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Minutes

Committee Hearing, April 12, 2005

Philadelphia City Council Committee HearingsApr 12, 2005

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2806 - - - COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING - COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, April 12, 2005, 10:20 a.m. - - - Bill Numbers 050001, 050002, 050003, 040789, 040767, 050007, 050008. Resolution Number 050022. PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN JANNIE L. BLACKWELL COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JACK KELLY COUNCILMAN JAMES F. KENNEY COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN JUAN F. RAMOS COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO - - - V A R A L L O Incorporated Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2807 Budget - 4/12/05 - - - P R O C E E D I N G S - - -

Council President Verna

Good morning, everyone. This is a continued public hearing of the Committee of the Whole regarding Bill Numbers 050001, 050002, 050003, 040789, 040767, 050007, 050008, and resolution Number 050022. We will now hear from the District Attorney. Please approach the witness table. THE DISTRICT ATTORNEY: Good morning, Madam President and members of City Council. My name is Lynne Abraham, L-y-n-n-e, A-b-r-a-h-a-m, District attorney of Philadelphia. And I'm pleased to appear once more before the Council considering the 2006 budget for the District Attorney's Office. If you wish, Madam President, I would move that the amended statement of the District Attorney regarding her budget be admitted into the record in whole. And I will just briefly outline, if you wish, the 2808 Budget - 4/12/05 few salient points that I think...

Council President Verna

That would be fine. We'll make certain that the stenographer has a copy of your testimony. It will be transcribed in full. And you can simply summarize, if you will. THE DISTRICT ATTORNEY: First I want to thank City Council, its President and staff for being so helpful last year when, after my presentation to City Council, we were facing an enormous budget cut which would have decimated many of our services, as I testified last year. Council was extraordinarily helpful in restoring a good deal of the budget cuts, probably about half, for which I am thankful. I want to talk specifically about the Blueprint for a Safer Philadelphia. The blueprint arose out of the culmination of a variety of shootings in Philadelphia which was, I think I can say with accuracy, the Fahim Thomas Child's killing in North Philadelphia outside the Pierce Elementary School. 2809 Budget - 4/12/05 As a result of that shooting, and a history of other shootings and killings in the City of Philadelphia, Dwight Evans, Jewel Williams and, a host of other legislators from both sides of the aisle contacted us. And in meeting with Representative Evans, he suggested that the District Attorney's Office come up with a plan of strategies that we would want the legislature to consider to implement. And so, we gathered a host of participants and partners and drew up what we called the Blueprint for Safer Philadelphia, a ten-point program that would help to fight crime, reduce the gun violence and give people in Philadelphia and those who visit here a better and safer self awareness and at least a modicum of safety and security. As a result of a tremendous amount of effort and work from our office and from all of our partners, this blueprint was submitted to representative Evans, Representative Perzel -- I should say Speaker Perzel, Senator Fumo and other senators. 2810 Budget - 4/12/05 And the legislature has been extraordinarily helpful in rescuing what for us would be the end of several important programs. And I'll speak at length later, if you ask me, on the blueprint. But I do want to point out that the blueprint, I believe, is one of the key features of a better, safer Philadelphia. And if it is fully funded and implemented and brought to scale, I believe that we can seriously impact violent crime and homicides in the City of Philadelphia, especially gun-related homicides and shootings. With regard to the other issues that I brought up in my budget request is another request, actually another plea for witness relocation funding. As you know, we have not received sufficient funds to get us through the myriad of requests that we get for witness relocation. We are holding our own, I am happy to say. However, we are facing a severe 2811 Budget - 4/12/05 crisis, if in fact the end of funding from the Attorney General's Office is upon us. S. Government to his office. And we get about 50 percent of that money. We get about $250,000 a year. The previous Attorney General, Jerry Pappert, advised us that that money had run out, and that we would be at the end of our ability to provide witness relocation for our victims and witnesses who were frightened about coming to court and had been either threatened, coerced or actually hurt or threatened to be hurt or killed if they came to court. We have had a recent meeting with the present Attorney General, and Attorney General Corbett has advised us that he will do what he can. However, he advised us that the Federal Government had cut his allocation; and therefore, he wasn't sure but he would use his absolute best efforts to try to find us sufficient money to match the amount he 2812 Budget - 4/12/05 had previously given us. However, this does not answer all of our questions. As you no doubt know, there are many people who either believe or feel or know that if they come to court, there are real threats to their lives and safety. And we need to be able to meet the challenge of getting our cases tried.

Council President Verna

And we can only get our cases tried if real live witnesses come to court, come on the witness stand, and testify truthfully and not out of fear or threats or any kind of coercion from anybody. So, obviously witness relocation is a big, big issue for us and for the safety and the security of the City of Philadelphia. We also brought up a few other issues, although it doesn't cover every issue. One of our major issues is economic crime/cyber crime. We see a trend, a growing trend every year, of increased complexity from computer-related and cyber crime. There isn't a day that goes by that some newspaper, 2813 Budget - 4/12/05 some story or some innovation in technology isn't put to work against the interests of citizens in general, and not limited to but senior citizens in particular. The Cyber Crime Unit, as you may recall, was funded by a special allocation of City Council several years ago. And we are trying to keep that up and going. But it's expanding, as more and more people call us and tell us that their identity has been stolen, that their computer has asked them for information, that somebody is putting dangerous spam on their computer, that they are subject to phishing, p-h-i-s-h-i-n-g, on their computers and they have had their identity theft compromised or stolen. So we need to be able to do that, as well as combat all the technological marvels that are coming to our courtrooms. I. effect. Television is ahead of technology but jurors and witnesses expect gee whiz 2814 Budget - 4/12/05 stuff, as I call it. And while technology isn't the way television depicts it, we know that we have to keep abreast of cyber technology. That means in our courtroom presentations, in our ability to get and analyze information, and track information, and catalog it and present it in a scientifically compelling way. And that all requires funding and great expertise. And the expert pool is relatively small, given the size of the problem. So, we are looking to Council for assistance in that. And essentially, what we are asking this Council to do this year, recognizing the considerable budget crisis that the Mayor has depicted Philadelphia as presently going through, that we are asking Council to keep our budget at last year's level plus the cost of living increase. And that will at least keep our present system going and allow us to carry on the programs that we have -- that we have 2815 Budget - 4/12/05 implemented and give high quality direct service to the citizens of Philadelphia. So, I thank Council for its indulgence. And I'll be happy, along with my staff, to answer as many questions as we possibly can. And I appreciate your cooperation and consideration.

Council President Verna

Thank you very much. Would you mind elaborating on the Blueprint for -- THE DISTRICT ATTORNEY: Yes.

Council President Verna

-- a Safer Philadelphia? THE DISTRICT ATTORNEY: I certainly will. We call this an agenda to implement a Blueprint for a Safer Philadelphia. It's a ten-point program and there are several initiatives. Would you like me to go down the initiatives?

Council President Verna

Do you mind? THE DISTRICT ATTORNEY: No, not at 2816 Budget - 4/12/05 all. I also didn't want to fail to mention that I have brochures for Council which I will give you in the next moment or two, and I'll talk about that.

Council President Verna

Regarding the blueprint? THE DISTRICT ATTORNEY: No. 10 Regarding child support. But I'll talk about -- I didn't want to forget that, Madam President. P. In 1998, my deputy John Delaney and I, as well as the Police Commissioner, several City officials, court officials, probation officers, journeyed to Boston to review their ten-point program. It was instituted by clergy, police, interested citizens, youth workers and others, to stem violence in a part of Boston. As a result of that two-day sojourn in Boston, the partners, as we call them, got together and formulated a program tailor made 2817 Budget - 4/12/05 to Philadelphia's youth violence problem. And what we did at that time is, we reviewed the whole City and said, with a small Federal grant that we obtained, what area of the City are youths the most likely to kill or be killed? We had our choice of several police districts. At that time, as you may recall, there was an area of Philadelphia which got a very bad name, and the people bitterly resented it. So, I mean no disrespect but it was called the badlands. It was the 24th and the 25th District, where a lot of killing was going on. And so what we did was, we started the Youth Violence Reduction Partnership there. This is a broad-based multi-disciplinary approach to preventing people between the ages of 17 and 24 from either killing or being killed. This is only one of ten points. I don't know how much detail, frankly, you want me to get into, but I'm prepared to fully delve into it. P. program has several components: Identification, positive support, surveillance, graduated sanctions and gun suppressions. What we did was, we went around the community and asked everybody in the community: The police, probation, teachers, parents, social workers, psychiatrists, mental health workers, judges, pick out the 125 young people in your district or division that you believe are the most likely to kill or to be killed. It wasn't scientific, but it was sort of a group think effort to attempt to identify those people most at risk of either one of those consequences. As a result of that, we put together a program which targets the City's most dangerous and potentially the most violent youths. Because if you look at the homicide figures, the people who are most likely to kill or be killed range anywhere from 17 to 24 years of age. 2819 Budget - 4/12/05 And as a result of that enterprise, to cut it to its quick, we began our Youth Violence Reduction Partnership. It was extraordinarily successful. But you can't measure success just in one or two districts, since homicide is spread out over the whole City. P. program. And they have agreed to do so, which will keep it up and running only at its present level which is really insufficient, in our view, to be a real measure of success. It is in the 24th, the 25th and a small part of the 26th, as well as the 12th Police District. But as you know, homicide is spread about the City. And while this program will keep it going, the money will keep it going, it's far from optimum. We need to bring this program to scale. The public/private ventures has put out a booklet that's called Alive at 25. , 2820 Budget - 4/12/05 keeping kids between and alive long enough to live to their 25th birthday. The second part of the program, number two on our ten-point program, is the Safe Neighborhood Initiative. This would allow the hiring of special officers, along with the Alcohol, Tobacco and Firearms Division, as well as local and Federal prosecutors and probation and parole officers, to intensively supervise young adults in high crime police areas. This is the next cohort of the highest number of people to kill or be killed. That's to 32. We were able to 16 get a grant to do that. So, that was done as 17 well. 18 The third component was a juvenile 19 justice curriculum in the School District of 20 Philadelphia.

Council President Verna

This is a year-long curriculum 21 for middle school students on the dangers of 22 violence, its criminal justice consequences, 23 and how to make responsible and informed and 24 intelligent choices in how they behave themselves. 2821 Budget - 4/12/05 This is an unfunded program. But the new curriculum has already begun. O. Vallas and his staff innumerable times. George Mosee, Deputy of our Juvenile Division, has trained all middle school teachers on the curriculum. And it is part of the social studies curriculum, and will be enhanced and expanded, assuming funding is available to us, to not only the middle school children but younger children. Because we see younger children obviously making not well-informed, intelligent decisions, which get them into trouble at a much earlier age than middle school, which is roughly as you know, 13, 14, 15, 16 years of age, somewhere in that age group. And this is a City-wide effort. O. Vallas very much wants and says he needs. And we're anxious to help him accomplish that because this will have a 2822 Budget - 4/12/05 better outcome for juvenile and adult criminal consequences, meaning a lower crime rate, safer neighborhoods, less criminal involvement by juveniles. A community educational involvement is an initiative to reach the at-risk populations of our City, through personal and community involvement and faith-based organizations. We have been able to get some funding through that, not for us but through those people who will do that. And we have engaged clergy of all denominations to help us in that regard. The fifth part, in no particular order, is zone courts. This is the ability of the court system to adjust itself to the realities of modern crime fighting. As you may know, from my various appearances before Council, I have been attempting to get the court system in tune with modern realities, because what happens is that court cases are assigned at random, not with regard to what district they 2823 Budget - 4/12/05 originated in, resulting in a police officer or police officers being sent on any given day to five, six, seven or eight or nine courtrooms, depending on the roulette of when each case comes up, meaning that police officers are trying to get to various courtrooms, with judges calling the calendar, officers not there. If the judge doesn't want to wait, the judge does one of several things, dismisses the case outright which forces us to rearrest and to implement the program all over again which is wasteful and time consuming and not efficient or the judge grants a continuance which counts against the Commonwealth in our time to bring a person to trial. And that results in time constraints and pressures put on us which we shouldn't have to have, and which we wouldn't have if we have zone courts. Here's the bottom line. The District Attorney cannot tell judges how to sit and where to sit. So, I have an appointment with the 2824 Budget - 4/12/05 Supreme Court later this month to ask the court to direct the local courts, in its wisdom, and if it decides to do so, to align our courts on zone or geographic bases so that officers who make an arrest in the 24th District, let's say, will be in front of the same judge for all cases arising out of the 24th District, eliminating some but not all of the backing and forthing. We still have to address the issue of juvenile courts and of course our divisional courts. But we're optimistic that the Supreme Court will consider this because the Supreme Court did accede to our request to give us a gun court. And we're very pleased that Justice Sandra Shultz Newman as part of our blueprint, met with the various partners and agreed that we should have a gun court which is the sixth part of our ten-point program. The Supreme Court agreed to dedicate a courtroom and a judge to hearing priority cases having to deal with people who are in illegal possession of firearms. 2825 Budget - 4/12/05 This is not just sort of a make weight.

Council President Verna

This is a very substantive program, which addresses people who do not yet use guns but who are in danger of using them in the absence of direct intervention. It's a multifaceted program that addresses itself to... For example, if I'm arrested for position of a firearm that's illegal, the first thing that I am given is an assignment. My record is reviewed, and assuming I am not a violent, dangerous offender by my criminal record -- Maybe my first arrest or even my second arrest. Maybe I have a theft, a retail theft case, nothing very substantive. If I am suitable for the gun court program, I am immediately assigned a case manager. This case manager requires that I come to his or her office. And there are especially dedicated case managers who will interview me in depth. This is not for use at court, so their 5th Amendment implication, obviously, 2826 Budget - 4/12/05 is still in effect. I'm not required to give any information about myself that will incriminate me and nothing will be. But they ask me questions about my background. They do an intensive background survey of me. And they ascertain do I need services right then and there. Do I need mental health treatment? Do I need interventions? Does my family, any support systems that the court has to offer, can they put them in place? The benefit is that if I am a person either in crisis or I'm impulsive or I am angry or if I have anger management problems, the manager can go to the court and ask the court to implement corrective programs pre-trial, which do not impact on my guilt or non-guilt of the underlying case but which seek to get me services so that I won't feel the need to "A", carry the gun, and "B", that I will be less likely to use it. So, this is a pre-trial intervention program much like our other corrective court programs. 2827 Budget - 4/12/05 When my case comes to court -- The gun court so far has handled about 220 cases with a very high -- This is only in the first two months. So, it's a very, very expedited program. In the first two months we've handled over 215 or 220 cases, a very high percentage of guilty pleas, a very high percentage of non-jury trials, and a very high percentage of other consequences flowing from guilty pleas, guilty verdicts, and the like. I might also add parenthetically that Judge Jeffrey Minehart, the judge whom the Supreme Court assigned to this court, is just dandy. He's the dream of a judge that every person wants: Right down the middle, calls it as he sees it, keeps himself to the facts and the law. And if every judge does that, we would be just in a super peachy situation. So, we've done a tremendous amount with that. And after the conviction, if there is one, then there's after care, 2828 Budget - 4/12/05 intensive intervention. If the judge believes that there are guns in my house that I shouldn't have, the judge may sign an order giving authority of police or the probation department to search my house and take all my guns away, give me intensive supervision. And the interesting part is that, unlike the situation with the probation department, which is overloaded with cases -- Now, 200, 300 cases on a probation officer. They're especially assigned and paid for probation officers to this court who will handle nothing but these gun court cases. So it's a better result all around. It is still too early, of course, after just two months, to see what overall impact it will have, but we are hopeful within the year we will be able to do this. The seventh part is the five-year mandatory sentences for armed drug traffickers. And we have accomplished that, and... Let's see. There is a... I'll give you the poster in a minute. Here it is. 2829 Budget - 4/12/05 We have distributed this handout to every Police District in Philadelphia. We just reordered 30,000 of these.

Council President Verna

This puts people on notice, through the Police Department, through various citizens groups, legislators, City Council people, if you like, in your offices, both here and any place else you'd care to, the notion that you're on notice. If you are... If you are in possession of a gun when you deal drugs for -- Let's use Mr. Taslowski as an example. I have a gun, Mr. Taslowski has the drugs or he has the gun and I have the drugs. So, if we're out there on the corner dealing drugs and either one of us is armed, each of us will be arrested and each of us will face a mandatory five-year sentence; no 20 plea bargains, no nothing. This mirrors the Federal statute and this is on both sides. There's information available to our citizens. The eighth and ninth part of our blueprint are other statutory enactments 2830 Budget - 4/12/05 which are presently being considered by our legislature. That's amending firearms possession, to increase the penalty for an illegal firearm from a first degree misdemeanor to a third degree felony. It also would disable or prohibit a person convicted of this offense from being able to get a permit to carry a firearm. And that's presently under consideration. This is Jewel Williams' Bill, House Bill 2799, and House Bill 2800 which was introduced this past July and is presently under consideration. The ninth part of our ten-point program is the Armed Violent Career Criminal Statute which creates, again, another mandatory sentence for violent criminals who possess firearms, a minimum of which is five years who have two prior convictions, ten years if three or more prior convictions. This is Dwight Evans' Bill, House Bill 1795, which was also introduced the same day as Jewel Williams' Bill, July 3, 2004. That is also presently under consideration. 2831 Budget - 4/12/05 And the last thing on our program was the Federal Project Safe Neighborhoods and the State Alternative Program. , tracing all firearms, targeted approach to violent hot spots in Philadelphia. And that is part of a budget appropriation of 2004. Now, those are the ten points. We're well on our way, but I have to sound a note of caution, that all of these programs are funded only in part and only for a brief amount of time. I've already spoken to Representative Evans and other legislators about permanent funding. And obviously, the state is going to consider our joint request from all of the partners involved: The Police Commissioner, the School District, the legislature, community groups, the District Attorney's Office, the State Attorney 2832 Budget - 4/12/05 General's Office, and other of our partners. But I don't know what the future will be for these programs. Every crime-fighting program depends on funding. And if the funding goes, all these programs which we believe have a high potential for success will be gone as well. And that is the only note of caution that I sound. It's not a full funding. It's not a dedicated source of funding. We're sort of lurching from year to year hoping that funding will continue. And that's the ten-point program.

Council President Verna

Thank you. I certainly appreciate your taking the time to go over the blueprint of the ten points for a safer Philadelphia. And I'm delighted to hear that at long last somebody's talking about zone courts. THE DISTRICT ATTORNEY: Yes, indeed.

Council President Verna

I guess I'm dating myself, but way back when, many 2833 Budget - 4/12/05 moons ago when I worked in the District Attorney's Office and I was in charge of listing cases, we did it manually. If Officers Goode and Verna were partners, I listed or of their cases in 7 one courtroom. 8 With all the modern technology that 9 we have today, I don't know why we would have 10 to have officers running to seven different 11 courtrooms in one day. 12 Don't they put the names of the arresting officers on the bills of indictment? THE DISTRICT ATTORNEY: Of course.

Council President Verna

And are they not placed into a computer, where you could just push a button and Officer Goode and Verna's arrest come out? It just seems so ridiculous to me that with all of the modern technology that we have today that we can't do something like that. THE DISTRICT ATTORNEY: Councilwoman, we have been asking the courts 2834 Budget - 4/12/05 which as you know are responsible for the listing of cases. We don't list cases; the court does. We have been asking the court to do this for years, for at least seven, eight, nine years.

Council President Verna

I'll tell you. I think... THE DISTRICT ATTORNEY: And they have refused to do so.

Council President Verna

And I think that every budget hearing that I've attended I've asked the same question. And at one time the court said, oh, it would be unconstitutional to do that. THE DISTRICT ATTORNEY: No, it wouldn't.

Council President Verna

Why? THE DISTRICT ATTORNEY: It wouldn't be unconstitutional. As a matter of fact, it would be efficient and effective. I think that the way that we best serve the public is by giving them the fastest, most efficient way to dispose of cases, without it at all infringing on the 2835 Budget - 4/12/05 defendants' constitutional rights. But judges are reluctant, extraordinarily reluctant. And the court administration, the President Judge, the former President Judge, Labrum Davis turned us down cold. We have been asking and asking and asking.

Council President Verna

May I ask why anybody would turn that down? THE DISTRICT ATTORNEY: Do you want my honest opinion?

Council President Verna

Yes. THE DISTRICT ATTORNEY: I think that judges are afraid that they might have their names well known in the community. And they are concerned that they might be somehow associated with any or all of their decisions. Here's my point. Here's what victims and witnesses and defendants want and are entitled to: A fast, expeditious, correct way of determining: Are the police right? Did they get the right guy for the right reasons or are they wrong? 2836 Budget - 4/12/05 We certainly don't want cases disposed of because the officer was in another courtroom and the judge dismisses the case. That is not justice for the victim, and it isn't justice for the City of Philadelphia, and it isn't justice for the defendant either. But what it's become is a series of games that are played in the courts. And we want the Supreme Court to even consider doing it on a pilot project basis, to see whether or not it works. Now, we know, for example, that Judge Minehart is in court every single day on gun court. We know that Judge Presenza has been in drug court every year for what, five years? Doing drug court. Judge Presenza, doing the same kind of prosecutions that we're talking about, and Judge Minehart in the first few months of the drug court, have done simply a sensational job. They get through their case load. 2837 Budget - 4/12/05 They're not breaking, you know, land speed records. They're doing it quietly and efficiently. I believe the entire court system will work the same efficient way by doing things the way you and I both agree they ought to be done, in zones.

Council President Verna

And you wouldn't have to have seven district attorneys -- assistant district attorneys working on this. If a case is continued, it would go before the same judge and the same assistant district attorney would be assigned to it. I think, as I said, with all of the modern technology that we have today, I just don't know why we are not taking full advantage of it. I found your testimony quite interesting. However, I think we better get back to the issue at hand, your budget. THE DISTRICT ATTORNEY: Mm-hmm.

Council President Verna

I see that it is being proposed that your budget be... 2838 Budget - 4/12/05 I believe, it's $918,999 less than what you had in '05. THE DISTRICT ATTORNEY: That is correct.

Council President Verna

Now, you are stating that you're requesting that your budget remain the same as last year, with only the increase being for cost of living. However, we don't have a dollar amount for that. Can you tell us how much money you're asking to be... THE DISTRICT ATTORNEY: $30,472,788, plus a COLA of $473,000, give or take. It's $472,649. The $30,472,788 includes the COLA of the $473,000, give or take.

Council President Verna

So that's what you're actually asking for. THE DISTRICT ATTORNEY: Yes, ma'am.

Council President Verna

The Chair recognizes Councilman Kelly for a point of information.

Councilman Kelly

Point of information. Thank you, Madam Chair. 2839 Budget - 4/12/05 I just want to ask why the First Judicial District will not list multiple cases for the same officer for the same courtroom. Is there any... THE DISTRICT ATTORNEY: They just refuse to do it, Councilman. And for the life of me, I do not understand this. My whole point --

Councilman Kelly

In other words, the police officer would go from court to court to courtroom.

Council President Verna

And a police officer in a busy district -- and there's scarcely a district that isn't busy, I might add -- could find himself assigned on the same day to eight or ten courtrooms, sometimes in the same building. But when he's on the stand testifying in, let's say, the eighth floor or the ninth floor, and somebody wants him on the fifth or sixth or seventh floor, he can't be there. When the case is called, we say to the judge, judge, officer "X" is testifying 2840 Budget - 4/12/05 in front of judge "Y". Well, sorry. Case isn't ready. Either dismissed or continued. We say, well, you know, he's testifying in front of another judge. Can you wait? They say, nope. Can't wait. So, you're going to have to ask the First Judicial District that question. I refuse to answer for them. I don't see the reason or the point of it. But I've been arguing with them over this question for seven or eight years. They still haven't given me a satisfactory answer.

Councilman Kelly

Okay. Madam Chair, I believe that this is something that we should address the First Judicial District for this. I think it makes sense.

Council President Verna

Very well. Thank you. I just have another question or two. I notice that just about every Council member here wants to be recognized. You mention the issue of your office 2841 Budget - 4/12/05 not being able to retain experienced prosecutors. What is the average stay of a prosecutor? And can you tell us what the average pay is at that time? THE DISTRICT ATTORNEY: It's hard to figure out an average, but here's the way it usually works, Madam Chair. The starting salary is what... 46... I'm going to give you... $46,000. Now, the average starting salary in our largest law firms is $115,000 to $125,000. So, if you really want to get technical, although I said less than half, I was hoping that you would ask me the median. The median in Philadelphia is about $70,000, $80,000 for medium sized law firms. But I hasten to add that these great men and women could go to the largest law firms and get the $125,000. So, they come to us burdened with a tremendous amount of student loan debt. And we've been championing student loan forgiveness for public service but we haven't 2842 Budget - 4/12/05 been able to get that. So we have a group of people who stay just for the three-year commitment. They give us a three-year commitment. Many of the people stay for three years, and then they move to the larger law firms because then they have litigation skills. Then there's another group that stays from between three and maybe five or six years. A smaller group than stays from five to maybe ten years. And some stay for even longer than ten years. Now, the difficult question to answer is, many of those people don't really come intending to spend either more than three years or maybe more than five years. But I must confess that the job is so interesting, that even though it's a great personal sacrifice, they stay longer. But the history of the District Attorney's office has been that we can't keep the most attractive people because the lure of big salaries outside is tremendous. 2843 Budget - 4/12/05 And when they marry which they do and have children which they do, their expenses go up far more than we can adequately compensate them. Even though they deserve much more, we can't keep them. So, if you want an average, it's about... The average is somewhere between four to six years, and the average salary between four and six years is around $60,000 which at the smaller firms would be their starting salary six years previous. So, they're working really for essentially nothing.

Council President Verna

Having to do public service. That's what it is. THE DISTRICT ATTORNEY: Well, public service is; but, you know, you have to pay the rent and you have to pay your student loans.

Council President Verna

Of course. Of course. And was this ever attempted to be addressed, as to how we can keep well-qualified prosecutors in the D.A.'s 2844 Budget - 4/12/05 office and pay them a -- certainly a much more reasonable salary? THE DISTRICT ATTORNEY: Well, Councilwoman, as you know, our budget, our Class 100 funds only allows us as much leeway as the amount in Class 100 allows us. You may remember a few years ago our starting salary was about $37,000. And we came to Council and said to you -- I think it was two years ago -- we can't even attract and keep people for their three-year commitment at $36,000. We just had to raise it because the prices of the marketplace were just too spectacular. And we told you what we wanted to do. And that's what we did. But we just can't go any further on the present budget, Councilwoman. And if we suffer this $1 million cut, there are going to be substantial and dire consequences for the citizens of Philadelphia.

Council President Verna

The Clerk of Quarter Sessions testified last week on her budget. And she indicated that there 2845 Budget - 4/12/05 would be five new courtrooms that would be coming into existence. If in fact that were to happen, would your budget be able to cover it? THE DISTRICT ATTORNEY: No. 7

Council President Verna

Do you know of five new courtrooms coming into being? THE DISTRICT ATTORNEY: I don't know, but if you'll -- I think if you hearken back to my testimony last year, when I advised the Council that if the court system was going to add courtrooms, we don't have the manpower to cover them. We can't sacrifice. We can't sacrifice quality legal representation to victims of crime and to the ultimate safety of the community by just putting a warm body in a room. It's not going to work. We need D.A.'s. And we have D.A.'s who are diligent and hard working and dedicated, but they also need time to prepare. And time to prepare means they can't 2846 Budget - 4/12/05 be, you know, hitched up to a courtroom where they have no time off, they have no time to call witnesses, they have no time to go to the scene, they have no time to interview and do all the things that they need to see and do, and be in courtroom five days a week, ten hours a day, and then start up the next day and the next -- you just can't do it. You do need prep time. You do need down time. You need time to collect yourself. And even if they work weekends, which many of them do, how long can you beat these people into submission? You just can't do it. So, I can tell you as a statement of fact, we're not going to staff those courtrooms. So, the court can do anything it wants. There won't be any D.A. in there without adequate funding, preparation, and the proper way to represent victims of crime and our neighbors. These are all our neighbors, these victims.

Council President Verna

Thank you. I think because of my questioning 2847 Budget - 4/12/05 about an explanation of blueprint it really did take quite a bit of time, and I know I certainly went over my five minutes. However, there are a number of Council members that would like to be recognized. For the first go-around we will accommodate everyone with five minutes. The first one to be recognized is Councilman Goode.

Councilman Goode

Thank you, Madam President. Good morning, Madam District Attorney. THE DISTRICT ATTORNEY: Good morning.

Councilman Goode

Let me start by saying, I take no issue with the level of your budget request. Public safety is a serious priority of mine. I want to talk a little bit about the fact that you amended your testimony, your written testimony, and also in your oral presentation, I think, reflected the changes in your written testimony. Can you tell me 2848 Budget - 4/12/05 why there was a change in your written testimony and how and why and when you made that decision? THE DISTRICT ATTORNEY: Yes. The gentleman to my right, Mr. Taslowski -- As you may know, I do not write my own testimony throughout. Mr. Taslowski does the first testimony for me, and submitted it to Council before I had a chance to thoroughly read it and review it. And he went away on military leave. And when I reviewed it thoroughly, I contacted the Council President's Office and said that with her indulgence I'd like to amend our testimony so that it more nearly reflected my views of it. And the Council President gave me leave to do so. I did so and I submitted a letter to her with, I believe, sufficient copies to go around to all of you, to indicate that with no disrespect meant to my very noble and worthy deputy, that I really wanted to put a 2849 Budget - 4/12/05 different spin, if you will, to my testimony. I am realistic and I'm not a Pollyanna person. I understand, you know, realities of the situation. But I didn't want to -- I didn't want to sound the same tone as the original budget message. I wanted to be more in tune with my own personal thoughts on these issues, and being mindful of Council's assistance in the past.

Councilman Goode

My question, though -- My line of questioning next really relates to sort of a disconnect between that written and oral testimony and the actual budget reality. So, I ask you a series of questions about your written and oral testimony. Does it actually reflect a change in your budget? And to what extent does it? THE DISTRICT ATTORNEY: I don't believe it changes our budget at all, no. 23

Councilman Goode

Okay. Does it reflect a change in your programs and initiatives? 2850 Budget - 4/12/05 THE DISTRICT ATTORNEY: No. 3

Councilman Goode

Does it have any dollars for witness protection and relocation? THE DISTRICT ATTORNEY: No, it does not.

Councilman Goode

Does it actually provide new dollars -- THE DISTRICT ATTORNEY: I'm asking Council for money. I've been asking Council for money for witness relocation, Councilman. We have never received any money from City Council specifically earmarked for witness relocation.

Councilman Goode

So, you would like to us do that on top of your budget allocation? THE DISTRICT ATTORNEY: Well, obviously, Councilman, we obviously need as many dollars as we can because Federal money is drying up and state money is drying up. And so, I'm presenting our budget to you with the realities that whatever you give us we will try to do our best with it. 2851 Budget - 4/12/05 However, the best is not good enough when victims' lives are at stake. So, because I've gone to --

Councilman Goode

So, your budget does not currently reflect -- THE DISTRICT ATTORNEY: It doesn't currently, but I'll be happy to receive any additional assistance that Council wishes to give us for any and all of our victim assistance programs.

Councilman Goode

Okay. Your budget does not also have any money for increasing the salaries of District Attorneys -- Assistant District Attorneys, other than the cost of living increases? THE DISTRICT ATTORNEY: That's correct.

Councilman Goode

So, what new dollars are there to improve public safety? THE DISTRICT ATTORNEY: Say that again. I'm sorry.

Councilman Goode

What new dollars are there to improve public safety? THE DISTRICT ATTORNEY: Well, 2852 Budget - 4/12/05 Councilman, you know, in light of the fact that the Mayor proposed cutting our budget $1 million, it's $1 million to improve our public safety capabilities.

Councilman Goode

It's $1 million over what the Mayor suggested. But my question is, what new dollars are there for public safety in your current budget? THE DISTRICT ATTORNEY: The dollars that we have will allow us to -- If Council agrees with our suggestion, we will be able to keep our public safety dollars at the same level as last year. Being realistic about what I can ask for and what I can get are two different things. I could come in here and ask for $10 million more in my budget. I don't want to be unrealistic. I want to try to help the Mayor and Council and the City, given the budget realities. And I believe that given the programs that we have, plus the funding, the new dollars we got from the state legislature, with the programs that they have 2853 Budget - 4/12/05 initiated, we will be able to keep the same high level of programs.

Councilman Goode

Madam District Attorney -- THE DISTRICT ATTORNEY: So the new dollars are -- the new dollars are the Youth Violence Reduction Partnership, $2 million. Not for us. Not for us but --

Councilman Goode

I'm asking, what dollars in the City budget that you're requesting are new dollars for public safety? It's a simple question. THE DISTRICT ATTORNEY: The only new dollars are the same dollars that I had last year.

Councilman Goode

Okay. Thank you. THE DISTRICT ATTORNEY: No 19 additional funding.

Councilman Goode

I'd like to move on. I have no problem talking about challenging your level of budget request at all. And my next question will get to where I'm really going. How do we actually 2854 Budget - 4/12/05 buy more public safety? THE DISTRICT ATTORNEY: How do we actually what?

Councilman Goode

Buy more public safety. THE DISTRICT ATTORNEY: I think we have --

Councilman Goode

If we wanted to invest more money, how do we actually buy more public safety? How do we actually buy a reduction in crime and violence? THE DISTRICT ATTORNEY: Well, I think, Councilman, that there are so many programs out there that have not really been fully tested at any great length. I find myself testifying in front of the legislature and Council bodies on programs that we have been proposing for years which have never been implemented. So, I believe that we can take the programs, for example, implicated in the ten-point program and direct all of our or most of our dollars to that. Rethinking, using the same... 2855 Budget - 4/12/05 (Timer buzzes.)

Councilman Goode

That's for me. THE DISTRICT ATTORNEY: ...using the same dollars that we have but in a different way. In other words, I think that full planning, a full planning document which implements the programs on the ten-point program, plus some of our other programs, will redirect the same dollars in a more effective way. So, I don't believe it's always and only dollars. But I do believe it's a different way of thinking about prosecuting criminal cases. For example, if we do zone courts, we'll actually be saving the City, I believe, millions of dollars in police overtime, millions. So, by asking for no more money doing zone courts... It doesn't cost us any money to do zone courts. We just put district attorney "X" into a courtroom. And those five or ten police 2856 Budget - 4/12/05 officers who aren't working double overtime shifts and day off shifts by making sure the calendar is attuned as much as possible to the officer's regular work shift or limiting the number of regular days off will save millions and millions of dollars. So...

Councilman Goode

So, we need a better strategy. THE DISTRICT ATTORNEY: It's rethinking the way we do it. And this is more efficient, more effective. Its dollar cost average is better.

Councilman Goode

Thank you, Madam District Attorney. Thank you, Madam President.

Council President Verna

You're welcome. The Chair recognizes Councilman Nutter.

Councilman Nutter

Thank you, Madam Chair. Madam District Attorney, good morning. THE DISTRICT ATTORNEY: Good 2857 Budget - 4/12/05 morning.

Councilman Nutter

I did -- I took down a couple notes from your comments. So, first, I'd like to get a law enforcement definition of a super peachy situation. THE DISTRICT ATTORNEY: I beg your pardon?

Councilman Nutter

A super peachy situation; is there a law enforcement definition? THE DISTRICT ATTORNEY: Yes, there is. There is. I'll tell you what I meant by that. There are people who think that the prosecution wants judges who are just prosecution minded. There are other people who want judges who are just defense minded. My definition of a super peachy situation is, if we get every judge in criminal court who is 100 percent right down the middle. If a person who sits as a judge delivers a verdict in accordance with the law and the evidence, not shading it to one side or the other, that is the optimum that people 2858 Budget - 4/12/05 in a free state can hope for, and that's my desired outcome.

Councilman Nutter

Only in a way that you could deliver it. I would strongly encourage that after some of the activities of the spring, you might want to -- you might just want to relax. THE DISTRICT ATTORNEY: I am relaxed.

Councilman Nutter

It was a totally whimsical question, but I knew you'd have a definition for it because you're right down the line. THE DISTRICT ATTORNEY: Thank you, sir.

Councilman Nutter

Let's go into your testimony a little bit. You talked about the Youth Violence Reduction Program. THE DISTRICT ATTORNEY: Yes.

Councilman Nutter

And I may have missed, popping in and out of the room. I know you were talking about possible state support maybe, if I heard you correctly. But when you talk about taking the 2859 Budget - 4/12/05 program to scale, presently it is operating in three police districts? THE DISTRICT ATTORNEY: Essentially 24th, 25th, a little bit of the 26th, and part of the 12th.

Councilman Nutter

Okay. So, maybe three-and-a-half or so. THE DISTRICT ATTORNEY: Give or take, yes.

Councilman Nutter

What is your estimate of what it would cost to take the program city-wide. THE DISTRICT ATTORNEY: We asked the legislature, sir, for about $13 million for the program. And that's not city-wide, if I could just make a bit of a correction. What we do, when we look at the Y.V.R.P. as presently contemplated is, we look at the districts that have the most homicides, and they are not the whole city. It doesn't mean that we're not mindful of a district that has one or two. But when we look at the City as a whole, we look at the districts that have the most 2860 Budget - 4/12/05 violence prone component of people from to 24. And so, we're looking at our youth violence reduction --

Councilman Nutter

Right. 6 THE DISTRICT ATTORNEY: -- 7 partnership to expand to all those districts. 8

Councilman Nutter

And what do you 9 think? That's about another six or seven or 10 eight or ten? 11 THE DISTRICT ATTORNEY: No. We got 12 $2 million. So, we believe that we needed 13 probably another $10 million, $11 million 14 from the state. 15

Councilman Nutter

No. No. No. 16 The number I gave was not in millions of 17 dollars. I was asking how many additional police districts do you think that is? Is that about a half a dozen, maybe seven or eight? THE DISTRICT ATTORNEY: Well, it's the... Let's see. It's the 22nd. I'm just going to do this off the top of my head, so please forgive me.

Councilman Nutter

It's all right. 2861 Budget - 4/12/05 Go through -- Sure. THE DISTRICT ATTORNEY: It's the 22nd, 23rd, the 18th, the 19th, the 16th, the 17th.

Council President Verna

Amen. THE DISTRICT ATTORNEY: Yes.

Council President Verna

Boy, do we need it there. THE DISTRICT ATTORNEY: The 39th, parts of the 14th, parts of the 35th. So -- and there's -- I'm sure there's another one off the top of my head that I've forgotten.

Councilman Nutter

It's all right. So, maybe about nine or ten. THE DISTRICT ATTORNEY: About nine or ten altogether.

Councilman Nutter

Okay. And $13 million covers the nine or ten additional districts? THE DISTRICT ATTORNEY: We believe that if we get that kind of money we'll be able to bring to it scale, to see how the program's working, and so we can really get some true sense of a different approach to 2862 Budget - 4/12/05 fighting homicide.

Councilman Nutter

Right. And what's your best sense of the prospects of the $13 million from the state? THE DISTRICT ATTORNEY: Well, I've spoken to House Appropriations Chair Evans. And he says he's going to try. But I have to be honest with you. The budget realities in Harrisburg, I don't know how much the Governor and the legislature is going to be willing or able to give to Philadelphia, given the other monies that we've asked them for on top of the Y.V.R.P.

Councilman Nutter

Right. Okay. So... And in this budget is part of the strategy here you are anticipating trying to get Y.V.R.P. money primarily from the state. So, there's no -- is there any request in this budget for additional funding for the Youth Violence Reduction Program? THE DISTRICT ATTORNEY: No, there isn't.

Councilman Nutter

Okay. Because 2863 Budget - 4/12/05 you were going on the state rep. THE DISTRICT ATTORNEY: We have money from the state.

Councilman Nutter

I understand. Okay. THE DISTRICT ATTORNEY: But I want to be cautious in my statement about that. The District Attorney's Office per se gets virtually nothing from that money. I want you to know that. We're not getting any additional --

Councilman Nutter

I understand. THE DISTRICT ATTORNEY: -- funding. The money that is gotten from the state pays the probation officers.

Councilman Nutter

Right. THE DISTRICT ATTORNEY: Parole officers.

Councilman Nutter

Mostly for salaries. THE DISTRICT ATTORNEY: And PAM and those other groups that go out, the street workers, and so forth. They're paid. We are not getting any money from that. 2864 Budget - 4/12/05

Councilman Nutter

No; I understand. I didn't think you were trying to load up the budget or something. No. I know where the money is going. Let's go... The next to last on your testimony you talked about minority prosecutor's reception and the recruitment committee. THE DISTRICT ATTORNEY: Correct.

Councilman Nutter

Could you... Maybe a two-part question, the second of which is a data request. So, could you give us a sense of what the results were from the last go-around? And then my data request is, if you could provide an analysis of your office, from a demographic standpoint, year by year over the past five years with a gender and race breakdown. THE DISTRICT ATTORNEY: We will get that to you. Sure.

Councilman Nutter

For the attorneys. 2865 Budget - 4/12/05 THE DISTRICT ATTORNEY: Sure. We'll get that to you.

Councilman Nutter

What was the most recent situation? THE DISTRICT ATTORNEY: Insofar as success is concerned?

Councilman Nutter

Yeah. THE DISTRICT ATTORNEY: Highly successful. Our incoming class of hires, 11 this incoming class coming in in August, 50 12 percent are minority. 13 With regard to our -- 14

Councilman Nutter

These are 15 attorneys. 16 THE DISTRICT ATTORNEY: Yes. 17

Councilman Nutter

Mm-hmm. Sure. 18 I have their names and their schools, if you 19 want them. 20

Councilman Nutter

No. 21 THE DISTRICT ATTORNEY: With regard to minority attorneys, do you want office wide or attorneys?

Councilman Nutter

On the data request, you can break it out. 2866 Budget - 4/12/05 THE DISTRICT ATTORNEY: Okay. Thank you.

Councilman Nutter

Keep the attorneys in one group and the office -- THE DISTRICT ATTORNEY: Sounds good.

Councilman Nutter

Why don't we do attorneys and non-attorneys. Is that a relatively high number, as compared to the past few years? THE DISTRICT ATTORNEY: Well, it's -- We... I don't know. I think it's -- Let me just think if I can... I just don't remember from last year's testimony, but we endeavor to mirror in our employee base the people whom we serve. So, we always have minority receptions. We have a brochure. We do special minority recruitment.

Councilman Nutter

Right. THE DISTRICT ATTORNEY: I'll provide you with a copy of our brochure, if you'd like to. We send people from our office throughout the eastern part of the United States at minority fairs. We're hosting, by the way, 2867 Budget - 4/12/05 Councilman, the National Black Prosecutors' Association this summer in Philadelphia. And we'd be delighted if you'd like to come because we would attempt to try to lure some prosecutors from other cities and states to Philadelphia.

Council President Verna

You're not going to lure them at $46,000 a year. THE DISTRICT ATTORNEY: Well, I'm sorry. It is what it is.

Councilman Nutter

I understand. I'll come back. Because we have had some discussion about this over the years. And I certainly applaud the efforts. But for whatever reason my recollection is, is that maybe in the past things were a little tougher, and that the numbers have moved up in recent times. THE DISTRICT ATTORNEY: It's always tough, Councilman, when you're trying to attract people with a lot of debt, $100,000 worth of debt or more, when the marketplace is so alluring. And it's difficult to retain, as I 2868 Budget - 4/12/05 indicated to the Council President, because our salary scale is so low.

Councilman Nutter

Right. THE DISTRICT ATTORNEY: So, it is always a constant battle to attract and keep talent. Now, these people want to come. They really want to come. But we can't keep them. I might also add that if you look at the city's law firms, they have a dismal, a dismal record of minority attraction and payment. Their figures are embarrassingly small, sometimes in the lower one -- single digit. And the Legal Intelligencer did a big story about that, which I'd be happy to send to you when I send our figures to show that.

Councilman Nutter

Okay. THE DISTRICT ATTORNEY: We are far and away the best and even striving to be even better than any law firm in Philadelphia, small, medium or large.

Councilman Nutter

Okay. I'll look forward to the data. I know my time is up. 2869 Budget - 4/12/05 THE DISTRICT ATTORNEY: Thank you. We'll be happy to provide it.

Council President Verna

Thank you. The Chair recognizes Councilman Rizzo.

Councilman Rizzo

Thank you, Madam Chair. Good morning. THE DISTRICT ATTORNEY: Good morning.

Councilman Rizzo

There's an issue that is causing a lot of disruption in our City that I'm going to ask where you think maybe your office could help. I've had conversations with the Police Department. And it pertains to what you've talked about a little bit ago as to technology and some of our capabilities. THE DISTRICT ATTORNEY: Mm-hmm.

Councilman Rizzo

Bomb threats have become a real, real problem for the police department, dozens of officers responding. THE DISTRICT ATTORNEY: Mm-hmm.

Councilman Rizzo

And doing some 2870 Budget - 4/12/05 research, that the Patriot Act has allowed under exigent circumstances for police agencies to almost immediately, without search warrants or any document, to get telephone information where the bomb threat came from. Our resources are limited at the police headquarters when a person calls 9-1-1. But also now they're calling the schools and there's technologies available in the schools. Unfortunately, not a lot of the principals knew that the technology even existed, to be able to determine the source of the call. The Police Department seems as though they're just so overwhelmed with this because there's just dozens and dozens of these types of calls, clearing airports and hospitals and transportation hubs. Is there something that your office can do? I think if something happens, and people realize that this is bad and that this is going to put people in jail that make 2871 Budget - 4/12/05 these kinds of calls, that cause evacuations of 30th Street Station and other transportation facilities, what can the Police Department do? What can the School District do? What can the District Attorney's Office do to really focus on this problem? Because if we added up the money that we spend every time there's a suspicious -- there's a call made... I'm just appealing to you for some help. And again, I know your resources are limited. But something has to happen here because the Police Department's really not doing much about it. The School District's not really doing much about it. And it just continues, dozens and dozens of calls every week, that are very disruptive and costly to our City. THE DISTRICT ATTORNEY: Councilman, the Patriot Act and the incidence of 9-1-1 and all the other terrorist incidents have put a tremendous strain on every police department in the country. 2872 Budget - 4/12/05 And while we are part of the task force on anti-terrorism, the anti-terrorism task force, there is no money in the Patriot Act or any place else to any prosecutor's office to do anything. In addition to that there... I'm talking about local prosecutors. Federal prosecutors, perhaps, but not local prosecutors. I can tell you, no place in the country is any local prosecutor getting any money from the Patriot Act to do anti-terrorism efforts. So, to answer your question, if I'm not getting any money, I don't know what I can do. The Federal Government, if you've been reading the papers about our anti-terrorism capabilities, it's an extraordinary strain on the Police Department. And you're right. When people call in a suspicious package or a briefcase that some innocent person left on the subway platform or the el platform, there's 2873 Budget - 4/12/05 tremendous deployment of police personnel and the bomb squad. That's all very expensive. I don't know what I can do to try to help the police, except what we've always been doing, meeting with the U.S. Attorney, as we do every month, on an anti-terrorism task force; have some of our officers working on the joint terrorism task force; and trying to funnel information and deploy as best we can to anticipate everything we can while, we're not receiving any money for it. So, the answer to your question is, I'm not included in the budget pie, so I don't know what I can offer you or the Police Department.

Councilman Rizzo

District Attorney Abraham, I understand the responses when there's a suspicious package. We have an obligation. And the money is spent. I'm talking more so these unfounded threats that now, because we met with all of the cell phone provides and we met with all of the land line providers. We have now a process in place to find out where these 2874 Budget - 4/12/05 calls -- if someone calls a particular school and threatens that school, they now have the capability of tracking the call and making an arrest. THE DISTRICT ATTORNEY: Absolutely. Of course. Absolutely. If they make an arrest for a bomb threat that is unfounded or even if it's real -- Obviously, if it's real the Federal government may take the case. But if a person calls in a false police report about a threat of a bomb that is absolutely without foundation, then the police should make the arrest, and we will prosecute, of course. And we would also not only prosecute locally but we would coordinate our efforts with the U.S. Attorney's Office to make sure that if this person was a threat to the security and the integrity of the United States of America, and that this person posed a real and present danger to the safety and security of the citizens of Philadelphia, we would respectfully ask that the Federal 2875 Budget - 4/12/05 government take that case and prosecute it because there is immediate pre-trial detention. There is trial within 60 to 90 days. There are very substantial Federal penalties for this kind of activity, and very substantial sentences without good time, earned time or parole. So, we would do whatever we could locally after consulting with the Philadelphia Police Department and our Federal counterparts to see which jurisdiction is better able to handle the false, threatening phone call. And all we need is whatever the police want us to do. We're full partners in anything they want us to do, as well as with the Federal Government.

Councilman Rizzo

I think the concern, and I know it's my... I have, like, 30 seconds.

Council President Verna

30 seconds.

Councilman Rizzo

I think the 2876 Budget - 4/12/05 problem is that the Police Department is under the impression that if they would bring one of these nuisance calls to the District Attorney, it would probably not be dealt with. THE DISTRICT ATTORNEY: They can't be under that impression, Councilman, because they have never yet called us for a case that we would decline.

Councilman Rizzo

And I straightened that out. I said, well, tell me the last time that you brought one there. And that was the answer. And I think that that may change because really the resources are being spread so thin, that they need to make sure that the word gets out there -- and that's part of my rationale speaking about it today -- because it is getting out of hand in this city. THE DISTRICT ATTORNEY: I can't imagine a situation where somebody called in a bomb threat. There are specific Pennsylvania statutes that would cover 2877 Budget - 4/12/05 exactly that. There's risking a catastrophe, there's threats and other statutes which we would take in a heartbeat as long as we are sure that the person whose cell phone it is is the person that made the phone call. For example -- And I want to be clear on this. If you have a cell phone. And you give to it me and I make the phone call. And by the time the police get to you it's two days later and you have your cell phone back and it's not you who made the phone call, we have to be sure that the person in possession of the cell phone was the one who made the call.

Councilman Rizzo

Okay. THE DISTRICT ATTORNEY: So, we don't have a problem about prosecuting anybody who is shown to us by evidence, we can walk into a courtroom and prosecute, is the person who made the call. That's not the problem for us. You can assure the Police Department, as I certainly will, and by this 2878 Budget - 4/12/05 testimony am, we'll take any bomb threat. I can't imagine anybody getting away with that.

Councilman Rizzo

Great. Thank you. Thank you, Madam President.

Council President Verna

You're welcome. The Chair recognizes Councilwoman Miller.

Councilwoman Miller

Thank you. Thank you, Madam President. Good morning. THE DISTRICT ATTORNEY: Good morning, Councilwoman.

Councilwoman Miller

Great. I just -- In reading your testimony I have a couple questions. Is the blueprint that you're describing, is that the same blueprint that Representative Evans and Dr. Stick and those people have put together? THE DISTRICT ATTORNEY: This is our blueprint. That's right. We worked -- 2879 Budget - 4/12/05

Councilwoman Miller

So, it's the same blueprint. THE DISTRICT ATTORNEY: We worked on it together. This is our blueprint. Sure.

Councilwoman Miller

I understand. I just didn't know whether it was another -- two blueprints or one blueprint. THE DISTRICT ATTORNEY: Oh, no. No. 10 No. No. There's only one blueprint, and this is it, ma'am.

Councilwoman Miller

Okay. All right. Great. I want to get more information about the juvenile justice curriculum that is being taught in schools. THE DISTRICT ATTORNEY: Yes. May I call up George Mosee to do that for you, ma'am, since he is the deputy in charge of that curriculum for the school system and he's the one who taught the teachers, so to speak?

Councilwoman Miller

Okay. Good.

Council President Verna

Good morning. Please identify yourself for the 2880 Budget - 4/12/05 record.

Mr. Mosee

Good morning. I'm George Mosee, M-o-s-e-e, Deputy for the Juvenile Division in the D.A.'s office.

Councilwoman Miller

Okay. Good morning. Just wondering. What exactly does the curriculum entail? And how many weeks.

Mr. Mosee

Well, it's a 30-week curriculum. It was developed to teach young people the ramifications of criminal and delinquent conduct. It also exposes them to American jurisprudence, and we hope that it whets their appetite for careers in law enforcement. The 30 weeks will include lectures by teachers, but will also include a video series that we're currently developing. And that series will include subject matter that relates to what it means to be a victim of crime, what it means to be somebody who abuses drugs and tries to get off drugs. It will also address some of the subject matter 2881 Budget - 4/12/05 related to what it is that we do in juvenile justice and criminal justice, some of those things that we just can't expect the teachers to be able to convey with the same expertise as the people who actually work in the system.

Councilwoman Miller

And will this be -- I know in your testimony you said it will be taught in middle school. And will it be for all students in a particular school?

Mr. Mosee

Every 6th, 7th and 8th grade class will have the juvenile justice curriculum -- will be exposed to the juvenile justice curriculum as part of their social studies curriculum.

Councilwoman Miller

And you did say that a part of the curriculum includes consequences.

Mr. Mosee

That's right. Consequences for juvenile -- for delinquent conduct, for criminal conduct and for violations of the school code.

Councilwoman Miller

Okay. And what about values, values clarification, 2882 Budget - 4/12/05 those kinds of things?

Mr. Mosee

I'm sorry?

Councilwoman Miller

What about values clarifications? I think a lot of what people think that, you know, many, many young people just don't have a particular set of values, and that's what causes them to participate in behavior that leads them to a negative behavior.

Mr. Mosee

And I agree. And what I think was necessary was for the school to have a formal curriculum that would at least allow them the opportunity to discuss everything related to violence, related to crime. And certainly values is a major part of that. And I would be remiss if I didn't point out that part of our hope is that we'll hear from young people vis-a-vis this curriculum, that we'll get feedback from them about what they think needs to be done in order to make our community safer.

Councilwoman Miller

So, that's 2883 Budget - 4/12/05 good. And when is it due to start?

Mr. Mosee

We've already started in some schools. But we hope to have it fully implemented in every school next year.

Councilwoman Miller

Very good. Okay. And I'd like to know... Actually, I know it takes a while to access and evaluate. But I'd like to -- I'm sure Council would like to receive information on the progress. Okay.

Mr. Mosee

Certainly.

Councilwoman Miller

Okay. Thank you. I have another question regarding ex-offenders or the reentry issues. Is the District Attorney's Office involved with the issue of offender or ex-offender reentry? THE DISTRICT ATTORNEY: Well, we are interested in it in several ways. The first is that we're attempting to -- We went to a seminar in England about juvenile reentry programs in England to see whether that would be something that we would want to consider. 2884 Budget - 4/12/05 The issue became, what was the effectiveness of their reentry program? And it was not promising. So, therefore, to date there has not been a juvenile reentry program available. We do work with the ex-offenders program. As a matter of fact, Councilwoman, people who are working for the Y.V.R.P., the Youth Violence Partnership, are ex-offenders. And they go out and talk to men and women on the street who are the subject or object of these partnership programs and try to reach them. Many of these, in fact, most of these kids, if not all of them, are already in the system. In other words, they are parolees, probationers. So, they already are in the system. And part of that reentry program is encouraging ex-offenders not to re-offend. That's the whole object of the Y.V.R.P. and the Safe Neighborhood Initiative. Between 17 and 32, we're trying to keep those people whom we have identified, as 2885 Budget - 4/12/05 best we could, with not re-offending. How we will eventually result in the successful outcome of this case is too soon to tell because of lack of funding, and lack of bringing the whole project to scale. There are so many more people we could reach if we had the funding. You can't judge any program as, quote, successful, unless we can show how this program works here as compared to either no program or a different program there. So, by bringing it all to scale, we hope to effect the reentry process. Now, here's the bottom line with reentry. It's not only ex-offenders talking to young men and young women about not re-offending and the problems of re-offending. It's the economy and jobs. And the availability of jobs, I think, is an essential component of any reentry. And that's going to be a central issue that has to be addressed.

Councilwoman Miller

I know. And 2886 Budget - 4/12/05 that is an issue that we're actually trying to work on. I want to ask you a question. I hope it's not out of line. But does the D.A.'s office hire ex-offenders or would the D.A.'s office hire an ex-offender. THE DISTRICT ATTORNEY: No and no. 9

Councilwoman Miller

Okay. We'll talk later. All right. Thank you. Thank you, Madam President.

Council President Verna

The Chair recognizes Councilman Clarke.

Councilman Clarke

I would actually like to follow up on that question, but it's going to take some of my time. I know you'll come back on that. You do believe in people getting a second chance. THE DISTRICT ATTORNEY: It depends on what the second chance is. I'm not sure.

Councilman Clarke

Okay. THE DISTRICT ATTORNEY: You have to give me an example, and I can answer that specifically. 2887 Budget - 4/12/05 In other words, if you kill somebody I'm not so sure that I would want you to get out of jail to have a second chance.

Councilman Clarke

Okay. All right. I'm not going to... That wasn't... Madam President, could you stop my clock, please?

Council President Verna

Stop the clock, please. The Chair recognizes Councilwoman Miller for a point of information.

Councilwoman Miller

All right. Thank you. What about the non-violent offenses? THE DISTRICT ATTORNEY: Well, non-violent offenders we do believe in second chances. For example, we have youth aid panels which take young people who have offended, and we try to make sure that they don't offend again by putting them out in the community with community-based programs. We also have gun programs for first-time defendants, youth offenders who carry guns but don't use them. 2888 Budget - 4/12/05 We have a program called Don't Fall Down in the Hood, which is sponsored by the Institute for the Development of African American youth, a long-term program of about weeks, where we have these young people, 7 mostly young boys, not over the age of the 8 juvenile court jurisdiction, go into a 9 program which is part of their sentence, that 10 they have to go to this program. They have 11 to go to school. They have to meet victims 12 of violent crime and gunshot injuries. 13 And by working with these young men 14 and young women, we hope that they won't 15 re-offend. There are a variety of offenders: 16 Prostitutes, non-violent criminals who 17 deserve another chance. 18 But for rapists, no. For multiple 19 serial robbers, no. For violent repeat 20 offenders, no. And for murderers, no. They 21 can get their second chance. I'm in favor of 22 that. 23 But I think we have to direct our 24 resources to the people whom I believe we can save from re-offending. And I believe we 2889 Budget - 4/12/05 have a good track record on saving people from re-offending.

Councilwoman Miller

Well, that's good. I just wanted to know if you have ever hired someone that's a non-violent offender. There are many people -- and I'm sure you know better than I do -- that have not committed violent crimes that are just having a terrible, terrible time finding employment. And I can't remember... Excuse me, Council President. Have we had the Personnel Department here yet.

Council President Verna

Yes.

Councilwoman Miller

Oh, okay. That's something I'd like to know about... I believe the City of Philadelphia does hire ex-offenders. I don't think a criminal record keeps someone from becoming employed with the City of Philadelphia. And when they come back, I think I'm going to ask that question. Because we can do everything; we want to help people, we have to be involved, too. 2890 Budget - 4/12/05 All right. Thank you.

Council President Verna

Again, the Chair recognizes Councilman Clarke.

Councilman Clarke

Thank you, Madam President. Good morning. THE DISTRICT ATTORNEY: Good morning.

Councilman Clarke

I'd like to ask you a question, one, first about your testimony when you talked about new initiatives. And I'd actually like to get a copy of the ten-point program. I wasn't here for the entire testimony as it relates to that. So, I'm not sure about some of the -- particularly legislative initiatives. (The District Attorney hands Councilman Clarke a copy of the program.)

Councilman Clarke

Thank you. You talk about, you know, the unfortunate death of Fahim Thomas Childs. THE DISTRICT ATTORNEY: Mm-hmm.

Councilman Clarke

And it stimulated the legislature to fund gun court. 2891 Budget - 4/12/05 Prior to that incident, had your office formally requested funding for that? Program in the preceding years. THE DISTRICT ATTORNEY: We had been asking for the Supreme Court to grant us the right to have a gun court. And there was a bill introduced, but it was attached as a rider to another bill by then House Representative... Wait a minute. Connie... What's her name... Connie...

Councilman Clarke

Connie Williams. THE DISTRICT ATTORNEY: Connie Williams. Thank you. I got a voice from the back. Thank you very much. Connie Williams. Which would have proved unworkable in a disaster, and that we wouldn't have been able to work that. So, we couldn't get it then, but we have it now. So we had asked for funding for a variety of initiatives, not maybe specifically a gun court. But not having the funding to it, and the important piece was not the funding because we didn't get any real money from the initiative from the 2892 Budget - 4/12/05 legislature except for a clerk. But what we did get was the Supreme Court's intersession to give us the right to assign a judge specifically to gun court. And the beauty of the gun court, with the Supreme Court's final intersession in this process, was that we'd be able to track the effectiveness of the program. And we also wanted additional components of the program. In other words, this was not just a situation, Councilman, where we would take anybody who didn't have a record and just throw them into gun court and just process the case. We wanted specific preventative measures pre-trial, and post trial preventative measures which only the Supreme Court could grant us. And so, we went to the court. It took a long time in granting us this request. But I'm pleased to say that they saw the wisdom of at least trying it. And when the supreme court said, we 2893 Budget - 4/12/05 will assign a specific judge, and we'll allow you to assign case managers pre-trial, probation officers post trial, we can at least see in the relatively near term, are we making a significant impact on people who carry illegal guns.

Councilman Clarke

So, the answer to the question is, yes, your office had formally requested of the Supreme Court -- THE DISTRICT ATTORNEY: Correct.

Councilman Clarke

-- the ability to authorize such a court or -- THE DISTRICT ATTORNEY: Correct.

Councilman Clarke

-- authorize your department's involvement. THE DISTRICT ATTORNEY: Asked the court to implement the program so we could have a gun court judge.

Councilman Clarke

Was there a request for funding from the legislature -- THE DISTRICT ATTORNEY: No. 23

Councilman Clarke

-- prior to... THE DISTRICT ATTORNEY: No. 25

Councilman Clarke

Never. Okay. 2894 Budget - 4/12/05 THE DISTRICT ATTORNEY: There was no 3 request for funding because essentially we didn't need the funding for us.

Councilman Clarke

Until you got... THE DISTRICT ATTORNEY: We needed funding for the probation, the service, the... What do you call them? The pre-trial case managers. And we needed money for the post-trial probation officers specifically assigned for that purpose. And we needed a clerk or two clerks, if you want to call them that or research assistants, I think, is the proper term, to monitor the effectiveness pre-trial and post-trial of the program to see essentially does it work. Because there's no use in having a program if it doesn't work. And this is the best way to find it out.

Councilman Clarke

Okay. So, no 23 pun intended, but the jury is still out, would you say, on this? THE DISTRICT ATTORNEY: Yes. It's 2895 Budget - 4/12/05 only been open, what, three months? January, February and March. Actually, yeah. The beginning of or maybe the middle of January. So, essentially two months and two weeks.

Councilman Clarke

All right. So, we can't really determine how effective -- THE DISTRICT ATTORNEY: Well, I can give you figures, if you want, and tell you what we've done.

Councilman Clarke

I think you referenced some numbers earlier. 200 and something individuals. THE DISTRICT ATTORNEY: Just give me one minute.

Councilman Clarke

You can give me that a little later because we're on the clock.

Council President Verna

My memory also is it was over 200. THE DISTRICT ATTORNEY: I'm sorry. As of March the 30th we had disposed of 203 cases, with the greatest number of them guilty pleas.

Councilman Clarke

Okay. All 2896 Budget - 4/12/05 right. Getting to my issue: Guns. In prior testimony, not necessarily in budget testimony, but from time to time you've had occasion to come here and talk about some initiatives that we, although not legally authorized to do so at this point, as it relates to guns. In my estimation, you indicated some level of support but it was rather pessimistic, in terms of you acknowledging that we would ultimately get something done. The last time we had this discussion it was essentially a situation where Councilwoman Miller and myself co-sponsored a series of gun bills that would require state authorization. THE DISTRICT ATTORNEY: Mm-hmm.

Councilman Clarke

We did not have that at this time. We are now, unfortunately, due to the levels of violence in the City of Philadelphia have a bill introduced, particularly one gun a month. And a number 2897 Budget - 4/12/05 of other initiatives that the state is seeking as it relates to gun violence. I would like to ask you, given the fact that now we at least have on the record a bill, we at least have a number of legislators willing to support that bill, and we at least have a Governor who prior to him becoming Governor, as the Mayor indicated, he was willing to support one gun a month. What will you, as the District Attorney, beyond saying that you support the initiative, plan on doing? What will you do, in a tangible sense. THE DISTRICT ATTORNEY: Two things. First of all, I didn't express pessimism as to any gun bill. What I think I said, Councilman, just to correct the record...

Councilman Clarke

You said here -- I mean, you -- not to paraphrase, but you basically said, good luck. It ain't going to ever happen. THE DISTRICT ATTORNEY: Well, no. 24 What I said was, I wrote you a letter and I said that I doubted that Council has the 2898 Budget - 4/12/05 authority to pass gun legislation.

Councilman Clarke

We knew that. THE DISTRICT ATTORNEY: All right. Well. Okay.

Councilman Clarke

That wasn't what we were seeking. We were asking the Pennsylvania legislature -- THE DISTRICT ATTORNEY: That's right. I did.

Councilman Clarke

-- to give us the authority. THE DISTRICT ATTORNEY: That's right.

Councilman Clarke

And you basically said, it's never going to happen. THE DISTRICT ATTORNEY: We'll, I'd be interested to see if it does happen, frankly. But I'll tell you what I have done, and I'm prepared to make a copy available. In 1999, I testified on House Bill then 46 and 402, which was, by the way, Dwight Evans' Bill. It was called the Firearms Trafficking Prevention Act. It was the straw purchaser 2899 Budget - 4/12/05 and one handgun a month bill, for want of a better term. I brought my testimony. I testified in full support of the straw purchaser prohibition and the One Handgun a Month Act that was in those two bills. And essentially, as I mentioned the in my testimony to you previously, I think it was Blondell Reynolds Brown. Maybe it was yours, but I thought it was her public health.

Councilman Clarke

We had a number of them. THE DISTRICT ATTORNEY: Whatever. I was here whatever time you asked me. And I said that the people up in the legislature told me that it had no chance of passing. I am willing, happy... In fact, I've already written and spoke to Dwight Evans and Jewel Williams and Representative Myers, and said, I will come up and testify again to my desire to have one handgun a month, plus a straw purchaser ban passed by 2900 Budget - 4/12/05 the legislature. I still don't know if Council -- If the legislature, Councilman, is going to pass those acts. I think they will pass the armed career criminal bill. And I do believe they'll pass the other bill which I referred to is the raising the level of crime from a first degree misdemeanor to a third degree felony for carrying an unlicensed gun in Philadelphia. And that would also be added as a prohibition against anybody getting a firearm. It would be --

Councilman Clarke

This is my problem. And I know the bell rang. This is my problem. With all of the legislation that is being discussed, it costs money. You earlier made a statement that all -- essentially, all crime fighting initiatives cost money. But we have before us a bill that, frankly speaking, doesn't cost us any money. If you limit the number of weapons that will be available, you know, it's not a real cost 2901 Budget - 4/12/05 to that. THE DISTRICT ATTORNEY: I agree with you.

Councilman Clarke

For some reason, you know, people don't feel the need to push that at the level. And I'm glad to hear you say that you are willing to go and testify at the state hearing -- THE DISTRICT ATTORNEY: I'll be happy to go back.

Councilman Clarke

-- as to this particular bill. Can I ask you today -- And I understand if you don't want do give a public commitment at this point. Can you also initiate discussion with other District Attorneys throughout the Commonwealth because this is -- although the City of Philadelphia is getting the headlines as it relates to the level of violence. There are also both second and third class municipalities in the state that have similar violent crimes. 2902 Budget - 4/12/05 And we believe that if the -- if everybody takes the responsibility from their perspective peers -- We plan on interacting with Council members throughout the municipality -- I'm sorry, throughout the Commonwealth. I understand that there are a number of advocates who are working with advocates across the state, legislators working with legislators. I would like to ask, would you be willing to interact with District Attorneys across the state to lobby and get support for this legislation. THE DISTRICT ATTORNEY: Sure.

Councilman Clarke

At a minimum, to get the ability for Philadelphia to have it, and hopefully somewhere down the line, maybe the state. THE DISTRICT ATTORNEY: Be happy to do that. I've done it before. I'll be happy to do it again.

Councilman Clarke

Okay. Thank you. 2903 Budget - 4/12/05

Council President Verna

Thank you. The Chair recognizes Councilman Kelly.

Councilman Kelly

Thank you, Madam President. Madam District Attorney, I hope to make your day today because first of all I want to commend you and your staff, I think, and especially your Nuisance Task Force in closing down one of the notorious bars in Burholme. I know that your man Scott Sigmund has been working with the Burholme Civic Association to make sure that that facility doesn't ever reopen. And I just want to pass it on to you that I think that Nuisance Task Force is doing a very, very good job. THE DISTRICT ATTORNEY: Thank you, sir. I appreciate that. I'll tell Mr. Sigmund of your kind remarks. I'm sure... Is Michael here? Where's Michael? Oh, there he is in the front row. Mike Erdos is right behind you, 2904 Budget - 4/12/05 sitting next to Joe Whitehead in the red and blue tie. He's the chief of that unit. I'm sure he'll go back and tell Mr. Sigmund. I'll tell you something. I wouldn't wanted to be on the other side of Mr. Sigmund on anything.

Councilman Kelly

That's true. THE DISTRICT ATTORNEY: He is phenomenal. But I have to say, he's also typical of all the men and women in the office and all the men and women in that unit in particular. It's a great unit.

Councilman Kelly

I also want to follow up on Councilman Clarke about guns. I want to again commend you for your efforts working with the Police Commissioner, and my good friend Joe Mamanna, in trying to get guns off the streets of Philadelphia. I think every gun that we take off the street of Philadelphia is going to make us a much safer City. And I hope that maybe that program can continue. I know it's -- I think there's a time limit on it. 2905 Budget - 4/12/05 THE DISTRICT ATTORNEY: No, there isn't, as a matter of fact. No. Mr. Mamanna and his -- the gentleman who owns City Blue whose name just went out of my head, they have agreed that, unlike the previous program which was funded by a cash gift for "X" amount of time and it ran out of money and the program ended. And I just want to say, just so that Councilman Clarke understands, that I contributed $1,000 to that gun buy-back program myself. So, the money ran out --

Councilman Kelly

Well, I know Councilman -- THE DISTRICT ATTORNEY: No, no, no, no, no. I'm not saying that.

Councilman Kelly

I know Councilman Clarke -- THE DISTRICT ATTORNEY: No, no, no, no. 23

Councilman Kelly

I know Councilman Clarke will probably -- THE DISTRICT ATTORNEY: No, no, no, 2906 Budget - 4/12/05 no. 3

Councilman Kelly

-- try to outdo you on that one. THE DISTRICT ATTORNEY: No, no, no. 6 No, no. No. 7

Councilman Kelly

There's no doubt. THE DISTRICT ATTORNEY: I have a foundation, so I could do that. But I just want you to know that Mr. Mamanna and the gentleman who owns City Blue... I apologize. I just can't dredge up his name. They have said to us that they're willing to let this go a substantial period of time to see if they can effectuate a positive change. And that's why they instituted a sliding scale of reward, depending on the caliber...

Councilman Kelly

And type of gun. THE DISTRICT ATTORNEY: As an example, Councilman, the last time we had the money the Commissioner noted that people would go to gun stores and buy a $30 gun and turn it in for $100 cash. They weren't doing 2907 Budget - 4/12/05 that any more. So now they have a sliding scale, depending on the type, the caliber of gun, they'll give you a sliding scale of reward based on how powerful, how modern and how lethal, if you'll excuse the expression, that weapon is.

Councilman Kelly

Okay. I have a question on child support unit. THE DISTRICT ATTORNEY: Yes, sir.

Councilman Kelly

You mentioned you collected $191 million last year. How does that compare to previous years? THE DISTRICT ATTORNEY: I'll give these out to you. Councilman, I don't know how it compares with other years. I'm not prepared to do that today, but I'll get you the information. The important thing is, Councilman, that we have about 125,000 open cases in the court system of Philadelphia of child support. And we collect it in a variety of ways. First of all, we have people... For 2908 Budget - 4/12/05 example, looking at... Okay. Let's say, a Sam Smith. We have a person who owes child support. We will comb all the court records to see if there's any case that Sam Smith has filed against anybody. And if Sam Smith has filed a case against anybody: An accident case, a worker's compensation case, somebody dies and leaves Sam Smith money, we file an order against that person's name, so that -- It's a non-distribution order. So that whenever that money comes forth, we get the money that is owed to the child first to give to the children before he gets whatever...

Councilman Kelly

Before he gets... THE DISTRICT ATTORNEY: Yeah. And we also get -- We also collect it in a variety of other ways. But it's a very effective unit. And I think you'll be pleased, when we give you the numbers, to see how diligent the unit and the court system is working with our assistance in collecting child support payments. 2909 Budget - 4/12/05 Many of our clients are welfare recipients, and they have no effective way of collecting child support were it not for us.

Councilman Kelly

Yeah. What cost is involved in providing the service? In other words, does Sam Smith -- Do you have to go after him? And does he provide -- at least, to reimburse you for your -- for the cost involved in collecting money from him? THE DISTRICT ATTORNEY: There's a $10 10 cost for filing a complaint for child support. That's it.

Councilman Kelly

That's it? Compare it to the cost of running it. THE DISTRICT ATTORNEY: The $10 is just for filing the complaint. Our costs are reimbursed in part by a Federal grant.

Councilman Kelly

But my point is, Sam Smith, does he -- do you tack on anything to charge him? THE DISTRICT ATTORNEY: No. 24

Councilman Kelly

Nothing? Okay. THE DISTRICT ATTORNEY: We are just 2910 Budget - 4/12/05 interested in him paying to support his children. That's all we care about, support your children.

Councilman Kelly

But he doesn't pick up any of the costs that you have to incur -- THE DISTRICT ATTORNEY: No. The Federal Government --

Councilman Kelly

-- in providing the service. THE DISTRICT ATTORNEY: No. The Federal government pays two-thirds of our costs to do that.

Councilman Kelly

Oh, okay. THE DISTRICT ATTORNEY: So, we don't pass it on to the... We're just happy if the man supports his children.

Councilman Kelly

Right. THE DISTRICT ATTORNEY: That's all we care about. And it's mostly men. That's why I'm saying man.

Councilman Kelly

Right. Okay. Thank you. Thank you, Madam District Attorney. 2911 Budget - 4/12/05 Thank you, Madam President.

Council President Verna

Thank you. The Chair recognizes Councilman Nutter.

Councilman Nutter

Thank you, Madam Chair. Madam District Attorney, in a similar way that Councilman Kelly did... This was on my second go-around list... I also have had just in my office staff a wonderful experience with... As wonderful experience as you can have, given the nature of the work, the Nuisance Task Force, and Mike Erdos who has been very, very helpful in any number of situations. And I just wanted to -- similarly to Councilman Kelly, recognize him for his work, and the work of the office that I do have a fair amount of contact with. THE DISTRICT ATTORNEY: Thank you, sir.

Councilman Nutter

Sure. There's been a lot of discussion with regard to the recent surge in violence 2912 Budget - 4/12/05 and certainly gun violence with... And we are presently seemingly on a path of almost a homicide a day. I don't know if you've articulated directly on this issue, but I'd certainly like to get your perspective on this recent violence wave. And you've talked about your ten-point plan, of course. But beyond a plan, I'd just like to know your thoughts about what's going on. THE DISTRICT ATTORNEY: Yes. My thoughts are that gun-related violence in the City of Philadelphia and elsewhere around the country is the greatest public health menace that we face, absent the overthrow of the government or a terrorist attack. As a matter of fact, it has been likened, and I would agree with this, to urban terrorism. And this country is awash with guns. We're a gun-loving country. It may be because of our history. But if you look at our homicide figures compared to the rest of the civilized world, 2913 Budget - 4/12/05 and this is excluding wars, you know, and rivalries that go back centuries and things of that sort. Our homicide rate is higher than any civilized country in the world. I believe that it comes from a variety of consequences. I've traveled to Harvard. The author of a book called Private Guns, Public Health. David Hemminway works for a friend of mine who's the Dean of the Harvard School of Public Health, as does Dr. Deborah Prothrostith, with whom I've also met, and Dr. Alvin Pusant, who's featured in the Philadelphia Inquirer this morning, talking about gun violence. Violent offenders don't care about the laws. They don't care about City Councils. They don't care about D.A.s. They don't care about anything. They're angry and hostile, and they act out angrily and hostilely and at random. It's not really predictable. And I believe that I've said on many occasions, and I repeat today that because I go into so many schools and so many 2914 Budget - 4/12/05 communities, as you undoubtedly know, I see that the precursors to violence are evident to us. You show me a child, a baby who is exposed in utero to alcoholism, abuse, a physical and psychological abuse, drug abuse, and then is brought up born into a family which is awash in family violence, sexual assault, television violence, violence outside his or her window, abusive, unloving, uncaring, unnurturing parents, who neither read nor hold, nor cuddle, nor love, nor nurture their children. Those kids will start off in school developmentally delayed and emotionally scarred. And they carry out that emotional scar and that anger and hatred and resentment, and they demonstrate it in schools. So, you can see markers. It's not a predictor. COUNCILAN NUTTER: Right.

Councilman Nutter

But markers in some kids' lives. 2915 Budget - 4/12/05 You show me a kid who is a troubled kid, and I'll show you a kid who most often, but not always, has a very troubled youth.

Councilman Nutter

But now that that person has come of, you know, some age, at least chronologically, possibly not developmentally... But they're now in their early or late teens, twenties, thirties. I mean they're now out here, you know, from under whatever notion of a protective wing of a parent or grandparent or other person, how are we supposed to deal with that person? THE DISTRICT ATTORNEY: These are the most difficult people that one ever could see. This past weekend, for example, I watched a program on CNN called the Gangs of Hollenbeck, in L.A. And these people who were featured were -- the talkers, the people who were speaking to the camera, were grown men. There were many gang members. That was the featured story. They don't care about anything except, you mess with me, I'm 2916 Budget - 4/12/05 going to kill you. You come into my neighborhood, I will kill you.

Councilman Nutter

I understand. THE DISTRICT ATTORNEY: So, I mean, if you ask me, how are we going to reach the unreachable? The answer is, we are going to pay as a society a terrible price. I am not aware right now of anything that can dissuade a person who is a gun-toting gang member who doesn't care about law, who doesn't care about the rule of law or courts or punitive sanctions. You show me that kind of person. I'm going to show you a person who will come in and out of jail all of his life and reassert his anger and hostility and resentment against anybody who crosses, them without fear of consequence.

Councilman Nutter

In response to a question that was raised by Councilwoman Miller, you made a statement. I wrote it down, I think, accurately. But I needed to come back to it and I needed to get a better understanding. This was a colloquy regarding 2917 Budget - 4/12/05 offenders, whether possibly violent, non-violent. And you responded in one of the exchanges that if the person killed someone, that you were not sure that they should get a second chance. Now... THE DISTRICT ATTORNEY: If they get a life sentence, Councilman, they won't have a second chance.

Councilman Nutter

I understand that. Suppose they served whatever their term is or they get out under some legal means. I'm not talking about a jail break or something. I mean, if you're years old, you 18 end up in some kind of fight, you go through 19 the process, you get convicted. I don't know 20 what kind of sentence you get or whether it's, you know, second degree, third degree, involuntary manslaughter, any number of things, which of course you'll know better than myself. But I mean, let's say you get, you 2918 Budget - 4/12/05 know, to something and you serve the 20. I mean, now you're 40-some years old. You've got, you know, I don't know... 20, 30, maybe 40 years ahead of you. I mean, what are you supposed to do? THE DISTRICT ATTORNEY: Well, there are many offenders who get out of prison and are totally reformed. As I mentioned in my testimony, we work with ex-offenders and we have a great success with ex-offenders. And we're trying to prevent other people from becoming offenders. I believe I said that was in the context of hiring people. Obviously, there are people that I would not and could not hire as a law enforcement officer. But there are many people -- And I'll give you an example, even a better example. The great middleweight fighter Bernard Hopkins is working with me right now on an anti-crime program.

Councilman Nutter

Mm-hmm. THE DISTRICT ATTORNEY: There is no 25 better example of a person who not only 2919 Budget - 4/12/05 deserved a second chance but got a second chance and made good on it. He is a shining example of a person who can and does get a second chance.

Councilman Nutter

Right. THE DISTRICT ATTORNEY: And becomes successful at it.

Councilman Nutter

Well, that is one of the premier -- THE DISTRICT ATTORNEY: It's that kind of person that I'm in favor of.

Councilman Nutter

I understand that. But If that is one of the premier examples, again, that's why I didn't understand the statement in its totality that if you had killed someone, that you weren't sure that the person should get a second chance. I mean, what does that mean? THE DISTRICT ATTORNEY: Practically speaking... Practically speaking, in our Commonwealth at least, many people who are convicted of first degree murder and who get life imprisonment do at some time in the 2920 Budget - 4/12/05 future come out. Not everybody, but some. And those people who come out and --

Councilman Nutter

Everyone who kills someone, even if they're convicted... I mean, is it always first degree? THE DISTRICT ATTORNEY: No. Of course not.

Councilman Nutter

All right. So, I mean, some people do get out, right? THE DISTRICT ATTORNEY: Everybody eventually gets out one way or the other.

Councilman Nutter

Okay. So, you've got to give me a little better understanding of -- I mean, what does that statement mean? THE DISTRICT ATTORNEY: What does what statement mean?

Councilman Nutter

When you say, if you killed someone you're not sure if the person should get a second chance. What does that mean? THE DISTRICT ATTORNEY: They get a second chance, but it's demonstrable. It's up to them. They have to go out into society 2921 Budget - 4/12/05 and prove that they are exemplars of good conduct. For example, there are people -- And I can tell you this, Councilman. There are people who come out of prison and say, I'm never going back to prison again and never go back. They lead otherwise productive lives. And that is certainly good, and we make use of those people any way we can, especially as exemplars to kids what not to do. On the other hand, there are other offenders who are not deserving of a second chance, serious violent offenders, sexual predators and others who, I'm sorry that if they came up for parole or probation or release or early release or commutation, we would oppose because we don't believe they should get a second chance. And unfortunately today, there was a man who was arrested for killing or is being sought for two killings who just got out of prison last year and said -- He even wrote a book about it. He said, I'm never going back 2922 Budget - 4/12/05 to prison. Now he's wanted for two homicide. So, you know, sometimes it works and sometimes it doesn't. I'm going to err on the cautious side. If you get a second chance I'm going to be cheering for you, but I'm going to be cautious.

Councilman Nutter

Did I get the bell?

Council President Verna

You did.

Councilman Nutter

Okay. I only have one question, and then I'll go away.

Council President Verna

If you promise it's your last question.

Councilman Nutter

It is absolutely my last question of the District Attorney.

Council President Verna

The Chair recognizes Councilman Nutter.

Councilman Nutter

Thank you, Madam Chair. Madam District Attorney, we received from Personnel a list of a variety of employees by department. I don't know how -- I don't know what the circumstance was that generated this particular list. Maybe it was 2923 Budget - 4/12/05 brought over by the Personnel Director. I just needed to understand. There's one person listed for the District Attorney's Office. This is a list of City of Philadelphia permanent employees not residents of the city. It's dated April 5, 2005. THE DISTRICT ATTORNEY: Correct.

Councilman Nutter

There's one person here listed a Garold Tennis. THE DISTRICT ATTORNEY: Gary Tennis.

Councilman Nutter

Okay. Garold, G-a-r-o-l-d. THE DISTRICT ATTORNEY: Sorry.

Councilman Nutter

Who it would appear from this form, if I'm reading it correctly, was hired back in October of 1980. THE DISTRICT ATTORNEY: Correct, sir.

Councilman Nutter

Has an indefinite specific waiver. THE DISTRICT ATTORNEY: Correct.

Councilman Nutter

What is the nature of that? 2924 Budget - 4/12/05 THE DISTRICT ATTORNEY: As I understand this, Councilman -- I'm sorry. I call him Gary. I don't know anybody calls him Garold. Ed Rendell hired Mr. --

Councilman Nutter

Well, I don't know him that well. I'm just reading the name from the thing. THE DISTRICT ATTORNEY: When you said Garold, I couldn't tell who you were talking about.

Councilman Nutter

We're not personal friends. THE DISTRICT ATTORNEY: Gary Tennis was hired by Ed Rendell. And Gary Tennis is a Swedenborgian. He lives in Bryn Athen which is a community -- a religious community.

Councilman Nutter

He's a what? THE DISTRICT ATTORNEY: Swedenborgian. I think it's S-w -- Church of the New Christ, it's called. They're called Swedenborgians.

Councilman Nutter

Okay. 2925 Budget - 4/12/05 THE DISTRICT ATTORNEY: And they live in a community, an enclave if you will, in Bryn Athen. And Gary appealed to Ed Rendell to grant him an exemption from living in the City for religious reasons because he lives in a religious community, and Ed Rendell granted it. And he's been working in the office ever since. I think Mr. McPherson is trying to whisper something.

Councilman Nutter

You said a religious waiver? THE DISTRICT ATTORNEY: My First Assistant came over to me to tell me that the Civil Service Commission granted him an exemption for religious reasons.

Councilman Nutter

What's the reason? THE DISTRICT ATTORNEY: Hold on. Just give me a moment, sir. (Pause.) THE DISTRICT ATTORNEY: As I mentioned previously, Councilman, the Church 2926 Budget - 4/12/05 of the New Christ requires people who are in that church to live within an enclave, if you will, a certain area closest to the church. And when Governor Rendell hired him, it was with the proviso, if possible, that he get a waiver from the City of Philadelphia. And he did get that waiver.

Councilman Nutter

What is his -- What is his job? THE DISTRICT ATTORNEY: He's the head of our legislative unit. He writes and lobbies for all these bills, including the bills that Councilman Clarke and I talk about extensively.

Councilman Rizzo

And it's never been revisited?

Councilman Nutter

I mean, you became District Attorney in '91 in the special -- THE DISTRICT ATTORNEY: Correct.

Councilman Nutter

Okay. Have you ever had any conversation with the gentleman about the nature of this situation? I mean, I understand you didn't hire 2927 Budget - 4/12/05 him, but you are the District Attorney. THE DISTRICT ATTORNEY: Yes.

Councilman Nutter

And you're in control of people in the office. THE DISTRICT ATTORNEY: Councilman, I had a conversation one time with Gary because somebody else several years back brought up -- and I can't remember in what context -- that he didn't live in the City of Philadelphia. And I asked him what was the reason why he was living in Bryn Athen but working in the D.A.'s Office? And he said that he had a religious waiver granted to him by the Civil Service Commission. So, I mean, we don't inquire of people's religion, but...

Councilman Nutter

No; I understand. THE DISTRICT ATTORNEY: But -- And frankly, when I first came here --

Councilman Nutter

I never heard of this. 2928 Budget - 4/12/05 THE DISTRICT ATTORNEY: I don't go down the list -- Well, there's only one person. So, I didn't -- I didn't look at my employee list and check addresses. So, he was already on staff when I came. And he's a wonderful employee. He's marvelously talented. Probably has assisted you in a million different ways that you may or may not even be aware of. And I saw no reason to countermand what the Civil Service Commission had given him which was a religious waiver. I'm not looking for a lawsuit.

Councilman Nutter

Well, I understand that. On a more lighthearted way, you know, I have innumerable people trying to help me in many ways that I have no idea from time to time. But just... I guess my last question is, are you aware of any other public employee having a religious waiver on residency? THE DISTRICT ATTORNEY: Councilman, I have no way of knowing who gets religious 2929 Budget - 4/12/05 exemptions. You'll have to check with the Civil Service Commission. I know nothing about that.

Councilman Nutter

I just wondered. I had never heard of, I mean, of specific, you know, training in background and language and any number of... Okay. I did not -- I did not know that. This is definitely my last question. Thank you, Madam President.

Council President Verna

Thank you. At this time the chair recognizes and welcomes home Councilman Ramos.

Councilman Ramos

Thank you, Madam President. Madam District Attorney, I want to thank you. I want to start off like my other colleagues. Thank you for a job well done. A couple months ago I called your office -- Though it was not one of the things that you do, but I was reporting that a Councilman on the other side of the river in Camden had called that his niece had been raped, and that they had an idea where this 2930 Budget - 4/12/05 rapist was in the City of Philadelphia. And your office responded. The Police Department responded. And a couple days afterwards, the rapist was apprehended. And I just want -- And the Councilman, he didn't want me to state his name, but he wanted me to thank you whenever I got a chance, whenever I remembered. THE DISTRICT ATTORNEY: Please convey my --

Councilman Ramos

I want to take this in a very public way to thank you for a job well done. And I will be asking your office for many of these pamphlets on child support because if you turn it upside down, it's in Spanish. And the Spanish is very good. A lot of times when we translate -- and that includes me -- the Spanish is not very good. And when you get it from the printer sometimes it reads atrociously. But it's a very nice job that you've done here. And I'll make sure that these pamphlets get 2931 Budget - 4/12/05 to the people who need to read it in another language. THE DISTRICT ATTORNEY: Thank you, Councilman.

Councilman Ramos

In your prepared text you mentioned that you met with the Attorney General, Mr. Tom Corbett, and that he pledged to work with the Office on issues of coordinating information, sharing in order to prosecute violence, street gangs, et cetera. But did he commit to funding any of this for you? THE DISTRICT ATTORNEY: Not yet. But here's what he told me, Councilman, as I mentioned previously -- I don't remember whether you were here because I was looking at the Chair. He said that the budget from the Federal Government through which he is funded, through this witness protection program, via... I think it's P.C.C.D, The Pennsylvania Commission on Crime and Delinquency... had their cut in budget from, I think, $600,000 to $400,000. 2932 Budget - 4/12/05 We got $250,000 of whatever monies he got last year. So, he's going to have to go back and see what the needs are of the rest of the Commonwealth. We have always gotten the lion's portion of that money. But he couldn't promise right then and there on the moment when we had our meeting that he would, "A", fund me or fund me to the extent that he had in the past. But he pledged that not only would we continue our good working relationship on gangs and guns and other violent conduct in the City, but he would go back and check with his people to see to what extent he could fund our witness protection program. I do want to add that... I want to make this as clear and as stark as I can because it's clear and stark to me. If we he do not have a witness relocation program, our ability to prosecute violent criminals in this City will fall precipitously, and the people out on the street who are wielding the guns will have even more influence than they 2933 Budget - 4/12/05 do already. Already the impact of threats, intimidation, violence is great. And we have people who come to us and ask us to relocate them. We are able to do that but only just barely. This program is critical for the safety and security of Philadelphia. I don't know how to say it any plainer than that. If he can't give us money, we're not going to be able to relocate people. And people will just say, well, sorry. I didn't see anything; I don't know anything; and I'm not identifying anybody. And our homicide clearance rate will drop even worse and lower than it is right now.

Councilman Ramos

So, what happens if we don't get -- if you don't get the funding from the order -- you've distinguished -- You've had a distinguished career. And to put it in, you know, to put it in very simple terms, you think out of the box. THE DISTRICT ATTORNEY: Yes, sir. 2934 Budget - 4/12/05

Councilman Ramos

Have you gone there -- Now, because it looks like, given budget constraints in this era that we're living, a limited amount of financial resources. I think we're going to have to go back to thinking outside of the box. And the more -- Not in the particular vein with you're -- this particular issue that I'm addressing with you. But in a general sense, I just came back from Rome, and I was very impressed by their equivalent of town watch. You know, town watch is a very big program. And people are proud to be -- And we have a difficult time getting people into town watch nowadays. But they seem to have more obligations, more authority, and not get paid. And they're yet very proud of it. So, they get summoned to be civil patrol for these millions of people gone to Rome to pay their respects to the Holy Father. Are we going -- I think we're going to have to go into an era -- go into this era 2935 Budget - 4/12/05 and think, you know, out of the box, in the event that we don't get funded for all these other things that are so essential to the quality of life of people. Have you had any thoughts of where you would go or is there anything else that we can do? THE DISTRICT ATTORNEY: Councilman, first of all, I've been to Rome many times, been to the Vatican as you have. Saw you on television. I was very impressed by your remarks. But let me just point out the difference between Rome and us. Nowhere in the world, including in all of urban Rome, is there anywhere near the thought of anybody carrying a gun. Gun violence in Rome is virtually non-existent. Does that comport with your...

Councilman Ramos

That's correct. THE DISTRICT ATTORNEY: All right. Nobody carries a gun, except a few police officers, the Carbionetti (phonetic) and the civil authorities, the police officers who 2936 Budget - 4/12/05 are not the Carbionetti. Nobody else has a handgun. You might get mugged or robbed or beaten, but you don't get shot and -- shot up by a nine millimeter semi-automatic pistol. That is not the case in Philadelphia. So, being proud to be a civil guard in Rome is not the same as being a town watch person in the City of Philadelphia. That's the first observation. The second is this. Last year I went to see Arlen Specter when he came here to Philadelphia to ask him for funds. And while he was able to give $1 million to the violent crime impact team, which would -- through the A.T.F. and Federal authorities -- try to make a dent on gun crime, with a liaison from my office. He didn't give us any money to do that. It was all to the Federal authorities. And here's what the disconnect is. I am meeting again, by the way, just so you know, with Arlen specter again. It was supposed to be on the 15th of this month, 2937 Budget - 4/12/05 I think, but he cancelled it for other reasons. So, I'm not quite sure what the reasons are, not health-related. I will speak to Senator Specter again. I will ask him for funding. But here are the sources of funding for local prosecutors: Your own City government or local government, the state government or the Federal government. The problem with looking for grants -- and we are always looking for grants -- is that -- and we will continue to try to get grant funding -- is that the President of the United States has cut a tremendous amount of programs that local prosecutors could tap into, including the juvenile justice intensive block grants, the local law enforcement block grants, the Burn Memorial fund and others. So, with an increase in gun violence across the country with prosecutors, thousands of us trying to get some money to do programs, and all City governments being like Philadelphia, up against budget 2938 Budget - 4/12/05 realities, I can think out of the box all I want. The question is, where does the money come from? When it's all said and done, the rubber meets the road at the dollar. And that's what we need to find. We need to find sources of funding which we can plow into witness relocation programs. And that's the reality. I'm trying to be as innovative and as creative as I can. But when the President says he's cutting money to victims' assistance groups, which he's planning, and which I'll talk about to a victim assistance group, victim witness group, this Friday. This Friday? Yes, this Friday. It's a real... It's a real wakeup call that the pipeline is drying up. And we... That means our citizens. This City will continue to suffer a tremendously high price if we don't get sufficient funding for crime. I mean, it's our number one priority, period. Before anything else safety is the number one priority of any government. 2939 Budget - 4/12/05

Councilman Ramos

Are you working with our City administration in pushing and kind of like demanding that we get funded for these type of programs because it's our only alternative as you have, you know, expressed now, that unless we get the funding there's no way that we can address -- there's no 9 other ideas outside of the box or any form of volunteerism that can remedy any of these problems. THE DISTRICT ATTORNEY: Moving companies do not want to volunteer. They want to get paid. I've spoken to the Mayor on innumerable occasions about this issue and related issues. And he's not unsympathetic to my plea, but he tells me about budget realities. And I understand that. But you can't solve crime unless you have victim relocation. I mean, it is the... Look: People not only experience it in their own lives. They see it on television. They see it across the country. 2940 Budget - 4/12/05 And they want to be assured that when they come to court and testify and do their duty -- and they want to because it's their own safety and security, in their own neighborhood from criminals that they're worried about. They want to know, am I going to live through this? And that's -- you have to be able to answer unqualifiedly that we in law enforcement have the money to take you and move you and keep you as safe as we can possibly keep you, if you follow the rules of our witness relocation program.

Councilman Ramos

How much does this program cost? THE DISTRICT ATTORNEY: It depends on the length of the delay between the person coming forward. For example, if a crime happened tonight -- And I'll use you as an example. You're a witness and, you come to the police and say, I'll tell you what happened but I'm frightened. From tonight you would be moved 2941 Budget - 4/12/05 someplace else. Tomorrow or the next day, as soon as we could get a moving company, we'd pack up your belongings and store them someplace until you were prepared to come and testify and then move someplace else. Or if you had made arrangements, we'd move you to wherever you were going to move. A lot of the cost depends on the number of days between the time you come forward and the day your case is tried and how many days you have to come back. So, it could be -- It's exponentially a day rate multiplied by the number of days we keep you housed in a paid facility versus how quickly we can seek to make arrangements. If you have a relative someplace that we can move you to, so that instead of paying for a place in a hotel or motel, someplace, you can go to your relative's place and stay there inside or outside the City. That obviously cuts down the cost of the program. It just depends on a variety of situations. 2942 Budget - 4/12/05

Councilman Ramos

With how much money are you working with now? THE DISTRICT ATTORNEY: We're working with about $250,000, but it's not a lot of money. It sounds like a lot, but it's very, very minor.

Councilman Ramos

I agree with you. THE DISTRICT ATTORNEY: And also, if we move you... Let's say if you have a relative in Oklahoma -- I'll just pick a state. Remember, every time you come back to Philadelphia to testify, we have to fly you out and fly you back or drive you out and drive you back. Either way it costs money.

Councilman Ramos

Thank you, Madam President.

Council President Verna

You're welcome. The Chair recognizes Councilman Clarke.

Councilman Clarke

Thank you, Madam President. Real brief. To follow up on Councilman Nutter's question. With respects 2943 Budget - 4/12/05 to the gentleman, Gerald -- Gary... whatever his name is. THE DISTRICT ATTORNEY: Gary Tennis.

Councilman Clarke

Gary. THE DISTRICT ATTORNEY: Like the game. Tennis.

Councilman Clarke

Tennis. You said that he is the head of the legislative unit? THE DISTRICT ATTORNEY: Correct.

Councilman Clarke

You indicated that he is one of your chief lobbyists? THE DISTRICT ATTORNEY: Correct.

Councilman Clarke

Does he personally lobby for gun bills or does he have people in his unit that do? THE DISTRICT ATTORNEY: Councilman, he writes most of the gun legislation that we advocate for, as well as all the other legislative changes.

Councilman Clarke

But is he a lobbyist in the true sense of the way? He has -- THE DISTRICT ATTORNEY: He's a 2944 Budget - 4/12/05 registered lobbyist. Yes, he is. He's a registered lobbyist. He doesn't get paid to lobby. You know, he gets paid a salary to be an Assistant District Attorney who writes and lobbies for legislation in the House and Senate of the United States and also in the United States Government. He lobbies for laws in front of the United States Congress as well.

Councilman Clarke

Okay. Sticking to the issue that I'm interested in, gun violence, I'm -- And I don't know this location. Where is it that he lives again? THE DISTRICT ATTORNEY: Bryn Athen. It's right outside the City of Philadelphia.

Councilman Clarke

It's a religious community? THE DISTRICT ATTORNEY: Yes.

Councilman Clarke

And I'm assuming that the level of violence is nowhere near... THE DISTRICT ATTORNEY: Non-existent.

Councilman Clarke

So... And I'm not questioning this gentleman's 2945 Budget - 4/12/05 capabilities. But I'm a little concerned when you have your chief lobbyist not living in the City of Philadelphia, not having what I consider a true understanding of the level of violence in the City unless you actually live and breathe it. I'm a little concerned about his compassion. THE DISTRICT ATTORNEY: Well, Councilman, I want to be absolutely honest and fair with you, as I think I always try to be. I'm not firing him. He's got a Civil Service exemption. I'll tell you what I think you ought to do. If you've never met him, I think you ought to sit down and talk with him. I believe in my heart you will be so overwhelmingly favorably impressed with this guy, you won't be able to see why we should let him go just because he lives someplace else.

Councilman Clarke

I'm not suggesting that. I'm just concerned about -- You know, I'm very narrowly focused on gun violence. 2946 Budget - 4/12/05 THE DISTRICT ATTORNEY: He's your man.

Councilman Clarke

I want to see -- I will feel comfortable if I knew that, you know, he was as passionate about the issue, given the fact that he's the lobbyist for your -- THE DISTRICT ATTORNEY: Wait until you meet with him. I think you'll be so overwhelmingly impressed, you'll say, gee, how come I didn't have this guy do some stuff for me? You talk to him.

Councilman Clarke

All right. I would like to -- THE DISTRICT ATTORNEY: He's helped City Council. I don't want do use Michael Nutter's joke about there's so many people who are helping me in ways that I don't know.

Councilman Clarke

Right. Okay. I would like to meet him. THE DISTRICT ATTORNEY: But he will help you.

Councilman Clarke

One last question. Just for the record, what's your 2947 Budget - 4/12/05 position on video surveillance in high traffic drug areas? THE DISTRICT ATTORNEY: I testified previously on this, and I will say so again. I believe that we must use every available advantage that we can possibly muster to take the sting and the bite out of criminal conduct. And I absolutely believe that we need video surveillance cameras. And I likened this to several cities that already have it. New Orleans has it. Of course, London has them by the millions.

Councilman Clarke

Baltimore. THE DISTRICT ATTORNEY: Baltimore has it. Chicago has it.

Councilman Clarke

Chicago. THE DISTRICT ATTORNEY: And I believe -- In fact, I've spoken to the Police Commissioner about this. And he may be there right now, for all I know. He told me that he had been invited out or invited himself to Chicago to see how they are doing it.

Councilman Clarke

Right. THE DISTRICT ATTORNEY: To see 2948 Budget - 4/12/05 whether and to what extent. The Mayor of Chicago, of course, has put millions of dollars in this video camera surveillance. So, I think this is critical that we do this. Even if there are violations of the law, these cameras swivel. They have an ear component.

Councilman Clarke

Right. THE DISTRICT ATTORNEY: Which if you fire a gun, the camera turns sort of directionally towards the sound of the gunfire and focuses in on whatever the ear and the technology and the chips tell it to focus in on, so the police know where the gunfire came from and where to go.

Councilman Clarke

Do you have any concerns about certain civil liberties... THE DISTRICT ATTORNEY: No. 20

Councilman Clarke

...as it relates to... THE DISTRICT ATTORNEY: No. And I'll tell you why. We as citizens only have expectations of privacy in our zones of privacy, in other words, in our houses, in 2949 Budget - 4/12/05 our bedrooms, private places. But we have no reasonable expectation of privacy, according to the Supreme Court of the United States and other courts all around the country, on the public street. So that if a camera is taken -- Well, look at it this way, Councilman: You know as well as I know that there are cameras taking our picture every place we go. In the supermarkets there are cameras. In the airports there are cameras. At the ATM there are cameras. When we go through the EZ-pass there are pictures being taken of us. Up on Roosevelt Boulevard when we go through Grant Avenue there are people -- there are cameras taking our pictures. So, cameras are an integral part of safety and security, both homeland and local. There is absolutely, positively, without a hesitation of a doubt that cameras on a public street where nobody has an expectation of privacy, violates no privacy right 2950 Budget - 4/12/05 established under our Constitution or our laws.

Councilman Clarke

Okay. Thank you.

Council President Verna

Thank you. The Chair recognizes Councilwoman Miller.

Councilwoman Miller

Thank you, Madam President. I also want to thank you and your office for working with my office around a lot of the community's safety issues and all those kinds of things. THE DISTRICT ATTORNEY: Thank you.

Councilwoman Miller

You're welcome. I do want to ask you one question. More and more of our constituents are asking us questions around identity theft. THE DISTRICT ATTORNEY: Mm-hmm.

Councilwoman Miller

And I know a number of people that have been a victim of identity theft. And right now I really don't know what to tell them to do, who to refer 2951 Budget - 4/12/05 them to. Could you talk a little bit about maybe ways people can prevent or are there any booklets available and whatnot? THE DISTRICT ATTORNEY: Well, first of all, Councilwoman, I or members of my staff would be happy to come out to your constituents and speak to them about identity theft. As I mentioned in my earlier testimony -- And I can't remember whether you were here or not. But I mentioned that identity theft is a growing problem. And it's getting harder and harder for people to protect their privacy because, while we tell people about their Social Security, their mother's maiden name, their birth date and any other personal information, we know that there are companies which collect information about ourselves which have been raided by computer hackers and get that information that we don't want them to have anyway. If we go to a doctor or a hospital 2952 Budget - 4/12/05 and give our information, somebody behind the desk taking that information can sell it. The American Red Cross blood bank up on Spring Garden Street had an employee who was selling the Social Security cards, the birth dates, mothers' maiden names, and all the other information about people who were giving blood to give Sunami relief victims blood. So, I can honestly say that although we try to impress upon us to... When I say "us" I mean us as civilians... how to be careful about your identity, and to make sure you're protecting certain personal information. It's getting harder and harder to do, but we'd be more than happy to tell people how to protect themselves. The first thing they should do is call the Federal Trade Commission. The second thing -- and report it. Report it to the Philadelphia Police Department. You should also call and put a fraud alert on all of your credit cards and your bank account. They should also call the three 2953 Budget - 4/12/05 credit agencies: Experian, TransAmerica, and there's one other... Equifax, that these are companies who will give you a credit report who will monitor your credit, every transaction that you make, so that if something unusual pops up -- Let's say you're 89 and you're buying $10,000 worth of computer equipment, something that happened to a lady who spoke to me yesterday -- it will jump up. So, there's lots of things to talk about.

Councilwoman Miller

Okay. THE DISTRICT ATTORNEY: Including cyber crime on computers. If you'll just call us, we'll be happy to come out and address your community on those and related issues.

Councilman Miller

All right. Thank you. Thank you, Madam President.

Council President Verna

You're welcome. The Chair recognizes Councilman 2954 Budget - 4/12/05 Rizzo.

Councilman Rizzo

Madam President, I'd appreciate it if this information we have learned today about an employee that has worked in the District Attorney's Office since 1980, years, that... You know, I'm 8 pleased with the fact that the District 9 Attorney has gotten a waiver that's in her 10 file and that that satisfies her. 11 But it doesn't satisfy me. What I'd 12 like to do is have the Personnel Department 13 to come back and walk us through for 25 years 14 what they have done to make sure -- And that 15 may all be -- The file may be absolutely 16 correct that every year the person had to 17 come back in and justify the waiver. 18 But the document that I saw appears 19 that doesn't happen any longer. So, I would 20 appreciate it if you could arrange for the 21 Personnel Department to come back and focus 22 on this particular individual, to find out 23 how a person could have a waiver for 25 24 years. 25 And again, it may have been handled 2955 Budget - 4/12/05 correctly where every year, every two years, every other year. But I think I'm more concerned about the process here. I'm more concerned -- Not about this individual. Might be the greatest guy in the world. But now we've identified the fact that there's the potential that since 1980 nothing has been done. I hope that's not the case.

Council President Verna

I think someone -- THE DISTRICT ATTORNEY: Councilman, could I just add something. I don't want to burden the record with this because in the scheme of things -- This is of concern to, obviously, some of you. But here's the bottom line. Just chatting with Ron Eisenberg, my Deputy for Law, Mr. Tennis got a lawyer. His name is David Rudovsky. I think you all know about him. He threatened to sue the City if he weren't granted an exemption because of religious grounds. And the City of Philadelphia -- 2956 Budget - 4/12/05 Because he was initially denied his right to serve the City because of his religious beliefs, under the First Amendment of the Constitution. Ed Rendell, for whatever reason Ed Rendell chose -- And you'll have to ask Ed Rendell -- the City agreed, the City of Philadelphia government agreed to put him on and not penalize him because of his religious beliefs. I have not revisited that question, and I'm not going to revisit it.

Councilman Rizzo

Well, I'm not asking you to. THE DISTRICT ATTORNEY: I don't think he has to go back either.

Councilman Rizzo

I asked the Chair, in all fairness -- and I think you heard me. I said, you had in your file what you needed to conduct your business. But I'm asking about process. THE DISTRICT ATTORNEY: Okay.

Councilman Rizzo

And I don't think the Governor... The Governor won't answer me 2957 Budget - 4/12/05 about where my $6 million is for the state police, so I doubt if he'll answer that question. So...

Council President Verna

That's the Civil Service Commission.

Councilman Rizzo

But I'm more concerned about the process. So, maybe what you just said, District Attorney, is the answer to the question, that someone was intimidated into putting this waiver in effect in... THE DISTRICT ATTORNEY: Oh, no, no. 14 No. No. Please don't... No; please. I don't mean... Nobody was intimidated.

Council President Verna

It was a court ruling, and apparently the Civil Service Commission --

Councilman Rizzo

Okay. If that's the case, I want to...

Council President Verna

-- gave a lifetime waiver.

Councilman Rizzo

Okay.

Council President Verna

That is what I'm assuming. 2958 Budget - 4/12/05

Councilman Rizzo

That's not what was said earlier. This is all new, Madam President, what's going on here right now, that a person has a lifetime waiver. And that's fine. That's fine. Just -- I just don't like people -- And I'm not suggesting -- I don't like to be scammed. And this may not be that. It's probably not that, but I think it's worth hearing it from the Personnel Department.

Council President Verna

Understood.

Councilman Rizzo

Whether privately or publicly.

Council President Verna

Understood. Thank you. Thank you. Are there any other questions or comments from members of the committee? (No response.)

Council President Verna

Seeing none, I thank you very much. And thank you for all the wonderful work you do. THE DISTRICT ATTORNEY: I thank the Chair. 2959 Budget - 4/12/05

Council President Verna

Thank you. We will now hear from the Defenders Association.

Council President Verna

Good afternoon. Thank you so much for your patience. May I ask that you please identify yourself for the record. And before you start with your testimony, I will simply say that we do have a copy of your testimony. It will be given to the stenographer. It will be transcribed in full. So, if you would be kind enough to summarize your testimony we would really appreciate it.

Ms. Greenlee

I will, Madam President.

Council President Verna

Thank you.

Ms. Greenlee

Let me introduce -- I'm Ellen Greenlee, the Chief Defender, Defender Association of Philadelphia. On my left is First Assistant Defender Charles A. Cunningham. And on my right is my faithful Controller, Selim Tawadros. 2960 Budget - 4/12/05 Do you want their names spelled?

Council President Verna

I don't think that -- I think the stenographer probably has it.

Ms. Greenlee

Selim Tawadros S-e-l-i-m. T-a-w-a-d-r-o-s. Thank you.

Council President Verna

Thank you.

Ms. Greenlee

Thank you again, Madam President and members of City Council for the opportunity to appear before you to discuss with you the work in the Defender Association and to thank you for your continuing support and ask for your support as we present our appropriation request for fiscal year 2006. I will briefly -- As you've mentioned, you have a copy of our testimony -- give you a snapshot of our work as the premier and only Public Defender in Philadelphia, is that we provide legal and social service and investigative services, in representing about 70 percent of the adults and juveniles in Philadelphia who are charged with criminal matters from the trial level 2961 Budget - 4/12/05 through appeal. We also represent percent of 4 court appointments in homicide cases. We 5 represent, through our Child Advocate Unit, 6 now about 6300 dependent children. 7 And we represent in civil mental 8 health hearings more than 4200 respondents. 9 In calendar year 2004, just to get the 10 numbers straight, we received 68,000 new case 11 appointments. 12 We attended 350,000 court hearings 13 representing clients. And we provided in 14 excess of 73,000 ancillary services, such as 15 investigations, social service interventions 16 and interviews. 17 There has been no reduction in our 18 services, certainly not in the number of 19 courtrooms in which we staff or in the 20 caseloads or in the struggle that our staff has to meet the needs of all our clients. We are justifiably proud of the work of the association. And I think it's fair to say that it is -- it should be a matter of pride to the City of Philadelphia and to 2962 Budget - 4/12/05 members of City Council the quality of work that the Defender Association does for the poor citizens of Philadelphia. A brief look at the work of just several units. Especially in the area of juvenile representation, we have been striving over the last several years to provide a more individualized representation of our young clients because certainly it's at that stage, with young people, that we can make a difference in which direction they go. In our juvenile unit which handles those charged with criminal matters, in the last calendar year we had 15,000 hearings, which represented a percent increase since 17 2002 which is a great deal of work. 18 We have expanded our team approach 19 to all five courtrooms in the juvenile system 20 which means that we have a senior attorney 21 who supervises the work of the younger 22 members of our staff who are representing. 23 And trying to provide that each 24 client in the juvenile setting is -- talks to 25 an individual attorney who will represent 2963 Budget - 4/12/05 that person at a hearing. This is a big change, as I'm sure you're aware, in terms of the horizontal nature of our practice, to try to make it more individualized and to have a greater effect on the outcome. We also in our juvenile area are involved in teleconferencing in which last year we made 36 trips -- the trip, including an attorney and a social worker, to 12 placements for review hearings. 13 This means that the City is not put to the expense of having to bring in the youngsters to Philadelphia for hearings. And this also allows us, obviously, to get a look at the placements which in many instances have turned up some serious problems that we are attempting to be -- to have addressed. We also in the juvenile unit have participated in the last year in two statewide trainings. We are attempting to try to upgrade the level of practice in the juvenile defender offices throughout the State of Pennsylvania. 2964 Budget - 4/12/05 In addition to that juvenile unit, we have a juvenile special defense unit which handles those youngsters who are charged as adults in more serious cases. Last year we saw a very significant rise in the numbers of juveniles being charged as adults: From 298 in '03, to 420 in '04 which is a very significant increase.

Ms. Greenlee

We're happy to say that this specialized unit of four attorneys and three social workers and two investigators. After preliminary hearings have been held, we have had 68 percent of those youngsters returned to juvenile court. We also are busy right now in working on the conditions of confinement. We have approximately 42 youngsters who are being held at the House of Correction in what can only be described as some kind of middle-aged sort of confinement. And we are working with the prison administration and the City to try to alleviate the dreadful conditions in which these youngsters are being held. 2965 Budget - 4/12/05 The third of our juvenile units that deals with children is our dependency unit, the Child Advocate Unit which represents approximately 6300 dependent children. There also over the last several years we have worked on a team approach which provides much more individualized service to our children. And we are also begun focusing over the last year on those children who are aging out of the system, who are reaching the age of 14, 15, 16, to better prepare them, in terms of education, housing, and jobs to -- to age out of the system and to get off the dependency roles. A part of the child advocate work also has been to expedite the adoption process, to get more children moving more quickly into adoption. A lot of these initiatives have been the work of Judge Myrna Field, who's the Administrative Judge of Family Court; has been very innovative and very assertive, in terms of these improvements in Family Court. That's pretty much the focus of what 2966 Budget - 4/12/05 we do with our juvenile clients. We also have -- Obviously, all the departments are busy. Probation, parole and alternative sentencing unit works very closely with our adult social service. They handled 57,000 probation violation hearings last year which is only important because it represents, like, a 57 percent increase since the year 2000. So, probation violations are soaring. They also are involved in early parole. And of the 2700 petitions that were granted last year, we have an 81 percent success rate in getting people paroled early. That units handles -- handled last year 40,000 phone calls from clients and families and everyone involved in cases and letters. So, that's a tremendously busy department. Also busy in getting clients into alternatives from jail through our intermediate punishment programs, we've got 607 people into programs last year. And also through our forensic 2967 Budget - 4/12/05 intensive recovery program, we work with 65 different drug and alcohol and mental health programs to get proper placements for clients. The last unit I would mention is our homicide special defense unit. As you're aware, our homicide unit began work in 1993. We do percent of court appointments only, 10 and since that time we've had 1,068 11 appointments in homicide matters. 12 And I think that you're well aware 13 that in that time frame, those 12 years that 14 we've been doing this, we have fortunately 15 had no client receive a death penalty. 16 I think that's a credit to the type 17 of representation that people get, where they 18 are assigned two attorneys, an investigator, 19 and a mitigation specialist to handle their 20 cases. Our homicide unit also works with the private bar in conducting continuing legal education programs and consulting on matters where they can be of assistance to the private bar. 2968 Budget - 4/12/05 A small part of that homicide unit is our special defense unit which is really only two people. They're kind of surprising how much they're able to do. Of course they do call on some of the members of the homicide unit. But they handle the high profile cases, complex cases, all involuntary manslaughter, all rape preliminary hearings. So they are a tremendously, tremendously busy small unit. Last year they handled 276 new cases and 594 rape preliminary hearings which is just incredible.

Ms. Greenlee

And I didn't even count the number of probation violations that they handle. That's just a kind of a snapshot of the work that we do. The nitty-gritty is our financial situation which I will broach to you at this point in time. For fiscal year '05, which is ending shortly, we've had a very challenging year. We had no increases in our budget, other than a small amount of roughly $123,000 for the administrative pay plan that the City agreed 2969 Budget - 4/12/05 to. We've had -- We had no money for salary increases. And still we are -- have been able in this fiscal year to stay within budget, due to very close monitoring of expenses, holding the line on salaries, postponing purchases, and significant changes to our benefit plans. One thing that differentiates us from other departments that come here is, obviously, we are not a City department. We do not have the advantage of having benefits and personnel and a number of things that are taken care of by centralized agencies. We operate like a private law firm. From the appropriation that we receive, we must pay all our expenses, including salaries, benefits, insurance, rent, utilities, professional services, supplies, and anything else that we need to run our business. This differentiates us greatly, I think, from City departments, so that for fiscal year '06, when in our discussions with 2970 Budget - 4/12/05 Budget Director Reed and her staff, the City again proposed no increase. This will be the third year where we would be at the same level. With all the savings that we have made, as we conclude fiscal year '05, we cannot -- we cannot sustain that level of funding without a significant increase, in order not only that there be fundamental fairness, in terms of how we as the lawyers for the poor are treated in terms of the City, but also because we are lagging behind both the City law office and the District Attorney's Office, since this would be, as it presently stands, the third year where we would have no 17 increase in our appropriation. What we are requesting -- And I should point out that we have been told by Budget Director Reed's Office that since we are not being asked to take a five percent cut, that we will not get the two percent that is included for salary increases. But there is no way in the world that we can take a five percent cut, since 2971 Budget - 4/12/05 there's been absolutely no reduction in the level of services that we are asked to provide and must provide on a daily basis to the City. And we are not a City department. We do not have the benefit of being part of any City pension plan or having centralized administration, in terms of personnel and benefits. 6 million. Exactly it's $1,646,450, and I will break that down for you. We first are asking for that two percent wage increase. Customarily, when the City negotiates with unions and comes up with a formula, as they have this year of two percent this year for '06, and then three percent, and I think then four percent. Customarily the Defender Association has benefited from that amount to give some kind of salary increases. P. Program, obviously, since we are not part of the City. We do not have people who are in a financial position to retire. So, we must request that two percent wage increase be reinstated. We are asking that attorney's salaries which have been at a starting salary of $42,000 for three years now, since the pay priority plan that Mayor Street and before him Governor Rendell endorsed has run out, that we move -- we intend to move the salary to $45,000. And I think you know that that's clearly at least where the District Attorney is. And there can't be any question in anyone's mind that Defenders work at least as hard as District Attorneys do. And I'm not saying anything negative about the District Attorney, but you all realize that the job of Public Defender is not an easy job, with long case lists and other things that have to be done for our clients.

Ms. Greenlee

We proposed in September to move our 2973 Budget - 4/12/05 starting salary to $45,000. As I mentioned, it's been three years at $42,000. And that implicates a bump to the newer attorneys who are already at $42,000. So, we have to keep a space between the younger attorneys. So, that move will cost us approximately $326,000. S. but what our social workers can go out and earn in any private agency probably about $30,000. For the last five years or more our starting salary with a bachelor's degree has been $23,500. With a master's degree it's been $25,500.

Council President Verna

That's absurd.

Ms. Greenlee

We spend a great deal of our time interviewing, hiring and then losing people because we are not competitive. I mean, we are not even close, in terms of salaries. 2974 Budget - 4/12/05 What we are doing is, we are moving to the level of D.H.S. because our social workers, especially the child advocate unit which has half of our social workers, about 35 social workers, work on a daily basis with the social workers at D.H.S. D.H.S. starts its social workers at $28,700, and $30,600 for comparable experience. We have had to do this in the interests of stemming the attrition which is really debilitating because we spend so much time having to interview and find people who will come and enjoy the experience but leave after about a year because they can't afford to live on our salary. In addition to those salary issues, we have -- we will have an increase in our medical insurance. We project at about 15 percent come December when we renew. We have over the last two years -- And I think it's clear since we were able to hold expenses during fiscal year '05, that we have put in place a number of items to save 2975 Budget - 4/12/05 money on our health plans. We have done away with the Blue Cross/Blue Shield entirely. We have a $500 co-pay for hospitalization. We have payroll deduction for those employees still on Personal Choice. We have changed our prescription plans to a three tier formulary plan. And we have provided mail order prescriptions for those who are on maintenance medicines. This has made significant savings. At this point in time we don't see that there probably are anything like the savings to be made this year. And we expect that we will probably have a 15 percent increase which will be roughly $341,000. The last two items are the benefits linked to the increase in the salary and increases in life insurance, Workers' Comp and disability, since we have to pay all of our insurance, which amounts to about $163,700. And finally, we have to add to our technology staff. We have a very lean, lean 2976 Budget - 4/12/05 technology staff. We have an I.T. manager and a staff of four who do the programming. One does programming. One does hardware. One does software. One does teaching. And that's it for a staff, including interns and students, of about 500 people. So, they are -- we are stretched kind of thin. What we are facing in the next year is the implementation of a statewide system, court history system, which we are not in a position to handle at this point in time because we do not have a case management system. As I've outlined in our testimony, we have been begging over the last 15 years from the state and especially the Pennsylvania Commission on Crime and Delinquency, to fund us so that we might develop a case management system. At this point in point there is no 22 choice about it. Something will have to be done. We have alerted the City and M.O.I.S. about the needs that we will have in the next year. 2977 Budget - 4/12/05 And obviously, we need to get moving right away because we're either going to have to develop our own case management system or we're going to have to adapt one that's off the shelf. In any event, we will not have a choice about that because the system -- criminal justice system will grind to a halt in the fall of 2006 if the Defender is not on line. To that end, at this point in time we are hiring a support specialist and a data base application specialist. And that's the last item on our budget list -- our appropriation list -- our increase list at this time, which takes us to an unhappy $1.6 million plus change, in order for us to be able to continue to provide the services we have, in order for us to insure that our staff receives the same kind of compensation that comparable positions in the City receive. And with that, Council President, I thank you for your time. I hope that -- I 2978 Budget - 4/12/05 trust that was not too long.

Council President Verna

No. You were fine.

Ms. Greenlee

Or too much of what's in our testimony. We will... obviously would very much like your support for this request when you have a chance to look at it and determine the validity of it, and also certainly will appreciate the opportunity to work further with City administration, with the Budget Director.

Council President Verna

I know that you have indicated that you're requesting an additional $1.6 million above the Mayor's recommended budget request.

Ms. Greenlee

That's correct.

Council President Verna

And you also indicated that you expressed your needs to the administration. Can you tell us what kind of a response that you received?

Ms. Greenlee

Well, in all candor, we actually only sent this request last week 2979 Budget - 4/12/05 to the Budget Director. So, we haven't had an opportunity to discuss the specifics of the request.

Council President Verna

So we don't know what direction we're going either. So, you're going to have to get back to us, please.

Council President Verna

And I would appreciate your doing that in writing.

Ms. Greenlee

Certainly.

Council President Verna

You know, there was a question... The Chair recognizes Councilman Rizzo.

Councilman Rizzo

Good afternoon. Let me see. Yep. Good afternoon. Talk a little bit about the organization. You said that there's 500 people plus in terms...

Ms. Greenlee

Yes, including interns and student. We're roughly at about 480.

Councilman Rizzo

Full-time? 2980 Budget - 4/12/05

Ms. Greenlee

About 215 full-time attorneys.

Councilman Rizzo

This residency thing is always very controversial around here. Could you tell us how many of your employees live outside the City? THE DISTRICT ATTORNEY: Well, the percentage, Councilman, is 33 percent live outside the City.

Councilman Rizzo

33?

Councilman Rizzo

So, since you're not a City agency... But you described the fact that, you know, there are certain things that you don't get as not being a City employee. But obviously you're not bound to any City residency in your organization.

Ms. Greenlee

That's correct.

Councilman Rizzo

33 percent. Okay. Thank you. Thank you, Madam Chair.

Council President Verna

I'm sorry. I was distracted. What was the percentage?

Councilman Rizzo

33 percent of the 2981 Budget - 4/12/05 full-time people. 400 and....

Ms. Greenlee

About 480.

Councilman Rizzo

480 people. 33 percent of those folks live outside the City of Philadelphia.

Council President Verna

And they are permitted to do that because you're under contract.

Ms. Greenlee

Yes. That's correct.

Council President Verna

Mm-hmm. Very well. I would appreciate it if you would notify us of the outcome of your meeting with the administration and what they propose to do regarding the $1.6 million

Ms. Greenlee

Thank you, Council President.

Council President Verna

Thank you.

Ms. Greenlee

We certainly will do that.

Council President Verna

Thank you very much.

Ms. Greenlee

Thank you for your time. 2982 Budget - 4/12/05

Council President Verna

You're welcome. This committee will stand in recess until 1:45 p.m. (A luncheon recess was taken from 1:00 p.m. to 2:00 p.m.)

Council President Verna

Good afternoon. This is the continued public hearing of the Committee of the Whole. We will now hear from the Law Department. Good afternoon. Please identify yourself for the record and proceed with your testimony. We do have a copy of your testimony which will be given to the stenographer. It will be transcribed in full, so I would appreciate it if you would simply summarize your testimony. THE CITY SOLICITOR: Good afternoon. Thank you, Council President Verna and members of City Council. I am Romulo L. Diaz, Jr., acting City Solicitor. Thank you for the 2983 Budget - 4/12/05 opportunity to testify today in support of the Law Department's budget request for fiscal year 2006. And I will summarize my prepared statement, as you requested, in the interest of time. I am accompanied today by the Law Department's Executive Committee, Donna Mouzayck, First Deputy City Solicitor; Don Marino, Chair of Litigation; and Barbara Ash, Chair of Social Services; as well as Chris Lane, Director of Administration and Management. Under the City Charter, the Law Department exists to provide quality legal services --

Council President Verna

Excuse me just a minute, please. I've been asked if you would please pull your microphone closer. They're having difficulty hearing you. THE CITY SOLICITOR: Under the City Charter, the Law Department exists to provide quality legal services to the City of Philadelphia. In sum, we fulfill that mission by 2984 Budget - 4/12/05 supporting the administration's vision for Philadelphia, meeting our responsibilities to City Council, and managing our resources to the City's budget goals for fiscal year 2006. In FY 2006 we will continue many of the efforts discussed previously with Council. For example, we intend to emphasize the collection of delinquent revenues owed to the City and contain legal costs, institutionalize court and administrative reforms designed to achieve timely placement permanently of children currently in the child welfare system, and meet our commitments to provide for equal opportunity and diversity both for Law Department contracting efforts and in the employment of a qualified diverse work force. Let me now summarize the Law Department's FY 2006 budget request. Overall we request $13.8 mill for FY 2006 in the General Fund. This represents a decrease of $1.4 million or nearly 10 percent from estimated obligations for FY 2005. We will also reduce 2985 Budget - 4/12/05 our General Fund budgeted staffing levels from 198 to 185. I would refer Council members to of my written testimony for our request in connection with other City funding sources. As acting City Solicitor for just over a week now, it is fitting that I recognize the leadership of former City Solicitor Pedro Ramos. During his tenure we had many accomplishments to celebrate. And I'd like to recite just a few of them. We restructured our tax unit and implemented a City-wide campaign aimed at delinquent taxpayers to increase collections in FY 2005 and beyond. We are on target to increase our annual collections by more than the $10 million promised to Council last year. We partnered with D.H.S. and Family Court to reform D.H.S.'s case management system which now provides continuity of representation and secures the best outcomes for the children in the system. 2986 Budget - 4/12/05 As a result of our negotiations and agreement with the Pennsylvania Insurance Department, the second stage of auto insurance rate reductions has begun. Reductions totaling approximately $18 million in Philadelphia went into effect between September 2004 and April 2005. We were successful in persuading the Pennsylvania Supreme Court to overturn a Commonwealth Court decision and reinstate the City's Life Partner Benefits Ordinance. Our litigation against S.E.P.T.A. avoided catastrophic rate hikes and service cuts which could have led to the dismantling of our public transit system. Our action provided an opportunity for the Governor to explore and secure alternative funding to keep the system running through the end of FY 2005. In short, the City of Philadelphia has been well served by a dedicated Law Department staff that is capable and ready to meet its Charter responsibilities to all of its clients, as well as to meet the 2987 Budget - 4/12/05 expectations of Philadelphia residents. I am honored and humbled to have been given the opportunity by Mayor John F. Street to lead the City Law Department. Madam President and Council members, that concludes my oral summary. And I request that my formal written statement be entered into the record. I would be pleased to respond to any questions that you may have at this time.

Council President Verna

Thank you very much. The chair recognizes Councilman Kenney.

Councilman Kenney

Thank you, Madam President. As you know, the City Solicitor represents both the administration and City Council. And the City Solicitor will often be faced with situations in which the interests of those two clients conflict. I would like to explore with you today how you would resolve such conflicts, in the context of ordinances which were duly 2988 Budget - 4/12/05 passed into law, even over the Mayor's objections. And let me give you an example. This past February Council enacted over the Mayor's veto Bill Number 040326. That bill 7 amended the City's pension code to eliminate the income offset provisions for disabled City pensioners. The Mayor in his veto message stated that the City Solicitor had advised him -- and I guess that was Pedro at the time -- that Council did not have the power to make such amendments -- make such amendments, quote, apply during the life of current collective bargaining agreements, end quote. My question is, suppose the Pension Board asked for your advice as to whether it should follow the provisions of this bill. Suppose further that as City Solicitor you agreed with your predecessor's conclusion that Council did not have the power to make changes to the Pension Code that apply during the term of current labor contracts. 2989 Budget - 4/12/05 Would your advice to the Pension Board be to follow your legal advice and to ignore an ordinance which was duly enacted by Council? Do you have an opinion? THE CITY SOLICITOR: Let me give a short context for the answer, if I may, and then respond directly to your question, Councilman. First of all, the City Solicitor, as you suggest, under the Charter, represents not only the administration but all 13 members of Council. 14 We have a responsibility and prefer 15 to offer written opinions as to the legality 16 of proposed legislation to all of our clients 17 so that there is consistency and transparency in that advice. There are opportunities, there are times when it appears that some of our clients prefer to have confidential advice, and we adhere to that request. But I have a responsibility to state what I believe to be the law, at least with respect to my responsibilities under the 2990 Budget - 4/12/05 Charter and that of the Law Department. In a particular matter where there is a potential conflict between clients, we not only have a longstanding policy as to how we deal with those potential conflicts, but we also have a Code of Professional Conduct that we as lawyers adhere to under the Pennsylvania Supreme Court rules. So, that's the context. And if I may respond to your particular question, I don't know this particular provision that you're referring to. But if it were a question put to me as to what my belief was as to the legality of a particular ordinance, I would be duty bound to give my best legal judgment. If the issue were -- And I think this perhaps may be part of your question, although not articulated as such. If the question were whether in fact, I should be providing legal representation, shall we say, if there is a difference of opinion as to the legality of a particular ordinance, we have honored those requests by City Council, and I 2991 Budget - 4/12/05 would intend to do that in the future as well.

Councilman Kenney

I guess this is a somewhat hypothetical question because you have not yet made a decision on this but your predecessor has. If you believed that a bill that was duly enacted by Council was not legal, would you advise the City agency involved or the Mayor not to enforce the provisions of the bill, prior to any court making a decision on its legality? Certainly your opinion's a legal one. You're a learned lawyer. It has validity. But no court would have yet made a decision on the validity or legality of the law. Would you then advise your client on the administration side to ignore Council's legislative prerogative in passing legislation? And why wouldn't the administration just go to court and have a court determine the validity of this particular ordinance or 2992 Budget - 4/12/05 any other ordinance that there's a disagreement on. THE CITY SOLICITOR: There are a lot of questions in that one question. So, if I can just sort of separate them, if I may. It seems to me that if I've come to the conclusion, which is part of your question, that it is duly enacted, I might have a different result. I think that's really the heart of the question, is whether a particular ordinance is duly enacted. And then in addition to that, is there... Even for those that are duly enacted, is there a responsibility of the administration to follow it. There are clear decisions in the past by courts. There are also long-standing policies about the limits of what City Council is authorized to enact and what the administration is obligated to follow. But I go back to my earlier response, Councilman, that I have to call them as I see them. That is my duty to the Charter, under the Charter, to the 2993 Budget - 4/12/05 administration and to Council. And without knowing the particularities of this legislation, I can't tell you how I would find as to its duly having been enacted, whether it essentially goes beyond the scope of Council authority, as to the prerogatives of administration. So, I don't want to go too far out on this hypothetical limb, but I just want to seriously philosophically --

Councilman Kenney

It's not as hypothetical as -- as it could be because we have a duly enacted ordinance which was ultimately enacted by overriding the Mayor's veto. And the Charter makes it clear that we have the ability as a legislative body to the process. We pass a piece of legislation; the Mayor doesn't like it; he or she vetoes it; council then has a process to override that veto. And at that point in my opinion, that would be a duly enacted law. What we had is a situation or have 2994 Budget - 4/12/05 as a situation is that your predecessor determined in his opinion that the law was not valid, and therefore advised the administration not to enforce it. That, to me, gets really clearly close to just dismissing the actions of Council and, you know, having your lawyer tell you that you shouldn't follow what Council has passed. And I think -- I mean, this Council's role has been diminished dramatically in the last five years to begin with. To diminish it even further by saying that even though we go through the process provided for in the Charter that the Mayor vetoes it and we 17 of us, 16 of us override that veto. And then the City Solicitor says, oh, by the way, I don't think it's legal, so you really shouldn't enforce it. I mean, where's the Charter powers granted to us by the framers of the Charter as a legislative body? 2995 Budget - 4/12/05 THE CITY SOLICITOR: I am aware, Councilman, that there are situations, particularly relating to administrative functions of the Mayor, relating to contracting, for example, where there are disputes as to the limits. It has been, I think, the long-standing policy of the Law Department and prior serving Solicitors that in areas where we can give deference to City Council at all, we will. In areas where there is a discretion of the Mayor, with regard to his powers, we certainly want to make sure that those powers and authorities are supported in terms of our interpretation. That's a long-standing policy and interpretation of the Law Department. In terms of whether in certain respects -- and McBride Principles is one that comes to mind -- whether that is one that as a matter of policy should be followed versus whether as a matter of law it is required to be followed. 2996 Budget - 4/12/05 You know, I think the long-standing policy is that we try to -- we try to at least carry out the desires of Council where possible. But -- And with regard to -- If I may finish.

Councilman Kenney

The where possible gets me -- has me more concerned, that the wishes of Council, where possible. I mean, the qualifier there does leave me some serious issues. I mean, where possible in your opinion. That's what is concerning me. And would it not be better advice to the administration and to the government to pass -- to follow the law duly enacted by Council? Allow the administration to challenge that in a court where a judge, whose job it is to make decisions on whether legislation is valid or not, would then make a decision and we'd go from there. As opposed to, you know, a civilian -- albeit an attorney, but a civilian employee of the government who is 2997 Budget - 4/12/05 not elected saying that the Council, who is elected, don't follow what they pass because, you know, you don't have to. Don't you find that somewhat concerning? THE CITY SOLICITOR: I can understand from your perspective your concern. But again, I go back to the point -- and I'd like to just reiterate -- that I have to -- and my predecessors have spoken and delivered opinions as to what they believe the law requires. With regard to the Charter and the law of Philadelphia, there are clearly powers which are reserved to the Mayor and to his administration. And with respect to those powers reserved to the Mayor and his administration, I would have to deliver an opinion in my best judgment as to whether I believe that Council enactments, if you will, cross over the line into those prerogatives and those powers of the Mayor. I think that is a responsibility that any City Solicitor has under the 2998 Budget - 4/12/05 Charter.

Councilman Kenney

I don't think I disagree with you on that point. I think you are required and responsible to give your learned researched opinion on what the law -- what you think the law is. But as not -- as not a member of the judiciary, and as not a member of the legislative body, why should the -- why should the view or the opinion of one City Solicitor supersede in some way the elected legislative body and/or a court of law which is empowered to make those decisions on whether or not a law is legal or binding? THE CITY SOLICITOR: I think the most direct answer that I can give you, Councilman, is that that is what I understand the Charter to authorize and expect and, indeed, perhaps, require the City Solicitor to do. Where there are potential conflicts of interest, as I had indicated earlier, with respect to the interests of our clients, the Mayor or City Council, as it may be, on the 2999 Budget - 4/12/05 same issue, the same Code of Conduct indicates that we should screen ourselves from those conflicts. We should make sure that we are providing fair and objective counsel and advice to all of our clients. And where it is necessary and appropriate, I am fully prepared to authorize outside counsel to protect the prerogatives of Council wherever appropriate.

Councilman Kenney

Wouldn't you think that in this particular case that we've talked about for a little while now would be one of the clearly conflicted situations, where the very powers of the branches of government are in conflict with each other, wouldn't it be appropriate to then step back and say, you know, I can't -- I am in conflict with both my clients? And I mean, based on the very -- on the very basis of what their power is. This is not just, you know, whether or not a contract is legal. This is about the role of the two branches of government. And once 3000 Budget - 4/12/05 you're in the middle of that conflict, it would seem that the City Solicitor should say, I can't make a decision between those two clients. We should get outside counsel. THE CITY SOLICITOR: Well, I go back, if I may, to my earlier answer. And that was that we prefer to provide transparent and clear advice. And we prefer to provide that advice early in the process so that we can advise both our Council member clients as well as the administration of how we see particular legislation and as to its legal efficacy. If there comes a point in time where there is a significant disagreement, with respect to the administration and Council's views, of the legal responsibilities under an ordinance, as you suggest, duly enacted by Council, then at that point if Council says, we want to have outside representation to protect our interests, City Solicitors in the past and this acting City Solicitor commits to you today, that you will have outside representation to protect your interests. 3001 Budget - 4/12/05

Councilman Kenney

Again, I don't want to beat this horse to death further, but... And I will contemplate -- most likely put together a letter asking for you to revisit this issue. But I agree with you in total up until the point where your advice -- potential advice to the administration or to the executive is not to follow the law duly enacted by Council unanimously. That, to me, I think is where you and I may depart on this particular issue. But I will look to prepare something for your... Take a look at it again. Perhaps you'll be authorizing outside counsel. THE CITY SOLICITOR: And Councilman, if I may very briefly just respond. I don't want my testimony to be mischaracterized, and I don't mean it in any kind of a... I just don't want my testimony to be mischaracterized as somehow saying that I would advise a client not to follow duly enacted law. What I really intend to suggest is 3002 Budget - 4/12/05 that I am trying to, in these instances, determine what I believe the law to be. I would welcome a letter from you. I would welcome the opportunity to respond, particularly after I've taken a look at the particular facts of this matter. And should it come to a point where Council believes that outside representation of its interests are needed, I would be prepared to take that action.

Councilman Kenney

Thank you. And again I apologize, because this was not your decision. You are defending a decision that was made by a previous City Solicitor. But I think in the end, the ultimate decision or advice from that lawyer to his client, the Mayor, was don't follow the law we passed. And I think that's -- And I don't need you to comment on it. That's my opinion. And I'll be contacting you shortly by mail. Thank you. 3003 Budget - 4/12/05 THE CITY SOLICITOR: Thank you.

Council President Verna

Thank you. The Chair recognizes Councilman Goode.

Councilman Goode

Thank you, Madam President. Good afternoon, Solicitor. THE CITY SOLICITOR: Good afternoon, Councilman.

Councilman Goode

Congratulations on your appointment. THE CITY SOLICITOR: Thank you.

Councilman Goode

I have two areas of interest this afternoon, first starting with -- THE CITY SOLICITOR: Thank you, sir.

Councilman Goode

-- the City's lease with S.E.P.T.A. which was executed on September 27, 1968, and expires at the end of this year. Could you please update me on the status of negotiation of that lease. THE CITY SOLICITOR: I think we responded, Councilman, within the last week to that matter, but let me just articulate 3004 Budget - 4/12/05 today where we are. We have undertaken a very serious analysis of the lease, leaseback agreement. We know that, at least according to our interpretation, meaning the City Law Department's interpretation, it would appear that the termination date is at the end of 2005, December 31, 2005. There is at least another school of thought, if you will, that's been expressed to me informally on behalf of S.E.P.T.A. What we want to do within the Law Department is to be able to advise the administration with respect to our conclusions, so that we can develop a negotiation strategy going forward. We have not yet formally commenced that negotiation, but I would hope to be doing that in the not too distant future and would be pleased to keep Council informed as to that.

Councilman Goode

And that information has already been forwarded to Council in writing? 3005 Budget - 4/12/05 THE CITY SOLICITOR: That is correct. And I think, Councilman, the letter may have been dated April 5th, if I recall correctly. April 4th, I'm told.

Councilman Goode

Thank you. As a follow up to that question, aside from looking at the legal ramifications of renegotiating that lease, is there someone looking at the economics of that lease and how it might benefit the City, in terms of privatizing certain services or other options? THE CITY SOLICITOR: I can't speak for the administration, but it would seem to me prudent to look at all reasonable options and look at all of the costs and benefits associated with those options, in order to make a determination as to a going forward strategy for a lease, leaseback negotiation, yes, sir.

Councilman Goode

Okay. I'll look forward to talking to you about that further. My second area of interest is the 3006 Budget - 4/12/05 executive order for minority participation that was prepared by the Law Department. Can you tell me why it has an 18-month expiration date. THE CITY SOLICITOR: I can't tell you as to the 18-month period, but I understand that we are currently in discussion with Council staff and the Law Department staff, in connection with eliminating what otherwise would seem to be a lack of synchronisity in the termination date of the executive order and the expected review of the disparity study and any updates that may be required. I believe that is about ready to be concluded successfully, in terms of that informal discussion, so that it would terminate at the later of the report that is required currently by the executive order or the updated disparity study, so that we don't have the disconnect that currently would appear on the surface to be there.

Councilman Goode

Thank you. THE CITY SOLICITOR: You're welcome. 3007 Budget - 4/12/05

Councilman Goode

Thank you, Madam President.

Council President Verna

You're welcome. Mr. Solicitor, on of your testimony, you indicate that the Neighborhood Transformation and Regulatory Affairs Unit will collect in FY 05 $3.4 million in increased fines. How does this compare to the original Mayor's revenue projection for FY 05? THE CITY SOLICITOR: There are -- There are two components of the revenue projection, insofar as the Law Department is concerned. There is first the tax collections. And let me just briefly summarize that, if I may, before I get to the Neighborhood Transformation unit number. But in connection with the tax collection projection, we had... I should say former City Solicitor Pedro Ramos had committed to City Council last year that the Law Department would increase its tax 3008 Budget - 4/12/05 collections by $10 million over the base of $90 million the prior year. And we are on target to exceed that by a significant amount, we believe now approximately $105 million. So, we will meet that commitment to City Council last year. With regard to the non-tax collections --

Council President Verna

Can you tell us where that would appear in the revenue estimates? We're looking at... THE CITY SOLICITOR: In terms of the Law Department?

Council President Verna

Yes. THE CITY SOLICITOR: For the Law Department, you're going to see that reflected in the revenue grants numbers, where you will see contingency fees to outside counsel reflected in the numbers. You won't see the exact. We don't account for these numbers in the City Law Department income, if you will. What you will see in our Law Department budget will be the numbers that we 3009 Budget - 4/12/05 pay out to collection firms, outside collection firms.

Council President Verna

Where would revenues be reflected in the budget? THE CITY SOLICITOR: To the best of my knowledge, I have not seen those revenue numbers reflected in the Law Department budget. They are reflected in the overall City budget revenue numbers. And the only way... And I will just ask my colleagues for confirmation. They're nodding their heads yes. The only way you would see our collection numbers reflected would be the extent to which we use outside counsel. And therefore, commissions or contingency fees paid to outside counsel would be reflected in the revenue grants numbers which are in the Law Department budget.

Council President Verna

I'm sorry. I was distracted. I'm talking about revenues. I'm not talking about fees. I'm talking about revenues. THE CITY SOLICITOR: And I guess... 3010 Budget - 4/12/05 I understand your difficulty. This is not a -- This is not a total budget reflective of both the income from the Law Department to the City General Fund or the other funds in total. These are the budget numbers that reflect before you the expenditures that we're requesting authority for in FY '06. And to the extent that part of our appropriation request would authorize to us pay outside collection firms for their success in helping us with both tax collection and non-tax collections, you will see those appropriations requests reflected in the revenue grants numbers. And I'm sorry if I'm not being clearer than that.

Council President Verna

Well, maybe Diane Reed could explain. Where would the revenues appear? THE CITY SOLICITOR: Madam President, the Budget Director advises me that she doesn't have that information at hand. Could we provide that to you, for the record? I understand that this is of 3011 Budget - 4/12/05 concern to you. We want to be forthcoming, but it's not going to be reflected in the Law Department budget.

Council President Verna

As I said, we don't know how to compare the original Mayor's revenue projection for FY 05. The revenues to us would appear to be much less than originally projected. But I'd like you to get back to us on that, please. THE CITY SOLICITOR: I'd be happy to, Madam President.

Council President Verna

On 23-4 of your detail, you have listed a general budget reduction of $1.1 million in Class 200. Can you explain this reduction, please? THE CITY SOLICITOR: Just one moment, Madam President.

Council President Verna

Sure. THE CITY SOLICITOR: Sorry, Madam President. I was confusing the section 23 number with the page number. The number that you're referring to which appears in Section 23 on , the 3012 Budget - 4/12/05 $1.1 million, the majority of that, about $680,000, reflects the technology investment, if you will, in some of the enhanced collection activities by the Law Department that we discussed before, which is going to allow us to back out of some of the commissions that we were otherwise paying to the outside collection firms. So, this was an investment in internal capacity in the Law Department to do the collection work, which means that we then did not have to pay the commissions to outside collection firms. About $500,000 reflects a reduction in our budget request for Class 200 dollars which is consistent with what other agencies and departments have had to deal with.

Council President Verna

We would certainly appreciate a breakdown. THE CITY SOLICITOR: We'll be happy to provide that to you, Madam President.

Council President Verna

Thank you. On -17 of your detail, you show $10,000 bankruptcy, TWA, US Air, Metal 3013 Budget - 4/12/05 Bank. Why isn't this being charged to the Aviation Fund? You are also asking for $40,000 P.G.W. multi-site agreement. What is it? And why isn't P.G.W. paying for it? 23-17. THE CITY SOLICITOR: Okay. Let me just refer to the contract that's related to the P.G.W. with multi-site agreement. These are environmental clean-up issues where we have both on behalf of P.G.W. and on the City, engaged in contract work with this particular firm, when it's done on behalf of P.G.W., even though it has been reflected on the City Law Department budget. Those numbers are reimbursed by P.G.W. to the City Law Department, where we have other environmental work where we use this firm. And then those numbers are paid for out of our budget without reimbursement. In connection with the --

Council President Verna

Excuse me. I just don't understand why they would even be in your budget. THE CITY SOLICITOR: I'm sorry, 3014 Budget - 4/12/05 Madam President?

Council President Verna

I don't quite understand why this would be in your budget. THE CITY SOLICITOR: It is an anomaly, if you will, of a past practice. It is one that we are changing. In fact, this year, this fiscal year, I've spoken to the P.G.W. general counsel. And going forward our intention is to have P.G.W. contract directly on behalf of these services needed for P.G.W. and not City-wide. But we're looking at a three-year snapshot in connection with our budget request. So, you're seeing the year before the current year and the year to come. And so, you'll see some of these transactions which may no longer reflect where we're headed, but they remain for this three-year snapshot on our budget tables.

Council President Verna

Did you respond to the $10,000 bankruptcy T.W.A., U.S. Air, Metal Bank? My question is, why 3015 Budget - 4/12/05 isn't this being charged to the Aviation Fund? THE CITY SOLICITOR: Well, we have used this particular firm on bankruptcy matters unrelated to the Aviation Fund. I don't know why in this particular matter we have listed T.W.A. and U.S. Air as well. But the Metal Bank matter is one that is related to a super fund cleanup issue for the City. And in that particular context, we've been quite successful in -- through the bankruptcy procedure which took place in Missouri, is my recollection, over the last year. We wanted to make sure that in protecting the City interests. We were being, I think, quite aggressive. And as a consequence of the work that we did, both in connection with the super fund litigation and in the bankruptcy proceeding in Missouri, we were able to eliminate the potential outside liability to the City of something on the order of $20 million to $25 million. 3016 Budget - 4/12/05 So a $10,000 investment for bankruptcy, even though it may be mislabeled, with regard to T.W.A. and U.S. Air for this reason that I mentioned before, that we're looking at a three-year snapshot, but for that confusion. This is unrelated to the Aviation Fund. And I'm also reminded that if you look, Madam President, on of this particular budget submission, where we have the Aviation Fund legal services mentioned, you'll also see the remainder the bulk of that same contract for the same firm reflected in the Aviation Fund category. We have many situations like this where we have a contract with a particular firm. And depending upon the nature of the work that's being done, bankruptcy could be handled for any number of the funds. We allocate the dollars to where we believe the work is being done. And in this particular instance, it would appear that the firm did some General Fund work at about a $10,000 level. 3017 Budget - 4/12/05 And you can see that over some $54,000 is allocated to the Aviation Fund for the same firm.

Council President Verna

Thank you. On -16 of your detail, you show $20,000 for Keel Communications media context, $120,000 for Wojack and Associates, lobbying services, and $50,000 HIPAA Compliance, City and P.G.W. Can you explain these three contracts and the services we receive and why the General Fund is paying for P.G.W. and HIPAA Compliance? THE CITY SOLICITOR: Let me start with -- Let me start with the Keel Communications contract.

Council President Verna

Mm-hmm. THE CITY SOLICITOR: In fact, this is an area where I, to the best of my knowledge, we haven't used that contract opportunity. But going forward it seems to me that as part of our tax collection efforts, one of the improvements that I'd like is to 3018 Budget - 4/12/05 see us having greater visibility and publicity given to the City's efforts to collect from delinquent taxpayers. And I would think that we'd want to be using a firm that has this kind of communications capability. We haven't been spending, but I'm now of a mind that we should be looking to publicize our efforts to enhance our collections. With respect to what is listed here for Wojack, I personally would have probably characterized it as legislative services. It has been important, in connection with the work done on behalf of the City and the General Fund, for us to have a presence in Harrisburg, to keep abreast of what is going on with regard to the General Assembly and related offices in Harrisburg. One of the successes that I mentioned in my formal written testimony, Madam President, was in connection with the success that we had in increasing the ability of the City to impose fines and to collect additional fees which would benefit the 3019 Budget - 4/12/05 General Fund. For many years -- I'm told for well over a decade -- the City has been trying to increase the $300 fee limit and fine limit which is currently imposed. The General Assembly this past year did authorize the City to do that, up to $2,000, subject to an annual increased cap of $400. That's the value of these kinds of services which are performed on behalf of the City and on behalf of the General Fund. With respect to the P.G.W. matter, again, any work that we do on behalf of P.G.W. is subject to reimbursement. And so, therefore, the General Fund is not ultimately responsible for those expenses.

Council President Verna

The Chair recognizes Councilman Nutter. Thank you.

Councilman Nutter

Thank you, Madam Chair. Good afternoon, Mr. Diaz. First... Which I'm sure these 3020 Budget - 4/12/05 issues will come up at a different hearing, but since I think this is your first appearance since being nominated, what is -- what will you -- what will your policy be with regard to requests specifically by members of Council? And if you've answered this question already, you'll just tell me, regarding legal opinions on any number of matters. Are they -- When -- When they are completed, does it solely come to the member? Is it a public document? Is there discussion as to whether or not the member wants it kept public or private? What do you anticipate your policy to be on that in that regard? THE CITY SOLICITOR: I did respond, but I'd be happy to summarize very quickly for you, Council member. We have, I think consistently, and my policy and approach on this would not be any different from former Solicitors. We recognize that we represent the Mayor and all 17 members of City Council. We prefer to offer written advice 3021 Budget - 4/12/05 that can be shared so that all of our clients can be comfortable that they are getting consistent and uniform advice in a transparent way. But where we get a request from a Council office to keep the advice confidential, our policy is and will remain to honor all such requests.

Councilman Nutter

Okay. And how does it work with regard to a legislative matter? And again, if you went over this, don't go over it again. A bill gets introduced. It's going through the process. At some point in time a document will appear. Is that just a general service? Is it for the purpose of trying to assist a member in, you know, making the -- putting the legislation in its best form or advising of potential legal issues? What is the -- What's the policy and what's the purpose? THE CITY SOLICITOR: I think you summarized the purpose. We want to be helpful, in terms of our advice, and timely, 3022 Budget - 4/12/05 and to assist in the development of legislation that is going to be effective legally. In terms of our policy, we want to make sure that we are providing consistent, uniform, transparent advice. And I think you can summarize why.

Councilman Nutter

Well, I'd only -- Making no comment whatsoever because you have highly competent people over in the unit, but I would only suggest to you as a legislator that there are times when that advice, possibly... We introduce a lot of things around here, and sometimes you don't know when something's going to move or not. But the timeliness of the advice can often be helpful or can be -- That's okay. I know where you are -- or it can be a hindrance to the process, depending on when it arrives. And so, I would only suggest to you that sometimes, rather than just receiving the document possibly a day or so before either a hearing or even in some instances 3023 Budget - 4/12/05 maybe before action to be taken by the body, some amount of dialogue could be helpful to the process, so that it's not viewed in some instances as more of a game of gotcha. And, you know, I just want to point out to you that other than maybe the words being spelled correctly, the bill might possibly violate either the Home Rule Charter or the state constitution or, you know, treaties with three small countries in other parts of the world. It creates at times an environment that is not necessarily conducive to getting things done, as opposed to a fight. And, I would much rather always get along than have a fight. So, we can have further discussion about it, but there might be a timing issue here that could cut down on some of the swordsmanship. THE CITY SOLICITOR: I think it's a very helpful reminder that legislators act in a realtime way. And our advice, if it is to be useful, has got to also be in realtime. I 3024 Budget - 4/12/05 will certainly keep that comment in mind, as we try to meet your needs going forward.

Councilman Nutter

I appreciate that. And I know, again, we put a lot of things in the -- We put a lot of things in the mix. And it's very difficult to keep track and also know what is going on in our various minds about the timing of what we're going to do and how we're going to do it. Having said that, the advice is always appreciated. The work product has been excellent. Even at times when I completely disagreed with the analysis, I appreciate the -- I appreciate the effort. Let's talk about -- THE CITY SOLICITOR: I wish you had been here when Councilman Kenney was putting me through my paces. Thank you. And I will share your comments with your colleagues.

Councilman Nutter

Thank you. I'll read the transcript. Let's go to Section 23-16 of the 3025 Budget - 4/12/05 budget book. First, can you explain to me... There's an item that seems to have a variety of abbreviations. Can you explain what the -- When you go into minor object code 253, there's a whole series of firms' names, with no dollar amount for FY 05. And then there is a large item on under various legal services as required. First, what is this line item? The first one is across from... Is that Christie Parabu. THE CITY SOLICITOR: The first one I have on my list, Council member, is Ballard Spahr.

Councilman Nutter

Okay. Right. I guess you're right. That one actually does have a dollar amount next to it. We've got labor. I figured that out. What is this next category which seems to be repeated on any number of occasions? THE CITY SOLICITOR: Well, I think 3026 Budget - 4/12/05 it will come as no surprise, Councilman Nutter, that what we have tried to do in the budget presentation is to honor both our responsibility as lawyers, which I did discuss earlier, in not providing detailed information about representation of clients or the amounts being spent on their behalf related to the Federal investigation. And what we have done is to list for your information the firms with which we have contracts. In some cases they cover more than just the Federal investigation and the client representation. So we're talking about investigation, cooperation and client representation.

Councilman Nutter

That's what that line is, that I.M.V.S.T. So this is investigation, cooperation/client representation. Is that what that is? THE CITY SOLICITOR: That is correct.

Councilman Nutter

Okay. THE CITY SOLICITOR: And then what 3027 Budget - 4/12/05 we have done at the bottom on Section 23, now how I realize the Council President was numbering these, Section 23-17. The number that shows for the General Fund in FY '05 as $863,192, there is not only in that amount in cooperation activities of the City with the Federal investigation and client representation, but we have other miscellaneous outside counsel. That essentially is a grouping that allows us to cover costs as they occur that may not be entirely foreseeable. Right now we're using, with respect to this category, some additional monies for the labor negotiation re-openers. We're anticipating that we'll have some expenses --

Councilman Nutter

Those dollars are contained within the $863,192? THE CITY SOLICITOR: That's correct, with regard to the General Fund. You will see in the Aviation Fund $109,000 which is comparable to the eight sixty-three number on Section 23-17. So, if you were to look at -- 3028 Budget - 4/12/05

Councilman Nutter

You've got legal fees in the Aviation Fund related to the Federal probe? THE CITY SOLICITOR: That is correct. And that appears on -35.

Councilman Nutter

You're able to charge those costs to the Aviation Fund? THE CITY SOLICITOR: See, $109,000 in FY '05.

Councilman Nutter

Yeah. I see it. THE CITY SOLICITOR: Let me just -- Let me just comment that one of the things that we have been doing through outside counsel representation -- And I'm not sure that it's fully understood. We have made sure that we have been responsive and timely in our cooperation with the U.S. Attorney's Office. That has entailed a great amount of work, to be responsive to requests for documents subpoenas, things of that like. In fact, what we have seen to date is that we responded to more than 60 document subpoenas. 325 document pages have been 3029 Budget - 4/12/05 reviewed, 200,000 e-mail messages reviewed. 30,000 gigabytes of computer data --

Councilman Nutter

Are you reading from a document that we have or are these your own notes? THE CITY SOLICITOR: These are my own summary notes.

Councilman Nutter

Okay. THE CITY SOLICITOR: So, when we talk about the investigation/cooperation line and client representation, we're talking about a great deal of activity that allows the City to be responsive to the U.S. Attorney's Office in its request for information.

Councilman Nutter

Let me ask this question: Solely for the Federal corruption investigation up through and, I guess, including today... So, I only want to talk about matters that have been in court as of today. What were the FY '04 costs related to the Federal corruption probe? THE CITY SOLICITOR: I cannot give you that number. And the reason why, 3030 Budget - 4/12/05 Councilman, is because we don't distinguish between whether it's a matter in court or not. If it's related to the investigation and to the representation of clients --

Councilman Nutter

Well, when you say the investigation -- THE CITY SOLICITOR: -- we could give you that number.

Councilman Nutter

When you say the investigation, what investigation are you talking about? THE CITY SOLICITOR: I'm talking about the information requests and other investigative matters, some of which we do not know any details at all about, that --

Councilman Nutter

Fine. Let me rephrase -- THE CITY SOLICITOR: -- that have been initiated by the U.S. Attorney's Office or the F.B.I.

Councilman Nutter

Fine. I understand. Then let me rephrase the question. Up through today, what were the costs 3031 Budget - 4/12/05 associated with the corruption probe for FY '04? THE CITY SOLICITOR: In terms of the Federal investigation, the number that we have for FY '04 is $2,036,217, which includes all City-related expenditures for FY '04.

Councilman Nutter

Okay. And up through what is now, I guess, the third quarter of FY '05, what have the costs been so far, either expended or anticipated? THE CITY SOLICITOR: I can give you a number as of April 6th, which is the latest calculation that we have concluded.

Councilman Nutter

Right. THE CITY SOLICITOR: And for FY '05, the number that we have calculated is $944,260. That's as of April 6, 2005.

Councilman Nutter

Gotcha. And what at the moment are you estimating... I'll hold that part of the question. What did you estimate them to be for FY '05? THE CITY SOLICITOR: We estimated in 3032 Budget - 4/12/05 the budget category, that included some additional matters. Not exclusively for the Federal investigation for '05, we had estimated $972,000, is my recollection.

Councilman Nutter

Okay. Do you think that -- But we still -- I mean, we still have, in essence, about a quarter to go. THE CITY SOLICITOR: I'm sorry?

Councilman Nutter

We still have, in essence, about one quarter of the fiscal year left: April, May, June. THE CITY SOLICITOR: That's correct.

Councilman Nutter

You estimated $972,000. You're presently at $944,000. Do you believe that you'll stay within your estimate or will it exceed the estimate, fiscal year '05? THE CITY SOLICITOR: Our current best estimate is that not only for the Federal investigation, cooperation and client representation, but also the labor negotiation reopeners and some of the things I mentioned earlier, that we are going to 3033 Budget - 4/12/05 require just under an additional $300,000 in FY '05. And I have communicated that information to the Budget Director.

Councilman Nutter

So you think in FY '05 you'll need an additional $300,000 for probe-related and non-probe-related matters. THE CITY SOLICITOR: For contract requirements in '05. That's with, to be very honest, a very aggressive management of our contracts in all areas. But in terms of the Class 200 dollars that will be required, over and above what we have previously projected. We're going to need just under $300,000.

Councilman Nutter

And within the $300,000 how would you break out the labor-related matters versus the probe-related matters? THE CITY SOLICITOR: I can calculate in a minute or two, if you will give me that time.

Councilman Nutter

Sure. THE CITY SOLICITOR: If you want to go on to the next question, I will come back 3034 Budget - 4/12/05 to that number.

Councilman Nutter

Well, the next question is, what do you anticipate the FY '06 probe-related costs to be? THE CITY SOLICITOR: Of the number, I actually have it now. I can go back to that, Councilman.

Councilman Nutter

All right. THE CITY SOLICITOR: I had said that just under $300,000 in additional authority would be required for our Class 200 funding, inclusive of the Federal investigation. That number was actually $286,580.

Councilman Nutter

Two eighty-six five... THE CITY SOLICITOR: $286,500, Councilman.

Councilman Nutter

So, that's the real number. THE CITY SOLICITOR: That is the number that we are projecting now in additional funding that will be required. I've backed out the numbers that we have for the labor negotiation reopener work. 3035 Budget - 4/12/05 And so, the remainder, backing out that labor negotiation work, it looks like for the Federal investigation itself that we'll need $166,580 in addition to what we have projected.

Councilman Nutter

So, the labor work is $120,000? THE CITY SOLICITOR: That's correct.

Councilman Nutter

Gotcha. Okay. And then FY '06? THE CITY SOLICITOR: For FY '06 we believe that the number we have in the budget before you is a good number. And that number is in the General Fund, $565,000; in the Aviation Fund that's $109,000, for a total of -- I'm sorry. For a total of $674,000.

Councilman Nutter

Okay. So... Let's see. We're at $2,036,217 for FY '04. We're at $1,110,840 for FY '05. That puts us at $3.1 million. And then you're at another six seventy-four... 3.8 or so? THE CITY SOLICITOR: Going through FY '06, that looks -- that certainly looks ballparkish. I haven't done the math, but 3036 Budget - 4/12/05 that loose ballparkish, Councilman.

Councilman Nutter

Looks like three eight two one oh five seven. THE CITY SOLICITOR: The number that I see my colleague, Mr. Lang here has is $3,817,051. Oh fifty-seven. Sorry.

Councilman Nutter

All right. So in the course of the three years, I mean, maybe we've got a 4,000 or so dollar -- maybe there's about a 4,000 or so dollar difference between us. And we'll figure that out in the course of the afternoon, but we're at three eight? THE CITY SOLICITOR: $3.8 million, I think, appeared to be a fair rounding. And yes, that appears to cover the '04, '05 and '06 projection at this time.

Councilman Nutter

Okay. THE CITY SOLICITOR: And of that I would just go back and reiterate, based upon the information I provided earlier with respect to the responses to the U.S. Attorney's Office, document reviews, subpoenas, et cetera, the vast bulk of that 3037 Budget - 4/12/05 expenditure is related to the City's cooperation with document requests, discovery, et cetera. And we've estimated just the production effort alone is taking about two-thirds of all of the dollars that have been spent or likely will be spent on the Federal investigation. And these are not the representation of individual clients, if you will, related to the use of outside counsel, but just the production of documents and cooperation on behalf of the City, relative to the Federal investigation. We're spending about two-thirds of all those monies just on that effort alone.

Councilman Nutter

So you're saying two-thirds of the 3.8... THE CITY SOLICITOR: At least two-thirds.

Councilman Nutter

...is dealing with documents and the review or production of documents? THE CITY SOLICITOR: Review of the 3038 Budget - 4/12/05 documents, the electronic materials that have been produced, all of the efforts on behalf of the City to be responsive to the Federal investigation. Our calculation, if I recall correctly, was 67 percent. 67 percent of the numbers that we had spent in FY '04 were related to the kind of activities that I mentioned.

Councilman Nutter

So, I mean... All right. Two-thirds of three eight sounds like 2.6? THE CITY SOLICITOR: In round numbers, I would accept that, yes.

Councilman Nutter

Okay. So, $2.6 million in dealing with documents and reviewing documents and producing documents and $1.2 million in actual legal representation? THE CITY SOLICITOR: I think in round numbers that's correct.

Councilman Nutter

Okay. And before this started... I mean, have they already been budgeted in the Law Department, 3039 Budget - 4/12/05 these kinds of numbers, over the past few years? THE CITY SOLICITOR: I'm sorry, Councilman. Before what started?

Councilman Nutter

Before this whole situation started. I mean, the Law Department did not have these dollars in its budget in anticipation of massive... THE CITY SOLICITOR: Well, they certainly were not budgeted for this purpose. We were not privy to the thinking of the Grand Jury process nor the U.S. Attorney. And, so, therefore, if you're asking have dollars been reprogrammed? Were they available for this purpose? No, they were not available for this purpose in advance of the investigation commencement. We --

Councilman Nutter

So they came from somewhere else in the government. THE CITY SOLICITOR: That is my assumption, although I was not involved with the Federal investigation at that time.

Councilman Nutter

Okay. Well, I 3040 Budget - 4/12/05 mean, I know my time expired, like, so long ago I can't remember. But it's at least clear to say these dollars were not in your budget prior to this. They had to come from somewhere else in the budget, and therefore were not available for other General Fund purposes to fund other programmatic initiatives in other departments of the government. I mean, some one, some any number of agencies within this government have not had access to these funds to do what they do because they're now being utilized for this particular purpose. THE CITY SOLICITOR: Councilman, it's not that I don't want to be helpful to you, but it seems to me that goes beyond the scope of my competence or testimony. I can only speak to what we have been authorized to spend. I understand that former Solicitor Ramos requested and received a transfer ordinance to cover some of these additional expenditures. I can't speak to where they came from and what other purposes 3041 Budget - 4/12/05 as a consequence were affected.

Councilman Nutter

Now, I mean, the main, I guess the -- so far, the big trial seems to be wrapping up. At what point in time or at least for fiscal years gone by, why would we not receive -- I mean, you -- And I appreciate it. I mean, on the one hand we have a listing of the firms. On the other hand, we have no dollar amounts to go with them. So, I mean... I mean, we've made at least that progress because there was, I think, a fight about a year or so ago as to we couldn't even know who the firms were. Why can't the budget at least show for fiscal years gone by what the expenditures were at those times? Of course you can't anticipate what FY '06 is going to bring. And we're in the middle... toward the tail end, at least, of FY '05. Why can't the budget at least show us what the past expenditures have been for a previous fiscal year that has now been closed 3042 Budget - 4/12/05 out? THE CITY SOLICITOR: I will go back to an earlier response before you joined us, Councilman. And frankly, the Code of Professional Conduct which is applicable to all attorneys practicing in this jurisdiction, would essentially restrict me and any City Solicitor from providing that information without an informed consent from the clients represented. We are not allowed to provide that kind of information without the clients informed consent. It has nothing to do with our desire to make your review of the budget.

Councilman Nutter

You need the client's informed consent before you can tell at least the legislative body how the City's money is being spent? THE CITY SOLICITOR: Well, in terms --

Councilman Nutter

I mean, it's not the clients' money; it's the City's money, right? 3043 Budget - 4/12/05 THE CITY SOLICITOR: It is the City's money. I think you did acknowledge that we're trying to be responsive by providing the dollars that are being used for this purpose. We're also providing the firms that are doing the work for this purpose. It seems to me asking us to take the next step and provide the information as to the identity of the clients represented by the firms --

Councilman Nutter

I didn't ask for that. THE CITY SOLICITOR: I'd like to give it some more thought.

Councilman Nutter

I haven't asked for that. THE CITY SOLICITOR: Okay. Okay.

Councilman Nutter

Don't -- Don't -- I haven't asked for that. What I asked you was: You have a listing of firms. We know what the overall amount is. You know who's billing us what or 3044 Budget - 4/12/05 providing the representation. My question is: We've got a previous fiscal year. The books have been closed on that. You know what the expenditures are. And there's a listing of firms. And all I'm asking is, why is there not a listing of what the expenses were from back at that time? You can't do it for '05 because we're in that fiscal year, and you don't know what they're going to be in '06. But why would there at least not be a listing for a previous fiscal year which is over and done and you know what those costs are? How does that violate anything or say anything about what might be going on within the probe, other than what the expenses were in a previous fiscal year to any or all particular firms? THE CITY SOLICITOR: My recollection of a year ago is that, you know, in a similar set of questions and answers, then City Solicitor Ramos commented, if I recall correctly -- and I would concur -- that it 3045 Budget - 4/12/05 gives rise to perhaps erroneous conclusions about the involvement, non-involvement, intensity of involvement of individual represented clients. Whether we have released the information or not, certainly --

Councilman Nutter

We don't know who the clients are. THE CITY SOLICITOR: Please; may I finish the answer?

Councilman Nutter

Okay. THE CITY SOLICITOR: Whether we have provided the information to you directly or you have gotten than information and the public gotten the information from the press, certain clients and certain firms are clearly linked in the public's mind. And I think the information that we would provide to you, with regard to the expenditures as to certain firms, could give rise to erroneous conclusions about the clients represented. That would be our concern, Councilman.

Councilman Nutter

I understand. Okay. 3046 Budget - 4/12/05 Well, this... You've projected 500 or 600-some odd thousand between the Law Department, the Aviation Fund for the upcoming fiscal year. This... I mean, 3.8 over three fiscal years. I mean, it seems to be moving at about, you know, a million or so a year. Do you have any estimate of the total costs of this probe, you know, toward its conclusion? THE CITY SOLICITOR: I think what you will see, because we don't believe -- I don't believe that we have reflected an average cost that is, you know, divisible by three.

Councilman Nutter

No; I understand. THE CITY SOLICITOR: I think we have seen the Federal investigation costs of the City and perhaps the intensity of the investigation itself -- but I can't speak to that -- the costs to the City have -- have increased in FY '05 and... I'm sorry. Was that FY '05 or '04? Was it '04? 3047 Budget - 4/12/05

Councilman Nutter

Well, you had big up-front costs. THE CITY SOLICITOR: I'm sorry. '04. '04.

Councilman Nutter

Right. THE CITY SOLICITOR: You see a lessening of those costs in '05. And we are projecting currently that they will continue to go down. And we are hopeful that we are accurate in that projection in '06.

Councilman Nutter

All right. But at the moment, I mean, you would not feel -- you would not be able to definitively say that given where you're projected to be, that going over $4 million is outside the realm of possibility. THE CITY SOLICITOR: I have not heard anything from the U.S. Attorney's Office which would give me a confidence as to when the investigation would end and the responsiveness the City might anticipate and its related costs, no, sir. Okay. Thank you, Madam Chair. I'll come back. 3048 Budget - 4/12/05

Council President Verna

Thank you. The Chair recognizes Councilwoman Tasco.

Councilwoman Tasco

Thank you very much. Good afternoon. THE CITY SOLICITOR: Good afternoon, councilwoman.

Councilwoman Tasco

I'm just going to take you in a different direction and leave those questions to Michael. What is the policy -- I have an interest in the collection of outstanding real estate tax to the City of Philadelphia. And what is the policy around collecting those dollars? I have a situation where there is a property that is owned by an individual with over $350,000 tax and water bills owed to the City. And we proceeded to move to take the building under the N.T.I. acquisition program, but was told that the gentleman had a permit to work on the property. And as 3049 Budget - 4/12/05 long as he was working on the property, we couldn't take it. Now, does that make sense to you? THE CITY SOLICITOR: I'm not aware of that particular situation. But what I am assuming is that the question was related to the viability and the economic value of the property and whether it would continue to be usable as opposed to vacant, and not usable, and therefore acquirable for N.T.I. purposes. I'm not familiar with this particular circumstance. I'd be happy to provide a response on the record particularly, if you could be so kind as to give us an address. I will check it out and respond to you.

Councilwoman Tasco

Well, what is the process where your collections on a property, if the City -- if it is owed City money. I see that you have on the back of your testimony a chart of the taxes you have collected, real estate taxes you have collected. 3050 Budget - 4/12/05 And how long -- And, you know, what is the process, and how long does it take to collect the taxes or move to have the property taken to Sheriff's sale? THE CITY SOLICITOR: It is from our perspective, from a collection perspective, it's a long process. It's one where we attempt at every juncture to work with the taxpayer to seek a negotiated resolution. We meet with taxpayers each and every day. We try to be helpful to them to develop payment opportunities. But in the end, if it turns out that it is not possible for us to come to a satisfactory resolution or payment plan or other negotiated result, then the process of getting it to a Sheriff's sale for tax purposes is quite lengthy, I'm told as long as 18 months to two years.

Councilwoman Tasco

So, in the meantime the business owner gets another license to operate the business under another name. They get a license to open the gas in another name. And they get the electricity 3051 Budget - 4/12/05 opened in another name, proceed to run the business, and again get in the cycle of not paying the real estate tax. It is an issue that exists. And I think we need to figure out how we deal with that. This is not just this one property. I'm sure there are many. THE CITY SOLICITOR: I agree with you. It's a real issue. It's one that we certainly have grappled with. And I know from dealing with P.G.W., they've been dealing with it. One of the enhancements that we have been trying to put in place, not only within the Law Department, but working with Licenses & Inspections and the Revenue Department and other agencies of the City government, we want to make sure that when people come and request approvals and privileges, if you will, from the City, that we're also checking in realtime to find out what kind of obligations that they have outstanding to the city. Let me just give you an example. If 3052 Budget - 4/12/05 you're coming and requesting a business privilege license or you're requesting a contract or a lease with the City, we are now putting into our standard terms and conditions a requirement that people be up to date. I don't care what name you've used. But if we can relate it to you that you are up to date in connection with your City obligations with regard to taxes, with regard to payments of water bills, et cetera. So, therefore, we are attempting to do that. It is not something that will happen overnight, certainly not with the antiquated legacy computer systems that we have. But we recognize it's a challenge that has to be met, and we're working on it right now.

Councilwoman Tasco

But it's been going on -- You just got here, so I just want you to know it's a problem that has been going on for so long. And the City in the end loses dollars because they never collect the real estate tax. But the business has the 3053 Budget - 4/12/05 opportunity, continues to operate, probably by the same owner, just using different names and different individuals to gain licenses and permits to run that business. I think that we need to find a way to move more quickly on taking these businesses to Sheriff's sale, particularly if you look at some of the businesses. And they've been working with the Revenue Department to try to make agreement after agreement after agreement. And I'm certainly pro-business, but you don't see the blight that ends up in the community as a result of what goes on in the community. A building will sit for two or three years. We don't move to Sheriff sale. We don't move to collect the taxes or they come back and they reopen under another name or assumed name or some other way they do it just to operate. And the City's still out the money that we should collect. And we could put it in the General Fund. THE CITY SOLICITOR: We agree with 3054 Budget - 4/12/05 you. And I think we're moving in the right direction. We certainly need to keep moving aggressively in that direction. But one of the things that we're, I think, projecting right now, and we're very pleased with -- and we need to stay committed to it -- is that last year former City Solicitor Ramos committed to City Council to increase tax collections by $10 million. Our best projection right now is that we expect to increase those collections this year by $15.6 million over the previous fiscal year. Part of that has come from the improved technology, the investments that we have made within the Law Department. Part of it has been to realign the way we collect older delinquent accounts. We previously paid commissions to collection agencies, that we paid out of our own pocket, which are now reflected, as Council President knows, in our grant revenue budget line items. But now we are moving with regard to 3055 Budget - 4/12/05 tax collections, and in particular with the Linebarger firm which is doing the City's older tax collections right. We're using our statutory fee provisions, so that rather than having it come out of the City's pocket, the statutory attorneys' fees of percent are being used 9 to compensate the Linebarger collection firm. 10 That means that the City does 11 better, in terms of its bottom line. We 12 increase the opportunities for collection. 13 And we're continuing to be as aggressive as 14 we possibly can. 15 But we also are looking at, internal 16 to the Law Department, with the realignment 17 of our resources, to not only just have liens 18 that sit unpaid and without, you know, any collection on, as far as legal title is concerned. We have instituted a process within the Law Department where we have organized a judgment execution unit. We taken the judgments that we have already -- if There are liens, we have tried to get them to a 3056 Budget - 4/12/05 judgment. If we have a judgment, we want to actually execute on those judgments. We want to make sure we're taking every step that we can, within our statutory authority, to collect all of the money that we're owed sooner than before. And yet we have to certainly balance that concern against those of the taxpayers who think in some instances that we need to be mindful of their particular circumstances. It's a balance, but on balance we think that we're got to make sure that the City's revenues are protected and collections continue to increase.

Councilwoman Tasco

Thank you. Let me just go a little bit to the City Council Ordinance and the Executive Order 205. How is it that you determine -- How do you determine whether an executive order is better than an ordinance, as in the case of our City Council's ordinance around the MBEC program and the Law Department's 3057 Budget - 4/12/05 issuance of a statement that it was -- the ordinance was not legal, and then the subsequent 205 Executive Order. THE CITY SOLICITOR: I don't know that I would feel qualified to testify as to which is better, but I can testify as to which we believe is legally sustainable, and with respect to the contracting activities and the expectations of the ordinance. Certainly because these are -- have been long the subject of City Solicitor opinions, which have found that in the area of contracting, that the areas that were addressed in the former ordinance were areas that were within the Mayor's prerogative. Certainly the legal authority is there to address the MBEC related matters through an executive order. In addition, if I may continue... In addition to that the passage of time certainly made it necessary that the former disparity study be updated which was done and was the basis for the Mayor's executive order. 3058 Budget - 4/12/05 I understand that there has been an interest expressed by City Council to make sure that the expiration date, which previously was months, be synchronized, if 6 you will, and recognize the need to update 7 the disparity study in the future. 8 And we have provided the Council 9 staff a proposed revision that we would will 10 be acceptable, which will provide that the 11 expiration date will be the later of the six 12 months after the presentation of the report 13 that is expected of MBEC by the executive 14 order or the update of the disparity study. 15 So, we are trying to work with City 16 Council to make sure that the executive order 17 addresses substantively the concerns of 18 Council, in a way that are consistent with the authority of the Mayor under the Charter. And we will continue to work with you in every way possible to try to meet your needs, consistent with the Charter responsibility of the Mayor.

Councilwoman Tasco

When you were... Do you see it's your responsibility 3059 Budget - 4/12/05 to look at other cities, in terms of what they're doing around ordinances in this area and their legality, in determining how you came to your decision? Or you just looked at it from your point of view, without looking at other cities, to see where they have adopted ordinances around minority participation and the legality of such? THE CITY SOLICITOR: Well, in terms of the authority of the Mayor and Council, it's clear to me that it's not going to be especially helpful for me to know what the law is in Dallas, Texas. But in connection with the best practices, and what can be learned from looking at what others have done around the country, you know, obviously we are trying to address a system of need here in Philadelphia, that reflects the successes in other places, the best practices, if you will. From everything that I have seen in the executive order, it has been developed in a way that we think takes into account what 3060 Budget - 4/12/05 others have experienced, tried to avoid the Constitutional and other legal challenges that other municipalities and the Federal government have encountered, with regard to this kind of effort. And we've also recognized the local experience, in terms of the need to not look only at City contracting. We've got a very significant budget impact in the City of Philadelphia. But when you look at it relative to the private market, clearly, if there are opportunities to look beyond the City and to help, in terms of minority, women owned and disabled business owners to look for opportunity, we have an obligation to do that. So, the executive order in many respects goes well beyond the authority -- The executive order goes beyond the authority that is applicable to City agencies, and tries to create an opportunity for replicating our success in connection with non-profits, in connection with the private sector, by creating task forces that are 3061 Budget - 4/12/05 broader than just City agencies and the City government.

Councilwoman Tasco

I guess my question, though, is, have you seen successful ordinances in other cities that could have been and that were comparable to ours that have not been challenged and have been successful? THE CITY SOLICITOR: I personally have not seen such an ordinance. Not that they don't exist, but I just did not do that particular research, Councilperson.

Councilwoman Tasco

Well, would it have been helpful to do an analysis of research around other cities, to see if our ordinance would have withstood legal challenge? Or was the issue solely to determine whether it was Council's right or prerogative to issue an ordinance versus the Mayor's right to do so? THE CITY SOLICITOR: Let me just go back because I don't want to leave the misimpression, Councilperson, when I said I personally had not seen ordinances in other 3062 Budget - 4/12/05 cities as part of this effort. I don't mean to suggest that we have not within the Law Department done that kind of effort. Certainly there was a review. And I'm happy to provide for the record the results of that review. But you raised an issue that I think is important to come back to. And that is were there legal issues of potential deficiencies of the ordinance. And it seems to me that the most important one that I have to raise in that regard is our concern related to the staleness, if you will, of the record on the disparity study. So, one of the most important improvements, if you will, in connection with the substance of the executive order, apart from who should have addressed it, whether Council or the Mayor, substantively speaking, the updated disparity study, which was the baseline for constructing the current executive order, was critical, we think, to making sure, as much as we possibly can, that 3063 Budget - 4/12/05 our program withstands legal challenge. And the ordinance in and of itself, without that updated disparity study, we think would have been subject to challenge. And frankly, it was potentially vulnerable to such a challenge. We think we have addressed that in the current executive order.

Councilwoman Tasco

So, you think that because we didn't have the disparity study when we passed the ordinance made the ordinance somehow flawed and subject to legal challenge because the information that we drafted the ordinance on was stale. Is that what you're saying? Or could we have used the disparity study that you... that was used to draw the executive order to enforce the ordinance? THE CITY SOLICITOR: My recollection is that there was a disparity study previously done. But I think one of the improvements of the current executive order that we discussed a moment ago is that there is a need to have a review of the situation, in 3064 Budget - 4/12/05 terms of disparity, in the market for minority, women and disabled contracting. That has to be reflected in all of the benchmarks that are set, with regard to City contracting. It is a continuing area of concern, I think, in all litigation to ensure that we have a very narrowly tailored remedy to meet the Constitutional requirements that the Supreme Court has established for this kind of a program. It's an important program. I think we would all agree that we want to do everything possible to create the strongest foundation against a court challenge. We hope it won't happen. But if it does happen, we want to make sure that we have protected the program. We think this executive order does that. And with the new addition that we discussed to update that disparity study into the future, we think that we have a more robust legal basis for protecting the program.

Councilwoman Tasco

Thank you. 3065 Budget - 4/12/05 Thank you. CHAIRWOMAN BLACKWELL: Thank you very much. Councilwoman Blondell Reynolds Brown.

Councilwoman Brown

Thank you, Madam Chair. Good afternoon. THE CITY SOLICITOR: Good afternoon.

Councilwoman Brown

Let me start out by first commending you on your diversity statistics. The Law Department in the few years I've been here consistently does what I call get it right with regards to the hiring of women and people of color. And we would hope and expect that that trend would continue under your leadership. THE CITY SOLICITOR: Thank you, Councilwoman. And I, you know, like in so many things, we all stand on those -- the shoulders of those who have come before us. And as you know, I was hired by former solicitor Nelson Diaz. And his efforts in this regard were certainly continued by 3066 Budget - 4/12/05 former City Solicitor Pedro Ramos. I'm building on their record and those that have preceded them. And I know that it's of great concern to Council and to the Mayor. But independent of that, I will have to tell you, if no one had told me a thing about this issue, it's something that personally matters to me. And you have my commitment to build on that record.

Councilwoman Brown

We thank you for that. THE CITY SOLICITOR: Thank you.

Councilwoman Brown

On your testimony, you talk about -- in your opening paragraph there you talk about a number of the efforts that you intend to align. One of which, and I quote is, provide high quality public education and comprehensive coordinated social services for children, adults and families. Elaborate, if you will, on what you mean by high quality public education for that constituency. THE CITY SOLICITOR: One of the 3067 Budget - 4/12/05 things that, you know, I was reflecting on as I developed the testimony for today's hearing was that the Law Department doesn't exist in a vacuum. And I could have, you know, the Romey Diaz, you know, top hits list. But to be very honest, the most important thing, given the fiscal resources that we have, the challenges that the City faces...

Councilwoman Brown

Mm-hmm. THE CITY SOLICITOR: ...is that the Law Department has got to be there in support of the overall priorities of this administration and to meet the concerns of Council. For this year, reflective of our budget priorities, I have listed the ones that include high quality public education and social services. But an example of that is what we have done in connection with the realignment of our resources and the work that we have done with D.H.S. and Family Court, to make sure that we are providing quality team 3068 Budget - 4/12/05 approach representation services to the children in our social services system. We need to make sure that we don't have multiple hands touching our children unfamiliar with their cases. We need to make sure that we're giving consistent, integrated analysis and recommendations about those children in our system, whether it comes from the D.H.S. social worker or the Law Department, legal advisor representing that child in court, working with Family Court, to make sure that we are working toward a goal of getting these children into permanent placement so they're out of the system and while they are in the system, they're being given the best possible care and representation by the City.

Councilwoman Brown

Well, that certainly answers the follow-up question that I have which was about the partnership with D.H.S. and Family Court and the new development where you put here the list system has been reformed. So, that's a good thing when it comes to, I guess, the 3069 Budget - 4/12/05 efficiency in how we manage the case load for those families. THE CITY SOLICITOR: No; absolutely. And among the people with me today is our Chair for Social Services, Barbara Ash. She and her team are under tremendous pressure dealing with real world, real people issues day in and day out. They do a tremendous job. And we're so thankful to their efforts in protecting our children.

Councilwoman Brown

Well, I have to say I couldn't agree with you more. We've together had worked on a couple of adoption public service initiatives. And her work and commitment of that team was revealed. So, I could not agree with you more on that. On the bottom of , you talk about staffing levels being reduced. Are they due to layoffs or the D.R.O.P. Program or what? THE CITY SOLICITOR: They're principally related to managing our budget resources, making sure that our reductions in the staffing levels are sustainable without 3070 Budget - 4/12/05 damaging our capability to meet our commitments. I think every manager in America, whether public or private, has got to manage resources.

Councilwoman Brown

Sure. THE CITY SOLICITOR: We understand we're a part of that budget process. We're managing our resources. But at the same time, through hard work, and I never ever, you know, forget the fact that we've got a lot of people in the Law Department doing hard work. We think that we can maintain these reductions and meet our commitments to the City of Philadelphia and its residents. As part of that, we do have a few limited number of individuals in the D.R.O.P. Program. My recollection is that we had about a dozen in the program through 2009. And I'd be happy to provide you the specific numbers, but at least directionally about a dozen people over a several-year horizon. So, we're not talking about D.R.O.P. 3071 Budget - 4/12/05 as being our principle effort to reduce our numbers. It's through attrition and making sure that we're redeploying our resources to the highest value work in the Law Department wherever possible.

Councilwoman Brown

Okay. And then my final question speaks to the... I'm curious about the P.G.W. collection statistics in FY '02, FY '03 and FY '04. It says that an estimated -- and I guess the operative word is estimated -- $12 million was collected. But for '05 and '06 there appears to be a shift. Why was a decision made to shift collections to P.G.W. and how are they doing, based on what you know? THE CITY SOLICITOR: The best information I have, in terms of how they're doing, is that they're doing very well indeed. They've had a lot of support from the Council, in terms of making sure that they are moving forward and making those collections and not shifting the collection 3072 Budget - 4/12/05 burden onto others. But the latest information that I have is that the collection rate at P.G.W. has had approximately 93, 94 percent. That is significantly higher than they have been over the last few years, where they were in the mid 80s to upper 80s percentile range. And one of the things that the P.G.W. executives and general counsel and I, along with the former City Solicitors, talked about over the last couple of years, was giving them more tools to essentially focus their collection efforts in a holistic way and not just pieces of it. They felt that they had more of an incentive to do the collection work right, because it mattered to them as to their bottom line. We agreed with them. That shift has been made as of this last fiscal year. And so what we have attempted to do, so that you can compare apples to apples, is to reflect what we thought was in the base relative to P.G.W. 3073 Budget - 4/12/05 collections done by the Law Department in years past, and you could then measure how we were doing going forward. So the $90 million that we show for the Law Department non-P.G.W. work last year now can be compared to what we believe we're going to achieve this year. And by the end of FY '05, our projection is that we will collect $105.6 million, significantly over the commitment made by former Solicitor Ramos last year at this hearing when he said we would improve it by $10 million. We think this year with luck and a one-time major settlement, that we're going to get it up to $15.6 million over last year.

Councilwoman Brown

Okay, then. And then finally, on of the testimony, you talk about community development. Just briefly, what does that mean in the Law Department? What is that? THE CITY SOLICITOR: That is primarily the funding source for the attorneys representing our housing work. 3074 Budget - 4/12/05

Councilwoman Brown

Oh, okay. THE CITY SOLICITOR: The Community Development Block Grant which is... you know, continues to be under pressure, in terms of Federal funding is one that we have a concern with. But this represents the allocation from the O.H.C.D. folks.

Councilwoman Brown

Okay. THE CITY SOLICITOR: Based upon their Community Development Block Grant dollars that are used for housing attorneys in the Law Department.

Councilwoman Brown

Very well. Thank you for your testimony. THE CITY SOLICITOR: Thank you very much, Councilwoman.

Councilwoman Brown

Thank you, Madam Chair.

Council President Verna

You're welcome. The Chair recognizes Councilman Nutter.

Councilman Nutter

Thank you, Madam Chair. 3075 Budget - 4/12/05 Mr. Diaz, I need to... This was not on my list, but you responded to some questions by Councilwoman Tasco, talking about the executive order related to minority business. And I took down a statement that the executive order was an attempt to address many of the issues that have been raised by Council in the past and that you were trying to work with Council on the MBEC related issues. Is that a somewhat fair characterization of what you said earlier? THE CITY SOLICITOR: I don't recall having said exactly that, but I certainly recall having said that the Law Department was attempting to work with Council to address what I understand are some outstanding issues. I think we've resolved them, in connection with the future disparity studies and the termination date of the executive board, yes, sir.

Councilman Nutter

On the point of working with Council, could you explain to me what the nature of the work with Council was 3076 Budget - 4/12/05 in the development of the executive order? THE CITY SOLICITOR: Well, with regard to the development of the executive order, I understand that there was a concern expressed by Council -- and I am sure that is where you're coming from -- a concern expressed by Council that there had not been sufficient coordination between the Law Department on this issue and City Council.

Councilman Nutter

When you say "a concern expressed by the Council," I know... And Council is a quite wonderful collection of unique members. Was this a collective 15 expression? Were these individual 16 expressions? How are you aware of the 17 Council's concerns? THE CITY SOLICITOR: I recall a hearing on the executive order, and the prior ordinance that Solicitor Ramos testified at...

Councilman Nutter

Mm-hmm. THE CITY SOLICITOR: ...perhaps two months ago. I was in attendance and heard concerns expressed at that time. 3077 Budget - 4/12/05

Councilman Nutter

Okay. THE CITY SOLICITOR: That's my reference.

Councilman Nutter

I understand. So, what is your knowledge or information with regard to any involvement by the Council or any of its uniquely qualified members having been involved in the 10 creation of the executive order? What 11 exactly was the working-with-Council 12 relationship that you reference by way of the 13 Law Department? 14 THE CITY SOLICITOR: In that 15 context, I would stipulate to the fact that 16 what I heard was that Council did not believe 17 that it had been consulted --

Councilman Nutter

Okay. THE CITY SOLICITOR: -- fully and coordinated with, as to the development of the executive order.

Councilman Nutter

Do you have any information... THE CITY SOLICITOR: If I may, my testimony was with reference to now that the 3078 Budget - 4/12/05 executive order is out and there are some continuing concerns that have come to my attention from Council members, those have been addressed. I understand that we have an agreement as to those issues. Our draft revisions are now with Council staff. And I would hope that the Council, through its staff, would clear those revisions so that we could seek a revised executive order. So, I was speaking in terms of the recent past, not the --

Councilman Nutter

You said that you're aware of what the concerns of the Council were, and that you've sought to address them, and that there are people now working on these issues? THE CITY SOLICITOR: We have a draft. And, in fact, I had a conversation with Mr. McPherson last Friday about it. And I understand that we are essentially in agreement as to the revisions, and we are awaiting confirmation of that from Council staff. 3079 Budget - 4/12/05

Councilman Nutter

Okay. I'm just trying to understand the process. Did someone from the Law Department talk to each of the members individually or is this you just reviewed the notes of testimony from a particular hearing? How would you know what all the concerns were? THE CITY SOLICITOR: Again, I'm not talking about the origin of the executive order.

Councilman Nutter

I'm not either. THE CITY SOLICITOR: I'm talking about once the executive order was issued --

Councilman Nutter

It's now been issued. How do you know what the concerns are? THE CITY SOLICITOR: It was brought to my attention by members of the Law Department, who had been in contact with Council staff. And I understood that to be Mr. McPherson, among others. And those issues that had been raised we believe we have addressed in a proposed revision of the executive order. 3080 Budget - 4/12/05 Whether your office or you in particular have been consulted, we haven't gone behind the curtain to, you know, to ascertain that. We've been working with Council staff.

Councilman Nutter

Okay. So there's been no discussion with each of the individual members about this. You're working with Mr. McPherson, who's on the Council President's staff, and through that process you're addressing all of the concerns by the Council. Is that... THE CITY SOLICITOR: I have not had any individual conversations with Council members. We're happy, certainly, to have those conversations. And I think as I began my testimony, I'm now in my eighth day as City Solicitor. I would certainly put this as a priority, if you tell me that is your desire, sir.

Councilman Nutter

Okay. Thank you. I do appreciate that. In a slightly different area, I noticed on our financial disclosure form 3081 Budget - 4/12/05 there is an item that makes reference to honoraria and that we are supposed to list sources over $100. You're, I'm assuming, familiar with that. THE CITY SOLICITOR: I'm familiar with the concept. I don't have the form before me, nor am I familiar with the instructions immediately, with respect to that provision. But if you'll ask your question, I'll tell you if I can respond today or in writing.

Councilman Nutter

Sure. Whether under City law or the Home Rule Charter or any state statute, are we allowed to accept honoraria at all? THE CITY SOLICITOR: Councilman, because it is an important issue, and I don't want to give you an off-the-top-of-my-head answer, and because we're dealing with both state and local ethics rules, I would propose to provide that response to you in writing, if I may.

Councilman Nutter

That would be great. Okay. 3082 Budget - 4/12/05 There was testimony earlier by the District Attorney who made a statement with regard to the demographic composition of her office, and seemed to indicate that the racial and gender breakdown of the office was at a superior level. And I asked if she could -- and she agreed, and so now I'll ask if you can -- provide an overview and an analysis of the past five years for attorneys and non-attorneys a breakdown by race and gender in the Law Department, so that I can have a better understanding and make comparison between the two. You've mentioned some of the information in your testimony but we may want to go into a little more detail. Can you do that? THE CITY SOLICITOR: I'd be more than happy to provide that to you for the record. I don't have the information, in terms of the five past five years.

Councilman Nutter

No; I understand that. THE CITY SOLICITOR: But in 3083 Budget - 4/12/05 connection with our employee demographics, you know, we're proud of the fact that we have 50 percent minority staff, 69 percent women. We have just under 1 percent disabled. We are always committed to trying to improve on that record. And I'll provide the five-year statistics that you're looking for as quickly as possible.

Councilman Nutter

Last question. There have been many, many twists and turns, going back to the MBEC, over the years. Now, my recollection is, is that it was originally created by an ordinance of City Council. Is that correct? THE CITY SOLICITOR: I can't confirm that. I understand there was an ordinance. I don't recall if the so-called Ortiz ordinance created MBEC. I just don't recall that.

Councilman Nutter

No. It was back from an earlier -- an earlier point in time. I think it may have been 1983. Has there been a subsequent 3084 Budget - 4/12/05 executive order creating the Office of Minority Business Enterprise? THE CITY SOLICITOR: I am not personally familiar with such an executive order.

Councilman Nutter

Okay. So, my recollection is -- and I'm sure you'll check back at the shop -- that there was a bill 10 that was passed. I believe the Mayor vetoed it, the Mayor at the time. Council overrode the veto. The Law Department, of course, opined that Council did not have the authority to create such an entity. And one of the many opinions that is on the shelf somewhere in the Law Department, you know. When Council acted, and then you go into the room where you keep all of these opinions, like Formal Opinion Number 7 and a few others, and you just, you know, pull them down and hit us with what we can and cannot do. THE CITY SOLICITOR: Well, we consider them important precedent, Councilman. 3085 Budget - 4/12/05

Councilman Nutter

Yes. No; I understand. THE CITY SOLICITOR: And we rely on that. We believe it creates the continued consistency --

Councilman Nutter

I understand. I'm just giving you a hard time. THE CITY SOLICITOR: -- of legal analysis and opinion.

Councilman Nutter

Absolutely. Yeah. Sometimes the footnote is longer than the rest of the commentary on the page. THE CITY SOLICITOR: Well, we lawyers tend to like footnotes.

Councilman Nutter

I understand that. So, I'm just trying to get a little better understanding of the footing that we're on here, in terms of its standing at the moment, creation of a process and procedure by executive order. Councilwoman Tasco again raised the issue of why in this kind of matter. I mean, this is not your garden variety executive 3086 Budget - 4/12/05 order, based on the weight of the issue. And I think the executive order itself is upwards of maybe pages. Is that possibly one of 5 the longer executive orders in the City's 6 history? 7 THE CITY SOLICITOR: Again, I have 8 to confess I can't give you personal 9 testimony on that issue, but I will take the 10 point that it is a substantive and lengthy 11 executive order. 12

Councilman Nutter

Right. It just, 13 of course, begs to the next question which is 14 why we wouldn't create such policy by 15 ordinance which is law and has a slightly 16 higher standing in the whole scheme of things 17 than an executive order. But I think it would be helpful if you could in a separate document lay out the history of the creation of the first attempt by the City to set policy by way of minority business enterprise, the ordinance, in any subsequent either bills or executive orders that have been formalized since that time, and then provide a sense of what's the legal 3087 Budget - 4/12/05 status of the entity at the moment. THE CITY SOLICITOR: I'm happy to provide that for the record. And I'm sure we'll have the requisite footnotes. But I will tell you this, Councilman: Whether there is an executive order that existed or exists currently creating MBEC, it clearly does exist. It clearly is within the authority of the Mayor to allocate resources to the function. The mission, I think, of MBEC is clearly laid out in the executive order. It has a -- It has a clear going forward expectation. But I'll be happy to provide the review of the historical record on this point.

Councilman Nutter

It would be helpful. THE CITY SOLICITOR: And address the establishment of MBEC.

Councilman Nutter

Great. Thank you. Thank you very much. Look forward to working for you. I think we'll have a good time. Thank you. 3088 Budget - 4/12/05 Thank you, Madam Chair.

Council President Verna

You're welcome. The Chair recognizes Councilwoman Blackwell.

Councilwoman Blackwell

My light was on by mistake.

Council President Verna

Thank you. The Chair recognizes Councilwoman Miller.

Councilwoman Miller

Good afternoon, Mr. Diaz. THE CITY SOLICITOR: Good afternoon, Councilwoman.

Councilwoman Miller

Can you tell us what's happening with the lien sales? Has that program ended, lien sales? THE CITY SOLICITOR: The tax lien sale program -- The tax lien sale program has not ended. The tax liens have been sold. They are currently continuing to be executed upon, if you will, through the tax sale process.

Councilwoman Miller

But we're not 3089 Budget - 4/12/05 able to make substitutions, correct? THE CITY SOLICITOR: The issue with regard to the tax lien sales, Councilwoman, is that the pool of available properties to substitute for those coming up for sale is dwindling. As a consequence, it becomes increasingly more difficult to substitute properties in kind for those that would otherwise be subject to a tax lien sale. So, except for those properties that are legally deficient and the City has a responsibility to substitute, we have recently communicated that we do not have at this -- at this point the ability to substitute, at the request of Council members' offices, for those properties scheduled to be sold because the only way that we could generally make the tax lien servicer putting these properties up for sale would be through cash. And we don't have the budget for that, Councilwoman.

Councilwoman Miller

So, then, there absolutely won't be any substitutions. 3090 Budget - 4/12/05 That's what you're saying, correct? THE CITY SOLICITOR: Generally speaking --

Councilwoman Miller

If we don't have the cash. THE CITY SOLICITOR: Generally speaking that would be the policy. We, you know, continue to work with the tax lien servicer wherever there is an opportunity to address a concern. We try to do that. But bottom line is as you suggested.

Councilwoman Miller

Okay. Are there any programs that help delinquent real estate tax homeowners? Do you know? THE CITY SOLICITOR: I'm sorry?

Councilwoman Miller

Are there any programs that's available to help people that have delinquent real estate taxes if they are having a hardship, they're facing a hardship? THE CITY SOLICITOR: In fact, one of the things that we have instituted -- and I know that some Council members have participated in the conversations with the Sheriff and the Linebarger Firm about the tax 3091 Budget - 4/12/05 lien sales, is that, first of all, we want to make sure that we are making people aware of their options early on. For example, the Office of Housing and Community Development has grant programs that can be made available to those that otherwise might be subject to a tax lien sale. It's important that people know what their rights are early enough so that they can access them. And obviously funds are limited. But the unfortunate situation, as I understand it, is that some of these funds remain unclaimed, which means to me that we need to do a better job of letting people know what their options are before they get to the critical end of a long process that I described earlier, as taking as much as 18 months to two years to complete. And one of the things that I talked about earlier, Councilwoman, is the desire to use communication tools to let people know that. Last year we were focused on making 3092 Budget - 4/12/05 sure that we were developing technology and redeployment options that made sense, so that we could maximize our tax collections within the Law Department. As we have matured this program, if you will, it seems to me that we need to go out and communicate what we are doing and tell people that the City is serious, the City Law Department is serious about these collection efforts. But it's got to be a two -- It's got to be a two-pronged message. We're serious and we're going to collect, but we have options. Here they are. You need to know what they are. And you need to take advantage of them. That is the reason why I communicated earlier that we need to be looking at communication mechanisms. And that's one of the things that I have identified I'd like to focus on as part of our collection effort going forward.

Councilwoman Miller

Okay. All right. Very good. Thank you. 3093 Budget - 4/12/05 Thank you, Madam President.

Council President Verna

You're welcome. Are there any other questions or comments from members of the Committee? (No response.)

Council President Verna

Seeing none, thank you very much. Thank you. THE CITY SOLICITOR: Thank you, Council President and Council members.

Council President Verna

We will now hear from the Commerce Department. Good afternoon. Thank you for your patience. Kindly identify yourself for the record and proceed with your testimony. We do have a copy of your testimony. We will give it to the stenographer. It will be transcribed in full. So, I would just ask that you summarize your testimony if you will.

Ms. Naidoff

Be happy to do that. I'm Stephanie Naidoff. I'm the City Representative and the Director of the 3094 Budget - 4/12/05 Department of Commerce.

Council President Verna

Welcome. Good afternoon.

Ms. Naidoff

Good afternoon, Madam President and members of City Council. I'm seated here with Charles Isdell, the Director of Aviation; Duane Bumb and Mjenzi Traylor. I'm sorry. He was here just a few minutes ago. I'm sorry. Mjenzi Traylor, the First Deputy of the department. We're here today to present testimony on behalf of the department's FY 2006 operating budget request of $239,661,470, an increase of $13,039,032 over FY 2005 estimated obligations. Do you want me to skip through all those details, since they are on the record?

Council President Verna

I think everyone has... All of the members have a copy of your testimony. So, as I said, if you would simply summarize.

Ms. Naidoff

The Office of the City Representative is the part of the office that supervises the part of the budget that 3095 Budget - 4/12/05 involves the Class 500 dollars for the Philadelphia Cultural Fund, which recently awarded 224 local arts and cultural grants. In addition, they supervise the other parts of the City -- They supervise the provision of services to City ceremonies and other initiatives such as festivals and events, such as the Fashion Festival at Becook, and the Sunoco Welcome America Celebration. On the commerce side of the house, on the Department of Commerce side, we function as the coordinating entity for the City's economic development programs and initiatives. We directly manage the K.O.Z. programs, the neighborhood economic development programs, including those funded through the C.D.B.G. contracts, economic development related capital improvements, international business development including the Sister Cities Program, and business services through the Mayor's Business Action Team. 3096 Budget - 4/12/05 We also contract and work closely with P.I.D.C. and P.C.D.C. on loan programs and other business services, and the Urban Industry Initiative, an independent non-profit, that works with issues concerning manufacturing businesses in the City and the economic development arm of the Empowerment Zone and Renewal Community Programs are all housed within our office, so that we can better coordinate economic development activities. The next part of my testimony relates to the C.D.B.G. budget. And since that will be discussed at a subsequent hearing, I'll just go through that and turn to the new initiatives which discusses the blueprint and particularly the ten objectives which I reviewed recently with Council in two hearings. I list the two objectives -- the ten objectives there, and talk about the fact that these objectives will provide the framework for the initiatives and priorities that our department will pursue. 3097 Budget - 4/12/05 I then go on to talk about the large-scale development projects including the Cira Center and Comcast Center, both of which are under way and will provide more than 2 million square feet of new office space in Philadelphia. We also note the residential renaissance taking place, particularly in Center City but also throughout the neighborhoods, as a result of the successes of the Neighborhood Transformation Initiative. That Center City has actually seen a total of over 6,000 new housing units and throughout the City there's a total of 10,000 new housing units that have gone up. And despite that tremendous boom, the vacancy rate actually remains quite low. We note particularly --

Council President Verna

I'm sorry. Did you say the vacancy rate?

Council President Verna

Remains quite low? 3098 Budget - 4/12/05

Ms. Naidoff

Yes, in our housing market. We note here specifically the expansion of the knowledge industry institutions, and we note the University of Pennsylvania and Children's Hospital, redevelopment of the former Civic Center site, and the Fox Chase Cancer Center plans for expansion at their northeast headquarters. I note also the tremendous boom in retail development, and as a result of the blueprint... Have talked about the fact that we will be creating a retail advisory board to help us coordinate and encourage the expansion of retail development throughout the City. In neighborhood economic development, we talk about the fact that we are going to focus on commercial corridors as a primary neighborhood economic development initiative because we believe that commercial corridors provide the backbone for our residential neighborhoods. 3099 Budget - 4/12/05 We believe -- We recognize that strengthening commercial corridors builds stronger, more vibrant and stable neighborhoods. Business attraction and expansion efforts will include small and neighborhood businesses with a particular focus on the commercial corridors. Talk then about the business attraction and retention efforts, and the fact that we've had a very successful partnership with P.I.D.C., Center City District, the Greater Philadelphia Chamber of Commerce and the Governor's Action Team to pro-actively meet with and address the issues of the City's largest businesses whose leases are about to expire. And this has been carried over now into our business attraction efforts. And we talk about hospitality and tourism on . And that is increasing at this point in -- especially in -- as a result of the Philly's More Fun When You Sleep Over Campaign. 3100 Budget - 4/12/05 Talk about the five tourist attractions that are the top draws, and especially about the expansion of the Convention Center which we believe is a very important and necessary step in our ability to continue to grow our tourism market. On the Aviation Fund, we have seen some tremendous successes at the airport in recent times, particularly as a result of the arrival of low-cost carriers. We had 28.5 million passengers who utilize P.H.L. this past year which is an increase of 15.5 percent over 2003. And our international passengers rose to 4.1 million which is a percent increase. 17 The low-cost carriers... I'm trying to skip over some of this. Our average air fares now rank slightly lower than the national average, compared to 20 percent higher in 2003. In addition, in February of this year Standard and Poors reaffirmed our A credit rating with a stable outlook. To meet the growing demand, we're 3101 Budget - 4/12/05 moving forward with a number of plans, including the terminal expansion program. We recently requested the City Council authorization to issue airport revenue bonds to cover the expansion and renovation of Terminals D and E and to have some improvements to Terminals B and C as well and A east; also, to do the resurfacing of one of our major runways. And we're in the major -- in the last stages of a master planning process which will allow us to relieve some of the congestion and delays that occur at the airport. Lastly, we talk about the fact that the airline use and lease agreement which became effective in 1974 is coming up in June of 2006 for renewal, and we have entered into negotiations with the airlines about that. Sorry. Quick and dirty summary. Readers Digest summary.

Council President Verna

Very good. Thank you. On of your testimony, you 3102 Budget - 4/12/05 state, now that the City has committed to creating a fund of $125 million from unlocked water and sewer bond reserve funds...

Ms. Naidoff

Mm-hmm.

Council President Verna

...and will leverage state and Federal funds to address the standard public responsibilities of planning, land assemblage, environmental remediation, demolition, and infrastructure. What do you mean by unlocked bond reserve funds?

Ms. Naidoff

This has to do with our request, which we will be coming back in a more formal sense to request from City Council the, use of the reserve funds under the water and sewer bonds to create this $125 million economic development fund that we've been talking about for some time now.

Council President Verna

Can you tell us how these bond funds will be used?

Ms. Naidoff

We are assembling the list at this point, as I had mentioned the last time I was questioned about it. We will be putting -- We are putting together a list 3103 Budget - 4/12/05 of the allocations of -- the proposed allocations of that money.

Council President Verna

Do you have any indication as to what the cost of unlocking these funds will be and who will pay for it?

Ms. Naidoff

I believe that the... Turn to the Budget Director. I don't know if she has more information than I do. I believe that there is -- the cost -- the major cost is the securing of a surety bond which I think was in the neighborhood of about $4 million. I'll have to get you some more specific information, Madam President, on that. But I think it was $4 million dollars. And I believe that the $125 million is net of the costs. I think the total amount in the reserve funds is --

Council President Verna

How would --

Ms. Naidoff

-- over $130 million.

Council President Verna

-- the $4 million be paid? And who would be paying for it? 3104 Budget - 4/12/05

Ms. Naidoff

The proceeds of the reserve funds would cover the expenses of securing that. And what nets out would be the $125 million, which would then be available for the use of those infrastructure projects.

Council President Verna

Would the water rate payers be paying for this investment?

Ms. Naidoff

No, I don't believe so. I think that this is money that is under current bond issues is required to be kept in reserve funds. And we believe that by buying the surety bond, we can unlock those reserve funds and use that money for other projects, such as these infrastructure projects, as long as we are able to secure that surety bond.

Council President Verna

But aren't the water rate payers paying for that reserve fund?

Ms. Naidoff

They're paying for the bonds, yes. 3105 Budget - 4/12/05

Council President Verna

So they, in essence, would be paying for this $125 million dollar issue.

Ms. Naidoff

I don't think this is a new issue. What we're talking about is reserve funds that are already there that are under the current bonds. And we are under the --

Council President Verna

Let me tell you --

Ms. Naidoff

-- current debt.

Council President Verna

-- I don't think... You know, this was brought up last year. And I don't think we got a very good explanation about the $125 million, and how it would be used, who would be paying for it, and who would oversee the expenditures. I think this is much, much too vague. And I think that Council certainly should be more informed as to how this is going to be spent.

Ms. Naidoff

I certainly understand what you're saying. And we intended at the point that we come forward with the actual 3106 Budget - 4/12/05 proposal for this, to provide you with complete testimony.

Council President Verna

It is in the budget. So, I just don't know when you would be coming forward, I mean. The budget hearings are practically over. You are requesting $4 million in economic stimulus funding.

Ms. Naidoff

Mm-hmm.

Council President Verna

How will these funds be used? And can you tell us, what is the total amount the City has spent in economic stimulus funds over the last five years?

Ms. Naidoff

I would need to provide you with that report. I don't have that with me.

Council President Verna

All right. When you provide the report, can you let us know what projects have they gone to, and how have the benefits of this program been factored into the Mayor's revenue estimates?

Ms. Naidoff

Yes, I will do that.

Council President Verna

I have one 3107 Budget - 4/12/05 last question.

Ms. Naidoff

Mm-hmm.

Council President Verna

I see a number of Council members want to be recognized. On -63 of your detail, you are requesting $10 million in the Grants Revenue Fund for your Economic Development Division. You do not list the grants title, award period, nor the objective. Can you tell us what these funds are for and what is the likelihood that you will receive these funds?

Ms. Naidoff

If you'll give me one minute.

Council President Verna

Sure.

Ms. Naidoff

I'm told that that is a number that we include in the budget as a standby appropriation for grants that we may receive.

Council President Verna

But isn't the normal process that it comes out of Finance, so that you know when you get the 3108 Budget - 4/12/05 grant and we know when you get the grant? Isn't that the way it's been done in the past.

Ms. Naidoff

No. I think we've always done it this way. Maybe Mr. Gordon can -- John Gordon can explain it.

Council President Verna

Welcome, Mr. Gordon. Please identify yourself for the record.

Mr. Gordon

John Gordon, Assistant Commerce Director. This standby appropriation in the amount of $10 million has been in the budget for at least years. It hasn't always been 16 necessarily $10 million, but there's always 17 been a standby appropriation. 18

Council President Verna

Okay. 19 Thank you, Mr. Gordon. 20 The Chair recognizes Councilwoman Tasco.

Councilwoman Tasco

Yes. Thank you, Madam President. I want to follow up on your questions about the stimulus funds. I know 3109 Budget - 4/12/05 that the President has asked what were some of the projects that were funded last year. I'd like to know if you've targeted those areas where that money would be spent in year 2006.

Ms. Naidoff

All right. We'll provide that in the report.

Councilwoman Tasco

Also, I'd like to know the criteria for determining which projects or entities receive economic stimulus.

Ms. Naidoff

I'm sorry. I didn't hear the beginning of your question. THE CITY SOLICITOR: I'd like to know what is the criteria for which projects -- for determining which projects or entities receive economic stimulus funds.

Ms. Naidoff

We'll provide that.

Councilwoman Tasco

Do you -- Are the dollars spent directly through you or through P.I.D.C.?

Ms. Naidoff

We authorize them, and it is -- the accounting is done through P.I.D.C. They issue the checks. 3110 Budget - 4/12/05

Councilwoman Tasco

Who determines who gets the money, though?

Ms. Naidoff

The City administration.

Councilwoman Tasco

Commerce or the City? Define that for me, please.

Ms. Naidoff

It's a process that involves four departments signing off on it: Our department, the Finance Department, the Mayor's Office and P.I.D.C.

Councilwoman Tasco

So, if someone is interested in getting some of the stimulus dollars, they apply to your department or to P.I.D.C.?

Ms. Naidoff

It's generally not done through an application process. It's done when we have negotiated agreements for development projects that we believe will create jobs and benefits for the City of Philadelphia, and the projects need some additional support, some City support in order to move forward.

Councilwoman Tasco

Well, what kind of funds were given to the American Business 3111 Budget - 4/12/05 Financial Services Group? Were they stimulus dollars? THE CITY SOLICITOR: It was $1 million of that was stimulus.

Councilwoman Tasco

So what happens now that they have gone out of business and did not bring those jobs into the City? How does the City recapture the dollars that they gave to this company?

Ms. Naidoff

I believe the City got more than the million dollars. I believe it was $2.2 million in wage tax revenues from that company on behalf -- from the employees of that company, so that we more than made up the amount of money that we invested.

Councilwoman Tasco

Well, what did the City lose when they proceeded to foreclose and use predatory lending practices on some of the people who live in the City of Philadelphia? How much did we lose?

Ms. Naidoff

That I don't know.

Councilwoman Tasco

I think we ought to look at that.

Ms. Naidoff

Mm-hmm. 3112 Budget - 4/12/05

Councilwoman Tasco

The other question I have about that is, who vetted this company before they came into the City?

Ms. Naidoff

I don't know the answer to that, since I was not around at that point.

Councilwoman Tasco

Someone who can answer that question.

Ms. Naidoff

Perhaps we can get you some information.

Councilwoman Tasco

Was it P.I.D.C. who gave the grant?

Ms. Naidoff

Peter Longstreth will be able to address that.

Councilwoman Tasco

I'd like to know how they determined this company was worthy of a grant. Did they vet them in any way to see what their business practices were?

Mr. Longstreth

Peter Longstreth, President of P.I.D.C. Happy to be here. This goes back three or four years. At the time American Business Financial Services was located in Bala Cynwyd and was 3113 Budget - 4/12/05 considered a very vibrant and successful company and a target for attraction to the City. We went through about a two-year process of reviewing with them a variety of different options in the City and underwriting the credit risk. And at the time it was considered, once again, a very positive opportunity for the City to attract 1,000 new jobs which represented the largest attraction in over 13 years. 14 So, I would say we went through the 15 normal underwriting process that we go 16 through with most companies, and ended up 17 with a financial structure that was largely 18 collateralized by a very valuable building 19 here in the City. 20

Councilman Tasco

So who gets the 21 building? 22

Mr. Longstreth

Pardon me? 23

Councilwoman Tasco

They 24 collateralized it with us? 25

Council President Verna

Yeah. I 3114 Budget - 4/12/05 think they were Lord & Taylor building; were they not?

Mr. Longstreth

Pardon me?

Council President Verna

Weren't they located at the Lord and Taylor building?

Mr. Longstreth

Yeah, the Wanamaker Building which has $110 million worth of value. We have a second position on that building for the $15 million worth of debt involved. And then, as it relates to the grant money that went to them, once again, the Commerce Director has indicated the wage taxes that were paid during the two years that they occupied it more than offsets that. Now, obviously, nobody is happy with the outcome. We feel particularly badly for the employees, the shareholders, the creditors. And obviously we're one of those creditors. But we are somewhat reassured by, one, having the collateral on the vast majority of the funding that was provided; 3115 Budget - 4/12/05 and then secondly, having the taxes collected during the two years that they did occupy the space.

Councilwoman Tasco

I also know that through their business practices a number of people in the City lost their homes. I'd like to have someone calculate what that impact was to the citizens of the City of Philadelphia.

Mr. Longstreth

Okay.

Councilwoman Tasco

The other thing is, when you are attracting these businesses to the City, do you look at the kind of business they are and what their practices are, and as opposed to their financial conditions? Sort of like a character review.

Mr. Longstreth

Yeah. We certainly -- We certainly try to. Based on what you're saying, I'm not sure we're always successful as we'd like to be, but we certainly try to.

Councilwoman Tasco

If you had been forewarned, say in 2003, that there was some problems with this company, what would you 3116 Budget - 4/12/05 have done? Could you have done anything to recapture your dollars or protect the investment of the City?

Mr. Longstreth

Are you saying --

Councilwoman Tasco

Had you known in 2003 that this company had the possibility of going out of business or at least were maybe not going out of the business at that time but at least had some -- had been cited by the Federal Government for their lending practices, what would you have done?

Mr. Longstreth

We closed on this transaction in May of 2003. And so, you're saying after we had closed we had realized that there were these irregularities what could we have done?

Councilwoman Tasco

Mm-hmm. Yes.

Mr. Longstreth

Is that... Yeah. Basically, the way the documents are written, as long as they were meeting their obligations under the agreement -- and that related to, obviously, paying their rent and meeting their job requirements -- I'm not sure there would be too much that we could 3117 Budget - 4/12/05 have met, as long as they were within the law.

Councilwoman Tasco

Well, at that time I sent a letter to the Mayor questioning their business practices, as related to the citizens of the City of Philadelphia and the predatory lending practices they were engaged in. I got no response.

Mr. Longstreth

Yeah. I -- I didn't see that letter, but I'm not sure we could have satisfied your concerns because it was, in fact, after the closing of the transaction, I assume.

Councilwoman Tasco

Currently, Ms. Naidoff -- Mrs. Naidoff -- the City Council, as you know, was just engaged in a discussion regarding contract reform. Do you believe that should P.I.D.C.'s economic stimulus contracts be part of the contract reform proposal?

Mr. Longstreth

I'm not sure I understood the question, but...

Councilwoman Tasco

Well, in the bill that's on the calendar now, relative to 3118 Budget - 4/12/05 contract reform, P.I.D.C., P.C.D.C., and some of these other agencies that give contracts to companies like American Business Financial, they're not included in the legislation. Do you believe that since this is -- these are contracts that are given out by the City, don't you think should they be part of the contract reform proposals?

Ms. Naidoff

Because they are not directly contracts given out by the City, I think we'd have to get a legal opinion as to whether that would fall within the confines of what you're talking about.

Councilwoman Tasco

But you're giving out City dollars.

Ms. Naidoff

Yes. And that would be the issue, whether the dollars would control that.

Councilwoman Tasco

All right. Does your contracts that are left from P.I.D.C.'s economic stimulus fund go through the City's Contract Review Committee? What is the Contract Review Committee? 3119 Budget - 4/12/05

Ms. Naidoff

I'm told no. 3

Mr. Gordon

Could you please repeat the question?

Councilwoman Tasco

What is the Contract Review Committee? And do the P.I.D.C' s economic development stimulus funds go through that Contract Review Committee?

Mr. Gordon

Well, the Contract Review Committee is an administratively created committee to review professional services contracts.

Councilwoman Tasco

Who is part of that committee?

Mr. Gordon

The Finance Director and some designees of the Finance Director, Procurement Commissioner, Budget Director's Office.

Councilwoman Tasco

So that's the Contract Review Committee?

Councilwoman Tasco

And they review all of the requests for contracts?

Mr. Gordon

Professional services. 3120 Budget - 4/12/05 Contracts for professional services.

Councilwoman Tasco

What constitutes a contract for professional service? What could you use to stimulus money?

Mr. Gordon

Engineering services, architectural services, legal services, consultants.

Councilwoman Tasco

Well, we submitted -- And I looked at your testimony...

Council President Verna

The Chair recognizes Councilman Goode for a point of information.

Councilman Goode

Thank you, Madam President. I believe Councilwoman Tasco was asking whether the economic stimulus money had to go through the Contract Review Committee.

Councilwoman Tasco

Right.

Mr. Gordon

No, it did not.

Councilwoman Tasco

It does not go through the review committee. 3121 Budget - 4/12/05 So I could put in a request for some stimulus dollars for a consultant to work in my district in the commercial corridors. Would that be something that would be considered?

Ms. Naidoff

The economic stimulus dollars are generally large dollar contracts that we use to support business attraction, retention and creation -- job creation efforts.

Councilwoman Tasco

So, the Commerce Director... Are you part of that committee?

Councilwoman Tasco

The Contract Review Committee?

Ms. Naidoff

I am a member of the committee, but Mr. Gordon serves as my designee.

Councilwoman Tasco

But then the P.I.D.C. economic stimulus dollars do not go through that committee.

Ms. Naidoff

That's right.

Councilwoman Tasco

So, solely the 3122 Budget - 4/12/05 dollars are granted by the... by whom?

Ms. Naidoff

They're City contracts for professional services. So, if a department is engaging an engineering firm to do surveys, for example, that would go through that committee.

Councilwoman Tasco

Okay. But who determines how the economic stimulus dollars are spent?

Ms. Naidoff

That's generally done on recommendation of our department, in consultation with the Mayor's Office.

Councilwoman Tasco

Okay. We'll probably come back to that. Let me ask you a question about the Cultural Fund.

Ms. Naidoff

Mm-hmm.

Councilwoman Tasco

Is the Office of Arts and Culture still in existence?

Ms. Naidoff

No, it is not.

Councilwoman Tasco

Last year we appropriated $100,000 for that department. What happened to it?

Ms. Naidoff

That money was used to 3123 Budget - 4/12/05 continue the payments for the Art Commission staff which formerly was done under the Office of Arts and Culture, and also to support some staffing needs that we had, in order to continue the transition, as those programs were accepted or were picked up by other City departments.

Councilwoman Tasco

Well, you know, we -- I now serve on the Arts and Cultural Fund. And we have budgeted $2 million appropriations for that fund, but we do not have dollars for administrative support which the Arts and Cultural Fund Office did provide support. Do you ever see that office being opened again? And what support can you or your office give to the Arts and Cultural Fund?

Ms. Naidoff

We don't envision the creation again of the Office of Arts and Culture. We have taken some rather comprehensive steps to make sure that all of the programs that were carried out by that 3124 Budget - 4/12/05 office have been picked up by other City departments and other staff members who are expert in the areas and able to carry out those functions. We believe that the day-to-day activities with the percent for art, the Sculpture Conservation Program, Art in City Hall, and the collection management functions are all functioning well now within the Public Property Department. And the Art Commission, as I mentioned a moment ago, is functioning well. That's now in the Planning Department. And I am carrying out the role of the Mayor's liaison to the arts and culture community and working with him particularly on the effort to find sustainable funding for arts and cultural organizations.

Councilwoman Tasco

Well, what administrative support can your office give to the Arts and Cultural Fund?

Ms. Naidoff

I don't know that we can give any. I'd be happy to help in my own personal capacity as the Mayor's liaison to 3125 Budget - 4/12/05 the arts and culture community.

Councilwoman Tasco

So they're left to fend for themselves, with no 5 administrative -- no increase in their appropriations for administrative work.

Ms. Naidoff

Well, I think it's no 8 different than any other appropriation, in that any organization that gets an appropriation has to account for a certain amount of administrative overhead as part of the receipt of those funds. And that's the way it's done generally.

Councilwoman Tasco

I'll come back. Am I finished, Madam President? If not, let me just go ahead?

Council President Verna

There are other members that have been waiting. So, if you don't mind, we'll do a second go-around.

Councilwoman Tasco

I have one question.

Council President Verna

Okay.

Councilwoman Tasco

I want to go to the question the President asked about the $125 million, which you may or may not be 3126 Budget - 4/12/05 able to answer for this fund. Who pays the debt service on the this fund?

Ms. Naidoff

The rate payers.

Councilwoman Tasco

Oh. Okay. Do you have an overall City plan for the water -- for the waterfront, that where you're going to use the fund for whatever you're going to use them for, infrastructure and all of those? Is there a design plan for the riverfront?

Ms. Naidoff

As I mentioned before to the President, that's what we are putting together now, is a proposed list of projects along the waterfront, in order to capitalize and galvanize the development that is going along -- on now along the 38 miles of waterfront. And we will back to you with that list.

Councilwoman Tasco

Is the City Planning Department involved in this?

Councilwoman Tasco

Okay. Thank you. 3127 Budget - 4/12/05

Council President Verna

Thank you. The Chair recognizes Councilwoman Brown.

Council President Verna

I'm sorry. Councilman Goode, you're next. You had asked for a point of information. Your light went off.

Councilman Goode

Thank you, Madam President.

Council President Verna

Thank you.

Councilman Goode

Good afternoon, Ms. Naidoff.

Ms. Naidoff

Good afternoon.

Councilman Goode

My questions are really around budgeting personnel for the next fiscal year and in the future, in light of the new economic development blueprint. How will staff capacity be adjusted to implement the blueprint?

Ms. Naidoff

The capacity issue has not been addressed yet. But what we have been talking about is how we will allocate the various functions and activities that we have outlined in the blueprint, among not 3128 Budget - 4/12/05 only the people in our department but the related agencies who work with us on a regular basis, like P.I.D.C., P.C.D.C., Innovation Philadelphia. And we are actually talking to all of them at this point about how to carry out those initiatives.

Councilman Goode

How many staff persons or consultants do you consider to be directly assigned toward the implementation of the blueprint?

Ms. Naidoff

I don't think at this point I could give you that answer.

Councilman Goode

Why not?

Ms. Naidoff

Because I don't think the decisions are made yet about how we're going to carry out all of the initiatives.

Councilman Goode

I'm just asking at this point in time how many staff people you have directly assigned toward implementation of the blueprint.

Ms. Naidoff

Well, in -- sometimes I guess you would have to say all of the members of our department are engaged in the blueprint. 3129 Budget - 4/12/05

Councilman Goode

Okay. What will be accomplished during the next fiscal year, in terms of the implementation of the blueprint?

Ms. Naidoff

We've laid out the blueprint, in terms of the next three years. So, we don't have specific goals for the next year.

Councilman Goode

Okay. Last question is, what's the total dollar amount in new resources to be allocated for the implementation of the blueprint?

Ms. Naidoff

The only specific allocation of new dollars is the one million dollar commitment to the Knowledge Industry Partnership.

Councilman Goode

And that's it for fiscal year '06?

Ms. Naidoff

(Indicating).

Councilman Goode

That's it for fiscal year '06?

Ms. Naidoff

That's for the next three years.

Councilman Goode

That's the only 3130 Budget - 4/12/05 commitment?

Ms. Naidoff

That's the only new-dollar commitment we've made.

Councilman Goode

You're not counting the $125 million?

Ms. Naidoff

No, because we have been talking about that as part of this budget proposal.

Councilman Goode

Okay. Thank you. Thank you, Madam President.

Council President Verna

You're welcome. The Chair recognizes Councilwoman Brown.

Councilwoman Brown

Thank you, Madam President. Good afternoon.

Ms. Naidoff

Good afternoon.

Councilwoman Brown

I'd like to follow up first on the questions raised by Councilwoman Tasco regarding the arts and -- the Office of Arts and Culture. Am I hearing you say that all of the former functions and roles of that department 3131 Budget - 4/12/05 had been fully integrated into other departments within government? None remain in transition?

Ms. Naidoff

I think it's probably not fair to say all of the functions have been assigned out to other departments. Certainly the programs that I mentioned have been assigned to a variety of departments, such as Public Property and the Planning Department. But as I mentioned, we maintain within our department a strong presence in the role that I carry out for the Mayor as the liaison to the arts and business community -- arts and culture community, and have been spending a fair amount of time and energy, particularly on the project of trying to find sustainable funding for arts and cultural organizations.

Councilwoman Brown

And so citizens outside of government who want to contact any of the programs that have now been integrated into other departments, the way for them to get to those programs is now how? 3132 Budget - 4/12/05

Ms. Naidoff

Many people know directly to call the Public Property Department or the Planning Department, but otherwise calls come through us. We've had one yesterday about the Caulder Sculpture Garden. Obviously, when we get those calls, we get the right people involved.

Councilwoman Brown

Okay. And you say not all of them have been fully integrated. Which programs remain?

Ms. Naidoff

I was just referring to the fact that I have retained within... we have retained within our department my specific role as the liaison to the arts and culture community.

Councilwoman Brown

Okay. Now to follow up on Council President's questions regarding the $125 million, is there any -- and knowing that what you've already stated which is the full breakout has not been -- is not public yet -- is there any consideration in that pending document on commercial corridor development?

Ms. Naidoff

The $125 million, if 3133 Budget - 4/12/05 it is made up of the reserve funds from the water and sewer bonds, will have to be used for related projects, for water and sewer projects. And the Mayor has committed this to his new River City Initiative. So, what we're looking at is those kinds of infrastructure projects that will help advance the new River City Initiative.

Councilwoman Brown

Okay. All right. Neighborhoods that have a significant number of residential properties, is there any -- do you know if there are any trends that speak to the number of openings or closing of those businesses along those commercial corridors?

Ms. Naidoff

No, I don't know of any.

Councilwoman Brown

Forgive me?

Ms. Naidoff

I don't know of any.

Councilwoman Brown

You don't know of any?

Ms. Naidoff

You were asking 3134 Budget - 4/12/05 whether I knew of any reports about that?

Councilwoman Brown

Yes.

Ms. Naidoff

No, I don't know of any.

Councilwoman Brown

So, currently, then, the Commerce Department is not keeping a handle on, if you will, businesses in the commercial corridors that are opening or closing and the whys to that.

Ms. Naidoff

Well, we have -- we have a number of people whose primary focus is the commercial corridors and the neighborhood -- and neighborhood economic development. And they do keep a fairly close -- They keep fairly close tabs on what's happening, but nobody keeps a list or report of the openings and closings.

Councilwoman Brown

Okay. Can you or a member of your team tell me what percentage of our City's commerce activities attributed to neighborhood commercial corridors versus downtown businesses. Councilman Goode has a point of 3135 Budget - 4/12/05 information, Madam President.

Council President Verna

The Chair recognizes Councilman Goode.

Councilman Goode

I'm going back to the question before that. Isn't it a requirement of P.C.D.C.'s contract to track --

Ms. Naidoff

I'm sorry?

Councilman Goode

Isn't it a requirement of P.C.D.C.'s contract to track openings and closings of businesses?

Ms. Naidoff

I will have to find out. I don't know the answer to that.

Councilman Goode

Okay. Thank you.

Councilwoman Brown

I was struck by the discussion during Councilman Goode's hearing on the blueprint, where Councilwoman Tasco raised a number of what I believe to be legitimate concerns about neighborhood commercial development and the City's priorities and where we want to invest dollars which is now what drives these questions. So, can -- if not now, sometime soon 3136 Budget - 4/12/05 hereafter -- this information be provided to Madam President on what percentage of dollars we yield from commercial neighborhood corridors versus downtown?

Ms. Naidoff

Yes. Be happy to do that.

Councilwoman Brown

That would be useful. Can you or a member of your team speak to the amount of capital development that has happened over the past four years? And for me, my interest is looking to see has there been an increase, a decrease, a fluctuation or whatever.

Ms. Naidoff

You're talking about in the neighborhood?

Councilwoman Brown

Yes, specifically within neighborhoods.

Mr. Traylor

Councilwoman, we'll have to try to get that information for you.

Councilwoman Brown

Okay. Let me just make sure I've covered all my questions here. There was one other item in your testimony. 3137 Budget - 4/12/05

Mr. Traylor

The $1 million in capital dollars per year have been spent now over the last... How many? Over the last three years, $1 million.

Councilwoman Brown

For?

Mr. Traylor

For capital improvements in the neighborhood corridor.

Councilwoman Brown

And you say that was over the last three years.

Mr. Traylor

Over the last three years.

Councilwoman Brown

Okay. My final question comes from your testimony on where you say, and I quote, business attraction and expansion efforts will include small and neighborhood businesses, with a focus on commercial corridors. What strategies, tactics or plans are in place or under way to speak to that reality, where you want to deal with business attraction and expansion efforts? Can you elaborate on that for us?

Ms. Naidoff

Several things. We have indicated in the testimony that we have 3138 Budget - 4/12/05 a very, you know, successful team effort that's been going on for a number of years now, in terms of primarily business retention. And now that that cycle of leases expiring is coming to a close, except for occasional ones... The bulk of them, though, have now been processed. So, we're now going to turn our attention to the business attraction effort. And that's a team effort of the Commerce Department, P.I.D.C., the Chamber of Commerce, Center City District and the Governor's Action Team.

Councilwoman Brown

The business retention focused on commercial corridors?

Ms. Naidoff

No. That's actually mostly for the downtown area.

Councilwoman Brown

Okay.

Ms. Naidoff

The commercial corridors effort is addressed in the blueprint when we talk about the fact that there are a number of agencies and departments and programs that focus on it. 3139 Budget - 4/12/05 And so, our first step now is to look at -- and we have begun this process of looking at -- the variety of ways in which we fund and support commercial corridors. And we're trying to see if there are some better ways of leveraging all of those efforts, so that we get more successful effort, more bang for our buck, frankly, in order to make sure that all of those efforts come together in a more consolidated fashion.

Councilwoman Brown

Okay. I guess my final comment would be, when we think of the Mayor's N.T.I. program and the targeted communities that are being impacted by that, the hope is that there's a link or a bridge to business corridors within those N.T.I. areas so that we, indeed, have neighborhood transformation in its purest form.

Ms. Naidoff

Mm-hmm.

Councilwoman Brown

And so, maybe I'm missing the link. Is there a link?

Ms. Naidoff

Well, we believe there's certainly a link. And as I said in the testimony, we 3140 Budget - 4/12/05 believe that the commercial corridors provide the backbone of the neighborhood economic development. What I'm saying is that we think that at this point there are so many different avenues in which the City administration is looking at commercial corridors, that perhaps there's a better way of consolidating or at least coordinating those efforts, so that we leverage those dollars better.

Councilwoman Brown

Thank you for your testimony. Thank you, Madam Chair.

Council President Verna

You're welcome. Councilman Rizzo, did you still want to be recognized?

Councilman Rizzo

Thank you, Madam Chair. If I have any time left over, Councilman Nutter would like to have it. Good afternoon.

Ms. Naidoff

Good afternoon. 3141 Budget - 4/12/05

Councilman Rizzo

One of the areas that you've been very responsive to me has been businesses that are being... There's an attempt, as you know... Businesses are trying to be picked off by other states. And I know that Virginia is one of those states that is making a very, very aggressive pitch here in the City of Philadelphia offering, obviously, lots of opportunities. And I know that you indicated that we do as much as we can do here, but there's also some need -- some help we need from the State of Pennsylvania. So, could you tell me... Do you know presently how many states are actually aggressive at this point trying to locate businesses into their states like Virginia? Are there others that are really focused on Philadelphia right now? And why do you think that? Do they feel as though things aren't good here or it's just that this is the way their strategy is? Why are they looking at Philadelphia? And why am I 3142 Budget - 4/12/05 getting so many calls from businesses that are receiving these letters from other states?

Ms. Naidoff

I think that's a very astute observation. I woke up this morning to an ad on radio about the State of Florida looking for some leads in Philadelphia. I just think that this is a trend that is going on all across the country. And I would venture to say there's probably not a state that doesn't have this kind of business attraction effort. So, what we are seeing here is probably the same thing you would hear from colleagues and friends in other parts of the country. And hopefully, they will hear about Philadelphia and Pennsylvania attracting business in their jurisdictions as well.

Councilman Rizzo

I don't mean to interrupt you, but I don't hear any of my colleagues in other places getting mail from Philadelphia or Pennsylvania. I haven't really... You know what 3143 Budget - 4/12/05 would be interesting? If you could have your staff show us what we do and Pennsylvania does to go after businesses. Because it's kind of depressing to have these folks call --

Ms. Naidoff

Mm-hmm.

Councilman Rizzo

...and say that Virginia is coming here to sit down to show me opportunities that I have in another state. Maybe we are just a little too close to the scene here. But I think it would be good to educate -- It would be educational for us to see and be able to say, well, look, we do the same thing. But I've never seen, honestly, other than a few ads a few years back about what we're doing as a city and in concert with the state to attract business here.

Ms. Naidoff

I'd be happy to show you. The state has actually been active in this for quite some time. And as you know, the City is just beginning its efforts with the Select Greater 3144 Budget - 4/12/05 Philadelphia effort which is being put together by the Greater Philadelphia Chamber of Commerce and which we are supporting. We do think that kind of collaboration is the way to proceed on this. And working together with the business community, I hope that it won't be very long before you start hearing from friends and colleagues who say they hear Select Greater Philadelphia ads in their part of the country.

Councilman Rizzo

Well, I'm glad that the new leadership is doing that, but you would have hoped that that would have been in place long before now. And I'm not trying to be critical. It's just that it seems as though other places, especially, like you said, the south, the sun belt, is very aggressive; and as a matter of fact, from what I hear, successful. Because I know one particular business that is trying to survive in the inner city that just, I think, is today or tomorrow making a decision to leave 3145 Budget - 4/12/05 Philadelphia. And I've tried to twist their arm, but it's not working.

Ms. Naidoff

Well, I'm sorry to hear that. But I do hope that in a very short order you'll feel that there is a great deal of successful effort going on in Philadelphia to attract businesses.

Councilman Rizzo

Well, that's good. I'd like to see some of that so I can be aware of it.

Ms. Naidoff

I'd be happy to do that.

Councilman Rizzo

Thank you. And also, I want to thank the folks at the airport for all of the good work that they do constantly getting involved in requests and different issues there. And they're very responsive and try to be as cooperative with a place that is just bursting at the seams. And I just hope that all the plans that we all want to see happen there happen and happen quickly. But again, thanks for the good work 3146 Budget - 4/12/05 at the airport.

Ms. Naidoff

Thank you for saying that. Mr. Isdell and his staff are here to hear those nice words. Thank you.

Councilman Rizzo

Thank you. Madam President, Councilman Nutter can have my last 34 seconds.

Council President Verna

Thank you. The Chair recognizes Councilman Nutter.

Councilman Nutter

It's just incredibly generous. Good afternoon, Ms. Naidoff.

Ms. Naidoff

Good afternoon.

Councilman Nutter

And Mr. Traylor.

Mr. Traylor

Good afternoon.

Councilman Nutter

Mr. Longstreth.. I didn't catch the other gentleman's name at the table. Let me go to -- Let's go to of the testimony which at least has a listing for both P.I.D.C. and P.C.D.C. in a number of performance indicators. What I've wanted to ask was how 3147 Budget - 4/12/05 many... Whether it's just those two agencies or there may be others, what was the total reconciliation on jobs either created, slash affected, and the total number lost? And what was the net last year? Did we have a plus? Did we have a growth in jobs in the City or did we have a loss in jobs in the City?

Ms. Naidoff

The loss figures, as we understand it, were in the neighborhood of 3,000. So, if you look at the total here, it looks like we gained some, if you add the 3,000 in P.I.D.C. and the 100 in P.C.D.C.

Councilman Nutter

Okay. Now, there was a report not too long ago from the Department of Labor that seemed to have a slightly different view of the job situation. So, can you explain the difference?

Ms. Naidoff

I can try. I actually don't have my materials here about that, but there are several measures, apparently, within the Department of Labor for job loss. And the figure of 10,000 which is the one I 3148 Budget - 4/12/05 think that had been...

Councilman Nutter

10,600.

Ms. Naidoff

Yes. ...had been publicized recently, was from a particular status called the Bureau of Labor Statistics Q.C.E.W, Quarterly Census of Employment, which is based mostly on unemployment figures. And there is another statistic that is called the C.E.S., is it? The C.E.S. which is the one that we rely on and many other jurisdictions do, too, because we believe it's more credible. It is not limited to unemployment figures and it is also, as I understand it, not limited -- it's not calculated on a county basis. And in looking at counties only, Philadelphia has typically come out with larger numbers than we believe are realistic for Philadelphia because they are only looking at a concentrated --

Councilman Nutter

Come out with larger numbers?

Ms. Naidoff

Of job losses. 3149 Budget - 4/12/05

Councilman Nutter

Right.

Ms. Naidoff

Because they're only looking at an area that has a very intense population; whereas, in other areas, where you have a county that covers much more -- covers rural and suburban figures -- landscapes, you get a different calculation for job creation and job loss. I can provide you with additional information, Councilman.

Councilman Nutter

Well, I mean, are you saying that the Bureau of Labor report was wrong?

Ms. Naidoff

No, I'm not saying it's wrong. I'm saying that they have different measures. And in the judgment of our policy analysts who follow this -- and apparently this view is shared by many others in other jurisdictions -- the better calculation is the C.E.S. calculation, as opposed to the Q.C.E.W.

Councilman Nutter

Okay. Well, I mean, has a document... Has a document been 3150 Budget - 4/12/05 put together to explain this or has there been a follow-up or have you challenged the assumptions of the Department of Labor? I mean, it's not like the report was, you know, issued in secret or silence. I mean, I believe it was on either the front page of the Inquirer in the A section or it was on the front page of the business section.

Ms. Naidoff

Mm-hmm.

Councilman Nutter

It has been talked about.

Councilman Nutter

In any number of places since that time.

Ms. Naidoff

Mm-hmm.

Councilman Nutter

There's been no 19 information put on any record anywhere that either disputes it or says, you know, they're right; we're wrong; this is why this report versus that report. So... I mean, that's the information that's out in the marketplace. And I guess, as you could imagine, it doesn't 3151 Budget - 4/12/05 necessarily present the rosiest picture for... What was that earlier today we learned of peachy... peachy situation? We learned from the District Attorney earlier. There's a certain law enforcement concept.

Councilman Nutter

Anyway...

Ms. Naidoff

I would just say to you that when we were first contacted by a number of reporters about the 10,600 figure, I worked with the Budget Director and the policy analysts who track these numbers and was given a very comprehensive explanation of it myself which is what I would propose to share with you. And we did try to explain that to the reporters who were covering this story. Unfortunately, they didn't choose to include that in their reports.

Councilman Nutter

Well, has there been a report put out by the City, I mean, the next day or couple days later? I mean...

Ms. Naidoff

I'm told that we sent a letter to the City Council President with 3152 Budget - 4/12/05 that information. We'll get another copy and distribute that.

Councilman Nutter

Well, I understand that. I can appreciate that. The City Council President doesn't have a newspaper.

Ms. Naidoff

Right. Well, we did what we could, in terms of talking to the press about it. It was not successful.

Councilman Nutter

Okay. So, what's the number?

Ms. Naidoff

I remember the number as something around 3,000. I'd have to get you the specifics on that.

Councilman Nutter

So, you're saying there was a net gain in jobs in Philadelphia of 3,000?

Ms. Naidoff

If you believe the -- If you look at the C.E.S. figures and the numbers in this chart of 3,100, yes, there would be a net gain of -- very slight gain. I would say it's really a tradeoff.

Councilman Nutter

Okay. Well, I mean, there is a little bit of a difference 3153 Budget - 4/12/05 from a 10,600 deficit to a 3,000 positive.

Councilman Nutter

It's a little bit of a swing. There's a slight gap between those two numbers. So...

Ms. Naidoff

We do believe that the rate of loss is declining, the losses are declining. And we believe that it won't be too long now before we'll begin to show some more positive figures.

Councilman Nutter

Okay. Can you... Thank you. Can you provide us with an update on... There's been some discussion publicly about efforts to create regional -- a regional funding mechanism for art and culture, involving not only Philadelphia but the four counties around us. What is going on with that effort?

Ms. Naidoff

There are a number of efforts going on. There are some efforts with respect to public funding. There are efforts with respect to private funding. The Mayor's effort is a committee 3154 Budget - 4/12/05 made up of business and civic leaders, and we are looking primarily at an approach that would engage the entire region in a funding effort to support all of the arts and culture organizations.

Councilman Nutter

And on the City of Philadelphia side of this and the people involved, who are they?

Ms. Naidoff

I would... If you'll give me an opportunity to check, I'd be happy to see if those people are willing to let me provide their names.

Councilman Nutter

What do you mean?

Ms. Naidoff

It's a private effort that so far has not been identified publicly, and I think the individuals involved need to be allowed the opportunity to let us know if they choose to be identified that way.

Councilman Nutter

I thought I read about this in the newspaper.

Ms. Naidoff

I don't think you saw any list of names.

Councilman Nutter

Okay. Maybe not 3155 Budget - 4/12/05 a list of names but just that it was going on. This is... This is an effort that's been reported publicly but the effort is private? Is that the way this works?

Ms. Naidoff

I meant that it's not an official commission or task force of the Mayor, so that we don't have permission from the members to release their names.

Councilman Nutter

Okay. Okay. Let's put the names aside. What is the kind of the sum and substance of it? I mean, what's -- what is the effort?

Ms. Naidoff

We've been looking at a variety. First of all, the group is comprised of people who are business and civic leaders who have some track record of commitment to and passion for the arts. So, that was the basis on which we identified the participants. And we've been looking at a variety of privately funded efforts that have been going on around the country, things like United Arts Funds, for example, or an 3156 Budget - 4/12/05 endowment campaign or a workplace effort. And we have been studying the success of the various efforts that have been going on in other parts of the country, trying to decide what we think will work here in Philadelphia and in this region.

Councilman Nutter

And is there a plan at this point?

Ms. Naidoff

No, there is not.

Councilman Nutter

Okay. Do you have any sense of a timetable for one?

Ms. Naidoff

We would hope that we would have something in place by sometime this summer because our hope and expectation is that we might even be able to get something in place by the end of the year.

Councilman Nutter

Okay. And this involves representatives from the other four counties?

Ms. Naidoff

Yes, it does.

Councilman Nutter

Okay. Okay. And will you need anything with regard to action by the City Council?

Ms. Naidoff

Not that I can 3157 Budget - 4/12/05 anticipate at this point.

Councilman Nutter

Okay. And is Council involved in this particular effort?

Ms. Naidoff

I'm sorry?

Councilman Nutter

Is City Council involved in this particular effort?

Ms. Naidoff

No, there is no member of City Council in this.

Councilman Nutter

Any particular reason?

Ms. Naidoff

We have actually no 14 elected officials, other than the Mayor, who participates.

Councilman Nutter

Okay. So, I mean, the decision was made that there would be no elected officials involved. Is that...

Ms. Naidoff

No. I think that really it was hoped that what we would be doing is spurring private philanthropy, private giving. It stemmed from the notion that there is a perception in some quarters that Philadelphia is not raising the amount of 3158 Budget - 4/12/05 money for the support of arts and culture that we are capable of doing. And the notion was, how can we galvanize this, how can we expand it so that we can get private philanthropy raised to a different level.

Councilman Nutter

Do you think any of the private philanthropic efforts are in any way affected by the very public demonstrations of some amount of withdrawal of City support for art and culture? Whether it's the elimination of the Office of Art and Culture or the proposal to eliminate funding from the city-owned Art Museum or proposed cuts last year in the art and culture fund -- or cultural fund, rather, or restrictions, in terms of hours of use of libraries or the closing of recreation facilities? Do you think any of that might cause concern in the private philanthropic community, that would at least cause a person to ask a question, why should I as a person of some means continue to contribute money in 3159 Budget - 4/12/05 the City when the City itself is withdrawing its support?

Ms. Naidoff

I think that's a good question. And obviously some others have asked it as well. But quite frankly, I have not seen that at all. I see just the opposite. There's been a fair amount of discussion at the meetings about the fact that all public funding, Federal, state and local, all local -- all public funding for arts and culture organizations is being reduced. And in fact, the whole objective here is to see if we can get the private community to step up because the arts and culture organizations are so important to our City. They're so important to our citizens. And we hope that by this effort we will gain more support within the private community: The foundations, the corporations, and individuals who care about these organizations will step up and provide greater support than they have in the past.

Councilman Nutter

Well, I 3160 Budget - 4/12/05 understand that. But what is your perspective on any impact that the withdrawal of public funding for these entities could possibly have on the incentive or the inspiration by those who are inclined to make their own contributions? I mean, is there no relationship between the City support for art and culture and private support?

Ms. Naidoff

I think that there are obviously a number of people who are affiliated with the organizations that are facing the most immediate impact of the cuts, to be very concerned about it. But I do think that in the final analysis, the discussions that I have heard -- and I can only speak to the things I've heard -- have not turned on the issue of the City's funding as any kind of disincentive to giving. It's just the opposite. People are talking about how we can encourage the private sector: The foundations, the corporations, and the individual -- wealthy 3161 Budget - 4/12/05 individuals in this community, to provide more support for our arts and culture organizations.

Councilman Nutter

Well, I mean, I appreciate your answer. And I won't -- I'll try to move on and not be too torturous about this. But, I mean, based on your response, at least from a theoretical standpoint, if we played this out to its illogical conclusion... I mean, if you're not willing to at least acknowledge some proportional relationship between public funding and private funding, and if you're now saying that even in the event of reduced City funding, that somehow the private sector is energized and inspired that much more to give, then the illogical conclusion of that is, if the City withdrew all of its support for these many institutions, those of a philanthropic nature would stumble over themselves in an effort to throw more money at these organizations. Right?

Ms. Naidoff

No. I think you're 3162 Budget - 4/12/05 making a conclusion that doesn't fit with the comments that I was trying to make.

Councilman Nutter

Well, I established a premise, that it is an illogical playing out of the facts. I mean, Madam Secretary... I mean, you may want to avoid the harsh reality, but -- And again, you're only speaking from what you've heard. So, in some of my conversations, it is -- it just has no basis in fact, that a person who is inclined to give is automatically that much more inspired to give to something that the public sector, owner of many of these institutions and facilities, the logic would say, if we don't want to support them, why should I, the person with my own private dollars, put money into that, when I have many other people chasing after me for other, you know, worthy causes, whether here in Philadelphia or anywhere else across the country? I mean, you cannot --

Ms. Naidoff

I think you're positing a premise that I was not intending 3163 Budget - 4/12/05 to create.

Councilman Nutter

Okay.

Ms. Naidoff

I wasn't saying that any drop in Federal, state or local funding is the source of any inspiration for giving. What I'm saying is that it is not standing as an obstacle to people --

Councilman Nutter

I understand.

Ms. Naidoff

-- feeling encouraged and inspired to give at higher levels.

Councilman Nutter

Okay. Lastly on this particular topic, is it your experience that for those who are inclined to give, are they more inclined to give for capital projects, as opposed to operating costs?

Ms. Naidoff

I think an initial reaction to any kind of fund raising is that it's easier to get people to part with their money to give -- make their gifts, when they have something specific, like a capital project, or a commission, or a specific program at a museum than general operating support. And that's exactly why we are now 3164 Budget - 4/12/05 engaged in this effort to provide some higher level of giving specifically targeted to general operating support.

Councilman Nutter

Okay. I'm sure we'll revisit this particular topic. Earlier there was some discussion -- I think it was raised by Councilwoman Tasco -- with regard to the contracting process. And I believe specifically there was some discussion with regard to P.I.D.C. and professional services contracts. Is there someone at the table who can respond to those types of questions?

Ms. Naidoff

Mr. Longstreth is here to talk about P.I.D.C. contracts.

Councilman Nutter

Okay. What would you estimate to be the amount of professional service contracting at the organization?

Mr. Longstreth

The total contracts in 2004 were a little bit more than $4 million.

Councilman Nutter

Okay. What was your overall spending in 2004? 3165 Budget - 4/12/05

Mr. Longstreth

P.I.D.C.'s total operating budget is about $8 million.

Councilman Nutter

Eight.

Mr. Longstreth

Eight. Little bit less last year.

Councilman Nutter

All right. But that includes, I'm assuming, staff and...

Mr. Longstreth

Yeah. That's our operating budget. It does not include the $4 million of contracts.

Councilman Nutter

Okay.

Mr. Longstreth

Or at least -- It includes some of it but not all of it.

Councilman Nutter

All right. But you think $4 million was for professional services contracts?

Mr. Longstreth

Correct.

Councilman Nutter

Okay. Is there a formalized process for the awarding of professional services contracts?

Mr. Longstreth

P.I.D.C., yes.

Councilman Nutter

I'm sorry. I didn't hear you.

Mr. Longstreth

Yes. 3166 Budget - 4/12/05

Councilman Nutter

Okay. What is it?

Mr. Longstreth

Basically, we go through a competitive process, in which we go out and select a number of -- go through a preliminary selection process, in which we generate a list of candidates, and then go through a normal competitive bidding process. Early in that process we sit down with MBEC and get their input, in terms of the minority and women-owned business elements of it. And frankly, when we make our selection, we review that with them as well.

Councilman Nutter

Okay. Has that process ever hampered your ability to get things done?

Mr. Longstreth

No. I mean, I would say that all -- that is the standard process. Not every contract falls under that process but it's the majority. And it does not hamper our ability to operate.

Councilman Nutter

What types of contracts would not fall under that process? 3167 Budget - 4/12/05

Mr. Longstreth

Well, in some cases where we're selecting, perhaps, a law firm or a provider -- either a provider that is -- that is sort of a generic provider of service or one that's very specialized, we may not go through a selection process.

Councilman Nutter

Okay. You would just pick someone, and...

Mr. Longstreth

Yeah.

Councilman Nutter

Okay. Can you provide to the Chair a listing of all of the contracts that you let last year?

Mr. Longstreth

I'd be happy to.

Councilman Nutter

Since last fiscal year.

Mr. Longstreth

I think we provide that routinely to the City. I'd be happy to.

Councilman Nutter

Okay. I assume that has the name of a company that received the contract, the amount, and what the nature of the contract was?

Mr. Longstreth

Correct.

Councilman Nutter

Okay. That would be great. Thank you. 3168 Budget - 4/12/05 Thank you, Madam Chair. Madam President...

Council President Verna

Yes. The Chair recognizes --

Councilman Nutter

I'm sorry. I'd like to recapture the 34 seconds that I was given by Councilman Rizzo.

Council President Verna

If Councilwoman Tasco has no objection to it, I don't.

Councilman Nutter

Thank you. The issue was raised earlier about the company that made the recent big announcement. And again, Councilwoman Tasco asked a number of questions about that. The response seemed to revolve around, I guess, a certain comfort level, that since the City apparently received more in wage tax revenues than the City expended in the attraction of the company. And what was that amount? How much did the City...

Ms. Naidoff

$1 million investment and $2.2 million in wage tax revenues.

Councilman Nutter

So, $1 million. 3169 Budget - 4/12/05 I mean, the $1 million investment, that was cash?

Mr. Longstreth

I don't mean to correct the Commerce Director, but I think it was $2 million economic stimulus. And it was a soft loan, with the idea that it was going to be forgiven over a ten-year period, in accordance with... Well... Oh, I'm sorry. Okay. It effectively -- Yes, it's the same. But I stand corrected myself. I apologize. $1 million. It was a UDAG funding and $1 million was economic stimulus. And they were both structured in the form of a... I'll call it a soft loan to American Business Financial Services, with the understanding that if they maintained the employment levels for each year, percent of the loan would 19 be forgiven, and over five years of course 20 the whole loan would become a grant. So, that was kind of the structure. And, I mean --

Councilman Nutter

Well, they only lasted a couple years, right?

Mr. Longstreth

Yeah, they only 3170 Budget - 4/12/05 lasted a couple of years. And they went out of business, obviously. I'm not trying to say this was a great deal. I'm saying we're all very, very disappointed that they went out of business. I am, I guess, grasping for a rationale that says that the $2.2 million worth of wage taxes that were received by the City was good, was incremental and was positive. And if that can be used to rationalize having lost $2 million, so be it. But it's bad news. I mean, I'm not trying to turn this into anything but making the best of a very bad situation.

Councilman Nutter

So, we've got a $2 million investment, and we got about $2 million in wage tax. So, it's pretty much a wash.

Mr. Longstreth

And that doesn't -- Excuse me for interrupting, but just to expand, that doesn't take into account, of course, the incremental use and occupancy tax and the business privilege tax which were also incremental. 3171 Budget - 4/12/05

Councilman Nutter

Right. I understand. Use and occupancy goes to the School District, right.

Mr. Longstreth

(Indicating.)

Councilman Nutter

But you made mention of a twenty percent reduction per year if they stayed for ten years or five?

Mr. Longstreth

For five.

Councilman Nutter

For five. Yeah.

Councilman Nutter

And then over ten it was just completely forgiven as a grant.

Mr. Longstreth

I'll -- I'll -- I'll -- I'll --

Councilman Nutter

What happens to the part that was not forgiven, since they didn't...

Mr. Longstreth

Basically, the part that was not forgiven becomes a debt that they owe us. And we will enter -- get in line with the rest of the creditors and do our best to recover as much of it as we can. And we're not particularly optimistic.

Councilman Nutter

That would 3172 Budget - 4/12/05 probably be the correct posture. All right. So, as we've gone further into this, I mean, you're not necessarily taking the position that $2 million in, pretty much $2 million out, it's kind of a wash, not a bad thing.

Mr. Longstreth

Not at all. It's a terrible thing.

Councilman Nutter

Okay.

Mr. Longstreth

This was the biggest attraction deal in years and they 13 went bankrupt. How could it get any worse? 14

Councilman Nutter

And what's the 15 impact or have you made any estimate of what 16 is the impact now of this having happened, 17 with regard to all of the personnel who are 18 now unemployed? 19

Mr. Longstreth

I'm not sure 20 there's an easy answer there. They're 21 unemployed. They're looking for jobs. I 22 know that the Philadelphia Workforce 23 Development Corporation, for example, is very 24 engaged, in terms of trying to assist in that 25 placement process. 3173 Budget - 4/12/05 I believe there's some out placement -- private out placement ongoing as well. But it's a difficult situation and one that, obviously, we hope the economy, generally speaking, will be able to absorb these employees.

Councilman Nutter

Two last questions. What do we know now that we didn't know then?

Mr. Longstreth

Well, I would certainly say what we know now relates to what Councilwoman Tasco was referring to earlier, that this was an operation that may not have been what it appeared to be. And obviously, not to sound at all glib, that's the risk we always take. And most of the time we're happy to say we're correct, and maybe this time we were not.

Councilman Nutter

And is there anything to be taken out of this situation, as we might approach the next business that we either want to attract here or retain here? I mean, what's the lesson? I mean, from a pure business standpoint, what's the 3174 Budget - 4/12/05 lesson learned here?

Mr. Longstreth

Yeah. I mean, I think from a pure business standpoint -- and once again, I don't mean to sound at all self-satisfied or congratulatory -- but I think being aggressive and being professional in underwriting these loans and looking to the kind of collateral that gives you -- gives one some kind of support in a worst-case scenario is what was done here, and what definitely has to be done and not compromised in the future. This is a worst-case scenario. Rarely do you live through one of these. We are in the process of doing that.

Councilman Nutter

Right. Okay. Thank you. Thank you, Madam Chair.

Council President Verna

You're welcome. The Chair recognizes Councilwoman Tasco.

Councilwoman Tasco

Let me just follow up on that for a moment. You said 3175 Budget - 4/12/05 that their loan was collateralized by the building. Did they own the Wanamaker Building?

Mr. Longstreth

No. There was $30 million worth of investments were made by the company in their tenant improvements at the Wanamaker Building. Approximately $18 million was funded through the City and $1.6 million from the state. Of that $18 million, $16 million of it went to the landlord. The landlord of the Wanamaker Building was the borrower, and the landlord provided the building that they owned as collateral. So, only $2 million of the $18 million was provided directly to American Business Financial Services.

Councilwoman Tasco

But we still -- The building owner still owes us $16 million?

Mr. Longstreth

Still owes us $16 million and is current on their debt, and indicates that they will continue to pay it. And once again, if they don't, we always have the recourse of essentially foreclosing on 3176 Budget - 4/12/05 the building.

Councilwoman Tasco

Let me ask this question. And it may sound strange. What motivated them to leave Bala Cynwyd, where the employees did not pay City Wage Tax, did not -- they did not pay Business Privilege Tax, to move to Philadelphia?

Mr. Longstreth

Well, I mean, I think in any competitive situation there's obviously a number of elements. I think here probably the -- a primary one was the fact that the chairman and his wife, who also worked at the company, lived in the City. They live, I believe, in Center City. And we always understood that was a primary driver in the equation. And then, obviously, we were as aggressive as we could be because at the time it was a very desirable target. And I'm sure that was part of their decision as well. Certainly that's what they told us.

Councilwoman Tasco

Okay. Thank you. I want to go back to the Commerce 3177 Budget - 4/12/05 Director. Ms. Naidoff, I want to go back to this Economic Stimulus Fund. Could those funds be used for neighborhood projects if one so desired, those who make the decision?

Ms. Naidoff

Yes. It's possible.

Councilwoman Tasco

It's possible that they could be used for neighborhood activity?

Ms. Naidoff

Mm-hmm.

Councilwoman Tasco

On your... I'll come back to that. I have some questions that Councilwoman Miller asked me to ask you because she had to leave for a meeting. And... But she wanted to ask me to get in writing: What are the services does MBEC provide? What services does P.C.D.C. provide? And what do they do together in commercial corridors? I think she wants to know: Is there a collaboration between the two or do they work together or what is the responsibility of one group and what is the responsibility of the other group? And she would like that 3178 Budget - 4/12/05 in writing.

Ms. Naidoff

Fine. Be happy to provide that.

Councilwoman Tasco

Also, what new businesses have come to Philadelphia? And where are they located as a result of the activities of P.C.D.C.? What new jobs have they -- or businesses have they generated for the neighborhoods?

Ms. Naidoff

We will provide that in writing as well.

Councilwoman Tasco

I guess that's all I have. Thank you, Madam President.

Council President Verna

Thank you. Are there any other questions or comments from members of the committee? Seeing none, I thank you very much. Thank you. This committee will stand in recess until tomorrow, Wednesday, April the 13th, at 2:30. (Hearing concluded at 5:30 p.m.) 3179 CERTIFICATE I HEREBY CERTIFY that the proceedings and evidence are contained fully and accurately in the stenographic notes taken by me upon the public hearing of The Philadelphia City Council, taken on April 12, 2005, and that this is a true and correct transcript of same. _____________________________ DAVID A. DEIK, RPR and Commissioner of Deeds (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)