Councilwoman Blackwell, you will get your turn, but Councilwoman Fernandez does have a question on this issue.
I have just one brief question on that whole thing. Mr. Queenan, when you went down through 64 COMMITTEE OF FINANCE - BILL NO.'S 980232 the people listed in your testimony for the PGW Revenue Bond Series '98 Financing Team.
For this record, I recognize some names, but could you indicate which of those are racial minority firms and which are -- I have difficulty with "female minority" since we're the majority, but also female-owned firms on both that one and on the commercial paper?
Okay, let me speak to the revenue bond financing as I go through the list. MBE firms are Ronald A. White, P.C., which is co-bond counsel; Singley & Associates, which is co-underwriter's counsel; Pryor McClendon Counts is an MBE; The Chapman Company, as a co-manager, is also an MBE; And M.R. Beal & Company -- I'm not sure -- is an MBE and possibly a WBE.
Well, I only say that 65 COMMITTEE OF FINANCE - BILL NO.'S 980232 because I believe that one of the partners is a woman. I don't know what the percentage is -- 51/49, I'm not really sure. I could check on that. But I believe they certainly are an MBE, and they may also be a WBE.
Just a second. On the commercial paper, Ronald A. White is co-bond commercial paper counsel. And is an MBE firm that is it. On this particular transaction, there are essentially three -- or really just two professionals who provide service on the transaction: Canadian Imperial Bank of Commerce is a letter-of-credit provider; Trustee Bank is -- First Trust of New York's Bank's placement agent is Goldman Sachs. They basically sell the bond for us; And then the City's financial advisor, Public Financial Management.
So the big parts of that are the legal counsel and the placement agency? 66 COMMITTEE OF FINANCE - BILL NO.'S 980232
The two big ones on that, then, are the commercial counsel, and Goldman Sachs is the placement agency? Is that the bulk of the --
Yeah. The other participant letter of credit, the fiscal agent and the placement agency are selected through a competitive bid process. In terms of those folks who were assigned, those professionals who were assigned to the transaction, it was limited to the two co-counsel that you see listed here, Wolf Bloch and Ronald A. White. And so of those two, one is an MBE.
Thank you. The Chair recognizes Councilwoman Blackwell.
Thank you very much, Madame Chair. I only wanted to make a statement that would reflect that during these harsh times, I don't believe it's that the issue of a person 67 COMMITTEE OF FINANCE - BILL NO.'S 980232 paying for somebody who can't pay. I believe the way that companies and organizations are structured and the way there are profits at the top and the state of economy causes the problem. The moratorium period has been severely limited. I don't know how we got there. You know, we fight and fight, and we still manage to get a very limited -- you only have a few months' moratorium. I remember when it used to be like, gosh, like maybe April to December. You get a couple months; moratorium now. And then you have people who come to my office every day who can't get gas, who have severe problems, and who just don't have the money in this severe economy. And with the job problem we have, they have they can't pay the bill. So I would only ask that the record reflect I do -- and if you go over to the Gas Commission and you appeal a high bill, they have about five or seven people who sit there, and you, John or Jane Q. Public sit there and feel totally intimidated against a board, one of whom is a lawyer. There's not even a balanced experience organized for a person to appeal their bill. 68 COMMITTEE OF FINANCE - BILL NO.'S 980232 So I wanted the record that I do not agree that we always pay for the person who can't, I believe it's the nature of this free-enterprise system. We get excessive profits at the top, etc., and the way business is sometimes organized that does not allow a person to pay their bills. So I would ask that you keep that in mind, that I'm absolutely committed to a fair perspective that will always look at the cases individually and that would allow people to have a chance to certainly redress the issue of not having enough money coming in to pay the bill. Thank you, Madame Chair.
Just finally for the record, I happen to agree with Councilwoman Blackwell. And, for the record, I would pay for free all the gas needs for every legitimately poor person in the City, not for those who can pay and refuse to pay because they know how to work the system,, and we need to segregate those who are truly needy from those who are thieves, and shut 69 COMMITTEE OF FINANCE - BILL NO.'S 980232 them off. And I would be willing to pay the gas bills for every poor, indigent, shut-in, wheelchair-bound person in the City 'cause I think there's probably enough money to do it if we took the commercial and residential deadbeats and shut them off.
Are there any other questions from members of the committee? I just have one last question. Can you tell me why of PGW's Annual Report claims that you will implement the weather normalization adjustment, when, in fact, this has not been approved by the Gas Commission and the hearing commissioner recommends that it be rejected?
I think when the Annual Report was published -- I mean, when it was written, which would have been in the October, November time frame, that is what we had planned. Obviously the Commission -- the Commission staff recommended, you know, a different position. We are currently now appealing that decision, and we'll see where it goes. But I think when that was written, as I recall, that was 70 COMMITTEE OF FINANCE - BILL NO.'S 980232 what we had hoped would happen, but that was in the October-November time frame.
And if I were writing that today, I would write it differently.
As further support, we had actually filed on August 1st a request for that.
On August 1st, we had filed a request. So at that time, it was actually a proceeding before the Gas Commission.
Thank you. Are there any other questions from members of the committee? (No further questions at this time.)
Is there anyone else to testify on the two bills that we are hearing? (No response.)
If not, I would ask the Treasurer to please go over the amendments to the bills very quickly. 71 COMMITTEE OF FINANCE - BILL NO.'S 980232
Okay, okay. I'll read into the record the amendments. Starting with Bill No. 980232: From , under Section 2.01, second paragraph, the revised language would be: "Accreted Value means with respect to any capital appreciation bond as of any specified date, the Original Value of such bond plus interest accreted on such bonds to such date, all as may be provided in an applicable Supplemental Ordinance." The next is on , the definition of "Exchange Agreement." We're adding: "Means with respect to a series of bonds or any portion thereof" is the amended language. And at the end of that paragraph, the last word "counterpart" should be "counterparty," with a Y. The next page is on of the proposed ordinance. I'm sorry, there is no change on of the proposed ordinance. Those two I've listed are the only amendments for this ordinance.
Thank you. Can we now go to Bill No. 980233. 72 COMMITTEE OF FINANCE - BILL NO.'S 980232
The first appears on for that referenced ordinance. Under Section 1, about midway through the paragraph, where it says "the bond shall be sold," it should read "the first series bond shall be sold." The next change is on of the ordinance.
Yeah, of the actual ordinance and are a typewritten document. And when I refer to the page numbers, I'm referring to page number referring to the actual --
All right, the pink copy, . Under Section 7, where it says "so long as the book entry" should read "so long as, but only so long as the book entry only system." If you go further down on that --
I'm sorry. I'm looking at the amended version, and I think you're skipping a couple.
You're right, I apologize. You're absolutely right. Let me start over again.
Okay, from Section 2, second paragraph, midway through the paragraph, it says "City or Gas Works." It should read "City or the Gas Works." Further down, in that same paragraph, after "Director of Finance or escrow deposit agreement," it should read "Director of Finance or an escrow deposit agreement." The third paragraph to Section 2, the last sentence of the paragraph, instead of saying "As project revenues in accordance with Section 20 4.02," it should read "As Gas Works revenues in accordance with Section 4.02." The next change is on , Section 23 7, again, where it says "So long as the book entry" it should read "So long as but only so long as the book entry." 74 COMMITTEE OF FINANCE - BILL NO.'S 980232 In that same sentence, where it says "The provisions of this Section 7," it should read "The following provisions of this Section 7." The next paragraph in the same section, second sentence, instead of saying "A beneficial owner who is the owner of such an interest in a bond" --
I'm sorry, I don't mean to interrupt you. I believe there is something before that in the first -- it's in the first sentence.
Oh, you're absolutely right. In the first sentence, it says, "Pursuant to the book entry only system, ownership interest in the bonds." It should instead read, "Pursuant to the book entry only system, ownership interest in the first series bonds." In the second sentence of that paragraph, instead of "a beneficial owner who is the owner of such an interest in a bond," it should instead read, "A person who owns such an interest in a first series bond (a beneficial 75 COMMITTEE OF FINANCE - BILL NO.'S 980232 owner)." In the third paragraph of Section 7, the first sentence, where it says -- these words should be removed from the ordinance: "Of the first series bonds, (the beneficiary-owner)" should be deleted. Further in that same sentence, it says "or to the participants." "Participants" should be capitalized. And further in that same sentence, the parentheticals that hold "the Participants" should be deleted. On of the proposed ordinance, the second full paragraph, instead of the second sentence reading, "If the book entry only system is no longer utilized upon receipt of notice from the fiscal agent, the beneficial owner may elect to receive bond certificates." It should instead read, "If the book entry is no longer utilized, bond certificates will be issued in such names as the City and the fiscal agent are directed by the depository." On of the proposed ordinance, under Exhibit A, the date of March 26, 1998 should 76 COMMITTEE OF FINANCE - BILL NO.'S 980232 be replaced with the date of April 21, 1998. On , Exhibit B, the date of March 26, 1998 should be replaced with April 17, 1998. On , Under Exhibit B, it says, "The acquisition of the building being currently leased by the Gas Works. . . " It should read, "The acquisition of the headquarters building currently being leased by the Gas Works." And in paragraph triple i on the same page, 14, we should, after the word "amortizing," insert the words "no more than 30 years," and delete the word "over." In that same sentence, the blank between the words "exceeding percent" should be exceeding 7.5 percent. On , under Section Roman numeral IV, the "Gas Works revenue" should be "revenues," plural. And the next paragraph down, the bracketed language which begins with "furthermore" and ends with "parameters" should be completely deleted. The next paragraph down, the brackets 77 COMMITTEE OF FINANCE - BILL NO.'S 980232 on Roman Numeral V, the words should remain, but the brackets should be deleted. And that concludes all of the amendments to Bill No. 98023.
I've been handed even more amendments. Okay, there's been added two more amendments. Back to , Roman Numeral II, we should add --
, Roman numeral II, first full sentence, third line, it says, "In the manufacture." We should add the word "in the supply," comma, "manufacture," comma. In other words, the word "supply" should be added. And then the final amendment is that the correct spelling of the name of the Director of Finance is Ben Hayllar. And that's B-E-N, H-A-Y-L-L-A-R. 78 COUNCIL COMMITTEE ON FINANCE - BILL NO. 980234 That concludes the amendments to Bill 3 No. 980233. It appears it actually might have been corrected already. But in our hard copy, it was spelled incorrectly, his name.
Thank you. Are there any questions from the members of the committee? (No further questions.)
Also, again for the record, I would like to request a suspension of the rules for these two ordinances.
Thank you. The Clerk will now read Bill No. 17 980234.
Bill No. 980234, an ordinance authorizing, generally, the continued issuance and sale by the City of Philadelphia of Gas Works revenue notes of the City, prescribing the forms of notes and providing for their execution and payment pledging certain revenues of the Gas Works as security, adopting a rate covenant, and directing the Gas Commission and the 79 COUNCIL COMMITTEE ON FINANCE - BILL NO. 980234 manager of the Gas Works to impose and collect rates sufficient to comply therewith, prescribing the conditions precedent to the issue of specific series of notes, including a resolution passed by the Bond Committee, providing for establishment of credit support for notes, providing for designation of a fiscal agent and sinking fund depositary, providing for establishment of a sinking fund and its management, providing remedies upon default, and providing for amendments and modifications.
What is the current out-- oh, I'm sorry you're here to testify on this bill. Would you give us some explanation of it, please.
My name is Thomas Queenan, City Treasurer for the City of Philadelphia. I'm here to testify in support of Bill No. 980234, which is a proposed ordinance 21 requesting authorization for PGW to continue its current commercial paper program, which is used to finance operating cash for the Gas Works. I submitted to Council my written testimony, which I actually would like to offer 80 COUNCIL COMMITTEE ON FINANCE - BILL NO. 980234 some amendments to that ordinance that was submitted, to revise some again, nits that are in the bodies of the document. Should I do that now or --
No. I think we will have questions from members of the committee before we go into that.
I would just say that this program is a program that was initially started in 1993. It was approved by this body, City Council. Authorization expires on June of this year. So this is an effort to just extend that authorization that was previously provided in 1993 because we have come to the end of the authorization provided by the original ordinance. This is a continuation. There have been some revisions to some of the language and some of the definitions, I suppose, in the original ordinance. But, for the most part, we have, as you've noted on the back page, the team, which is the original team that was the participant in the 1993 authorization for the commercial paper program, this team has 81 COUNCIL COMMITTEE ON FINANCE - BILL NO. 980234 committed to continue to provide this service to the City on an ongoing basis. Ray Sharbutt, CFO for PGW, is here to describe how the commercial paper program is utilized by PGW.
Raymond Sharbutt, Chief Financial Officer, PGW. As to the commercial paper bill, No. 11 980234, the commercial paper program authorized in 1993 is a crucial part of our management tools at PGW. Due to the highly seasonal nature of our business, the ability to issue such short-term debt is one of the most important aspects of our operations. The funds from this debt are used to provide our working capital retirement. And during the seasons when very little cash comes in, it's the only bridge that allows us to get through the season without severe adverse impacts financially on the company. The bill currently before you is merely a continuation of the existing bill, and we recommend the continuance of this, and it's a 82 COUNCIL COMMITTEE ON FINANCE - BILL NO. 980234 crucial part of our operating program on a day-to-day basis. I'm available to answer any questions you may have.
Thank you. Can you tell us what the current outstanding balance in the commercial paper issued by PGW is?
We currently have $80 million, and that is the peak that we've experienced for this year.
Is PGW authorized to issue the maximum amount authorized by City Council without approval from the Philadelphia Gas Commission?
No, ma'am, we're not. City Council has authorized the issue of up to a $100 million. The Gas Commission has not gone up to that level. They have retained an $85-million-level, which is the one. We did go before the Gas Commission earlier this year and sought their approval, and it was granted to go above the 85 million that they have authorized. That's a limited agreement, 83 COUNCIL COMMITTEE ON FINANCE - BILL NO. 980234 and at the end of this season, it will go back down to the '85. So we do have two limits here.
Thank you. Are there any other questions from the members of the committee? (No further questions.)
All right. Perhaps we can go over the amendments at this point.
Thank you. There are fewer amendments to this particular ordinance. The first one appears on Bill No. 980234, under Section --
On , in the paragraph that begins with the "Gas Commission," we should delete the words "and the manager are" should be deleted and replaced with "is hereby authorized. . ." The second line down, in the same 84 COUNCIL COMMITTEE ON FINANCE - BILL NO. 980234 paragraph, between the word -- the word "and" in "to impose and charge." The inserted language after "charge" should read: Comma, "and the Gas Commission and the manager are hereby authorized and directed without further authorization to collect or cause to be collected rents, rates, and charges." The next change is on , the paragraph G.
Okay. "The Gas Commission currently is the Gas Commission hereby authorized. . . " it should be revised to read, "The Gas Commission is hereby authorized. . ." The second line of the same paragraph, where it says "to impose and charge and to 85 COUNCIL COMMITTEE ON FINANCE - BILL NO. 980234 collect," it should be revised to read "to impose and charge, comma, and the Gas Commission and the manager are hereby authorized and directed without further authorization to collect or cause to be collected,," . The second change to this ordinance is on . Paragraph G. It states it has, comma, the following two words, "by ordinance," should be deleted and replaced with, "in Section 4.03 (B) hereof authorize the imposition. . ." The second line of the same paragraph after the word "charges," the words "by the Gas Commission and the manager" should be deleted. That concludes all the offered amendments to Bill No. 980234.
Are you asking for a suspension of the rules on this bill also.
Yes, we are requesting a suspension of the rules on Bill No. 980234.
Thank you. Is there anyone else to testify on the bills that we have heard, any one of the three bills? (No response.) 86 COUNCIL COMMITTEE ON FINANCE - BILL NO. 980234
We will now go into our public meeting. The Chair recognizes Councilwoman Tasco regarding Bill No. 980232.
It has been properly moved and seconded that the amendments be approved. All in favor, signify by saying aye. Those opposed? The ayes have it. The motion has been carried. - - -
Madame Chair, I move that Bill 980232 be reported out of committee with a favorable recommendation, as amended, and a request for a suspension of the rules so as the 87 COUNCIL COMMITTEE ON FINANCE - BILL NO. 980234 bill will have a first reading at the next session of Council.
It has been properly moved and seconded that Bill No. 980232 be reported out of committee with a favorable recommendation, as amended. Also a recommendation that the rules of Council be suspended so as to permit a first reading at our next session of Council. All those in favor, signify by saying aye. Those opposed? The ayes have it. The motion has been carried. - - -
The Chair recognizes Councilwoman Fernandez regarding Bill 20 No. 980233.
Madame Chair, I move that we accept the amendments proposed in the public hearing on Bill No. 980233.
It has been 88 COUNCIL COMMITTEE ON FINANCE - BILL NO. 980234 properly moved and seconded that the amendments be approved. All in favor will signify by saying aye. Those opposed. The ayes have it. The motion so carried - - -
Madame Chair, I move that Bill No. 980233, as amended, be reported out with a favorable recommendation by this committee. And I request a suspension of the rules to provide for first reading at our next regularly-scheduled meeting.
It has been properly moved and seconded that Bill No. 980233 be reported out of committee with a favorable recommendation, as amended. Also a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. 89 COUNCIL COMMITTEE ON FINANCE - BILL NO. 980234 All in favor will signify by saying aye. Those opposed? The ayes have it. The motion is carried - - -
The Chair recognizes Councilman Kenney regarding Bill No. 10 980234.
Thank you, Madame Chair. I move that we accept the amendments of Bill No. 980234. (Duly seconded.)
It has been properly moved and seconded that the amendments be approved. All in favor will signify by saying aye. Those opposed? The ayes have it. The motion is carried - - -
The Chair recognizes Councilman Kenney. 90 COUNCIL COMMITTEE ON FINANCE - BILL NO. 980234
Madame Chair, I move that Bill No. 980234, as amended, be reported out of this committee favorably, and a request made for suspension of rules to allow for first reading at our next session of Council. (Duly seconded.)
It has been properly moved and seconded that Bill No. 980234 be reported out of committee with a favorable recommendation, as amended. Also a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. All in favor will signify by saying aye. Those opposed? The ayes have it. The motion is carried. This concludes our public meeting. Thank you all very much. - - - (Adjourned at 11:12 a.m.) - - - 91 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Tuesday, April 21, 1998 were reported and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE ON FINANCE BILL NO.'S 980233 and 980234 __________________________________, JOSEPHINE CARDILLO, RPR