so22 I'll just look at that. I apologize for23 being late.24 Mr. McDonough, can you explain25 38 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 to us why, after issuing a Pension2 Obligation Bond in 1999, we have -- of3 the billion dollars, we have roughly the4 same assets that we had in 1999? What's5 the reason for the sort of -- the Pension6 Obligation Fund didn't catch us up?7 MR. McDONOUGH: Well, we're8 what -- what would be considered a mature9 pension plan, so we have more retirees10 than employees, active employees. And11 because of that, we pay out more in12 benefits than we receive in each year13 from the City through the contribution14 and through employee contributions.15 So in any year, when we do not16 exceed the actuarial assumption rate, you17 know, the assets are going to decline,18 we're running in that deficit.19
Right.20 MR. McDONOUGH: If you look --21 go back to '99, when the bond was issued,22 it took the Fund from 3.5 billion to23 about 4.6 billion. I believe by 2003, we24 were back down to 3.5 billion, so that,25 39 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 you know, 1.1 billion had been completely2 gone from the Fund.3 You know, I would caution that4 it wasn't specifically the billion5 dollars from the Pension Obligation Fund;6 it was just, you know, the money is7 fungible, it all goes to the same pool.8 You know, over that period, there's9 different reasons for declines in funds.10 You have the money you're paying out, you11 have investment gains and losses.12 I believe for that -- over that13 two-year period -- or, actually,14 four-year period, 60 percent of the15 decline in value of the Fund was due to16 paying more benefits than we were17 receiving contributions.18
Right.19 MR. McDONOUGH: In fact, over20 that period, I think the Fund performance21 was basically flat. It was about -- you22 know, it was slightly positive.23
So if we hit24 our 8-and-a-quarter now, new benchmark25 40 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 return, for the next 20 years, will we2 have enough funds in the Pension Fund to3 meet all of our obligations?4 (Timer bell rings.)5 MR. McDONOUGH: I believe if we6 consistently hit the assumption rate,7 whether it's 8-and-a-quarter or it's8 8-and-three-quarters, we would become9 fully funded around 2029, so that's10 approximately 20 years from now, yes.11
Okay.14 MR. McDONOUGH: I should clarify15 that. I believe it would -- it would be16 between 90 and 100 percent funded by17 2029.18
So what is19 the effect of the different changes we're20 asking the State to allow us to make on21 the health of the Pension Fund? Are we22 digging a deeper hole? Without these23 changes, when would you estimate,24 following 8-and-a-quarter, would we be25 41 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 fully funded?2 MR. McDONOUGH: I can't say what3 impact the changes will have on the4 funding ratio, whether it's 2029 --5
So 2029 is6 based on the current way it's operated.7 MR. McDONOUGH: Yes.8
-- in State12 law if we get them.13 MR. McDONOUGH: Correct.14
Could you15 please provide those differences to the16 Chair, please.17 MR. McDONOUGH: Yes.18
Thank you,22 Madam Chair. I need Mr. Dubow.23 (Mr. Dubow returns to witness24 table.)25 42 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Mr. Dubow,2 if you would be so kind as to kind of3 explain again -- and I know you've done4 it in your initial testimony early on and5 in the budget process. But explain to me6 exactly what we're asking the State to do7 and why we need them to do it.8
We are asking the9 State to allow us to change the10 amortization period for an unfunded11 liability. Right now, it's an average of12 20 years. We're asking them to allow us13 to take it to 40 years.14 And the primary reason we're15 asking them to do that is, it would save16 about $330 million over the life of the17 plan. And if we don't get that change,18 we would have to make other adjustments19 to the Five-Year Plan to balance.20
Would the21 extension of the amortization number22 affect any current pensioner relative to23 their monthly payments?24
It does not affect25 43 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 benefit payments in any way.2
And if you6 had to make a negative argument against7 it, what would be the negative side to8 extending the amortization?9
The negative side10 would be that you're extending your11 liability, so you would be paying them12 longer into the future.13
We could go back to15 one of the discussions earlier. One of16 the other things that will happen is, if17 PERC declares us to be really distressed,18 we'd then have to make changes to the19 Pension Fund to reduce our costs.20
That would produce22 savings over the long haul that should at23 least help balance out some of the24 increase in liabilities from stretching25 44 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 out the amortization.2
What's your6 reaction to some of the comments made by7 apparently -- well, not apparently --8 legislative leaders not from9 Philadelphia?10
They were consistent11 with the things we had been told in12 private before.13
Okay. So14 now that these individuals are known, we15 can see clearly who they are and who they16 represent and what positions they hold in17 both the Senate and the House.18
In the event20 of that worst-case scenario that we don't21 get from the State -- sales tax aside22 issues, just issue of pension right23 now -- what would be the reaction of the24 Administration if we stay at 20 instead25 45 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 of going to 40? What would be the2 impact?3
It would be a4 $330 million impact over the life of the5 plan, with a substantial increase in 20116 of well over a hundred million. So we7 would have to make cuts very quickly to8 compensate for the loss of that9 amortization.10
And 201111 would seem to me, if we're lucky, to be12 the time when we may be getting back on13 our feet nationally, you know '10, '11,14 hopefully sooner, but two years.15
So the17 potential of having the necessity to make18 a very large payment to the Pension Fund19 in 2011, at a time when the economy may20 or may not have rebounded, would be --21 how would you term -- what would you term22 that situation to be?23
That would be24 damaging.25 46 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Which would2 create the need to -- it would -- we3 would be required to make the payment,4 correct?5
So there7 would be no way around making the8 payment.9
And the11 payment -- the extra payment has to come12 out of the General Fund.13
Thank you,19 Madam President.20 While Mr. Dubow is still there,21 since he volunteered to come to the table22 on pension issues.23
I didn't think I'd24 get away that easy.25 47 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 (Laughter.)2
I asked3 Ms. Bell a question earlier which may not4 have been appropriate but may be5 appropriate, since the Administration is6 here, talking pension issues.7 If we look at those four8 classifications I described earlier --9 one being retirees, two being vested10 workers, three being non-vested workers,11 and four being future workers -- should12 there be a hierarchy in terms of13 protecting those different14 classifications?15 In other words, there's the16 issue of protecting the Fund and then17 there's the issue of protecting who the18 Fund is supposed to benefit.19
I guess the best20 answer is, we should ensure that all our21 retirees receive a pension and that they22 receive the amount that is consistent23 with the plan that they're in.24
But should25 48 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 there be a hierarchy in terms of who2 we're protecting? I understand3 protecting the health of the Fund, but4 should there be a hierarchy in terms of5 who we're trying to protect? And I'm6 creating those four classifications --7 retirees, vested workers, non-vested8 workers, and future workers.9
But should12 there be in hierarchy in terms of who we13 protect?14
Well, I guess16 you may not want to answer the next17 question then.18 If there were a hierarchy,19 should some classifications pay more to20 protect their hierarchy?21
In other23 words: Should future workers pay more to24 protect the vested and non-vested workers25 49 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 and particularly pensioners? Should2 non-vested workers pay more to protect3 vested workers and retirees?4 Does that make sense?5
You're talking about6 the amount of contribution that people7 make?8
Yes, but I'm9 also talking about rather than just10 looking in terms of protecting the Fund,11 looking at protecting who the Fund is12 supposed benefit and who's contributed13 the most to the Fund.14 And, obviously, retirees have15 contributed the most to the Fund; then16 vested workers contribute more to the17 Fund than non-vested workers; and, of18 course, current workers contribute more19 than future workers.20
I think that the21 amount that people contribute depends on22 what plan they're in, not -- not how many23 years they've been working.24
I'm talking25 50 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 about collectively, I'm talking about2 classifications.3
I'm not6 trying to get into anything that's going7 to be a matter of contract negotiations,8 though I understand there may be9 proposals within contract negotiations.10 But, more importantly, I'm11 talking about, as we look at the health12 of the Fund, it's already been determined13 here today that legislation that's been14 introduced in Council will, in fact,15 perhaps protect the Fund more but not16 protect some of the Fund's potential17 beneficiaries, particularly retirees.18
Well, I'll say that19 a little differently. I think it will20 protect their -- it will protect them if21 it protects the Fund, but it would mean22 that they wouldn't be getting the23 additional COLA payment, but their24 payment would be protected if the Fund25 51 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 were healthier.2
Just as if3 you have certain classifications of4 future workers and non-vested workers5 moving forward pay more to protect vested6 workers and retirees.7
And again -- I mean,8 I'll go back. There are vested workers9 and non-vested workers who are in10 different plans now, who pay different11 amounts.12
I understand13 that. And I'm not asking a question of14 how the system works; I'm asking how you15 believe the system should work in the16 future, 'cause there are proposals the17 Administration is putting on the table.18
There are20 other proposals that could be put on the21 table. As part of this discussion, I'm22 asking that in terms of potential ideas,23 not in terms of how the system works now.24
And, I mean, you're4 kind of getting us into kind of where the5 negotiations would go, and I'm not real6 comfortable doing that, you know, in a7 public forum.8
Well, at the9 same time, we're going to be asked to10 vote on legislation that would impact11 retirees. That's why I pose the12 question.13
So we can16 separate contract negotiations from the17 budget as much as we have to.18
But in some20 ways we can't when we're being asked to21 consider legislation at the same time22 we're considering the budget.23 (Timer bell rings.)24
I mean, I understand25 53 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 what you're saying. I just think it kind2 of goes too far over to the negotiations3 side here.4 I do understand that if there's5 specific legislation that we have in6 front of you, that while we're discussing7 that legislation, we'd need to talk about8 the components of it.9
Thank you,12 Madam President.13 COUNCIL PRESIDENT VERNA:14 Mr. Dubow, following Councilman Kenney's15 question, I think it would be extremely16 helpful if the actuary would brief17 members of Council. So if you could make18 those arrangements, I think it would19 basically very good.20
Thank23 you.24 The Chair recognizes Councilman25 54 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Jones.2
Thank you,3 Madam President.4 I want to go back to the5 pension-adjusted fund. What is the6 national average for the ratio of funds7 like this? What's the national average?8
I don't have that9 information. We do not take a survey.10 But there are different types of11 plans. Some of them give cost-of-living12 increases. This is not -- this is a13 bonus payment, a one-time bonus payment.14 So I have not polled other plans to see15 what they're paying.16
What was the17 average payment to the retiree based on18 the Pension Adjustment Fund? What was19 the average payment to the retiree?20
Okay. I can get that24 for you. I don't have it with me.25 55 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Okay, because2 these are people on fixed income. This3 is a one-time payment. It is based on4 the performance of the Fund.5 And those people retired with an6 expectation -- and almost a contract, if7 you would -- that they would receive8 this. Is that correct?9
The bonus payment10 is -- is only paid, as we said before,11 based on the availability of funds and if12 the criteria is met. And so --13
-- at the17 point they made the contribution into the18 Fund.19
And so, there21 is a reasonable expectation that if you22 pay for something, you should at least23 anticipate it in your golden years as you24 make your financial plans, that maybe,25 56 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 just maybe, there might be some type of2 adjustment given to them one time in3 their lifetime to sustain them in their4 retirement, and that's what they put into5 the Fund, with that expectation.6 So if we change the terms of7 that particular covenant within the8 contract, you know, I don't know if we9 are fulfilling what the expectation was10 at the time of the contribution.11
At the time of12 contribution, in most cases, they would13 have not been eligible for the bonus14 because we did not meet the -- we didn't15 -- we weren't at the funded ratio that16 was required. The funded ratio17 requirement was just recently removed.18 So based on the expectation,19 they would not have gotten the bonus20 payment previous to very recently, when21 that was lifted, because it was required22 that the funded ratio be approximately23 72 percent.24
Okay, all25 57 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 right. Thank you.2
Thank you,5 Madam Chair.6 So I'm looking at the budget7 detail summary by class, summary of8 positions. And I see in FY '08, actual9 at the end of year, there were 67 people.10 Fiscal '09, original appropriations had11 79 people. Estimated 2009 obligations12 right now is 65, and you're requesting13 74.14
There were some15 recent retirements in the office.16 Actually, for this month alone, we have17 three requirements. We've had several18 over the last couple of months, so we're19 filling those positions, so there are20 some vacancies. Actually, we filled one21 clerk position this week.22 So we're -- there were positions23 that weren't filled. It was pending24 getting a certification from civil25 58 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 service and waiting through the process2 and --3
Active Services is a6 unit within the Department that, if you7 are a new hire, you will be mailed a8 letter telling you if that you have any9 previous qualified time, which is10 government time, municipal time, military11 service, previous SETA time, or previous12 City employment, that you could -- if you13 took a withdrawal of those contributions14 that you could buy that time back.15 They also handle -- for the16 court reporters who are now eligible to17 purchase mandamus fees, they calculate18 the cost of those buybacks.19 And, you know, you have a20 certain period of time that. And you can21 also do it on installment.22
And they do23 those letters and calculations by hand?24
They -- just25 59 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 recently, it's been automated. So2 there's a program they can use to3 calculate the cost.4
So it looks8 like they've been running at five people.9 And now they're going -- and the Fiscal10 2009 budgeted was eight.11
You've put in13 automation and you're actually trying to14 increase it by --15
Well, there's still a16 backlog, because with recent legislation,17 a large group of people are now eligible18 for buyback, so there is a backlog of two19 to three months.20 There is a tremendous amount of21 people that are taking leave to go into22 military service now and for people that23 are closer to retirement, that want to --24 you know, I guess people don't think of25 60 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 purchasing their time until it becomes2 time close to retirement, when their3 retirement benefit would increase.4 So there is a large demand for5 these types of calculations.6
So why aren't11 we seeing efficiencies from that12 automation?13
Some of the positions14 that we're hiring now are not for people15 that calculate; they're more typing,16 clerk typists.17
Once the18 backlog is finished with, will you need19 all of these people that you're hiring?20
Yes. Actually, some21 of the -- one of the positions eliminated22 was within that unit.23
Well, you've24 actually gone up since 2009 budgeted25 61 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 positions.2
Well, we're filling3 positions that were vacated. You have to4 realize that we've expended a lot of5 overtime to keep up, so that's where the6 cost savings will show.7
Okay. Well,8 if that's the case, how come overtime is9 expected to be the same as it was last10 year?11
It was difficult for12 us to know when the positions would be13 filled. And at the current rate, it was14 probably safer for us to leave the15 overtime there.16 The other thing we can17 anticipate are special projects. We had18 to do a lot of overtime for the Pension19 Adjustment Fund.20 We have to do overtime when21 there are any changes in labor22 negotiations, most recently with health23 and welfare changes on the table.24 So it's hard for us to predict25 62 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 how much overtime would be needed, and we2 left it at the same level.3
I have the4 same exact questions about5 administration. You're going from 20 in6 2008 to 22 was budgeted in 2009. The7 increment run, you have 20, and you're8 trying to go to 23.9 Why are you increasing personnel10 there?11
Um... One of the --12 some of the increases are offset in other13 areas. For example, the pension program14 administrator is a new position, but it15 was this person who was a supervisor in16 the office, so you will see that that17 position was eliminated in counseling.18 So --19
Okay. Please24 go back and explain each move in each25 63 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 department versus 2008, which is2 significantly higher essentially, and3 provide this information to the Chair.4 (Timer bell rings.)5
And then also6 tell us exactly what you would do if we7 cut your budget by $500,000.8 Thank you.9
Thank10 you.11 The Chair recognizes Councilman12 Kenney.13
No?16 The Chair recognizes Councilman17 Goode.18
Thank you,19 Madam President.20 Ms. Bell, in your testimony,21 there's a request for roughly22 $3.9 million in Class 200 for Purchase of23 Services. Can you describe what those24 services are?25 64 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Class 100 is2 personnel. They're -- those are salaries3 and --4
It's actually8 up from $1.5 million the year before.9 (Ms. Bell looks through10 documents.)11
-- as you15 look for that information.16 In testimony from each and every17 other department so far, we've received18 goals in terms of contracting with19 minority, women, and disabled businesses,20 but your testimony does not include any21 goals.22
Okay. I'm not aware23 of what the other departments are doing,24 but I do know that --25 65 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
We were told2 that every department was notified, and3 every department has given that4 information.5
Are you aware7 of what level of participation you8 reached last year?9
There are two sides.10 There's contracts that we have, general11 contracts, and then there are investment12 contracts.13 When we issue RFPs for contracts14 on the benefits side, we work closely15 with MBEC to make sure there's minority16 participation. We have meetings with17 them and bring vendors in and explain18 what the --19
Are you aware20 of what level of participation you21 reached in Fiscal Year '08?22
Actually, I25 66 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 have it in front of me.2
It says that4 for the first three quarters, there were5 roughly $1.5 million in contracts. Only6 $540 went to minority, women, and7 disabled businesses, 0.003 percent.8
Not even10 1 percent. So the question again is11 twofold.12 One, in your budget request for13 $3.9 million in Purchase of Services,14 what is that for? And what is your goal15 in terms of contracts with minority,16 women, and disabled businesses?17
You're25 67 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 welcome.2 The Chair recognizes Councilman3 Rizzo.4
Thank you,5 Madam Chair.6 Good morning again. I'm just7 picking up on something that is in your8 testimony. You have 64,000 participants9 in the Pension Plan, right?10
Could you14 tell me, of that number, how many get15 their pension checks deposited16 electronically versus a paper check?17
We only have 5,00018 people that receive paper checks. We're19 very high-level nationally.20
But here's my24 question: Of that 55,000, there are25 68 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 some, I would assume, very senior-in-age2 participants --3
What do you8 do if, in fact, one of those 5,0009 mishandles that check? They're up in10 years, they could be in their nineties,11 they lose it, it doesn't cash; what do12 you do?13
We have a tracking14 system that, after three months, if the15 check isn't cashed, we suspend payment.16 We investigate why the check hasn't been17 cashed. We'll get in touch with the18 person. We'll encourage them to do19 direct deposit.20 But you're certainly right that21 a lot of people want the check in hand,22 but --23
But that's a24 good thing I'm hearing because I just25 69 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 heard of a situation where a company that2 deals with a lot of older folks actually3 sent them a letter and said, you know, we4 sent you a check on a certain date 605 days ago, and it hasn't been cashed.6 So am I hearing that if one of7 our senior retirees would lose,8 mishandle, misplace, not deposit a check,9 we will help with that and make sure that10 that money eventually gets to them? We11 send them a letter saying -- or call that12 they have not deposited that check?13
That's good.20 Government has a little sensitivity.21 Thanks very much.22
Thank you,24 Madam Chair.25 70 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
You're2 welcome.3 The Chair recognizes Councilman4 Green.5
Thank you,6 Madam Chair.7 I haven't looked at this. Are8 you guys part of the Plan B, Contingency9 Plan B reductions? Do you have anything10 in your budget being taken out if we go11 to Plan B?12
Okay. So15 provide exactly -- instead of just16 500,000, do it at 250,000 and a 500,00017 reduction in your budget.18
So I just20 want to close a loop on something. The21 Pension Board is no longer calculating22 pensions by hand; is that correct?23
We are still24 calculating pensions by hand.25 71 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Unfortunately, I have to say that we are,2 for final calculations. We do estimates3 on -- electronically. And we are hopeful4 that -- we have seen demonstrations for5 pension payroll systems, and we are6 hopeful that we will find an Oracle-based7 program that will be able to calculate8 our pensions for us.9
That's --10 basically, last year you said, and I11 quote: "Unfortunately, I have to admit12 that we're still calculating pensions by13 hand. And the programs that we've looked14 at would allow us not to only bring over15 information over from Payroll and16 Personnel to feed into the system but17 would also allow us to do calculations18 and take leaves of absences and credited19 services into consideration."20
We haven't24 implemented it because there was a change25 72 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 of focus from the DOT system. There was2 a new director from DOT that wanted to3 reassess our needs, and we've been put on4 hold.5 And we're -- we didn't get a6 good response when we did the RFP. I7 actually just had one vendor. So8 that's -- we're still asking for requests9 for information.10 The focus was changed from a11 COTS program to an Oracle-based program.12 So it was all technical. The13 requirements were reviewed by the14 Department of Technology, and so we are15 still hoping that we'll see a new system.16
Well, how17 many people are involved in calculating18 pensions by hand?19
There are several20 people. We have a counselor who21 calculates the pension, we have another22 person that checks the calculation, we23 have another person that puts payments24 onto the system.25 73 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 So you're looking at maybe at2 least three people.3
How many4 other cities are you aware of where they5 calculate their pensions by hand?6
I know that some10 systems do have programs. I've spoken to11 some of those cities when we were doing12 reference checks. Some of the large13 cities that did purchase the systems took14 a long time to get them up and running; I15 would say anywhere from 18 months to16 three years. A lot of manual data entry17 had to be done to get those systems18 going.19
As George20 Washington said when he was planning an21 oak tree in front of his house, the22 people said, "But it will be 50 years23 before this is a big, beautiful oak tree24 and providing the shade you're talking25 74 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 about." And he said, "Well, then we'd2 better get it planted."3 It's time to start acting on the4 things that were identified over two5 years ago.6
That can8 bring efficiencies to your department.9 Thank you.10
Thank you.14 Thank you, Madam President.15 Good morning. I just have a16 couple questions.17 Can you walk me through your18 calculations? In your testimony, you19 state that you will be taking a $6,00020 decrease from Fiscal Year 2009. And in21 your operating budget, the original22 appropriation was $10,610. And your23 estimated obligations for Fiscal Year24 2009 is $8,812 -- $12,000 and 177.25 75 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Why do you use your2 appropriations rather than estimated3 obligations? And I see how you come up4 with the $6,000 decrease in 2009; I just5 don't believe that it's accurate. It's6 more up about a $1.8 million increase7 from Fiscal Year 2009 or a $2.7 million8 increase from Fiscal Year 2008.9
Just how12 you come up with this $6,000 decrease13 and -- because the numbers just don't add14 up.15
Okay. So I'll have16 the person that worked with me on the17 budget. How detailed do you want it? By18 class code? Do you want us to go class19 code?20
Okay. I'll have her22 do that. So we'll get that information23 to you.24
I'm sorry.25 76 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 I didn't hear you.2
Okay.5 Thank you.6 And I have one another question7 here. Is your pension website part of8 MOIS, do you know?9
Yes, yes. We have a10 pension website, and out there, you'll11 find different publications -- the actual12 evaluation, you'll find any legislative13 changes, and it's active, and it's a part14 of MOIS.15 We request -- when we want to16 put something on, we put a request into17 MOIS, yes.18
Okay. And19 is your pension newsletter done in-house20 or --21
It's done in-house,24 and we send the articles to a publisher,25 77 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 and they'll print it for us. They'll2 arrange it and print us for us.3
And how13 does that person get a contract is that14 a--15
Okay, all19 right.20 And I don't know whether anyone21 asked this question, but I want to ask22 it: Can you explain the difference23 between -- can you explain what and how24 the Deferred Compensation works? And how25 78 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 is that different from DROP? It seems2 like it's a good program.3
The Deferred4 Compensation is a way for an employee to5 save in addition to their pension by6 having contributions taken out of their7 pay on a tax-deferred basis.8 So if you make $50,000 and you9 put 4,000 into deferred comp, your10 taxable income is the 4,000 less. That11 money is not accessible.12 There are certain requirements.13 It's not a savings plan; it's a14 retirement plan. You're not able to take15 that money out till you reach -- until16 you terminate or retire or -- and you may17 borrow on it, but there's certain federal18 restrictions on being able to take that19 money out.20 Now, the DROP Program means that21 you apply to go into the Deferred22 Retirement Option Plan, and whatever23 point you enter, once you're eligible,24 you have to have ten years of service,25 79 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 you must be either over age 55 or 60,2 depending on the plan you're in.3 Your salary for pension4 calculation is frozen a that point and5 it's calculated. And if you are to get a6 thousand dollars a month, that goes into7 a savings for you. It accrues interest.8 And at the end of your four-year period,9 or whenever you leave within the10 four-year period, you're paid a lump sum11 based on the pension calculation based on12 your salary and years of service at the13 time you entered.14 So if you have 20 years of15 service but you enter DROP after 16, the16 pension is calculated using 16 years of17 credited service and the salary at the18 time you enter DROP. But you get a19 lump-sum payment at termination.20 And so it's a different -- it's21 a retirement -- that's a part of a22 regular retirement.23 The deferred comp is a24 supplement to that. It's your only25 80 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 personal savings.2
Okay. And3 you can put -- you can designate as much4 as you want into deferred comp?5
There are caps on6 deferred comp. There are federal7 guidelines that allow you to put funds8 in, but there are caps.9
Okay. How10 does -- how do you know the cap? I mean,11 what is the cap? How do you figure12 out -- how do you calculate the cap on13 deferred DROP -- I mean Deferred14 Compensation?15 MR. McDONOUGH: The cap is16 announced by the IRS on an annual basis,17 and then we communicate that with the18 participants.19 (Timer bell rings.)20 MR. McDONOUGH: I believe the21 cap for this year for regular deferrals22 is $16,000.23
Per year?24 MR. McDONOUGH: Per year.25 81 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
All right.2 Thank you.3 Thank you, Madam President.4
Thank you,7 Madam President.8 Good morning. I want to follow9 up on questions raised in every single10 hearing with regards to departments, and11 that's MBE/WBE participation.12 How long have you been in your13 capacity there, at the Pension Board?14
I've been -- in July,15 it will be in this position for seven16 years.17
Seven20 years. And what is your understanding21 with regards to MBE/WBE participation22 across City departments?23
We work actively with24 MBEC to have minority participations.25 82 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 And for our general contracts, some of2 them are -- most of them require that the3 vendors subcontract with the minority4 vendor.5
And we have been7 actively involved in that, having8 meetings with MBEC and potential vendors9 to be inclusive of minority10 participation.11
What type12 of documentation and verification do you13 expect of those who subcontract to14 MBE/WBEs? How do you get that15 information to ensure that the16 follow-through is actually happening?17
Okay. Well, we18 worked with the staff from MBEC because19 we don't know what the requirements are.20 We give them our requests for proposals21 or our requests for information, and we22 tell them what the project is, and that's23 posted.24
Point of25 83 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 information.2
Excuse3 me.4 The Chair recognizes Councilman5 Goode for a point of information.6
Ms. Bell,7 you've said at least five or ten times8 you work with MBEC?9
So how close17 are you working with MBEC if they set a18 goal of 20 percent?19
For every request for20 proposal or request for information, we21 do have contact with MBEC, and we provide22 the RFP to them.23
Did you tell24 MBEC that you could not achieve the25 84 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 20 percent participation rate?2
So if MBEC5 sets a goal for 20 percent this year, do6 you believe you can achieve a 20 percent7 participation rate?8
If MBEC,11 which is now the Office of Economic12 Opportunity, sets a goal of 20 percent,13 do you believe you can achieve a14 20 percent participation rate this year?15
Because a18 20 percent participation rate this year19 would be about $750,000 or more.20
So about 7 or22 $800,000. For the last year, for three23 quarters, you did $540.24
So it doesn't2 sound like a real conversation.3 Thank you, Madam President.4
I'll have to check9 and get back to you. It was a10 subcontractor that worked on a technical11 contract we had with our imaging, but12 I'll provide the name.13
Okay. I'm14 at a loss to understand the leverage, the15 role, the leadership of the department in16 helping MBEC, and now, OEO understand how17 each department head achieves those18 goals.19 So a different question: The20 1.5 million in contracts, those were21 contracts that included what? And22 complete the sentence. The $1.5 million23 contracts included contracts such as...?24
Such as... our25 86 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 imaging program.2
Imaging, yes. Our4 medical consultants. And of our medical5 consultants, we have three medical6 co-chairs, of which two are minorities.7
No. So I will have10 to get you additional information,11 because the Medical Panel, there are two12 contracts with co-chairs, and we recently13 hired an alternate, and two of those14 three are minority positions.15
Okay.16 Before my bell rings, let's go to Wolfe17 Block, which dissolved. On of18 the budget, it says that received19 $55,000. With the recent news that Wolfe20 Block is disbanding, what is the process21 for the I.D. of the next law firm that22 secures that opportunity?23
The Law Department24 will hire or make recommendation for25 87 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 replacing Wolfe Block.2
So that3 responsibility falls squarely in the Law4 Department?5
Okay, all8 right. So what you owe us is the9 breakout and breakdown of contracts for10 the 1.5 million, correct.11
And so who19 ultimately has responsibility? Does OEO20 have responsibility or does the21 department head have the responsibility?22 'Cause we're getting -- OEO has yet to23 become before us. And more and more, the24 hour are pointed towards OEO.25 88 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 (Timer bell rings.)2
So we need3 to know where the responsibility and4 accountability lie with regard to5 honoring these goals.6
Okay. I'll provide7 the information you requested, and I'll8 also provide you where we've had meetings9 with them in regard to these contracts.10
Okay.11 Madam President, here is my ask. My12 learning in the nine years I've been here13 is that when we allow departments to come14 back with information, we do get it.15 Sometimes it's well after the budget and16 we've moved on to another challenge.17 So my ask in this instance is18 that we make room for this leadership to19 come along with OEO, because, more and20 more, we're hearing that OEO is21 responsible; yet, when we look at the22 level of the goals attainment, I'm23 perplexed as to why that department head24 hasn't met the goal yet OEO is25 89 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 responsible.2 So we need to have both3 department heads at the table to see how4 we can work through what we see here on5 paper.6
Madam13 President, I'd like Mr. Dubow to come14 back to the table, please.15 COUNCIL PRESIDENT VERNA:16 Mr. Dubow?17 (Mr. Dubow is not in the chambers18 at this time.)19
Well, while20 I'm waiting for him, don't -- the21 question I have is very important, but I22 will follow-up on this MBEC.23 COUNCIL PRESIDENT VERNA:24 Certainly.25 90 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Who does2 the -- who's in charge of the procurement3 in your department and putting out the4 RFPs and that kind of thing?5
Our human resource6 does most of our requests for proposals.7 But when there's a technical --8 a request for a technical support, we9 work with the assistance of DOT.10
Is there11 any outreach to vendors to let them know12 that a contract is coming up? Is there13 an outreach?14
For any vendors that19 have called us during the year, we keep20 track of them and we send them letters as21 well. So if anyone's called and said22 that they're interested in working with23 the Pension Board, when the opportunity24 comes, we send out a letter.25 91 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Okay.2 We'll come back to that.3 (Mr. Dubow returns to witness4 table.)5
Mr. Dubow,6 earlier, we talked about the article in7 the paper relative to Harrisburg's8 concerns about the Philadelphia financial9 situation.10 Isn't it true that the11 Pennsylvania Taxpayer Relief Act allows12 for the City to enact a wage tax or a13 business tax if the -- if there's a14 greater -- a 2 percent greater reduction15 in total tax collections?16
Now,18 wouldn't it be foolish for Council not to19 set the process in place to -- given the20 financial condition of the City, the21 financial condition of this country,22 looking at all of the options we may have23 in an unusual circumstance such as we24 have, wouldn't it be prudent for us to be25 92 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 able to put everything on the table so we2 could at least look at what our options3 are?4
Yeah. I think we've5 said all along that all options should be6 on the table. So I think it is7 appropriate to look at everything. And8 we just need to, you know, fully9 understand all of the consequences or10 potential consequences of what we might11 do.12
Yeah, but13 the State legislature gave us that14 provision in the Act, so they can't blame15 us for taking advantage of their16 recognition that you could need that to17 enact the taxes. So why would they look18 to punish us if we are following the19 rules?20 We're following the rules. They21 said, "Under these conditions, you can22 look at these taxes." And what we're23 asking -- when we submit our resolution24 is that we're asking for you and all of25 93 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 the parties concerned to give us the2 information so we can make an intelligent3 decision.4
So the7 notion that the consequences in8 Harrisburg will be dire seems a little9 disingenuous since we have the right,10 under their legislation granted to this11 city, to do it.12
So to keep14 saying that is a little disingenuous to15 me.16
Well, I mean, it's17 what we've been hearing, and we wanted to18 make sure that people understood that19 that's a potential consequence. I20 understand what you're saying, but --21
Well, we22 understand what you're hearing and we're23 also hearing something also. Everybody's24 hearing different things from different25 94 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 people, so evidently, everybody's saying2 different things to different folk.3 I just want to be clear and the4 record to show that we have the option of5 looking at this wage tax based on the6 rules set forth by Harrisburg. Maybe the7 people who are making the comments don't8 know that the rule exists and we might9 have to remind 'em, okay?10 Thank you.11
The14 Chair recognizes Councilman Green for a15 point of information.16
Thank you,17 Madam Chair.18 Mr. Dubow, would you agree that19 it would be extremely irresponsible for20 the Administration, or any of their21 allies on City Council, to be lobbying22 State legislators against a potential23 wage-tax increase or lobbying for a24 potential property-tax increase, given25 95 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 that we don't know what the unified2 position of the City will be when it3 comes out of this body?4
That's not anything5 that's been going on. I mean, what has6 happened is --7
That's not my8 question.9 Would it be extremely10 irresponsible for the Administration to11 try to have this fight in Harrisburg12 rather than have the discussion here in13 City Council, in this body?14
That's not my17 question.18 Would it be irresponsible of the19 Administration to be encouraging State20 legislators, or people from the General21 Assembly, to make comments such as those22 that were made in the Daily News today?23 Would it be irresponsible?24
For them to make25 96 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 those comments? No, it --2
For the3 Administration to be lobbying for a4 property tax against a wage tax in5 Harrisburg, would that be irresponsible?6
You're asking, would7 it be irresponsible to ask people to make8 those comments if they're saying --9
Can I finish,12 please?13 If they made those comments to14 us and they're telling us that would be15 the repercussions of what we're doing, I16 think it's responsible for us to want17 that knowledge.18
Would it be19 irresponsible for you to be lobbying them20 for one tax over another? Not you21 personally, the Administration, to be22 lobbying them to favor the property tax?23
I don't think we24 would lobby them to favor any tax.25 97 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Would it be2 irresponsible if you were trying to wage3 a battle in Harrisburg on which taxes4 will be raised versus having the5 discussion and dialogue here in City6 Council? It's a yes or no question.7 (Indiscernible; parties talking8 over each other.)9
... but I would like12 to give full answers.13 I think it's not something that14 we're doing. We're not going to lobby15 for a tax. Whether it's irresponsible or16 not --17
It is your18 testimony that nobody from the19 Administration is --20
-- for a tax24 increase? No.25 98 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
--2 encouraging this property-tax-versus-3 wage-tax discussion in Harrisburg?4
My testimony is that9 that these are things that people told to10 us --11
We briefed people on20 our budget, and we were told -- and this21 was unsolicited. We were told that we22 would get in real trouble if we increased23 the wage tax. And, yes, that was24 unsolicited.25 99 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Mm-mm, yeah.2 Legislators told that to me too in the3 context of casinos, which is -- at the4 time we were up there.5 I'm just saying if it's6 discovered that the Administration is7 trying to wage this battle in Harrisburg,8 I think that would be extraordinarily9 irresponsible, because this body may not10 agree with the Administration's decision,11 and as Dwight Evans said in the paper,12 the Chairperson of the Appropriations13 Committee, when we finally have a budget14 out of this body, this city needs to15 speak with a unified voice as to what we16 want, and it may not be what the17 Administration wants.18 So let's not lobby for something19 that is not going to get through this20 body. It's a waste of time and money.21
I agree that we24 should speak in unified voice when we25 100 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 have a budget.2
It seems to7 me, given the crisis that we all talk8 about to recognize that we're in this9 city, it seems to me to be narrow -- a10 narrow focus to only put your bet on one11 tax, which some of us believe is quite12 onerous on people that we represent,13 given the crisis. Maybe under normal14 circumstances, we wouldn't do this, that15 we put ourselves and the Administration16 included in the position of having all17 options open so that we could make a18 prudent decision about what to do rather19 than try to set the tone that only one20 tax should be given -- implemented.21 And so, I just want to let my22 feelings be known about this, because I23 think that, given the State's action to24 allow us to take the action if we need25 101 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 to, it seems to me that we ought to look2 at that too.3 Thank you.4 Thank you, Madam President. I'm5 done.6
Thank you,9 Madam Chair.10 I was not here when questions11 were being asked about the 2.2 million12 for the -- basically, the Board of13 Pensions and Retirement last year14 testified that 2.2 million of Class 20015 was to purchase an off-the-shelf package16 which should be Oracle-based.17 Total appropriations were 3.718 million last year for Class 200. And19 1.5 million -- there was an underspend of20 1.5 million.21 So what was the Class 20022 spending going to be last year? Do you23 know what all Class 200 spend was?24
You're asking -- we25 102 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 budgeted for the new payroll system that2 we did not purchase. So your question3 is: Of the Class 200, what those funds4 were expended for? Is that what your5 question is?6
Class 200 --10 2.2 million was being put aside for this11 package.12
But you only14 underspent by 1.5 million, you're only15 planning to underspend by 1.5 million.16 So explain to me essentially where that17 $700,000 went.18
A lot of it was used19 for the imaging package, but I'll have to20 get a breakdown for you.21
Okay. If you22 could please provide that to the Chair.23 And then also, do you have an24 ROI for the investment of -- what do you25 103 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 expect the return to be for an investment2 in a payroll -- pension payroll system?3
It's ROI,6 return on investment. How many years7 will it take us to pay back the purchase8 of that payroll system through the9 gaining of efficiencies in your10 department?11
It would be difficult12 to say because I believe that, based on13 what we've seen in speaking to other14 cities, the implementation itself would15 take anywhere from 18 months to three16 years.17 So it would probably be three to18 four years out before we could give you19 an estimated savings, but --20
So you're21 spending $2.2 million without knowing22 that it will provide more efficiency?23
Oh, it absolutely24 will provide more efficiency.25 104 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Some of the7 efficiencies would be that you currently8 receive a benefit statement from us each9 year. And I will tell you that about 2010 percent of them are inaccurate because we11 cannot include any purchases of service12 or any adjustments for leaves of absences13 and those kind of things.14 So you're getting a benefit15 statement, but it says you're going to16 get 200,000 a year. And then if you17 purchase military service, it could be18 $2500 a year. So almost 20 percent of19 those are wrong. That's one of the20 things that you'd see a difference in.21 The other thing is, we'd be able22 to calculate for a person if they called23 in estimates on in a really quick24 turnover time. So a person could call in25 105 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 and say, "If I got a 3 percent increase2 over the next three years and I require3 retired at age 62, 63, 64, what would I4 get?" Those would be things you would be5 able to get within a matter of minutes6 rather than a matter of weeks.7 And so, we'd be able to provide8 more services, we'd be able to provide9 more information. Um --10
Would you be11 able to provide it with fewer people12 through attrition?13
Okay. And so16 what changes in workflow -- two question.17 What will the savings be for this18 investment? And what changes in workflow19 processes would you implement in your20 department in order to take advantage of21 this technology?22 In other words, typically, we23 build software to follow our current24 workflow processes instead of going with25 106 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 the commercial, off-the-shelf solution2 and changing our workflow processes to3 create efficiencies.4
I think the5 efficiencies would be that we would not6 have to wait a month or two for a person7 to receive their first benefit. And8 there's a supplemental payment made for9 the first partial month and a full10 payment made for the second month.11
I'm asking18 for the efficiencies within your19 department.20
-- I'd2 actually like to see what you actually3 think it's going to save.4
And then6 we'll talk to Mr. Frank about how long it7 would take to implement if we started8 today.9
Thank you,14 Madam Chair.15 Could I get Mr. Dubow back for a16 sec?17 (Mr. Dubow returns to witness18 table.)19
Thank you,20 Mr. Dubow.21 Early on in the questioning, I22 had alluded to a story that appeared in23 the Daily News this morning and did not24 specifically comment about what was said25 108 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 in the story, but since the issue's been2 raised again, I just want to read you a3 couple quotes.4 First of all, the headline is:5 "Council Wage Tax Push Gets Harrisburg's6 Cold Shoulder." There's a couple quotes7 in here from various legislative leaders.8 "Senate Majority Leader Dominic9 Pileggi, a Delaware County Republican,10 told the Daily News that he would11 strongly oppose anything that would have12 an impact on raising the Philadelphia13 wage tax.14 "Senator Jay Costa, an Allegheny15 County Democrat, who recently took the16 minority position on the Appropriations17 Committee said that a City wage tax hike18 would go against the goals of the gaming19 law. 'My guess is that many people here20 would view it as a violation of trust and21 in conflict with the tax reduction goals22 of the gaming law,' Costa said in his23 statement."24 Steve Miskin, who's a spokesman25 109 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 for House Minority Leader Sam Smith, a2 Jefferson County Republican, predicted "a3 heated debate in Harrisburg if the City4 tries to raise the wage tax.5 'Suburbanites really have no say in6 Philadelphia's overspending over the7 years,' Smith said. So the question8 arises, should they pay more than they9 already do?"10 Of course, our own state11 representative, Dwight Evans, who's12 probably our best friend in Harrisburg13 issued a statement basically saying that14 there's some concern that he has.15 Now, let me explain to you what16 my experience is relative to the17 legislature, and I've been around some of18 these people for 30 years. The heads of19 these caucuses, the leaders in both the20 Senate and the House, are not bad people.21 They really -- many of them I know22 personally, and they like Philadelphia.23 But they represent a caucus,24 they represent their members who have25 110 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 varied opinions about Philadelphia, many2 of them misguided, but regardless of the3 misguided opinion, they have them.4 So I think what they are telling5 us here, in addition to the fact that6 they're being very clear about any7 attempt to raise the wage tax, they're8 saying that they can't hold back their9 caucuses. They will try. Dwight Evans10 will stand up and do his best, as he's11 done his entire career, to hold off12 anything that's negative towards13 Philadelphia. But there's a limit on14 what they can do.15 And tomorrow, it's likely we're16 going to pass a resolution that's going17 to potentially start this wage tax ball18 rolling, and it's going to be rolling19 downhill. It won't be with my support,20 but it's going to start rolling downhill.21 And I just want to make sure22 that people understand, the public and23 our members understand, that there's only24 so much friendly leadership can do. And25 111 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 all these people, whether they're2 Republicans or Democrats -- Senator3 Pileggi a very big fan of Philadelphia,4 Sam Smith is a very big fan of5 Philadelphia. But the members in their6 caucus, I don't believe, will stand for7 it, and I believe they're telling us that8 clearly up front.9 So I just wanted to put that on10 the record since it was raised for an11 additional time. I think these12 statements are very clear, and I don't13 see any way of reading them any other14 way.15 Thank you.16
The19 Chair recognizes Councilman Green for a20 point of information.21
Madam22 President, the point that our Majority23 Leader is trying to make, I think, is a24 very important one, and that is, the25 112 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 State law authorizes us to increase the2 wage tax; they don't have to vote on it.3 It authorizes it under two4 circumstances: One, if the revenue's5 down 2 percent; or, two, which we clearly6 meet, a fiscal crisis is present.7 A fiscal crisis is present.8 We've heard testimony from the9 Administration to that effect for the10 last two weeks. In fact, Councilman11 Kenney consistently points out that we're12 in an international financial crisis of13 historic proportions.14
A meltdown.17 I'm sorry Councilman, that's correct.18 So my point here is that it is19 irresponsible of this administration not20 to be lobbying for whatever comes out of21 this body to push one proposal versus22 another proposal.23 This administration has to24 understand that Council may not agree,25 113 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 and this administration has to use its2 lobbyists that we appropriate funds for3 to represent what's going to come out of4 this body.5 Thank you.6
The9 Chair recognizes Councilman Jones for a10 point of information.11
I think we're12 way off point with this testimony. We13 have begun and shot the first volley in a14 discussion that we will have for several15 weeks going forward. Both sides of the16 issue, whether it should be a wage tax17 increase or a real-estate tax increase18 have their merits and detractors.19 And I don't think it's fair for20 us to wage that battle right now, at this21 point in time.22 I will also say that to my23 esteemed colleagues in Harrisburg with24 whom I've developed a relationship over25 114 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 the years and trust their judgment on a2 lot of matters, but when it comes to what3 Philadelphia does and what we do and how4 it impacts our city should be our primary5 concern versus Lackawanna County.6
Thank you13 very much.14 I do agree with Councilman Jones15 relative to our own self-destiny.16 However, when we go to Harrisburg and ask17 for specific things to help us get out of18 this budget mess and we ignore clear19 warnings from various leaders around the20 State that something negative will happen21 if we pursue this potential course, I do22 think we are not creating our own23 destiny.24 We are asking for assistance in25 115 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 sales tax, we are asking for assistance2 in pension regulations. If we were doing3 this in a vacuum, we could have this4 debate.5 But when three legislative6 leaders, four, make it very clear that7 this is a misguided approach, I just want8 to make sure the record's clear that if9 we go that way and the bad things happen,10 that those who are promoting it should11 stand up and take credit for it.12
Point of13 order.14 COUNCIL PRESIDENT VERNA:15 Councilman Goode.16
(Inaudible,17 off mic.) ... for the Board of Pension18 retirement.19
Can we move22 on?23 COUNCIL PRESIDENT VERNA:24 Please.25 116 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Councilman Green, I believe it2 was -- you were -- it was your turn? You3 wanted to be recognized?4
Yes, Madam5 President.6 So the question I had for7 Mr. Dubow was: Is it responsible for8 Councilmembers to fan the flames in9 Harrisburg?10 Thank you, Madam President.11
Thank12 you.13 Are there any other questions or14 comments?15 (No further questions.)16
Seeing17 none, thank you very much.18 MR. McPHERSON: Sinking Fund19 Commission is next.20 (Witnesses come forward.)21
Good22 morning. Welcome. Please identify23 yourself for the record and proceed with24 your testimony.25 117 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Good morning, Madam2 President and members of City Council.3 I'm Carl Coin.4
Excuse5 me. To those leaving, please do so6 quietly. Thank you.7 Please proceed.8
3 million. 2 The Class 200 request provides3 for payments on leases for facilities4 such as the Municipal Services Building,5 the One Parkway Building, and certain6 correctional facilities. 2 million and provides for18 the General Fund's portion of the19 interest and principal payments on the20 City's General Obligation Bonds. 2 In order to meet the City's3 annual temporary imbalance between the4 payments of obligations at the beginning5 of the fiscal year and the receipt of6 taxes and other revenues early in the7 calendar year, it is expected that the8 City will issue Tax Revenue Participation9 Notes early in August of 2009. 1 million all in4 Class 700 for payments of debt service on5 Water and Sewer Revenue Bonds and General6 Obligation Bonds. 6 million, all Class 700, is to15 provide for payments on regularly16 scheduled Airport Revenue Bonds. 6 million over Fiscal Year18 2009 estimate is due to the provision for19 a year's debt service on a new Airport20 borrowing in Fiscal Year 2010 to fund21 improvements at the Airport. 5 This concludes my written of my6 testimony. 9
Thank10 you.11 What are the projected12 borrowings by the City in FY '09?13
Hi. Rebecca14 Rhynhart, City Treasurer.15 COUNCIL PRESIDENT VERNA:16 Welcome.17
In Fiscal Year18 2010, we have Airport Revenue Bonds of19 about 420 million and the -- we have20 Water Bonds that are being issued in a21 month, so that will be done in Fiscal22 Year '09.23 So for 2010, we also have the24 JJC Bonds, but those will be in Fiscal25 123 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Year '09, within the next month, to fund2 the new JJC project. So I'm getting to3 the answer to your question.4 In Fiscal Year 2010, I think5 it's just the Airport Bond issuance6 scheduled at this time.7
Can8 you tell us what is the projected amount9 to be borrowed in the tranche?10
About13 350? And what is the projected interest14 cost of the tranche?15
Could17 you tell us how the City determines the18 amount it will borrow for its cashflow19 requirements?20
I could answer25 124 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 that question.2
We do cashflow5 forecasting in conjunction with the6 Budget Department, which projects monthly7 cash inflows and outflows.8
And that's what10 leads us to the process of what the right11 amount of the tranche borrowing is.12
Thank13 you.14 The Chair recognizes Councilman15 Green.16
Thank you,17 Madam Chair.18 Could you explain in your19 testimony what Class 200 combined20 requests reflects, a 2 million increase,21 mostly due to a rise in estimated22 obligations for the paid stadium lease23 revenue bonds? What does that mean?24
It's the -- the25 125 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 stadium bonds are -- were done through2 the Philadelphia Authority for Industrial3 Development, and there's a slight -- a4 $2 million increase in the variable-rate5 cost.6
They are. And we14 increased the -- just because of the15 market fluctuation over the last year, we16 thought it would be prudent to increase17 the budgeted amount to leave a little bit18 more room in case the variable rate19 fluctuated more than anticipated last20 year.21
So does the22 $2 million reflect current rates or23 predictive rates or what?24
Predicted.25 126 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
It's actually2 more. It gives about a little under3 1 percent cushion for the higher rate4 than it is right now.5
No, the interest12 rates.13 So right now, we restructured14 the paid stadium bonds, so the interest15 rates those bonds are trading at is,16 like, half a percent right now. They're17 trading very well.18 But if interest rates were to19 increase to 1-and-a-half percent, which20 is not that outlandish --21
So then it's22 1 percent of the total outstanding debt.23
Is what25 127 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 you're --2
That we can hedge9 that risk? Well, the bonds do have an10 associated swap. There is no way to11 hedge a possible mismatch between the12 rate that we're receiving on that swap13 and paying out on the bonds.14 So no, there isn't.15
So you can't16 hedge it. So we're just -- we have sort17 of naked exposure to increases in18 Variable Rate Bonds.19
No. I'm sorry.20 It's not naked. We have the Variable21 Rate Bonds. Then we have a swap on those22 bonds, a derivative, which is -- we've23 had on since 2007, which, in normal24 market times, exchanges the variable rate25 128 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 for a fixed rate. So that is the hedge2 that you're referring to.3
What we've seen5 in the last year is the possibility that6 no hedge works perfectly and that there7 is a chance for that hedge to go in the8 slightest dislocation. And that's what's9 happened in the last year.10 So we wanted to make sure that11 we were prepared going forward in case12 that dislocation happened.13
So are there14 any other Variable Rate Bonds for which15 you're basically requiring extra money to16 put aside besides stadium bonds?17
Well, you're18 talking about variable rates that we've19 put a little bit of extra room in.20
I mean, we tried23 to be realistic with -- we have several24 swaps on several issues of bonds that25 129 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 we've tried to budget for in a realistic2 manner with a little bit of cushion. I3 would not say that it's, you know, that4 much extra cushion, though.5
What exactly6 is the extra cushion that you've built7 into this budget?8
Yes. I mean,11 you mentioned specifically the 2 million12 for Stadium Revenue Bonds, but what other13 bonds are you worried about the swaps or14 hedges or derivatives not giving us the15 protection that we expected?16
In the General17 Fund budget, there's only -- right now18 one series -- other series of bonds,19 which is variable rate debt with the20 swap. We do plan to fix those bonds out21 so that -- in the General Fund Sinking22 Fund Budget, that's the only -- in the23 Fiscal '10 year, the paid Stadium Bonds24 are the only bonds that have the swap25 130 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 moving forward that we have that built2 in.3
So when we4 hear about sort of us making interest5 payments for the Eagles, is that these6 bonds?7
So when we21 hear about us giving money to the Eagles22 for interest payments, what is that?23
We may be giving24 -- it's not interest -- it's not debt25 131 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 service, but we could find out. I don't2 know offhand what it is.3
How much do7 we annually give them for maintenance?8 (Mr. McPherson answers this9 question off-mic.)10
It's 7 to11 $9 million for maintenance?12 Let me ask a question. We have13 sued the Eagles, saying that they owe us14 $8 million.15
It's our17 belief that they owe us $8 million 'cause18 we've sued them. Every year we give the19 Eagles $8 million roughly.20 Can you explain to me -- you're21 the Treasurer; you have to sign that22 check. Can you explain to me why we just23 simply don't send them the money and let24 them sue us?25 132 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
I think that's2 outside the scope of the Sinking Fund3 Budget, which handles the debt service on4 the bonds.5 (Off-mic. discussion.)6
Let them sue7 us.8 Okay. I'm sorry. All right.9 Back to the -- I just -- so there is10 $2 million in the Sinking Fund Budget11 that you may not need. I mean, this is12 a -- it's -- you could come back to13 Council if you need 2 million bucks for14 another appropriation if the swap doesn't15 do its job; is that correct?16
I think that it's17 prudent budgeting to have a little bit of18 room in case of an interest rate19 fluctuation. I mean, these bonds, the20 interest rate went up very high this21 year, to 8 percent, before we22 restructured them.23 So having that cushion, which is24 a much lower amount than what we25 133 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 experienced over the last year, before we2 restructured these bonds, you know, I3 don't think that it's --4
Are there any9 other cushions in the Sinking Fund10 Budget?11
Are there any12 other cushions in the budget? In the13 General Fund Budget, there's no other14 cushions for variable rate15 (indiscernible).16
Okay. So17 this -- okay, perfect.18 So it's your testimony that if19 we cut 2 million out of the Sinking Fund20 Budget that you don't need the money21 today. This is just in case -- and, you22 know, that's what Council's for, you can23 come back to us for an appropriation --24
Mm-hmm.25 134 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
-- if you2 need it. I mean, why should we authorize3 this now if we don't know if you're going4 to need it and it will just end up in the5 General Fund at the end of next year?6
I think we need7 to make an assumption on Variable Rate8 Bonds and then --9
Well, I think15 we've seen over the last year that the16 swaps aren't perfect hedges in any which17 way.18
Okay. So can19 you live with, you know, a $ 1 million20 cushion instead of a $2 million cushion?21 I mean, we're trying the finds money22 everywhere.23
Mm-hmm. No, I24 fully understand that.25 135 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Okay. So --5 but right now, you don't need the money;6 this is just insurance. Is that a good7 way to describe it?8
Okay. Thank13 you.14 We've found another $2 million,15 Madam President.16 COUNCIL PRESIDENT VERNA:17 Wonderful. Thank you very much.18 This committee will stand in19 recess until 12:45. Thank you.20 (Short break taken.)21 COUNCIL PRESIDENT VERNA:22 Mr. McPherson, would you please call the23 next department.24 MR. McPHERSON: The Civil25 136 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Service Commission.2 (Witnesses come forward.)3
Good4 afternoon. Welcome. Please identify5 yourself for the record and proceed with6 your testimony.7
Good afternoon,8 Council President Verna and members of9 Council. I am Doris Smith, Chair of the10 Civil Service Commission. I am pleased11 to testify on behalf of myself and Civil12 Service Commissioners Linda Orfanelli and13 Roberta Santiago in support of the14 Commission's budget request for Fiscal15 Year 2010.16 Our total budget request of17 $170,309 consists of: $143,743 in Class18 100, $24,500 in Class 200, and $2,062 in19 Classes 300 and 400. This requests no20 change over our Fiscal Year '09 estimated21 obligations, and we anticipate no22 budgetary increases through Fiscal Year23 2014.24 Under the Home Rule Charter, the25 137 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 commissioners are charged with ensuring2 the application of merit principles to3 public employment; and carrying on that4 mandate, the Commission approves or5 disapproves a large variety of actions6 affecting Civil Service employees. These7 include the establishment of job classes,8 position, and pre-classifications,9 residency waivers, personal-service10 contracts, Civil Service regulations, and11 exemptions from the Civil Service.12 Currently, there are 104 active13 residency waivers. Of those 104 waivers,14 9 are indefinite or permanent waivers for15 highly-specialized medical and health16 care-related jobs. The rest are17 temporary class waivers, which we allow a18 candidate up to one year from date of19 hire to move into the City. This is a20 helpful tool to support the recruitment21 and retention of college students who are22 studying in Philadelphia as well as23 candidates for hard-to-fill jobs that24 necessitate using a wider recruitment25 138 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 area.2 The Commission periodically3 reviews the list of waivers, eliminating4 those that are no longer required. Over5 the last 10 years, 87 waivers have been6 rescinded. The Commission will be7 resending another 12 waivers in the next8 months due to recent class abolitions.9 Significant time is also10 required to carry out another major role11 of the Civil Service Commission: That of12 an appellate body which hears and decides13 on Civil Service employees' appeals of14 personal decisions. Most appeals are15 regarding dismissals, suspensions of more16 than ten days, demotions, failures on17 oral examinations, denials of requests18 for leaves of absence, and claims19 regarding injured-on-duty time.20 At the beginning of Fiscal Year21 '09, there were 35 appeals pending. In22 the first six months of Fiscal Year '09,23 the commissioners received 80 new appeals24 and issued 61 opinions and orders25 139 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 resolving appeals. Presently, 54 appeals2 are pending resolution.3 This year, mindful of the impact4 that barriers to employment may have on5 many of Philadelphia's most vulnerable6 citizens, we worked with Councilperson7 Blackwell to repeal application8 processing fees established prior to our9 appointment. With this budget, President10 Verna and members of Council, the11 Commission can continue its important12 work of assuring the preservation of the13 Philadelphia merit system, as mandated by14 the Philadelphia Home Rule Charter.15 This concludes my testimony. I16 would be happy to answer any questions17 you may have at this time.18
Thank19 you very much.20 The Chair recognizes Councilman21 Greenlee.22
Thank you,23 Madam President.24 Good afternoon to you both.25 140 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 First, on the processing fees2 for employment, are there none now? Were3 they all taken away? Or is it based on4 income or -- I'm not clear on that. To5 apply for jobs.6
My name is7 Albert D'Atillio. I'm the Director of8 Human Resources.9 The fees are no longer in10 existence.11
No longer12 at all, okay. I thought that was the13 case, but I wasn't sure. Okay, thank14 you.15 When it comes to the waivers, I16 have a question on it. It says nine are17 indefinite or permanent. What would18 constitute -- so, in other words, they19 may never have to move into the City; is20 that correct?21
How do you23 determine that? I mean, what is the24 general guidelines for that? I mean, I25 141 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 could certainly understand, you know,2 time-related ones -- six months a year or3 whatever -- but how do you determine,4 like, some people that would never have5 to move into the City?6
There are many7 people in the medical profession that the8 jobs are hard to fill.9
And the recruitment11 process doesn't allow for us to hire12 people that do not have the13 qualifications. And then there's an14 income problem. So, therefore, there are15 times when we give out indefinite16 waivers.17
Yeah, I18 didn't really -- I certainly knew about19 the timeframe issue, but I didn't know20 there were people who never have to --21 and they get -- they're City employees --22 I mean, they get City paychecks, right,23 obviously? And they never have to live24 in the City, they may never have to live25 142 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 in the City; is that true?2
Hmm, hmm,4 okay.5 And then the last thing: On6 appeals, are -- and I know you've only7 been there a certain amount of time, but8 have the appeals gone up over the years?9 Maybe, Mr. D'Atillio, do you know? Or10 have they gone down, stayed about the11 same? I'm just...12
I don't know off13 the top of my head. We can get that14 information to you.15
If you16 could. I'm just wondering, you know,17 kind of what factors might play into18 that, you know.19 Okay. Thank you both.20 Thank you, Madam Chair.21
You're22 welcome.23 The Chair recognizes Councilman24 Jones.25 143 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Thank you,2 Madam President.3 Good afternoon, first of all.4 Just as a point on Councilman5 Greenlee's inquiry, doesn't the 84 or so6 exemptions heavily find themselves in the7 Health Department based on doctors that8 we've kind of hired that are hard to get?9 This was one of my understandings as to10 why I wanted one of the classifications11 became exempt.12
That's true. People13 in the medical profession that's hard to14 get. There are other people other than15 physicians that sometimes get permanent16 waivers.17
So these are18 highly-specialized kind of job19 classifications that, but for these20 waivers, we might find hard to fill.21
Okay. The23 rule that was passed by this body that24 allowed a six-month wait before the25 144 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 residency required -- requirement kicked2 in, how has that affected your ability to3 fill positions since last year's passage4 of that ordinance?5
We have seen a6 positive trend in the number of7 applicants who are applying for positions8 who live outside of the City. We do not9 know yet whether those applicants are10 successful enough in the examination11 process to be offered employment partly12 because hiring has almost ceased to exist13 since --14
But there are15 specialized categories that we still are16 --17
We're seeing --18 on the elimination of the one-year pre-19 employment requirement, we are seeing a20 positive influence on correctional21 officers, forensic scientists, youth22 retention counselors. So it's not only23 on the highly-specialized medical24 positions in which there has been a25 145 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 residency waiver in existence.2
And at the3 point that they do and are successful in4 getting a job, they have six months to5 establish residency; and if not, we can6 actually find them in violation of our7 employment contract, correct?8
And may I -- I'm13 sorry. I -- Commissioner Orfanelli has14 whispered if my ear that we have looked15 at appellate trends over the years, and16 we are not finding any difference in the17 trends, but we will provide you with the18 actual numbers.19
Just another20 point of information, Madam President,21 since he commented.22 How have we changed our23 marketing? Or have we changed, I guess24 we should say. Have we changed our25 146 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 marketing to try to let people know about2 these positions' availability? Have we3 gone to our local universities and other4 universities to kind of let people know5 that, in a difficult job market, to say6 the least, that thee opportunities exist?7
When we announce8 for one of these titles, particularly in9 the Health Department, we work with the10 Health Department and their recruitment11 staff in creating marketing materials and12 targeting those marketing materials to13 specific classes.14 So if we're looking for15 pharmacists, we would target people with16 a license in pharmacy and that sort of17 thing.18
Just as a19 friendly suggestion, you might want to20 get to the local universities, get on21 their website, and let upcoming22 graduating classes kind of know about23 these things so that they consider them24 in their career options.25 147 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
And that's a3 low-hanging, no-cost way of kind of4 expanding the net of potential employees5 to the City of Philadelphia.6
Thank11 you.12 The Chair recognizes Councilman13 Green.14
Thank you,15 Madam Chair.16 I understand that the Office of17 Human Resources is trying to achieve18 savings by reducing the number of19 classes. What role does the Civil20 Service Commission play in that effort?21 Are you aware of that?22
Would you be25 148 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 involved if Human Relations was trying to2 achieve savings by reducing the number of3 classes?4
Okay. So how12 many classes are there within the City's13 Civil Service system?14
Currently,15 there's a little under 1100 classes. We16 had a high of 1600 classes going back to17 the '80s, and we are slowly but18 methodically identifying classes that we19 can eliminate, and I --20
Sorry. How21 many of these classes were added in the22 last five years?23
Were added in24 the last five years? I would have to get25 149 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 that number for you.2
Probably I'm3 going to ask a bunch of questions, if you4 could provide the information to the5 Chair. Provide a list of all6 classifications, including:7 When the classification was8 created and how many positions there are9 within it.10 The pay range for the position.11 How many of those positions are12 filled.13 And what departments those14 positions are in.15
Do you have17 any sense of how many classes currently18 are unfilled?19
I'd like to24 know how many are unfilled and the length25 150 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 of time they've been unfilled as well.2
All right.3 Michael Niconelli, the Deputy Director of4 Human Resources, might have that5 information.6 MR. McANALLY: We have7 approximately 150 classes that are vacant8 right now.9
The entire10 class is vacant --11 MR. McANALLY: The entire class.12 There are no employees in the entire13 class.14
Okay. I15 assume those are high on the list of16 classes to eliminate?17 MR. McANALLY: Yes, they are.18
Okay. Do you19 ever eject a recommendation by the HR20 Department to eliminate a class?21 MR. McANALLY: It's very rare22 that the Commission would reject it. We23 will occasionally have requests from an24 operating department that we not abolish25 151 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 a class because they have some hopes to2 fill it in the future. In that case, the3 Office of Human Resources will usually4 not send that recommendation to the5 Commission.6
Okay. I'll7 give you a copy of this just so you have8 what I'm looking for.9 So if -- are you -- is it -- and10 I apologize for -- is it your department11 that, if an employee believes there was12 some violation of Civil Service rules,13 they'll come to you for an adjudication14 of some kind of complaint? Is that --15
Yes. They will file16 an appeal, and it will come to the17 Commission for a hearing.18
And how often19 does that appeal sort of overlap the20 collective-bargaining agreement?21 In other words, it seems like22 there's a lot of rules in place in the23 collective-bargaining agreements and24 there's also a lot of rules in the Civil25 152 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Service Commission. Has there ever been2 an attempt to, you know -- I guess my3 question is: Other than exempt4 employees, who do you really protect?5
Well, we have weekly6 meetings where union personnel is there,7 and some of the problems are ironed out8 at that time.9
And so, are10 most of the things that you deal with a11 subject of collective-bargaining12 agreements in addition to being potential13 Civil Service rule violations?14
And23 non-represented -- unrepresented24 employees, okay.25 153 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 All right. I won't bore us now,2 but I'm very curious about the interplay3 of that, and I'll get in contact with you4 about it.5
Thank9 you very much.10 Are there any other questions11 from members of the committee?12
Madam Chair.13 COUNCIL PRESIDENT VERNA:14 Councilman Green.15
I'm finished16 with these people, but I understand that17 today is your 39th birthday.18
And the21 freshman, on behalf of all of Council,22 have gotten you a little gift that we'd23 like to give you.24
Oh,25 154 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 my. Oh, my.2 (Birthday cake is presented to3 Council President Verna.)4
That's5 nice. I'm impressed. Thank you. Thank6 you very much. Thank you. That's very7 sweet.8
Is this9 called buttering up the teacher or what?10 (Laughter.)11
Thank12 you all very much.?13 Are there any other questions?14
Thank16 you all very much.17 MR. McPHERSON: The next18 department is the Personnel Department.19
You could24 have went anywhere today; you chose to25 155 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 spend your birthday in City Council.2 Thank you, Madam President.3 (Laughter.)4
13 My name is Albert D'Atillio, and I am the14 City's Director of Human Resources. I am15 here to present testimony in support of16 the Department's Fiscal Year 201017 operating budget request. 2 Our FY '10 budget represents a3 decrease of $193,107 from our FY '084 estimated obligations. 14 A fourth division, known as the15 Organizational Development Division, has16 been added to the Office of Human17 Resources. 5 The mission of the Office of6 Human Resources is to work with all City7 agencies to recruit, select, develop, and8 retain an effective qualified and diverse9 workforce. 21 The Civil Service Commission and22 the Office of Human Resources are23 responsible for implementing employment24 laws and regulations enacted at the25 158 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 federal, state, and local level. Over2 the past year, we have enacted Civil3 Service regulations, implementing the4 City ordinance governing leave due to5 domestic or sexual violence and the6 elimination of the pre-employment7 residence requirement. 2 Online applications. As you3 know, the Civil Service Commission and4 the Office of Human Resources has worked5 together in the past -- in the past year6 with Councilmember Blackwell to eliminate7 the application fee. 12 Councilmembers Blackwell, Goode,13 and others of City Council have pointed14 out that the fee had an adverse impact on15 low-income applicants. 23
Thank24 you.25 160 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
When fully2 implemented in the beginning of Fiscal3 Year 2010, the system will increase the4 reach of recruiting efforts the Office of5 Human Resources services. 12 The Department will also be able13 to communicate with applicants via14 e-mail, providing faster feedback,15 enabling more rapid scheduling of job16 interviews. 21 The Office of Human Resources22 and the Division of Technology continue23 to collaborate in the implementation of a24 new human resources information system,25 161 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 otherwise known as an HIRS, to replace2 the existing system that was purchased in3 1976. 24 The rapidly rising cost of25 162 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 health benefits is an increasing2 challenge. The Office of Human Resources3 supports prudent use of scarce benefit4 dollars by negotiating rigorously with5 insurance providers. 6 million9 reduction in reduced costs for10 prescription drugs, and $250,000 in11 savings from rate reductions in the12 dental and vision plans. 15 Additionally, the City changed16 from an overall composite rate per17 covered employee to a tiered rate; for18 example, rates based on employee-only,19 employee- plus-one-dependent, of family20 coverage. This change ensures that the21 City pays for only what is required to22 provide quality benefits to our employees23 and their families. 5 The change to tiered rates was6 enabled by the implementation of the HIRS7 systems benefit software, which was8 approved by City Council in September of9 2006. 16 It also enabled four17 departments -- the Finance Department,18 the Office of Human Resources, the Law19 Department, and the Health Department --20 to conduct the annual benefit open21 enrollment via self-service last22 November. That's a paperless option that23 allows employees to make their own24 elections and obtain an immediate25 164 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 confirmation document. 5 In Fiscal Year 2010, the Office6 of Human Resources will release a request7 for proposal for our medical,8 prescription, dental, and vision9 insurance benefit packages. 14 The number of job15 classifications, as previously discussed,16 have been reduced significantly during17 the past twenty years. In 1989, there18 were 1600 classes; at the beginning of19 Fiscal Year 2009, the City of20 Philadelphia had 11,027 Civil Service21 classes. 4 The Office of Human Resources no5 longer has the staff available to support6 excess overly-specialized classes. In7 2009, we implemented several initiatives8 to reduce the number of classes. 20 This initiative should produce a21 significant process improvement, and it22 will eliminate the need to administer23 multiple examinations that test for the24 same competencies. 7 Layoffs. 15 A total of 121 Civil Service16 employees was scheduled for layoff17 effective January 16, 2009. Of those 12118 employees, 106 were full-time employees19 and 15 were part-time employees. 6 The Office of Human Resources is7 part of the Administration and Technology8 Reform Team working to review the9 administrative processes and implement10 efficiencies to reduce resources consumed11 and improve services. 18 This concludes my prepared19 testimony. 21
Can25 169 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 you tell us if we're still having2 difficulty in filling the EMS positions?3
Yes, we are. I4 assume you're talking about the paramedic5 positions?6
Yes.7 MR. McANALLY: Yes. We're still8 having difficulty because there's just an9 absolute shortage of employees qualified10 to perform that work. We are having some11 increased success partially because of12 the elimination of the preemployment13 residency requirement. And this fiscal14 year alone, we've placed eight employees15 on the eligible list for that class.16
So how17 many vacancies presently exist; do you18 know?19 MR. McANALLY: I don't know how20 many vacancies there are.21
Please.24 Councilwoman Miller was unable25 170 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 to be with us this afternoon; however,2 she wanted me to ask several questions on3 her behalf.4 What is the process that the5 City uses when the City selects its6 health-care providers?7
We issue a8 formal RFP. We solicit proposals from9 the major vendors, we evaluate those10 proposals. Again, this is for the11 City-administered plans. And we choose12 the provider who, you know, gives us the13 most value. It's a competitive process14 for the City- administered plans.15
Thank16 you.17 Can you explain why some benefit18 packages cost more and provide less? It19 is hard to accept the fact that smaller20 businesses can negotiate more services21 and better rates than the City of22 Philadelphia, with such a large pool of23 employees.24
I think there's25 171 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 a number of factors involved in the rates2 that insurance carriers charge the City3 of Philadelphia. A big determining4 factor is utilization. So if our5 utilization rates are higher because we6 have an older workforce or because we7 have a workforce with more medical8 problems, that will cause our rates to9 increase.10 We were very competitive in11 negotiating with the carriers this year,12 and if you compare FY -- if you compare13 Plan Year '08 to '09, you will see that14 we realized a 1.2 percent increase in15 benefits overall, which is pretty good in16 this market.17
The18 Councilwoman is asking if you would19 provide a chart of all City health plans,20 with details such as: Who receives the21 plan, what the plan costs the City and22 the employee with the benefits and the23 copays that the employees receive,24 including, I guess it says, medical,25 172 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 dental, prescription.2 Can you provide us with that3 kind of a chart, please?4
Thank6 you.7 The Chair recognizes Green8 Greenlee.9
Thank you,10 Madam President.11 Just quickly. I can't help but12 ask this question. Under legislation,13 you mentioned about the bill, the14 domestic violence leave bill --15
-- which17 you and I had, you know, somewhat of a18 agreement on the effects it would have.19 I know it's a little early to have any20 determination yet, but have you21 experienced any problem with that?22 Anybody trying to abuse the abuse leave23 at this point? I know it's only been a24 few months, but...25 173 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Okay. You4 won't be surprised I predict you won't5 have any, but okay. And that is a bill6 we have to do permanently 'cause it's a7 sunset bill.8 So, all right. That's all I9 have. Thank you. Thank you very much.10
Thank you,14 Madam President.15 My question is of a similar16 type, curiosity. Since the voters17 approved the tie-breaker preference for18 City residents, have there been any tests19 given at this point, Civil Service exams?20
And do we23 know whether there were ties or how many24 ties there were between City residents25 174 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 and non-City residents?2 MR. McANALLY: I'm not aware3 that there have been any ties between4 residents and nonresidents yet.5
Is that6 information that we can determine?7 MR. McANALLY: Yes, yes. I can8 give you a precise answer.9
Can you10 provide that information to the Chair?11 MR. McANALLY: Yes.12
You're16 welcome.17 The Chair recognizes Councilman18 Jones.19
Thank you,20 Madam President. And, once again, happy21 birthday.22
How many25 175 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 suits have been filed based on2 discrimination or sexual harassment to3 the City of Philadelphia? Or have been4 registered with your department?5
I can tell you6 that our department has investigated, in7 FY '08, 22 cases of allegations of that8 sort. I cannot answer whether those --9 any of those cases actually went to10 litigation. I think that question would11 be better posed to the Law Department.12
And my13 question becomes: Over the last, let's14 say three or four years, have they15 increased, decreased, remained the same?16
Our internal17 complaints have roughly remained the18 same. They were 22 in FY '06, 23 in FY19 '07, 22 in FY '08. This year we have20 nine investigations to date.21
Of those22 investigations, can you tell me the23 status of any of them that have come to24 conclusion?25 176 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
How many on3 average get resolved in a given year?4 The complaint is filed; how many of 'em5 come to resolution within a year, and6 what have been some of the dispositions7 of those cases?8
Thank12 you.13 The Chair recognizes14 Councilwoman Blackwell.15
Thank16 you, Madam President.17 Good afternoon, Mr. Director.18 And I want to thank you for your work on19 the jobs bill. You were always very20 cordial, and your department very21 helpful. Thank you.22
Let me24 ask you a question. Someone mentioned25 177 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 something about the Health Department2 that causes me to ask a question, because3 when we've been meeting with some of the4 people in the unions that go around, they5 were saying that if we had people in the6 health centers, from doctors on down,7 that were in-house, it would be a lot8 cheaper than the hiring that we do to9 break people in and do bids, and we hire10 so many other people, that maybe there11 are only about three -- three doctors in12 the system that we put out RFPs and we13 bid in all services at health centers.14 Do you know anything about that?15
All17 right. We'll ask the Health Department.18 Thank you.19 Thank you Madam, President.20
You're21 welcome.22 The Chair recognizes23 Councilwoman Sanchez.24
Thank you,25 178 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Madam President.2 Just a brief question on health3 benefits. Approximately how much do we4 pay per employee for health benefits?5
... it's roughly9 $1,000 per subscriber per month for10 active and retired employees.11
And how15 much -- we have many City employees who16 have spouses that have coverage, whether17 the spouse works for the City or for18 another entity. How much do we entice a19 City employee to waive their coverage20 with what's the enticement amount based21 on us saving the balance of the $12,000?22
Per pay.25 179 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
It's $36 per4 pay, and I think it roughly comes out to5 $780 or --6
So for the7 City saving the balance of $12,000, we8 offer somebody $700, which is taxable, so9 they make a decision whether to keep the10 double coverage or give us the benefit11 overwhelmingly of the $12,000 that we're12 paying.13 What is the sense of that in14 terms of -- just in an arm's length15 transaction, if you had sat down with me16 and said, "Well, look, it's costing us17 $12,000. I know your spouse works18 somewhere and has benefits. We'd like19 for you to waive it 'cause we'll save a20 lot of money."21 The average person, I believe,22 just -- this is just logical common23 sense -- when you tell them that you're24 going to keep $11, 300, you'll give us25 180 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 700, on which we'll have to pay taxes,2 unless we flex it -- we can always flex3 it. But pay taxes, so maybe we're around4 4 or 500 by then. You've now reached5 somewhere around 90 percent of the pot6 going to the City.7 It just seems to me -- I talk to8 an awful lot of people that say it's not9 worth it. And it seems to me when it was10 $4,000, maybe a $1,000 was the right11 number. We're still doing -- or 700.12 We're still doing basically the same13 number we did when these benefits were 314 and $4,000.15 I know that the Budget Director16 is here. I hope somebody can look at17 this before this budget. You know,18 everything is a little piece of it, but19 it's really no incentive for someone to20 give up and waive their health benefits21 and tag on with their spouse if they're22 getting 5 to 10 percent of the benefit23 and the City's getting 90 to 95 percent24 of the benefit.25 181 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 I don't know what the right2 number is, but I know that it's way out3 of whack compared to when these benefits4 were a lot lower and we were doing the5 same offer.6 (Witness comes forward.)7
Councilmember --8 Steve Agostini, Budget Director -- you're9 right. And given the math that you just10 did here, we should go back and look at11 it and bring something 'cause there's --12 sort of in economist lingo, there's room13 for a detail there.14
Thank you,22 Madam Chair.23 Just following up on24 Councilmember O'Neill's question, how25 182 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 many are in the City-administered plan2 that we would be able to offer that3 option to?4
We don't know --5 well, there's about 6,000 employees in6 the City-administered plan.7
We do not know10 how many of those employees would have11 access to medical benefits outside the12 City.13
Well, in17 some cases, you have two spouses that18 work for the City -- the courts, the19 Council, you know, any -- Sheriff's20 Office, whatever.21
I mean, the22 interesting thing here: If you could23 find 250 people, or we could save $6,000,24 that's one-and-a-half million dollars.25 183 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 If you could find 500 people, that's2 three, you know, et cetera, et cetera.3 This is big money.4 And Councilman O'Neill -- Madam5 President, Councilman O'Neill just found6 us probably 3 or $4 million to add back7 into tax relief.8
I've worked9 successfully with op-out programs in the10 past, and I agree with Councilman O'Neill11 and Councilman Green.12
I'm sorry. I've15 worked with op-out programs in the past,16 and I totally agree with Councilman Green17 and Councilman O'Neill, and we will look18 into this.19
Based on your20 past experience, was that outside the21 City?22
With the Gas25 184 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Works? And of the number of employees2 there, do you know what the incentive was3 and what the opt-out rate was?4
We had an5 opt-out rate of up to $1500. We -- one6 year, I guess my last year there, we7 doubled the opt-out to $3,000, and we8 believe we experienced an additional9 quarter of a million dollars in savings,10 and that was based on a population of11 1800 employees.12
So for those17 keeping score, City Council has found18 today at least $4 million in savings from19 the budget.20 So, I'm sorry, what savings do21 you expect to generate from the22 implementation of your online job listing23 system over the Internet, et cetera?24
Well, we25 185 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 anticipate a minimum of three positions2 that will not be required that are3 dedicated essentially to manually4 inputting application information into5 the applicant-tracking system. That's6 a -- I believe that's a conservative7 estimate, but that's what we've put in8 the budget.9 With the -- with the online10 applications and potential to do online11 testing and to provide certification12 information across the network, we13 believe that we can actually make a14 larger savings, but we haven't quantified15 it yet.16
The system is19 not in place yet. We're still in20 negotiations with the vendor. We issued21 an RFP, we've selected a vendor, we're in22 negotiations with the vendor, and we hope23 to have those negotiations finished24 shortly and have the system in place and25 186 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 begin to run on July 1st.2
Is the cost3 of implementation in your Class 2004 budget?5
It is. It's6 $75,000 a year. It's a licensing fee for7 a hosted service.8
Okay. And9 it's commercial, off-the-shelf software,10 a vendor who does this elsewhere. We11 don't have to -- we're not building12 software or maintaining software, okay.13
No. The vendor14 specializes in Civil Service -- in15 providing these services to Civil Service16 jurisdictions.17
So what18 you've talked about is three positions,19 and that's kind of based on just online20 applications. Implementing this entire21 system, how many more positions can we --22
I would not want23 to guess at this point because the24 system's not in place, and until we25 187 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 really see it work --2
What's your3 best -- I mean, what I'm asking you to do4 is guess, because, you know, I don't want5 to over-appropriate money to any6 department in this environment, and it7 sounds like there are efficiencies that8 will be gained from the implementation of9 this system starting July 1st, which is10 the beginning of the year.11 So let me just put the question12 another way: If we were to cut your13 budget by another $250,000, would you be14 able to function?15
Well, I -- you18 know, we would have to make do, but where19 my budget stands now is, we had 7820 authorized positions for FY 2009; I21 currently have 64 employees. The budget22 for FY '10 that's proposed has 7023 employees.24
So you're25 188 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 adding --2
We would have to3 make serious reductions in service, I4 believe.5
We have 6412 because during the past year, we've had a13 number of retirements.14
You have 6415 filled positions, and you're budgeting16 for 70.17
We are. It's a21 downtime for hiring services because of22 the hiring slowdown.23
We could do a25 189 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 better job in organizational development,2 we could do a better job with3 recruitment.4 (Timer bell rings.)5
We could do a6 better job in benefits; we're in search7 of a benefits manager who can become more8 strategic than what we currently have.9
Thank11 you.12 The Chair recognizes Councilman13 O'Neill.14
Just a15 couple of follow-up questions on the16 opt-out discussion.17 How many City employees are in18 other plans besides that managed by the19 City? Approximately.20
Yes.25 190 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
How many2 retirees -- so we basically have a3 little -- say, 25 percent are in our plan4 roughly.5
And our plan9 includes roughly 2,000 employees who opt10 out of the union-administered plan to be11 in our plan.12
1300?20 Okay. So the bulk of the others are in21 other plans, not the retirees; the22 retirees are in a much smaller part of23 the additional --24
That's right.25 191 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Do you know2 what opt-out provisions are in the other3 plans?4
Okay.7 Could you find out what they are, how8 they compare to ours. And if we were9 going to do something, maybe we could10 coordinate it and capture savings on11 those other 75 percent or so?12
Okay.18 Well, if they don't exist -- we know the19 employees exist. If there's no opt-out20 plan, that's worse than a bad opt-out21 plan. So hopefully, we would want to22 encourage or negotiate an opt-out plan23 that would hopefully save the City some24 money. Do I -- am I clear on that?25 192 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Okay. End3 of that discussion.4 The employees mileage5 reimbursement, do you administer that in6 HR?7
Thank14 you.15 Are there any more questions?16 The Chair recognizes Councilman17 Green.18
Thank you.19 I'm sorry. How is it that20 somebody who's covered by a collective21 bargaining agreement, who is in a City22 union, is able to be on our plan? In23 other words, we pay the union per24 employee. Do we give the union an amount25 193 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 of money if that person is on our plan or2 do --3
Okay. So5 they just made the decision -- only6 employees that are covered by the union7 plan are being reimbursed.8
Okay. Okay.10 That's good.11 And do you know what we pay per12 employee per different union plan?13
Okay. And16 you're not aware of any incentive from17 the unions to have people go on our plan18 rather than the union plan.19
Based on, you21 know, risk profile or, you know, any22 other thing.23
Okay. So how25 194 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 many employees are engaged in posting2 time and attendant data for payroll3 across the government?4
We're in the5 process of studying that now. I believe6 that there are approximately 3007 employees who post time and attendance.8
The Water12 Department estimates -- just one example13 -- Water Revenue Bureau, that they go14 through 28,000 timesheets and 6,00015 overtime forms a month. That's 408,00016 data entries a year just in that17 department.18 In this technology upgrade that19 you're looking at, are you considering20 eliminating the function of timesheet21 data entry?22
The Chief23 Information Officer, Alan Frank, and I24 have been working jointly on a project to25 195 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 bring in an automated and integrated time2 and attendance system for the entire City3 of Philadelphia.4 I'm unaware of the Water5 Department's own individual initiative; I6 would need to follow up on that.7
No. We're still10 in the data-gathering requirement stages.11 We plan to have a recommendation by12 September.13
And do you14 know how long it would take you to15 implement after that?16
I think it17 depends upon how much configuration is18 required.19 Again, you know, I went through20 this process at the Gas Works, and21 because of the number of unique rules22 that you have to configure into a23 system -- and we have four unions as24 opposed to one that the Gas Works had --25 196 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 we spent over a year in the2 implementation, in just designing,3 configuring all of the rules and4 implementing it.5 So it might be -- you know, we6 haven't made our final determination, but7 we may end up rolling it out on a8 phased-in approach.9
Okay. Have10 we considered trying to change the rules11 as part of our collective-bargaining12 process so there's one way to measure13 time across the City so that we can14 implement this quickly and have 30015 redundant positions?16
-- is it21 changing the rules with respect to22 timesheet data entry? It seems like23 something that the unions would be least24 concerned about in this environment,25 197 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 something that's being looked at in the2 context of putting in new systems.3
I'm sorry. I4 wasn't there.5 When I was referring to rules, I6 was referring to rules that govern pay7 and leave, so that, you know, an employee8 gets paid overtime after eight hours,9 after 40 hours, on the first day off, on10 the second day off. An employee gets --11
And that has15 to be reflected in the system by the16 employee?17
Okay. Thank20 you.21 In August of 2008, OHR reported22 that 5,000 employees had not received23 their performance rating in the prior 1824 months and another 6,300 had no rating at25 198 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 all. Why is a performance rating2 important?3
Well, it's going4 to be difficult to answer in five5 minutes.6 For so many reasons. Because,7 A, without that feedback, an employee8 doesn't know whether their performance is9 acceptable, can be improved, how it could10 be improved.11 It also plays into the12 disciplinary process. It would play into13 the layoff procedures if we need to14 effectuate layoffs.15 It's just good HR management to16 have employees apprised on a periodic17 basis of their level of performance. I18 mean, the documentation is crucial.19
So is this20 something you're looking at automating21 for supervisors?22
It's one of the23 initiatives that the Reform Team -- that24 our reform team is looking at.25 199 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
-- data that you8 had looked at. So I have no reason to9 believe that that figure has changed.10
And that will14 be through the implementation of15 technology that allows for automated sort16 of online or on our local-area network17 performance ratings by supervisors.18
Reminding20 them when they haven't done it via21 e-mail, et cetera.22
That gives us23 the ability to not only ensure compliance24 but also to extract information for a25 200 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 variety of purposes. So I think it's2 much needed. And there are software3 packages out there that are very good.4 I think we need to identify what5 our requirements are, put out an RFP, and6 go through that process.7
Three. Did11 you have two last year? Did you hire a12 new deputy?13
Well, last year,14 I believe Celia was the only deputy.15 Michael was promoted from the16 hiring services area to oversee hiring17 service at a deputy level.18 Brian Albert was transferred in19 from the Managing Director's Office to20 help build our organizational development21 area.22 So these were City employees who23 essentially came in at a lateral and went24 from a civil -- in Michael's case, a25 201 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Civil Service position to an exempt2 position at essentially the same salary.3
Well, I'm sorry.11 That's not correct. We were hoping to12 hire, and we still are, a deputy in13 charge of benefits.14 Our Benefits Unit is extremely15 transactional, and we need a qualified16 benefits manager who, you know, can help17 us with the strategic planning, the18 opt-out, dependent audits, plan-design19 changes, everything that you need to do20 to constantly stay on top of benefits.21
Celia is24 handling it -- I don't want to say in her25 202 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 spare time --2 (Laughter.)3
Okay. And6 what do you imagine that deputy's salary7 would be?8
130,000. And11 you're performing the function today12 without that person?13
Well, okay.15 So a bunch of departments have16 come before us, and other departments are17 coming before us, and one of the things18 I've noted as we've shed staff in various19 departments through the Street20 Administration, there was an uptick in21 '09 in the Nutter Administration, and now22 we're kind of getting back to FY '0823 levels in departments.24 One of the things I notice is25 203 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 that you'll have -- and pensions2 counselors is an example of this, they3 appeared before us today, and I didn't4 ask the question. There are three5 supervisors supervising nine people. So6 each supervisor has on average three7 people that they supervise. And this --8 you could this in almost every9 department.10 Why wouldn't we have a more flat11 structure? I know of no supervisors in12 the private sector that surprise so small13 a number of people. What's the reason14 for this?15 And I don't mean in that16 department; I just mean throughout the17 City.18 MR. McANALLY: Yeah, Councilman.19 In many of the supervisory titles, their20 primary function is not supervising;21 they're also performing the work that22 their subordinates perform, so they don't23 devote anywhere close to one hundred24 percent time of their with supervisory25 204 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 duties. They're working and providing2 direction to their subordinates. And in3 the case of pensions, that's very much4 the case.5
Do you have6 any sense of the -- everybody with a7 title of supervisor, by title, how much8 time they're spent supervising versus9 performing the function?10 MR. McANALLY: No. I couldn't11 give you a precise number.12
So -- well,13 how do we know that supervisors are14 needed? I mean...15 MR. McANALLY: We review every16 request that --17
I mean, if we18 eliminate that position. Yeah, but19 that's a request to create the20 supervisor. No department -- or very21 rarely, I would imagine, do departments22 put in requests to remove supervisors.23 MR. McANALLY: That's correct.24
So how is25 205 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 it -- when is that reviewed what the2 department's number of supervises should3 be relative to the number of employees it4 has?5 MR. McANALLY: Every time6 there's a request for a new position, the7 --8
Okay. So9 basically, you don't go back and look at10 all to see whether or not supervisors are11 needed. Once someone has the title in a12 position, it's not taken away.13 MR. McANALLY: No. We don't14 perform that function.15
Who does?16 Who's responsible for that?17 MR. McANALLY: I don't think18 that anyone in City government performs19 that function.20
May I add to22 this? Back in the 1980s, the Personnel23 Department was a much larger department24 and had a fully-functioning25 206 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 classification team, with about 20, 15 or2 20, analysts whose job it was to3 constantly audit job classifications.4 That function no longer exists.5 As I said, we now have 646 employees, roughly half of what existed7 in the 1980s. So we don't have the8 resources to go out and do routine9 classification audits.10
Do you think,11 if you did routine classification audits,12 you would find savings?13
Michael, you14 were a part of classification.15 MR. McANALLY: Yeah, I think we16 could identify savings. It's very hard17 for us to implement those savings to18 force the operating departments to remove19 supervisors. The best that we can do is20 to make a recommendation that the jobs21 not be filled when the current employees22 vacate their positions.23
Okay, but24 that's not being done at the moment.25 207 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 MR. McANALLY: Not at -- no, no,2 it's not.3
Okay.4 MR. McANALLY: 'Cause we don't5 have the staff to do it.6
If the7 workflow of the City was automated such8 that what every employee did was9 basically in a database, you could see10 how many -- let's just take pension11 consultants, for example -- how many12 people each person was helping a day and13 how many people the supervisors were14 helping a day, you would be able to get15 some gauge of the amount of time16 supervisors are spending performing the17 function that they're supervising versus18 time spent supervising, 'cause19 presumably, the time they're not spending20 doing the function that, you know, the21 counseling would be reflected in an22 absence of increase to the database or,23 you know, the number of people they help24 per day, et cetera.25 208 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Is that something that we're2 capable of gauging today in various3 departments? If we were to send you a4 list of supervisors and positions in5 various departments and said, Look and6 see over the last year how many people or7 how much of whatever function it is was8 performed in the database for that9 applicable department by employees versus10 supervisors, who would be capable of11 telling us that?12
I think it's13 each individual, you know, HR manager.14 And their managers and supervisors would15 have to tell us that.16 It's sort of the process we're17 going through now with the HR personnel.18 We sent out a survey, and we're asking19 the HR personnel in the departments to20 break down their time. I mean, it would21 require a classification audit.22 Once you have that information,23 you know, we can then put that24 information into the HRIS system, and the25 209 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 HRIS system does provide for position2 management and for staffing.3 To the extent that that4 information exists and is currently in5 the Oracle system, I don't believe that6 it's a hundred percent accurate.7
Okay. In the8 private sector, overtime accounts for9 about 1 to 5 percent of payroll costs,10 much towards the lower end of that range.11 In most of our peer cities, or the12 average of our peer cities, overtime cost13 is 5 percent of payroll costs.14 In the City of Philadelphia,15 historically it has accounted for 10 to16 13 percent of payroll costs. Why is17 that? Why is our -- why are we very poor18 at managing overtime?19
I think you20 would need to ask each department head21 who's responsible for controlling22 overtime in his or her own department23 what are the driving factors for24 overtime.25 210 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
So would you2 say the only way we can really force a3 department to lower their overtime is to4 appropriate less money for overtime?5
The only way8 we can force a department to use less9 overtime might be to appropriate a10 department less overtime? I mean, that's11 essentially what control we have, right?12
Councilmember,13 having worked in a number of the peer14 cities you're probably looking at, I15 would tell you that, based on my16 experience in those cities, we have17 significant understaffing in a number of18 areas.19 And I think the largest20 components of our overtime are in two21 departments; that is, in the police and22 prisons. And I think, with respect to23 prisons, it is the inability to attract,24 recruit, and retain people that has25 211 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 driven that overtime, along with the rise2 in census. I think in many of those peer3 cities, unless they are operating a4 county lockup facility, you're not going5 to see those kind of overtime expenses.6 And I think with respect to7 police, the ability for us to be8 successful, and for this particular9 commissioner to be successful, where this10 crime plan has been largely driven by his11 ability to utilize overtime to create a12 series of shifts, notably a power shift13 to generate people on the street.14 So I think it's -- you need to15 be a little careful about looking at16 those peer cities and be sure that we've17 got like situations and like functions.18
Well, I19 completely agree, and I'm glad you raised20 the point.21 Compared to many peer cities --22 and I'll mention a few. LA has about 9.423 municipal employees per thousand24 residents, Chicago has a little over 11,25 212 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 San Jose California has 7 --2
And in all three3 of those cities, they don't run the4 county functions that we run.5
It's 16,60010 City employees; the rest of our employees11 are county employees. And we have an12 extremely high ratio compared to our peer13 cities of employees per thousand people.14
I've shared17 it with the Administration many times --18
If you'd be happy23 to send it to me one more time, that'd be24 great.25 213 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Are4 there any other questions from members of5 the Committee?6 (No further questions.)7
Our11 next department?12 MR. McPHERSON: Our last13 department for the day is the Human14 Relations Commission.15 (Witnesses come forward.)16
Good17 afternoon. Please identify yourself for18 the record.19
Good afternoon.20 I'm Rue Landau, the Executive Director of21 the Philadelphia Commission on Human22 Relations.23 MS. DeSHIELDS: Angela24 DeShields, Administrative Officer with25 214 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 the Human Relations Commission.2
5 Good afternoon, President Verna6 and members of City Council. 13 The Philadelphia Commission on14 Human Relations is a City agency that15 enforces the Philadelphia fair practices16 ordinance, Chapter 9-1100 of the17 Philadelphia Code, which prohibits18 discrimination in employment, housing,19 use of public accommodations, and the20 delivery of City services. 6 Finally, the PCHR staffs the7 Fair Housing Commission, which is charged8 with enforcing the fair housing9 ordinance, Chapter 9-800 of the10 Philadelphia Code. 14 The PCHR's budget is -- consists15 of 97 percent Class 100, percent Class16 200 and 1 percent Class 3 and 400. Our17 staff is split between three units, or18 divisions: The Compliance Unit that19 deals with the discrimination cases, the20 Community Relations Division, and the21 Fair Housing Division. 25 216 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 The PCHR's budget was reduced by2 $29,300 during the FY '09 Rebalancing3 Plan; that reduction was taken from Class4 100. These Class 100 savings were5 generated mainly through staffing6 irregularities such as medical leave,7 maternity leave, and vacancies on our two8 commissions and the fact that the9 previous administration had over-budgeted10 the Commission's Class 100 funding for FY11 2008. Accordingly, these cuts were made12 without the need to lay off any of our13 much-needed staff. 17 In the Mayor's proposed FY '1018 budget, our agency's budget will be19 reduced by $72,923. 23 The PCHR is mandated to protect24 people's civil rights and to advocate25 217 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 against all forms of prejudice and2 violence. We currently have a skeletal3 staff of 34, down from 44 in 2004. 13 Finally, we saw a small but14 significant increase in the number of15 cases filed with the Fair Housing16 Commission. We saw increases in these17 types of cases even though, in August of18 2007, our office moved from 34 South 11th19 Street to 6th and Walnut. We were20 conveniently located right next to the21 DA's Office, where they handled private22 criminal complaints and municipal court23 landlord tenant court that used to just24 refer cases down the hall to us. 10 In order to be responsive, our11 staff continues to work efficiently and12 effectively. We've already started to13 reorganize the way our agency does intake14 to increase revenue. 20 One of our intake staff just21 retired last week -- two weeks ago. 3 We've a work-sharing agreement4 with the Equal Employment Opportunity5 Commission, the EEOC. For each case, we6 close we receive $550 from them. 15 In order to fill our intake16 slots, we hope to hire two people with17 the title of Human Relations Technicians18 at $29,580 apiece to replace the retiring19 employees. 25 220 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 In our Compliance Division, we're2 instituting a case prioritization system3 that will allow us to close more cases4 next year. 8 Recently, our Community9 Relations Division underwent a10 work-refinement process through a retreat11 in order to more efficiently resolve12 disputes and conflicts throughout the13 City. 4 Since 97 percent of our budget5 is comprised of Class 100 funding and the6 work of the Compliance and Fair Housing7 Divisions are mandated in the8 Philadelphia Code, any staff decreases9 outside of administrative reductions10 would have to occur in the Community11 Relations Division. 14 The staff has a high success15 rate for resolving neighbor conflicts16 before they escalate to violence. 19 In fact, we've already been to20 approximately six high schools to resolve21 ethnic- and race-based conflicts already22 in FY '09. 5
Thank6 you.7 The Chair recognizes Councilman8 Greenlee.9
And over14 the years, I've worked with the Human15 Relations Commission, particularly the16 Community Relations Division, and they do17 a very good job --18
-- in, I20 know, very difficult situations.21 Along those lines, do you have22 any idea how many roughly percentage -- I23 know you said you increased the number of24 cases resolved, but on average, about how25 223 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 many cases just are beyond what, say, the2 Human Relations Commission would do when3 it has to go to the courts or whatever?4 Would you --5
I don't know the9 answer to that. We always get involved10 with cases when they don't rise to the11 level of criminal activity.12
I don't know how17 many cases that we don't resolve. The18 Community Relations officers and the19 Police Department often refer cases to us20 --21
Yeah, I24 know you all work together in those kind25 224 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 of things.2
Would you5 say that with more and more immigrant6 groups coming over into the City, has7 that heightened problems? Has that --8 have you seen an increase in the kind of9 issues you have to deal with that are10 either racially or ethnically --11
Absolutely. We've12 gotten calls from this body and from the13 police and various other agencies to14 resolve all sorts of disputes that15 include new refugees and immigrants being16 placed in neighborhoods.17 For example, recently, there was18 over 50 Iraqi families placed in the19 Northeast. They've had some trouble in20 some of their high schools.21
They've tried to23 transfer to George Washington High24 School, where they can at least all be25 225 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 together.2
We've resolved --4 there are -- we've intervened with the5 Burmese community in South Philadelphia.6
And we're seeing8 more and more of these on the rise.9 We've written a letter of10 support with some of the immigrants11 advocacy groups, where we're going to try12 to partner with them to become13 ambassadors for the new refugees and14 immigrants who are coming to the City so15 we can help navigate neighborhoods at the16 time that people are being placed there.17
And I18 guess the languages -- you know, as more19 and more languages come in, I assume you20 might not have a person that can speak to21 Iraqi people right on hand, right? How22 do you handle that?23
We don't have that.24 In our office, we have people who speak25 226 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 approximately eight or nine languages.2 We use the language line, as all City3 agencies are required to do, including4 this body.5
And we use the8 language line. And, depending on the9 dispute, there's often neighborhood10 people -- we have contacts in every11 single neighborhoods and in every single12 ethnic community for -- that we can reach13 out to and help us in any way they need.14
I guess15 this is sort of a loaded question, but16 would you say the kind of work you do in17 the end saves the City a lot of money --18
-- because20 people don't have to go to other avenues21 and spend a lot more money and --22
There's no doubt23 that our conflict resolution -- we are24 very successful. With our mediations and25 227 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 all of our conflict resolution, we get to2 issues before they arise and escalate to3 the level of violence.4
If violence never9 happens, how do you quantify something10 that didn't happen? But we do that.11 We also -- by the way, our12 mediators have been intervening more in13 landlord-tenant disputes, including14 subsidized-housing disputes.15 (Timer bell rings.)16
Okay. Where we19 have property managers who now call our20 office and say, "I'm going to give these21 folks one last chance. If you can help22 to resolve this case, it will keep from23 going to landlord-tenant court and being24 evicted and going through all other25 228 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 avenues in our system."2 So we've gone and we've3 successfully mediated a lot of4 landlord-tenant disputes before they even5 got to court.6
And, Madam10 President, that's the first time I got11 buzzed.12 (Laughter.)13 Thank you.14
Councilman19 Greenlee, that's because Charlie20 McPherson likes you.21 (Laughter.)22
And23 congratulations and welcome to the fold.24 I want to ask the question I25 229 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 asked the prior folk that testified. How2 many discrimination cases, both sexual3 and other forms of discrimination, have4 been filed on behalf of City employees5 against their --6
I don't have the7 City employees number. I can tell you --8 I can get that to you.9 You would have to look at if10 they filed with us the, Pennsylvania11 Human Relations Commission, and the EEOC12 directly. When somebody comes to us,13 they dual-file with the EEOC. So I can14 check on that.15 I don't have the numbers exactly16 for the City, but I can tell you the17 overall numbers of the cases that we18 receive.19
And the20 second part of that question, which I21 asked prior, was: Has that number gone22 down over the past couple of years?23 And I harp on that because one24 or two things is true: Either we're25 230 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 getting better at training our workforce2 as to what discrimination actually is,3 what sexual discrimination actually is,4 and maybe that's having a positive5 benefit. Or, the opposite is true:6 We're not doing enough.7 But I would like to look at8 those trends over a period of time to see9 if we're actually kind of engaging our10 staff in a way that's helping them to11 proper behavior as opposed to improper12 behavior.13
Sure. I can get14 you those numbers for the past couple of15 years, and I'll contact the Pennsylvania16 Commission and get them for you as well.17
I would also18 say, are you -- you mediate private19 disputes between residents in the City of20 Philadelphia often?21
Can you give24 us a breakdown of where some of those are25 231 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 by Councilmatic District? because I think2 that there may be a correlation. We're3 getting calls about things that we really4 have no qualification in resolving, one5 neighbor versus another neighbor, and6 they've had a serious situation for7 years, one child versus another child.8
And those10 kinds of interventions and those kinds of11 early interventions can stave off serious12 crimes that are a result of minor, minor,13 minor situations.14
Right. First of15 all, please send all of those cases our16 way; that's exactly what we get involved17 in and what we resolve every single day.18 We resolved 386 neighbor disputes last19 year alone.20 The second thing is, I'm sure,21 like many people who are testifying to22 you, we have a very antiquated computer23 system. I've already been in24 conversations with Allan Frank of DOT to25 232 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 get us a better system.2 I -- we can't run reports based3 on certain criteria. I'd have to go by4 hand to -- I'd have somebody go by hand5 to find out where the cases fall in6 Councilmatic Districts but it's not --7 unfortunately not something that I could8 just push a button on.9 In FY '10, I'll be able to do10 that for you, I promise you. It's very11 frustrating for us as well.12
I should say, you15 know, we get calls and complaints16 throughout the City. There's obviously17 certain areas that we get a little bit18 more, we get more calls. We don't get as19 many -- for example, we get very few20 calls from Roxborough and Manayunk, but21 we'll get a lot from Southwest22 Philadelphia.23
You get fewer24 calls from the 4th District, you say?25 233 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
The other4 thing is, and final point, is that if you5 are finding patterns of discrimination6 with companies, we would like you to7 forward that to the President of City8 Council to distribute to its members,9 because if we're doing business with10 companies that have a pattern of11 discrimination and providing them access12 to our procurement, maybe we should13 cross-reference those cases to make sure14 that there isn't a discrimination problem15 that might preclude them from doing16 business with the City of Philadelphia.17
So cross-19 referencing that with both the EEOC and20 this body would be helpful information21 going forward.22
That's wonderful.23 And they -- I think they'll start coming24 in reverse, as well as Council President25 234 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Verna already sent a case to us that2 we're investigating, which is -- there's3 been a class action south filed in it4 because it's so egregious.5
Well, that6 information would be helpful to us,7 particularly as we engage companies in8 long-term contractual relationships --9
-- whether11 concessions or services rendered. We12 need to know that kind of information,13 and if they're bad neighbors, maybe we'll14 pass them by.15
You're22 welcome.23 The Chair recognizes Councilman24 Green.25 235 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Thank you,2 Madam Chair.3 One quick question. Your4 testimony mentions a bunch of different5 revenue sources, reimbursements from6 EEOC, et cetera, but none of that shows7 up in your budget as it -- and your8 budget just shows all money from the9 General Fund. Is there a reason for10 that?11
Oh, our -- we only12 get -- the only source of revenue at this13 current moment -- and hopefully I'll tell14 you something different in a year or15 so -- is from the EEOC, and it goes16 directly to the General Fund.17
So, really,21 this is an unfair characterization of the22 size of your budget because you're23 reimbursed for some of these expenses,24 and it's not reflected in the budget you25 236 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 presented to us. Is that -- in other2 words, you're spending fewer of the3 City's resources than this represents.4 (Mr. Agostino comes forward.)5
Councilmember, if6 you were to read the budget and7 particularly the detail, you will see8 there were a number of departments where9 that has been the case, and not just this10 year, but for years, where they generate11 revenue from a variety of permits from12 fees, L&I being a very good example of13 that. They come into the General Fund as14 departmental revenue. They're broken15 into some detail, the pages are in the16 detail budget.17 So it is not that Rue has done18 anything different than we have done in19 years or is not displaying the budget in20 any particularly transparent way.21
Well, my only22 point was that it's costing us less than23 this shows.24
And my point --25 237 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
And my point is4 that you need to read the budget5 correctly to see that.6
Steve, I read7 the budget; you should be most aware of8 that. And I really, really am tired of9 the tone that you -- and disrespect that10 you approach this body with.11
Madam President,12 in deference to you, I won't respond to13 that.14 Thank you.15
Can we18 finish with this witness, and then maybe19 there could be a little debate afterward.20 Please proceed.21
Very well.22 So I think you testified that23 you have an average annual EEOC24 contribution of $200,000 for the past two25 238 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 years. Why is the expected FY '092 payment so much lower?3
Oh, sorry.6 That was last year's testimony. I'm7 sorry.8
So why is10 this year's payment so much lower than11 last year's?12
Last year, I saw --13 last year's testimony. Last year, we14 didn't receive $200,000. I'm not sure15 why.16
Okay. Last21 year, PCHR testified about its continuing22 effort to qualify for a contract with23 HUD, and so this was last year, and a24 Charter change is required, and we can25 239 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 apply for something called a "substantial2 equivalency" and offset another $120,0003 of the cost of PCHR. Why haven't we done4 this? What Charter change is required5 and how can we proceed with this?6
It's on my agenda.7 I've got an elaborate five-year plan8 myself. In order -- back in the '80s,9 HUD had -- didn't have certain10 requirements in order to work with11 entities like the Human Relations12 Commission in order to reimburse us for13 cases. At some point, they raised their14 standards and said -- I -- my15 understanding is that they then told all16 of the entities, You have four years to17 come into compliance -- come -- raise18 your standards to our level, and then19 you'll be substantially equivalent, and20 you can keep a contract.21 We did not raise our standards.22 It was many years ago. And ever since23 then, I don't know that anybody's taken24 the -- how much of an initiative they've25 240 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 taken on this.2 I've already had some3 discussions with people in the Mayor's4 Office and around, that we are -- it's5 definitely on the agenda. We would like6 to become substantially equivalent. We7 are losing out on HUD funding.8 It's -- when somebody would file9 a claim with us on a housing10 discrimination case, we -- there's is11 almost -- there is very little incentive12 to file with our agency versus the13 Pennsylvania Commission because the14 Pennsylvania Commission can get them much15 higher fines and penalties and damages,16 and we can't. So it's -- they have every17 incentive in the world to go to the18 Pennsylvania Commission.19 It's serious, it's significant.20 We do housing discrimination cases but21 not as many as we would do if we were22 not -- if we were substantially23 equivalent.24
So do you25 241 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 know what Charter change is required?2
I have a memo from3 the Law Department, from their analysis4 in the previous administration, and I'm5 submitting it to this administration to6 make sure that they agree with what the7 analysis was. I don't have an exact8 answer for you.9
It's a -- it's --12 'cause you have to make a State13 legislative change as well.14
Okay. Could15 you -- well, that wasn't reflected in16 testimony last year, but the point is, it17 wasn't your testimony.18
However,20 there's no excuse for a department -- and21 I know you weren't there, but there's no22 excuse for a department not doing --23 taking an action or a simple thing like a24 Charter change that would get us $120,00025 242 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 a year, you know, in this time. Now2 we're past the point where a Charter3 change would be effective in FY '10.4
So let's not6 be here next year and not have saved this7 $120,000.8
I have more11 questions, but I can defer unless there's12 someone else.13
Thank14 you.15 The Chair recognizes Councilman16 Sanchez.17
Thank18 you, Madam Chair.19 Welcome, Rue. Your first20 testimony.21
Going23 along the line of the questioning -- or24 the comments from Councilman Greenlee,25 243 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 let me say on the record how very helpful2 the Human Relations Commission has been,3 particularly in the 7th Councilmatic4 District, the most diverse district in5 the City. And I know Councilman Jones6 appreciates that statement.7 But to the value of the early8 intervention as it relates to changing9 neighborhoods, as the commercial will10 say, it's priceless. And, unfortunately,11 we can't document those types of12 activities and prevention and13 intervention activities.14 But, you know, for the record,15 our office works very closely with the16 Human Relations Commission and17 appreciates the proactive role that it18 takes through our (indiscernible) and19 other community relations activities.20
I wanted22 you, Rue, for the record to speak to the23 Human Relations Commission's uniqueness24 as it relates to other efforts in similar25 244 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 cities, 'cause I think sometimes we2 forget how proactive the City is with the3 creation of the Human Relations. So for4 the record, I wanted you to speak to how5 many other cities, if other cities, have6 similar commissions.7
Thank you. Thank8 you for accolades as well.9 I have to tell you, this is -- I10 have found myself in the greatest job in11 the City. I love it. It's a fantastic12 staff; they're so hardworking and they're13 all incredibly committed to the mission14 and the goals of the PCHR.15 We were actually the first human16 relations commission in the country and17 the first commission -- you know, the18 first city to have it codified -- you19 know, put in our Home Rule Charter, which20 I find historic and significant.21 When I meet with -- the few22 times I've met with various people mostly23 around the region, not around the24 country, for other commissions, I think25 245 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 we're unique in the ways in which we've2 handled some of our community relations3 and outreach. And not every human4 relations commission has an arm that does5 soley the community relations work;6 sometimes they're only doing7 discrimination cases over and over and8 over again. And other times, sadly,9 they've had budgets cuts and had to cut10 that program out.11 But particularly with our12 Dispute Resolution Program, where we're13 actually going out and resolving neighbor14 disputes and resolving some of the more15 significant intergroup tension cases,16 when it's coming race against race or17 ethnicity or various other things, we are18 unique, and we do stand out, and we19 are -- people really see us as, you know,20 the leaders in the community.21 I'll also say -- I should say22 that the Pennsylvania Commission also23 does quite a good job, but they can't24 focus on Philadelphia like we can.25 246 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
Thank you,7 Madam Chair.8 You testified that Human9 Relations Commission is instituting a10 case-prioritization system that will11 allow you to close more cases next year,12 underwent work in a refinement process --13 that's the Community Relations14 Division -- and that the Fair Housing15 Commission has streamlined its internal16 operating procedures.17 Can you describe these internal18 efforts, including whether any of them19 involved the utilization of technology?20
Sure. We are very21 eager to have a new computer system. 4 I've had meetings with the5 members of the EEOC to talk to them about6 their case-prioritization system, and7 we're going to do something relatively8 similar. There are cases that get filed9 with our office, discrimination cases10 that are -- early on show that they're11 great cases, very obvious discrimination12 definitely happened. They would be13 con -- it's a basically an A, B, C14 system, 'cause we considered eight cases15 and should be streamlined as quickly as16 possible. Let's find probable cause; if17 we're going to find probable cause, let's18 get to a public hearing. 22 There's also cases that, pretty23 early on in the case, look like there's24 just nothing there, there's not enough to25 248 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 substantiate discrimination. There might2 be absolutely no witnesses; maybe, you3 know, the person wasn't even working the4 week that he or she said the5 discrimination happened. Those should6 also very quickly be closed on the other7 end. 9 And there would be the B cases10 in between. 18 We do it in a very good job of19 investigating our cases; we're very, very20 thorough. And what I's like to do is21 speed up the agencies a little bit more22 to move them along. 25 249 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 At the Community Relations2 Division, we went through an entire3 retreat process of looking at priorities,4 including -- we currently have the 75 field workers down from approximately 166 just in 2004. 12 So we're in a reorganization13 process of shifting around who's in what14 area and streamlining that. All of the15 internal letters that we do, all of our16 form letters that are going out, they're17 all going redone. There's going to have18 more information on them. There might be19 fewer letters. 24 We're certainly doing more25 250 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 outreach to more communities, especially2 more immigrant communities, to make sure3 that they know of our services. We've4 got our -- all of our brochures5 translated into seven languages, I6 believe. 9 And then, finally, with the Fair10 Housing Commission, we're working --11 we're streamlining that process with more12 legal updates. 25 251 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Our agency has been working2 without a lawyer for twenty years. And3 as the only lawyer there, with only an4 expertise in landlord-tenant law, we're5 really reaching out. 11
Well, that's12 terrific.13 So can you -- are there any --14 once you go more paperless, eliminate the15 paper forms, will that eliminate data16 entry if people are --17
No, partially18 because our office is -- it's more like a19 little law firm. You know, we have the20 cases -- we have a computer system for a21 case management system; it's just22 antiquated. So there are -- but there's23 a lot of input. Most of the work does24 happen in the case management system.25 252 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1
I'd say that we3 definitely -- it just has to be a better4 system.5
Okay. Thank6 you.7 What would the impact -- are you8 -- what's the impact on your department9 if Contingency Plan B goes into effect,10 where the State doesn't approve some11 funding or sales tax increase or pension12 thing? Do you know what kind of cut13 you'd get in Plan B?14
Thank24 you.25 253 4/15/09 - COMMITTEE OF THE WHOLE - FY '10 BUDGET1 Are there any other questions2 from members of the committee?3 (No further questions.)4
This8 committee will stand in recess until9 Monday, April the 20th, at 10 o'clock.10 Thank you.11 (Proceedings end at 2:55 a.m.)12 * * *13 14 15 16 17 18 19 20 21 22 23 24 25 254 C E R T I F I C A T E1 2 I HEREBY CERTIFY that the3 proceedings of the City of Philadelphia4 Council Committee of the Whole are contained5 fully and accurately in the stenographic notes6 taken by me on Wednesday, April 15, 2009, and7 that this is a true and correct statement of8 same.9 10 11 12 __________________________________ 13 JOSEPHINE CARDILLO Registered Professional Reporter14 15 16 17 18 (The foregoing certification of19 this transcript does not apply to any20 reproduction of the same by any means, unless21 under the direct control and/or supervision of22 the certifying reporter.)23 24