COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC MEETING BEFORE THE COMMITTEE ON RULES - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, December 3, 1997 2:10 p.m. - - - BILL 960823 - Amending Title of the Philadelphia Code entitled "Contracts and Procurement" by 9 revising the prevailing wage ordinance. BILL 960512 - Amend Philadelphia Zoning Maps in the 10 14th Ward, in an area bounded by N. 12th St., 11th St., 9th St., Percy St., Brown St., 10th 11 St., and Fairmount Ave. BILL 970591 - Amend Philadelphia Zoning Maps of land 12 located within the block bounded by Roosevelt Boulevard, Ramona Avenue, and Adams Avenue. 13 BILL 970670 - Amending Retirement System Ordinance to allow fire and police employees laid off in 14 1978 and 1980 and later reinstated to purchase service credit for the lay-off period. 15 BILL 970740 - Declaring it desirable for The Hospitals and Higher Education Facilities 16 Authority of Phila. to participate in a project consisting of refunding certain prior bonds. 17 - - - PRESENT: COUNCILMAN JAMES F. KENNEY, Vice-Chair COUNCILWOMAN AUGUSTA A. CLARK COUNCILMAN W. THACHER LONGSTRETH COUNCILWOMAN ANNA C. VERNA COUNCILMAN RICHARD T. MARIANO COUNCILMAN MICHAEL A. NUTTER COUNCILMAN FRANK DiCICCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center Plaza, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 I N D E X BILL 970740 PAGE Donald A. Cramp, President and CEO, The Hospitals and Higher Education Facilities Authority of Philadelphia-------------------- 4 George J. Walmsley, III, President and CEO, North Philadelphia Health System------------- 6 Austin J. McGreal, Esq., General Counsel, The Hospitals and Higher Education Facilities Authority of Philadelphia-------------------- BILL 970670 8 Joseph J. Herkness, Executive Director, Board of Pensions and Retirement---------------------- 9 BILL 970591 Richard Lombardo, Chief, Project Planning, City 10 Planning Commission-------------------------- 12 Lester Hall, Citizen---------------------------- 17 Michael Sklaroff, Esq., Counsel, Maurice LoPiccolo------------------------------------ 18 Larry Watesman, CEO, Watesman Planning Group---- 21 Maurice LoPiccolo, Real Estate Agent------------ 43 BILL 960512 Thomas Chapman, Representative, City Planning Commission----------------------------------- 51 BILL 960823 Gerald Murphy, Deputy Mayor for Labor, City of Philadelphia--------------------------------- 55 Louis Applebaum, Commissioner, Procurement, City of Philadelphia------------------------------ 57 Pat Gillespie, Building Manager, Philadelphia Building Trades Council---------------------- 83 Robert Harris, Assistant to the President, Local 36, Service Employees International Union---- 95 Joe Shields, Organizer, Local 36, Service Employees International Union---------------- 96 Steve Lashinski, Organizer, ACORN--------------- 104 Harry Foy, President, Local 98, Electricians Union---------------------------------------- 117 - - - Public Meeting---------------------------------- 130 - - - 3
Good afternoon, ladies and gentlemen. The Council Committee on Rules is now in session to take testimony on a number of bills. To we have a quorum represented by Councilman Mariano, who is being appointed to this committee because of the illness to Councilman Cohen; Councilwoman Clark, who is a member of the committee regularly; and Councilwoman Verna is a regular committee member. The first bill is Bill No. 970740, an Ordinance declaring it is desirable for the health, safety, welfare of the people in the area served by the North Philadelphia Health System, a Pennsylvania nonprofit corporation, located at 11th Street and Girard Avenue, Philadelphia, Pennsylvania, 16th Street and Girard Avenue, Philadelphia, Pennsylvania, and 1522-1524 West Girard Avenue, for The Hospitals and Higher Education Facilities Authority of Philadelphia to participate with the Hospital in a project consisting of refunding certain prior bonds issued by the Authority, making certain renovations and improvements to the Hospital's facilities, purchasing certain equipment 4 BILL NO. 970740 and funding certain reserves and other capital requirements. Good afternoon. Please identify yourself for the record and proceed.
Thank you, Mr. Chairman. My name is Donald Cramp. I serve as the Chief Executive Officer of The Hospitals and Higher Education Authority of Philadelphia. If I may, I would like to make a brief statement this morning in support of this proposed bill. I correct myself; this afternoon. On October 27, 1997, North Philadelphia Health Systems attended The Hospitals and Higher Education Facilities Authority of Philadelphia Board of Directors' meeting seeking The Authority's assistance in this financing. The North Philadelphia Health Systems' request was accepted for consideration by The Authority. We will ratify this financing, to include your actions to, at our meeting on Tuesday, December the 9th. A public tax equity and fiscal 5 BILL NO. 970740 responsibility -- that is, a TEFRA hearing -- on behalf of North Philadelphia Health Systems is scheduled for Thursday, December the 4th, in our board room, in accordance with the published newspaper advertisement at that time. Both The Authority and North Philadelphia Health System will be represented at that TEFRA hearing. This financing is an FHA-insured loan. Thereby, the obligation to repay this debt is not on behalf of the City of Philadelphia and not on behalf of the Philadelphia Hospitals and Higher Education Authority. We have to, Mr. Chairman, Council members, a panel of experts, should you have questions. We have to the privilege of assisting the North Philadelphia Health System and many people who are associated with this remarkable system. I would also like to express our appreciation for you convening to. Because part of this financing is FHA insured, and we must close by December 31 as a provision of that FHA condition. I would like to introduce Mr. George 6 BILL NO. 970740 Walmsley, to my left. In many people's eyes in this community, we would not be here to without Mr. Walmsley. Mr. George Walmsley.
Please identify yourself for the record. MR. GEORGE J. WALMSLEY, III: Yes. I am George J. Walmsley, III, President and CEO of North Philadelphia Health System. I am here to to request the committee's favorable consideration of Bill No. 13 970740. This bill would authorize The Hospitals and Higher Education Authority to issue bonds for the benefit of North Philadelphia Health System. The new bonds that we will be issuing are part of an overall debt restructuring that the hospital has been contemplating for the last two years. We reached approval with the Health and Urban Development group in Washington on the 31st of October. And, as Mr. Cramp testified, they have given us 60 days to complete the transaction. 7 BILL NO. 970740 We will actually be refunding our current debt with this new bond issue, which will be federally insured. North Philadelphia Health System is comprised of the two hospitals, St. Joe's Hospital at 16th and Girard, and Girard Medical Center at 8th and Girard, servicing the North Philadelphia community, and has serviced the community at St. Joe's for over 150 years and at Girard for some 70 years. The institutions employ some 1300 employees in the North Central Empowerment Zone, with an annual payroll of $40 million. This bond issue is crucial to the success of the hospitals maintaining the service for the North Philadelphia community. And, for the record, we want to thank City Council, President Street's office, Mayor Rendell and his staff, for all of the health, help, and support that they have given us in proceeding with this transaction. The hospital's history, the changes in hospital reimbursement, has made it very difficult for us to maintain the current debt in its 8 BILL NO. 970740 current size and structure. And with the approval, now with HUD and the FHA financing, will enable us to continue to provide for the community the health needs in North Central Philadelphia. We thank you.
Thank you for your testimony. Are there any members of the committee that have questions for these witnesses? Seeing none, thank you very much for coming with us to. Would you identify yourself, sir, although we know who you are. AUSTIN J. McGREAL, ESQ.: Austin J. McGreal. And I would ask, Mr. Chairman, if you see fit to recommend this, that you suspend the Rules.
Thank you very much, Mr. McGreal. Anyone else to testify on this bill?
Thank you very 9 BILL NO. 970740 much. Councilwoman Clark.
While I don't have a question, because these hospitals are in my neighborhood, I would like to personally speak to how they impact on the quality of life for citizens who live in North Philadelphia. And to say how much less healthy that section of the city would be but for the services of these two hospitals, which are variously named and called different things. Some of us are still calling Girard St. Luke's. But under whatever name, they provide a continuing service for which we are grateful. Large numbers of people will be benefited when this committee passes this with a favorable recommendation.
Thank you, Councilwoman Clark. Thank you very much for your testimony. Next bill is an Ordinance, Bill No. 24 970670, which is an Ordinance amending the Retirement System Ordinance, approved December 3, 10 BILL NO. 970670 1956, as amended, by amending Section 221, and amending the Municipal Retirement Benefit Plan, 1987 Ordinance, which became effective January 8, 1987, as amended, by adding a new section, 119C to, in the case of both ordinances, allow fire and police employees who were laid off in 1978 and 1980, and later reinstated, to purchase service credit for the layoff period, under certain terms and conditions. Good afternoon. Please identify yourself.
Good afternoon, Mr. Chairman. My name is Joe Herkness. I am the Executive Director of the Board of Pensions and Retirement. And I am giving testimony to on behalf of Ben Hayllar, the Director of Finance, who is out of town on city business. I am testifying in support of Bill 20 970670, which would allow fire and police officers who were laid off in 1978 and in 1980, and later reinstated, to purchase service credit for the period of that layoff. This option was made available to uniformed employees several times in the past, while 11 BILL NO. 970670 there is probably only a small number of employees who did not avail themselves the opportunity when it was available in the past. The Administration has no objection to opening up the repurchase for this layoff time, as long as the proper interest rate is paid to the Fund. And the present language of the bill 10 contains the 9 percent compounded annually, which is the actuarial assumption in existence now.
Great. Thank you for your testimony. Any questions for this witness?
Do we know how many employees would be able to avail themselves of this?
Off the top of my head, we don't know. We know it is a very small number. Within a couple of days, if you actually wanted that number, we could go through our files and go back to the layoff lists and see how many are still working and get a ballpark. We think it is very, very small. 12 BILL NO. 970591 In talking with the actuary over the phone to, he thinks that the cost would be what he calls immaterial, quote.
Thank you very much for your testimony. Are there any other questions for Mr. Herkness? Thank you very much. Is there anyone else in the room to testify on this bill? Seeing none, we will move to Bill 14 970591, which is an Ordinance to amend the Philadelphia Zoning Maps by changing the zoning designation of certain areas of land located within the block bounded by Roosevelt Boulevard, Ramona Avenue and Adams Avenue. Is there anyone from the Planning Commission here? Please identify yourself for the record and proceed.
Good afternoon, Mr. Chairman, members of the committee. My name is Richard Lombardo, Chief of 13 BILL NO. 970591 Project Planning for the City Planning Commission, here to to speak on this bill. For the record, the Planning Commission is scheduled to take up this bill 6 tomorrow in our regular meeting. Your hearing got ahead of us. But I am here to basically testify to what the staff will be recommending to the Planning Commission.
How did we ever get ahead of you? It must have been a mistake.
It is easy. We only meet twice a month, and you guys meet... This bill seeks to rezone a parcel of undeveloped ground along Roosevelt Boulevard, just north of Adams Avenue, or just, I guess, in that case east of Adams Avenue, from partly R-14 and partly C-2 commercial to a single designation of R-14 residential. The purpose of this is to bring this land, which I believe has been zoned this way since the 1930's, into conformance with the surrounding land, since this particular parcel that is zoned C-2 is in the middle of the block. It would be like a hole in the donut, 14 BILL NO. 970591 completely surrounded by the R-14 zoning. And there is a map before you that shows the zoning pattern as exists to and as proposed. The one thing that I would just broach with you is, the R-14 zoning itself may be inappropriate, given the fact that it is a high-density, high-rise district, in a portion of Northwood, which is characterized by three-story twin homes. And we would suggest, the Commission will be suggesting, that the Council consider rezoning this entire block to R-5 residential, which would be the same rezoning character of the rest of the Northwood community which is east and north of this particular block.
Yes. This bill does not have the zoning classification in the short title, so you should be able to amend it to, if you would like to do that.
I would like to do that. 15 BILL NO. 970591 You didn't bring an amendment with you. Can you whip one up real quick?
We can have one for the clerk by the end of the day to. That's not a problem. For the record, I said the Planning Commission will be taking this up at tomorrow's meeting at 1 o'clock in the afternoon. The staff will be recommending approval of Bill 970591.
Let me ask you a question. Councilman Mariano. I am very familiar with this. This is like my backyard. And this is my division where I am Democratic committeeman. Why do you think this was ever done? I mean, I know you weren't around in the '30s.
Well, in the '30s mainly what they did was, they did the zoning what they called windshield. It was a WPA project. They rode around the city. And what they saw, they looked for appropriate classification and zoned it. I understand back then -- this is only hearsay -- that there were garages behind the houses facing Ramona Street. 16 BILL NO. 970591
Like rental garages, right where you would come in and rent space, like rent for storage. And since they were a commercial enterprise, they probably zoned them commercial. Now, why they used the rather than 9 another district for the housing, I do not know. 10 Maybe because of the home across 11 Adams -- home across Adams Avenue. But I really 12 don't know where the R-14 would have come from. 13 Because back then, still the 14 character of that area was three-story single and twin homes, for the most part.
There has been some discussion over potential amendment to this bill. Are you aware of that?
Other people may have, 17 BILL NO. 970591 also. But we are suggesting that the zoning be brought into conformity.
Could you do us all a favor. And, do you think you could do that before the end of this hearing to, to begin working on it now, give us something in writing so we can deal with this? Because I would rather get the bill 9 done to, as opposed to holding it. We have one bill which is a very complicated issue, and we can't go forever. So I want to make sure you think you can get it done within a certain time frame.
Is there anyone else to testify on this bill? Please come forward. Good afternoon. Please identify yourself for the record.
My name is Lester Hall. I live at Northwood, at the direct opposite end, at 5398 Oxford Avenue.
I would just like to say that Northwood, through deed restrictions, has been 18 BILL NO. 970591 in the dark ages for many years. And I would like to see that this bill be passed so that this property could be developed, instead of being an eyesore. Thank you.
Thank you very much. Anyone else to testify on this bill? Please come forward. Please identify yourself for the record. MICHAEL SKLAROFF, ESQ.: Mr. Chairman, members of the Rules Committee, my name is Michael Sclaroff. I am the attorney for the equitable owner of this property, Maurice LoPiccolo, L-O-P-I-C-C-O-L-O, who is to my right. And to my left is Larry Watesman, the land planner for Mr. LoPiccolo. This bill comes kind of out of the blue in response to a zoning application Mr. LoPiccolo now has before the Zoning Board of Adjustment. And this, as has been testified to --
Just so I can make sure the record is clear about the 19 BILL NO. 970591 characterization of a piece of legislation introduced by a duly elected member of City Council, it should not be determined as "out of the blue." It came out of Councilman Mariano's office, and introduced in appropriate order.
Yes. But it was something where the zoning of this property has been the same for 65 years.
I just don't want the record to reflect that somehow, out of the heavens somewhere dropped this bill, and no one knows where it came from. We all know where it came from. It came from the District Councilperson.
Yes. Exactly. Thank you for correcting the record, Mr. Chairman.
And it came in response to a specific development. It is not part of a comprehensive planning exercise on behalf of the Planning Commission or any other body under the city Charter. It is designed to stop a specific development. And if we can be heard briefly, I 20 BILL NO. 970591 would like Mr. Watesman to explain the history of development of the site, the efforts since 1979 to develop the property for residences, and where we stand to. Mr. Watesman.
Please. Sir, what I would do is, Councilwoman Clark requested that the schematic be brought closer to the table, say in front of Councilwoman Verna's desk here.
Sir, you are going to have to use one of the microphones. Just pull one of those off of there.
Realizing that this photograph is small, we did bring copies. It looks like this is the best I can do.
Yes, sir. My name is Larry Watesman. I am a professional 21 BILL NO. 970591 planner. I have 27 years of experience, and I am the Chief Executive Officer of the Watesman Planning Group. We serve municipal clients, as well as private clients, in both Pennsylvania and New Jersey.
Thank you very much, Mr. Chairman. First of all, I would like to explain a little bit about this property and its unique situation. I have distributed copies of this aerial photograph, which actually was introduced as an exhibit by the neighbors at the zoning hearing. But I think it really shows that this is a very unique piece of property. The property is the undeveloped portion of the triangle which is located on Roosevelt Boulevard, and which is also bounded by Adams Avenue. The homes that I am pointing to here are developed residentially on Ramona Street. What you notice as you look at this photograph is that Roosevelt Boulevard makes an S-turn. So that the Boulevard really points 22 BILL NO. 970591 directly at the undeveloped corner of this triangle. The only other place in the entire Boulevard where this unique configuration really occurs is on the opposite side of the S, where there is currently commercial development. This is a photograph that was actually produced a number of years ago. It is not current. You will see what appears to be a high-rise building up in the upper right-hand corner. That is actually part of the former Sears complex. And as I am sure many members of Council are aware, it was imploded. And in its place we now have a power center developed by the Rubin organization, which will ultimately have over 500,000 square feet of retail space. A number of those uses are currently open. Roosevelt Boulevard is one of the busiest and most heavily trafficked nonlimited access highways in the Commonwealth. This doesn't come as a surprise to anybody on Council, but there are 61,500 vehicles a day that pass this site. 23 BILL NO. 970591 What was a little more surprising to me is the volume on Adams Avenue, which has 31,500 vehicles a day. So adding these two together, we have nearly 100,000 vehicles passing this property a day on the site.
66, I'm sorry. Thank you for correcting me. And 31,500 on Adams. So we have together almost 100,000 vehicles. The question is, is this really an appropriate location for residential development, whether it be R-5 or R-15? And I would suggest that from not only my experience as a professional planner, but from the development history of this property, the answer is a resounding no. 24 This property has attempted to be developed a number of times since 1979. Actually, 24 BILL NO. 970591 in 1979 the Zoning Board approved the plan that would have permitted the development of 70 -- excuse me, 32 twin homes on Adams and Roosevelt Boulevard. The only homes that were ever started of those 32 were 6 semidetached units, in a total of three buildings, which you see in this picture on Roosevelt Boulevard. The developer was unable to even complete those six units. They were sold -- they were taken over in an unfinished state by the bank, sold to individuals who completed them themselves, and those properties have had a difficult time being occupied. Several have been for sale recently. One at the corner is currently boarded and appears to be vacant. Several of the windows are boarded. It is not a good site for residential development. In 1995 another developer took over the property, attempted to complete the project, and built the as yet unbuilt units from that original 22 1979 plan. 23 He was unable to get necessary 24 approvals from the Zoning Board. And even though 25 there had been some prior agreements, the Zoning 25 BILL NO. 970591 Board reduced his plan to 14 units. He set up a trailer to attempt to market those 14 units and was not able to raise interest in a single dwelling. So the fact of the matter is, he has since abandoned the property and has signed an agreement with the current owner. We had a real estate expert testify at the zoning hearing, who also confirmed that, in his opinion, there was no market for residential development. The gentleman who preceded us, the resident, indicated that he would like to see something done with zoning that would permit the property to be developed constructively. We believe that that should occur, but will not occur with residential zoning; but will, in fact, occur with an extension of the C-2 zone to the entire site. The applicant has proposed the plan that you see in front of you, which is a six-island gasoline service station, filling station, with a convenience store. The applicant is extremely concerned BILL NO. 970591 about the sensitivity of the neighborhoods, and so he has provided a minimum 100-foot buffer to the rear of that development between his development and the homes. He has proposed to landscape it heavily, provide berms, provide an attractive upgrade to the neighborhood. This can only occur with the C-2 zoning. And, in my opinion as a professional planner, it is clearly the most appropriate zoning for this site. And to rezone it to any residential district would be, in my opinion, a planning mistake. Further, I would like to mention that, to my knowledge -- and I think Mr. Lombardo has just confirmed this recently -- there has never been a comprehensive planning study as to what the zoning of this property should be. He indicated that in the 1930s it was a WPA project, which basically drove around in a windshield survey and legitimized existing uses. It is my understanding that there has never been -- and I have spoken to the City Planning Commission about this -- there has never been a 27 BILL NO. 970591 comprehensive plan of Northeast Philadelphia. An argument could be strongly made, based upon the Ugella decision, that comprehensive planning is, in fact, a mandate for the enaction of any zoning ordinance to avoid it being arbitrary and capricious. And I would respectfully recommend that Council consider not the residential rezoning, but commercial zoning, which I think is most appropriate for the site. Thank you.
Thank you very much. Can I ask the question, what is it you want to develop there?
The applicant would like to develop the convenience store and the gasoline service station as shown on this plan, with the 100-foot landscape buffer between the development and the homes.
The question, I 28 BILL NO. 970591 guess, I have for you -- and maybe it is rhetorical in nature -- but don't the residents of that particular area have some right to oppose a retail development that they don't think is necessarily appropriate for their community, despite lack of housing planning? Just as to what, I guess, to what your plans, or your client's plans, are, if they are not conducive with the wishes of the neighbors, why shouldn't we allow them to oppose that successfully?
Well, respectfully, Councilman, there have been numerous development opportunities and plans for this site. In many of those instances the residents have been consulted, there have been agreements that have been reached and have been subsequently changed on the residents' behalf. There has never been a residential or a commercial development that has been acceptable to the residents. And we believe that, frankly, the appropriate role for Council is to make a rezoning request based upon good planning sense, not upon, 29 BILL NO. 970591 you know, what the residents may consider. Because, in fact, this has a substantial buffer, which is designed specifically to protect the residents.
If I may, Mr. Chairman, the residents are currently opposing the development at the Zoning Board of Adjustment, which is the proper forum. Now to rezone it, after that application, in a manner which does not reflect comprehensive planning, really, is a judgment for Council. Of course the residents can oppose it. The question before Council to is whether it is appropriate legislation at this point.
Would you characterize your testimony as being in favor of or against the bill that's before us?
If I understand 30 BILL NO. 970591 your testimony, it is that the tract of land needs to be rezoned, but that the zoning that the bill 4 contemplates is inappropriate?
Well, Councilwoman, the current zoning, which is shown on this exhibit, is a very unusual zoning situation. There is a C-2 zone.
So what this committee has to do is to weigh the evidence we hear 31 BILL NO. 970591 to determine whether yours is more persuasive than that which is coming opposite yours?
Just one other question. What is the history of the planning that went into the current C-2 designation? Let me try to get this. Was there any extensive planning that went into making that little triangle in the middle of the big triangle C-2?
Well, Mr. Chairman, my understanding of the history of this is sort of in the same league as Mr. Lombardo's. I believe we are guessing. I have been told that the original zoning in the township, in the city, was enacted in 1933 as a result of this WPA study. I had not been aware that there had ever been garages in this area. But there was a restriction placed on the property in 1917, which would have permitted public garages and other uses 32 BILL NO. 970591 not harmful to the residents in this center triangle. And it may well be that the zoning attempted to pick this up. The point I would make to Council is that the conditions that existed in 1917 are considerably different than the conditions that exist to, and that restriction may not be relevant to.
So my final question, before I recognize Councilman Mariano, is, what extensive planning have you undertaken that would indicate a forceful argument to us that the entire triangle should be C-2?
I have conducted an existing land use study of the property. I have visited the property. I have reviewed the zoning ordinance. I have reviewed plans. It is my firm that has designed the landscape plan with the buffers that you have seen there. I have investigated the -- reviewed the development history of the site. And I am convinced, based upon my 27 years of professional experience as a planner, that the site is one of the most inappropriate for 33 BILL NO. 970591 residential development that I have ever seen. And I write numerous zoning ordinances for suburban municipalities.
In all fairness, let the record show, on behalf of your client, who wants to put in a retail C-2 development.
Oh, absolutely. I am representing the client here. But as I told the client when I took this assignment, he asked me what would I say, what would my position be, if in fact I was hired by the neighbors. And I simply told him I wouldn't take the case. Because I have a professional reputation at stake. And, in my honest professional opinion, it is not an appropriate site for residential development.
You spoke, sir, of an extensive survey of the area. Is that survey reduced to a report? And, if so, can you share it with us?
It is not a written 34 BILL NO. 970591 report. It is based upon notes, any number of annotated exhibits that were submitted to the Zoning Board of Adjustment, and is on file with the Zoning Board, as is my testimony.
Is there any corroboration of your judgment that this is a better use of the land?
And that corroboration is in the form of what? Witnesses who you are prepared to call? How will we get the corroboration that your position is the better of the two?
Well, again, based upon the fact that I know Council has a busy addenda to, we had not intended to put all of our witnesses on. We are on the fourth or fifth day of hearings before the Zoning Board. That record is available to Council, and has already been transcribed. There has been testimony by traffic experts, by planning experts, by engineering experts, by real estate experts. 35 BILL NO. 970591
Now, may I ask the question, all of these experts that you have just named are independent of you and your client?
I guess what this committee is trying to get is some independent corroboration that this is a better land use plan than the one that you oppose. And your lawyer seems to have something on his mind. Yes, sir.
Councilwoman Clark, thank you. If the Rules Committee would wish, we would be happy to forward copies of the notes of testimony from the Zoning Board proceeding, where the applicant was heard, the neighbors were heard, there was expert testimony. And we would be happy to furnish that to the members of the Rules Committee if that would be helpful.
They have not yet ruled. So that we should not be relying on an incomplete record, should we?
Well, the facts are as established in the record. It may well be that Council would want to wait until the Zoning Board made its decision. We would have no objection to that.
Okay. Mr. LoPiccolo, where do you live? MR. LoPICCOLO: Media.
Well, I live a block from here. And let me tell you something. In 1982, when I was a new journeyman electrician in Local Union 98, I bought a house in this area a block away. I am the Democratic committeeman there. This area has been here since -- and if you take the zoning notes of testimony, if we wish to do that, Federal Judge Ed Becker, who has been there since probably the '20s, was the community association's representative. And he had been the lawyer for the community association when this was done a number of times. This triangle here, I don't know why it 38 BILL NO. 970591 wasn't zoned. And one of you guys said that I am doing this after you started. Well, let me tell you. I have a comprehensive plan to rezone my whole district. I have worked with Councilman DiCicco and watched him rezone part of the First Council District. And we happened to start here because I live here. This should have been done 4, 5, 6, 10, 20, years ago. Why it wasn't, who knows. I have talked to Mr. LoPiccolo and I have talked to Mr. DePalma before him. And I told him, "Mr. LoPiccolo, you want to build a gas station? Anywhere but here. " If Judge Becker wanted to open a law office in here, he could not. He could not, because the neighbors do not want it. And that's why I moved there, because of the ambiance of that neighborhood. And that's why a lot of the people moved here. The Councilperson that I replaced, 39 BILL NO. 970591 this is in his backyard. He was against this. And I told Mr. LoPiccolo -- and he seemed like a very nice guy -- I said, "You want to build houses here" -- first I told him don't buy it. Because the guy that had it before him, DePalma, lied to us, tried to build nonunion houses. They didn't have any sold. Put a trailer up, and left the trailer there, said it belonged to the Department of Recreation. I had to go picket his house in New Jersey almost -- because of course he lives in New Jersey. Nobody lives here that wants to put money into this neighborhood. We have all people and hired guns coming over telling us what we want to do with our neighborhood. Okay? With our neighborhood. And what happens is, this guy wouldn't even cut the lawn, then he tells me the trailer belongs to the Department of Rec. I had to get one of the union contractors to come, drag this out of here, from Jimmy Jordan and the riggers, and move this thing, and then he buys it. 40 BILL NO. 970591 I said, "Mr. LoPiccolo, you are a nice Italian guy. Relate to me here. " What did you pay for it? $100,000? I will get the neighbors to get 100 grand up, and we will make a park there, but it is not going to be anything. If we were going to do anything there, the Mormons wanted to go in before. What better neighbors than Mormons? Okay? But they went against that because of the ambiance of the neighborhood. Now, I won't say the magic word that you are trying to get me to say. We know what that is. And that will be solved in court. But I sat there, just like all three of you guys did. And you listened to Becker. Now, Judge Becker, who is a federal judge -- and a Republican, by the way -- who knew what was happening, lived there, grew up there, still lived in the neighborhood, raised his family, went to Frankford High School, went to law school, became a lawyer and a judge, lived through this whole thing, and he said he know another lawyer you had over 41 BILL NO. 970591 there. You had another lawyer at the zoning hearing; he knew Becker because he represented the client before. I saw a guy out in the hallway. 6 years ago he wanted to put a gas station here. 7 Believe me, if I have to lay down in front of the 8 bulldozers, there will not be a gas station here. I 9 guarantee that. Because the neighbors don't want 10 it. 11 People are fleeing this city every 12 day. I get a call, Jim Kenney, Frank DiCicco, 13 Mrs. " 16 We are going to have control in 17 Northwood. When it comes to that little division in 18 Northwood, I have control.
And we are going to have 19 control. 20 Now, I understand everybody has a job to do. I will get you a community development corporation, we will change this to R-5, and we will build houses there -- union project, by the way; there will be union carpenters and union plumbers and union electricians working on the job -- and 42 BILL NO. 970591 everybody will be happy. I can bring my friend Councilwoman Blackwell up here, whose passion is for the homeless. We could put people there. We had testimony here two weeks ago about Section 8 and housing. Okay? So this is where we are going with this. This isn't going to happen, believe me. It is not going to happen. Not because of the magic word that I won't say, that I know all three of your legal minds know. I didn't say it, deed restriction; Murphy said that. But that's where we are at with that. There was a comprehensive plan. The comprehensive plan is in my office to rezone the whole Seventh Councilmanic District, from Girard to Grant. I started here on Castor Avenue. Now, why people before me didn't do it, I don't know. But if it is going to be rezoned, it is going to be rezoned R-5. And when we go back to the Zoning Board, let the Zoning Board make their decision, and you guys can go to court and do what you got to do. 43 BILL NO. 970591
Fine. Would you please identify yourself for the record. And before we do, let the record reflect that Councilwoman Clark believes that Baptists are better neighbors than Mormons. She wanted the record to reflect that. Please, Mr. LoPiccolo, would you identify yourself for the record.
Are they better quarterbacks? MR. MAURICE LoPICCOLO: My name is Maurice LoPiccolo. And I am a real estate, licensed real estate agent. I am a developer. I run several service stations in the City of Philadelphia, and I own other properties which are used as residential apartments. Mr. Mariano said that he wants to put people to work. And I agree with him. Certainly any kind of building will be a building for the trades union. Any kind of building that then 44 BILL NO. 970591 continues the jobs, I would think, would be more preferable to a one-time deal. I mean, we can have the ironworkers come in and put up a canopy. We can have a pump and tank, and the electricians and carpenters and roofers and so on come in and do this project. So we are even on that score, I believe. But the benefit from this is that the jobs would continue, many jobs would be created, and certainly the exodus of residents would be alleviated when you have jobs that keep them in the city. The city now seems to be spending an awful lot of money in trying to attract business and jobs here. Here is an opportunity for Councilman Mariano to create 15 to 20 jobs right in his own neighborhood. It is a project that takes into consideration the health, well-being, and the quality of life for the neighbors. The berms that are being provided are being so far removed from the rear of the garages of the residents in front of Ramona, as to give them additional greenery, where they can enjoy their back 45 BILL NO. 970591 yards and screen them from the Boulevard. If I may --
Can I just interrupt for a second? I don't want to be rude. But the information you are providing now seems to be best to be provided -- and I am sure you have already -- to the Zoning Board of Adjustment. The issue we are discussing here now is whether or not a District Councilmember has the support of his colleagues in passing a piece of legislation that rezones a portion of land a certain designation. I don't know necessarily whether or not it is the purview of this body to to determine the propriety of the shrubbery and landscape and the gas station, and what the prices are going to be, and how wonderful. I don't think that's what we are being asked to deal with. What we are being asked to deal with is a colleague's request to rezone a parcel of land to a certain designation. And that's what I think the Zoning Board, on the variance issue, would determine the 46 BILL NO. 970591 propriety in their mind of the actual business.
Mr. Chairman, that's correct. However, here -- and I don't think Councilman Mariano would take issue with this -- here this --
Well, if you would. But this bill is intended to stop a specific development. But I think --
That's your opinion. It is not. I just told you that we are up trying to redevelop my whole district. I have a comprehensive zoning plan. I told the Zoning Board that. You are wasting our time. I told you. I told you that.
Well, then, the characterization, Mr. Chairman, of what is happening here is, the evidence is that there is no market and hasn't been a market since 1980 for homes on this site. 100,000 cars pass this site every 47 BILL NO. 970591 day. It is appropriate for the proposed use. If you rezone this to R-5 or to R-14 or to any R district, take away the C-2 that has been there for 65 years, what you are doing is zoning it back so that there is no commercial use. Yes, if you had subsidized housing here or housing --
Nobody said subsidized housing. I said housing, with the redevelopment associated. When you quote me, make sure you quote me right.
I assume the homeless are not going to spend market value for the houses. But the testimony before the Zoning Board and here is that there is no market. The result of this would be a confiscation, would be special legislation and spot zoning. We are asking you, on behalf of the land owner, the equitable owner of this property, please don't rezone this. It is not part of comprehensive planning by the Planning Commission. And what it 48 BILL NO. 970591 does is, just puts more fuel in the fire in what is a dispute at the Zoning Board. And this one, we would hope that City Council would stay out of this dispute.
And your testimony is duly noted and will be considered in our deliberations.
Can I ask Mr. LoPiccolo a few questions? Mr. LoPiccolo, how much did you pay for this land? MR. LoPICCOLO: $327,000.
And how much will the people make, the 6 or 10 or 15 jobs, an hour will they make in your AM/PM mini-market or your Mobile station? $28 an hour? $30 an hour? How much will they make? MR. LoPICCOLO: A manager would normally make somewhere around $50,000 a year.
And how about the slugs that work at the window; what do they make? 49 BILL NO. 970591 MR. LoPICCOLO: The assistant manager would make somewhere around 30,000. And then --
And what's that about an hour? Any math geniuses in here? What's that, $15 an hour, 16? MR. LoPICCOLO: Those are usually salaried jobs, Councilman, and I can't quote you.
It is about $6 an hour. MR. LoPICCOLO: I think it is maybe $8, $9 an hour. Mr. Councilman, the jobs created by the development of the site are definitely trade union jobs. The jobs that stay with the project are perhaps not the best jobs, but they are jobs and they help, I am sure, the fabric of the city. There are also additional revenues generated by such use; Use Taxes, Gross Sales Receipt Tax, Sales Tax, Fuel Use Tax. There are many other benefits to the city.
As opposed to 50 BILL NO. 970591 taxes, what about say you build, what, houses before. Use and Occupancy Taxes, School District Taxes.
Let me make a 6 suggestion. 7 The people you have to convince are 8 the residents of that neighborhood and the person 9 who represents them. 10 And while we understand and accept 11 your testimony for the record as it relates to your 12 opinion on the attempts to rezone this parcel at 13 this particular time, we will either accept or 14 reject that. 15 The debate on the propriety of the 16 development is between the neighbors, the developer, and their legal representatives. And we do appreciate your coming in.
Anyone else to testify on this bill? We will now go to Bill No. 960512, which is an Ordinance to amend the Philadelphia 51 BILL NO. 970512 Zoning Maps by changing the zoning designations of certain areas of land located in the 14th Ward and within an area bounded by North 12th Street, former Brown Street, 11th Street, former Parrish Street, 9th Street, Percy Street, Brown Street, 10th Street and Fairmount Avenue from partly Class R-10 residential, partly Class C-2 commercial, and partly Class G-2, general industrial, to a single designation of R-13 residential. Please identify yourself for the record and proceed.
Good afternoon, Mr. Chairman and members of the committee. For the City Planning Commission, my name is Thomas Chapman. Bill No. 970512 was introduced by Councilwoman Clark for Council President Street on June 6, 1996. It concerns the area bounded by Parrish Street, 9th Street, Fairmount Avenue, and 12th Street. The purpose of this bill is to rezone the blocks in question and to consolidate the zoning to a single classification of R-13 residential. This would assist in the redevelopment of existing 52 BILL NO. 970512 PHA housing at the Richard Allen housing site. The site will be developed with the rehabilitation and construction of 369 units from the existing 628 units. As Councilman Kenney stated, this area is kind of a mixed batch of zoning. It has some C-2, some G-2, and some R-10. And, obviously, especially the G-2, would be inappropriate, as well as the C-2 commercial. For the record, the Planning Commission at its meeting of May 23, 1996, reviewed Bill No. 960512 and recommended that it be approved.
Thank you for your testimony. Any questions for this witness? You are requesting a Rules suspension, I would suspect?
This will continue the new housing that is being built near the Nea Mia Housing; is that correct? 53 BILL NO. 970512
That housing is making a substantial difference in the quality of life. And I would urge my colleagues to support this and report it out with a favorable recommendation.
Thank you, Councilmember. Anyone else to testify on this bill? Seeing none. We will now move to Bill No. 960823, an Ordinance amending Title of the Philadelphia 14 Code entitled "Contracts and Procurement" by 15 amending Section 17-107 entitled "Contractors, Labor 16 Management Relationships" by revising the prevailing 17 wage ordinance, including extending the prevailing wage requirements to certain service contracts, revising administrative and reporting requirements, providing for payment to persons who file complaints and prohibiting discrimination against persons who file complaints, imposing costs for filing appeals, providing for enforcement by withholding certain sums due on contracts, providing for interest on underpayments of wages, and providing for increased 54 BILL NO. 970512 penalties, all under certain terms and conditions. Let me say at the outset that this bill was introduced back on November 21, 1996, by myself and Councilman Mariano, in an effort to bring some level playing field and some equity to the issue of contracting within the City of Philadelphia. We believe that union and non-union companies should be on an equal level, on an equal playing field, when bidding on appropriate city work. And we want to ensure that companies that bid on projects are bidding on projects with the intention of paying wages that are commensurate and applicable to the particular area in which they are doing work, so that people can earn a living, raise their families, and pay their bills, and continue to be productive citizens of the city. With that as a preface, I would like to have Deputy Mayor Gerald Murphy, Deputy Mayor for Labor, to identify himself and proceed. There have been discussions relative to proposed amendments by the Administration to this bill, and he will give his testimony and offer said 55 BILL NO. 960823 amendments. Good afternoon. DEPUTY
Good afternoon, Mr. Chairman and members of the committee. My name Gerald Murphy, Deputy Mayor for Labor. And I am here along with Commissioner Lou Applebaum from Procurement to present some testimony on behalf of the Administration on Bill No. 960823. We have analyzed the bill on behalf of the Administration and would present the following revisions and amendments. And I believe you do have copies, and I will read those for the record.
Hold on one second Deputy Mayor. They are being handed out now. All right. Please proceed. DEPUTY
Part 1, or Section 1, Subsection B, at the bottom of the paragraph we would delete from the semicolon "and all other nonprofessional service contracts with the city for compensation that exceeds $2,500." In the same section, we would add Subsection C to the next paragraph. Going further down on , at the bottom of the page, in Subsection I, we would delete the word after trade, "service," we would delete that word. Going to --
I tell you what, let me make this a little easier. We all have the amendments. Why don't you describe the substance and nature of each of the amendments and why the Administration is supporting or requesting such change. DEPUTY
Well, we are requesting the removal of the word "service contract" and "service contract act" from the ordinance. They are separating it from. And we would like to continue and do support the prevailing wage on all 57 BILL NO. 960823 construction-related public works projects.
And what is the Administration's position on the need for that amendment? DEPUTY
No; the need for the deletion of the service contract issue. DEPUTY
Commissioner, please identify yourself. And feel free to step in with any information to enlighten us. COMMISSIONER LOUIS APPLEBAUM: Procurement Commissioner Louis Applebaum. We absolutely agree with the amendments. We stand behind the public works part of it. The problem lies with what is called "service contracts." And if the bill would be extended to service contracts, it would impose a severe burden on both the Procurement Department and the operating departments making these purchases, as well as the Labor Standards Unit. 58 BILL NO. 960823 The bill would also diminish competition and significantly increase the costs of some city contracts. The burden also would be placed on service vendors, these are some small vendors, by requiring their submission of compilation of contractor listings, weekly certified payrolls, including maintenance of these records for a minimum of two years, coupled with the legal costs they may incur from taking an appeal of a violation of the ordinance, which could also significantly decrease the bidders' pool. Many of the city service contracts would be subjected to these requirements of a relatively small dollar value. We are talking about extermination services, small room air-conditioner repairs, equine services, horse shoeing of policemen's horses.
We only have 18 left. COMMISSIONER APPLEBAUM: But they are considered service contracts. Copying machine contracts. And moreover, in addition to those 59 BILL NO. 960823 problems, we see the small and disadvantaged businesses, such as minority- and women-owned businesses, may be discouraged from bidding on contracts where the prevailing wage rates differ substantially from their current labor wage rates. That would hurt, could hurt, some of our small minority contractors by developing two levels of employees, employees who would be working on city jobs and employees who are working on their other contracts.
Let me ask you a question about the issue of service contracts and the complicated area we would be entering into if we changed the prevailing wage to those contracts. Is the issue one of the amount of the contract? I mean, I could recognize in a $2,500 contract, the burden of a small vendor in doing that kind of reporting and having those requirements. But in a contract that's 50, 75, 100, 200 thousand dollars for, for example, cleaning, city maintenance and cleaning contracts that are above a certain level, why would they be any different than a company that's a general contractor doing window replacement, for example? 60 BILL NO. 960823 COMMISSIONER APPLEBAUM: You are absolutely correct. In all of our major contracts, City Hall custodian, the triplex complex, triplex cleaning and building maintenance, the prisons that we contracted out, those major contracts already contain prevailing wage requirements.
For what mechanism? COMMISSIONER APPLEBAUM: Through the Procurement Department and the operating departments, dealing directly with the Deputy Mayor of Labor, who establishes the rates for those contracts.
And at what level of contract number? What's the contract number amount that would trigger, generally, a discussion of a prevailing wage issue? COMMISSIONER APPLEBAUM: Generally speaking, I would say contracts in excess of 200 to 250 thousand dollars. These are serious contracts that be going to be let to major vendors. And they have the ability to monitor them, the ability to submit 61 BILL NO. 960823 certified payrolls, because they might be doing that anyway in other areas. So where you hit major contracts, that could be a reasonable expectation, and would work. It is when we get below those, that we have difficulty.
Can you tell me how many service contracts we have entered into, say, in the last calendar year with the city, city and a private contractor? Just a rough... COMMISSIONER APPLEBAUM: I am going to give you a ballpark. A thousand.
A thousand different contracts? COMMISSIONER APPLEBAUM: Yes.
And of those contracts, how many was prevailing wage negotiated into the contract? COMMISSIONER APPLEBAUM: Not negotiated, but entered into.
Entered into. COMMISSIONER APPLEBAUM: I would say, again, everyone over the 200,000. And maybe there are 10, 15 the most. 62 BILL NO. 960823 There are a lot of small, janitorial; cleaning of small areas; some security guards at Vet's Stadium, just a small part, like two or three; some library services. There are a ton of very small vendors and tons of small contracts. And that would be a burden on us, as well as -- more serious of a burden on the vendor.
So on the issue of the level of the contract at $200,000 or so or more, that is something that you would not consider to be a burden to either the vendor or the city? COMMISSIONER APPLEBAUM: I think we would accept that and agree to that. Because we are doing that now. So that would not be a change to the existing program, and we would feel comfortable if that was in the bill at that level.
If there are any questions on this, on the issue of service contracts and levels.
Commissioner or Deputy Mayor Murphy, a service contract, they renovate the Municipal Services Building across the 63 BILL NO. 960823 street. Now you need a service contractor to come in maybe five years, or right away, to take care of the HVAC. Now, if that's less than $200,000 now -- COMMISSIONER APPLEBAUM: That particular contract is what we call the triplex contract, which was just awarded maybe less than six months ago. And that was awarded to Elliot Lewis, and it is for three major buildings. It is for the Criminal Justice Center, MSB Building, and the new One Parkway. Now, that's a major contract. And the amount of that contract was a million dollars or more. That contract --
It is a million because you put all three of those together; right? COMMISSIONER APPLEBAUM: Yes. And we do that for economy of scale.
Correct me if I am wrong -- you are the expert on this -- COMMISSIONER APPLEBAUM: No, I am not the expert. 64 BILL NO. 960823
Oh, you know a little bit. Say you wanted to do the opposite. Like say you wanted to revamp all the ballasts in the fluorescent lights at MSB. And you said, let's pretend it is another Administration, and Mr. Murphy doesn't work here, and we can't really contact you people about what's going on, but, anyhow, they say, well, there are floors in the MSB building. 11 Let's give every contractor a floor. Now it is 12 below that window of $200,000 to replace the 13 ballast. 14 That's where I am coming from on this 15 thing. 16 COMMISSIONER APPLEBAUM: Let me comment that if in the event some future Administration would want to deal that way and issue 16 contracts to do 16 floors, we can't do anything to --
Climates change and mayors change, and Councilpeople stay. COMMISSIONER APPLEBAUM: Successes of the contracts that we have to, such as Elliot Lewis at the triplex, such as Hallifax at the prison, they 65 BILL NO. 960823 are very successful, very cost effective. No reason to believe that anyone who has any brains would change that.
The problem here is the word "service contract." Right? When I think of service, I think of Elliot Lewis. COMMISSIONER APPLEBAUM: Elliott Lewis, generally speaking, every contract that they have with us is a major contract, and the prevailing wage or wages are stipulated in the contract. This building right here, we have Collin Care is the janitorial company that handles this building. That contract, that bid, had a requirement of the dollars paid for janitorial services, and also for their health benefits were in there. So that was covered without this legislation. It is in there. And every contract of that type will have it. But let's assume you have a small cleaning contract for a half a dozen rec centers, and maybe Donna Ali at Team Clean wants to bid on that. 66 BILL NO. 960823 She is not equipped to monitor and submit certified payrolls, to have that kind of extra burden on top of her other burdens. I am talking about a minority, the janitorial contractor.
But if it was a minority electrical contract, they would have to do that. COMMISSIONER APPLEBAUM: Not if it is a small service contract. Your electrical contractors who go after and bid on the major projects in Public Works --
I am not talking about a major project. A little rec center job, maybe two rec centers. COMMISSIONER APPLEBAUM: If they are Public Works contracts, it is prevailing wage. Every Public Works contract is a prevailing wage. No problem.
Let me make one suggestion in the interest of time. We are going to have some discussion while you guys are testifying. If we could leave 67 BILL NO. 960823 the service contract part of it out right now, and if Deputy Mayor Murphy could talk about the other additional amendments that are not service-contract related, we may wind up with some compromise we could all live with. DEPUTY
The Administration, as we discussed, supports the other part of the bill. And a lot of the amendments in there are just clarifying apprenticeship. A lot of the problems that come up with the Labor Standards Unit, which it falls under my responsibility, we tried to clarify a lot of the problems that that unit has with contractors coming in with violations, as far as apprentices, what is an apprentice, how is it an approved program, how is he paid, what is the correct wage for him. So we are putting amendments in for that. We are also trying to strengthen the system as far as the process, due process hearing, which is required, is implemented in there, as well. Which, when we first came into this Administration, the Courts had sent a debarment back to my office because there was no due process 68 BILL NO. 960823 hearing. So we implemented that process to follow all the legal procedures that we should be following. In addition, we are implementing fines and penalties. Under the past years on this ordinance, there have been no penalties other than debarment. And we have a lot of minor small penalties that contractors have, and they just walk away with a slap on the wrist. And the corrections are made, but there are no penalties or fines. So we are implementing penalties and fines which will also generate a nice, pleasant revenue back to the city, and also put more teeth into the amendment and into the ordinance, as well. The other thing is that we are putting the debarment proceedings under the Procurement Commissioner to make it uniform. In the past it fell under each operating commissioner. And it is difficult keeping all of them up to date on what the investigation on the Labor Standards Unit is. And since the responsibility for defaulting a contract falls under the Procurement 69 BILL NO. 960823 Commissioner, we are putting this debarment proceeding also under the Procurement Commissioner. And they are basically most of the amendments we are making in there. And the Administration does support the bill as written.
Okay. Commissioner Applebaum, do you want to add anything, while we have this ongoing answer and discussion of service contracts? COMMISSIONER APPLEBAUM: I think it is important to realize, for the panel to realize, that service indicates an awful lot of things, in addition to the trades that you might be focusing in on. We have service contracts to maintain and repair Xerox machines, copying machines. We have service contracts to take care of computers. We have service contracts throughout the city in many, many areas that do not lend itself to a prevailing-wage-type factor. But these are all small. Again, I think if we focus in on the size, we will be able to handle something in a 70 BILL NO. 960823 respectable manner that makes sense. Because our goal is to increase competition, bring more bidders to the table, to get better service and better prices. Every time we throw in new rules, prevailing wage on a copying contract, what this does is, scares people away. And we have been trying for the last five years not to scare people away, but to be user friendly, to bring them to us, to get more bidders. And this is one area where I am afraid we could hurt ourselves by eliminating the pool.
And I want you to understand, with all due respect, my goal and the goals of other Council members who have expressed that opinion, is that while we do want to ensure the maximum number of bidders and the best price for the taxpayer, in the end, if the company that wins the bid based on their low level of wages are from an area outside of the city or outside of the state or outside of the region, and the workers who do that job are also workers from outside of the area, state, or region, there is no additional multiplier benefit to the city in the area of wage tax and 71 BILL NO. 960823 business taxes and buying power and tuition and mortgage paying, and none of those other things. So, again, while the taxpayer deserves and should have the best price possible, if that money is being plowed back into a community in Florida, it doesn't help us much. So there is somehow a balance there. When the taxpayer gets the best price, but all the economic multiplier benefit is going to North Carolina, that's nice, but it is not as nice as if we get the best price possible and the ancillary multiplier benefit goes into Philadelphia County. COMMISSIONER APPLEBAUM: You are absolutely correct. We have spoken about this many times. And would like to use the --
More times than you probably want to hear. COMMISSIONER APPLEBAUM: We would love to be able to use the concept of local business, but we can't do that.
You do have a commerce clause to the Constitution that says you can't put up walls on the Philadelphia boundaries 72 BILL NO. 960823 and say that -- COMMISSIONER APPLEBAUM: If what we are trying to do here would help solve that problem, I would be all for it. But there is no relationship between this prevailing wage on small service contracts. And I am going to make it be Philadelphia versus Camden.
But remember that on the larger public works contracts and the larger service contracts, the thing that concerns us, an anecdotal example, is that if we have a contractor in the city, outside the city, or outside the state, who wins the contract based on the lowest bid, and the workers that they hire to do plumbing or electrical or other types of work are not qualified mechanical people to do that work, they are getting paid a very lower wage, 7, 10 dollars an hour, and the work that they are doing may not be up to the standard that we would expect as taxpayers. So in some ways we have to ensure that the bidding contractor who wins the bid is paying people who are qualified to do the work, so that we get the best work possible for the lowest 73 BILL NO. 960823 price possible, while at the same time not fooling us into hiring college kids -- nothing against college kids -- to do work that they are willing to accept the 7, 10, dollar an hour wage, that they 6 are not feeding a family with, that they are just 7 getting money to get their way through school, and 8 that contractor portrays themselves as a qualified 9 contractor doing qualified work. I don't want that 10 person doing the electrical work on my house. 11 COMMISSIONER APPLEBAUM: We agree with you. In fact, if I may bring an anecdotal comment, you are aware of the major federal lawsuit that was filed by an electrical contractor from outside the city, major suit against the Mayor, David Cohen, Louis Applebaum, and the City of Philadelphia, and Deputy Mayor Murphy. And we spent three, four, five, six days at the federal court testifying on that particular case. And I believe you probably have heard that the judge, his Order came down just the other day, and they found for the city. So we take very seriously -- 74 BILL NO. 960823
Congratulations on your testimony. COMMISSIONER APPLEBAUM: -- prevailing wages. And that case was a prevailing wage case that we threw that bidder, the low bidder, off the job because he wasn't paying prevailing wages. We had three or four violations that were brought to us through the Deputy Mayor's Office. And we successfully defended that case. A lot of nervous people. So we take it very serious.
But I also want you to recognize, in the story that you are telling us, you don't want to send a business-unfriendly message to the regional and national bidders for work for us. But you also want to send a message that you are not going to come here and snucker us into paying you money. Because what happens is, that low bidder who pays those unqualified workers a lower wage takes the balance of the money and puts it in his pocket. 75 BILL NO. 960823 He doesn't put it back into the economy, so we are really not gaining at all. COMMISSIONER APPLEBAUM: That bidder spent a ton of money on legal fees.
Good. Every dime, he deserves to spend. COMMISSIONER APPLEBAUM: And, in fact, the judge ordered the loser, what do you call, the plaintiff --
The loser. COMMISSIONER APPLEBAUM: -- to pay our costs.
Good. He probably won't be able to get a new boat this summer. What are you going to do? COMMISSIONER APPLEBAUM: Just the point I am trying to make is, we take very serious prevailing wage rates, prevailing wage regulations, and we monitor them very, very closely. And we just want to make sure that we don't put a hamper on ourselves, where we get lost in the forest and lose the big picture. The big picture, major contracts, major service contracts, public works contracts, and 76 BILL NO. 960823 not the little guys that we don't --
Mr. Applebaum, this might be a good time for us to discuss that is not simply the lowest bidder. There is a little R word in there, the lowest responsible bidder. And nobody is relieved of the obligation to make sure that the city gets what it bargained for. Now, if we are bargaining for a competent service, then whether we pay prevailing wages or prevailing wages plus a bonus, or not, we should not be accepting work that is less than we expect. And I certainly hope that nothing about the size of the contract impacts on the fidelity with which you check to see whether the city is getting what it is paying for. COMMISSIONER APPLEBAUM: You are absolutely correct. The bidders must be the lowest responsible bidder. Very often we disqualify people. We are in the process now, we disqualified a company that was doing rodent control and pest control. They weren't providing a good service; they are 77 BILL NO. 960823 out. We continually go through this process. We have a construction, a demolition company, that was found to be taking our debris and off-loading it into illegal places. They have been found that they were doing that. We have taken them off the bid list, and they are not allowed to bid. So we do monitor.
Mr. Applebaum, what reason would a contractor have for paying less than prevailing wages? COMMISSIONER APPLEBAUM: The reason to pay less than prevailing wages is for the contractor, or the service provider, to make more money.
Or to be able to hire a staff so that he doesn't do the work at all. There are some jobs that are so low, the cost of them is so low, that he couldn't afford to hire the people to do it if he had to pay prevailing wages in every instance. COMMISSIONER APPLEBAUM: Well, we do monitor our bids. And when bids come in, just as some of them are ridiculously high, we investigate them. 78 BILL NO. 960823 If they are ridiculously low, we do the same thing. We must take the lowest responsible bid. But when a bidder comes in and the bid is outlandish, we won't accept it.
Because that's not really a savings, because you are still going to have to pay money to come in and finish the work at a level that we can accept. COMMISSIONER APPLEBAUM: Exactly right. Exactly.
Just one other addendum to your story on the contractor who lost in federal court. That individual was awarded the bid initially as the lowest responsible bidder; correct? COMMISSIONER APPLEBAUM: Yes.
Correct. And at some point in time during the course of that contract, he snuckered us. How did we catch him? How did we catch that individual to bar him or to remove him from the contract and wind up in federal court in the first place? 79 BILL NO. 960823 If we followed the process of the lowest responsible bidder, he would have never got the job in the first place. COMMISSIONER APPLEBAUM: Well, no. 6 DEPUTY
That was brought to my attention by -- Local 98 submitted a document to my office with some allegations against the contractor which we weren't aware of before. In fact, his violations were in Jersey. And my office had investigated and found those allegations to be true. And then we took them to Commissioner Applebaum's office.
And the violations in Jersey were committed after the award of the contract, during the course of the work. COMMISSIONER APPLEBAUM: The violations were actually --
In New Jersey. COMMISSIONER APPLEBAUM: -- they were prior.
No. You are missing my point. The violations in New Jersey that were brought to your attention, were they or were 80 BILL NO. 960823 they not violations that were done during the course of the contract, the Jersey contract? DEPUTY
Yes. That's my point. My point is that the individual who got the New Jersey bid, one, he is the lowest responsible bidder, then began to do the bid, then began to do the work. COMMISSIONER APPLEBAUM: No. No. 12 The contractor never was awarded the contract.
In the City of Philadelphia, it was never awarded the contract. COMMISSIONER APPLEBAUM: Right.
In New Jersey, where he did the violations he did, whatever violations he did, he did in the course of a contract that he was duly awarded. DEPUTY
So he was, in that case in New Jersey, the lowest responsible bidder who turned out not to be a very responsible contractor because he didn't pay prevailing wages and he did other things to falsify records and other 81 BILL NO. 960823 things to show that he was being a prevailing wage rate payer. Okay? COMMISSIONER APPLEBAUM: Correct.
So now he comes to Philadelphia and he bids, and he is the lowest responsible bidder again. Now, without those violations that we became aware of from New Jersey, we would have wound up awarding him that contract. COMMISSIONER APPLEBAUM: You are correct.
And it is possible -- not definite, but possible -- he would have continued his practice in Philadelphia of falsifying records, paying people below prevailing wage, and pocketing the money. DEPUTY
And I guess that's what we are trying to avoid by strengthening this legislation to ensure that individuals like that do not get contracts with the city, and we don't have to wind up in federal court in the first 82 BILL NO. 960823 place. COMMISSIONER APPLEBAUM: That's why we all support this ordinance, with the adjustments and amendments that we are suggesting to.
What I want to do is -- again, and I appreciate your patience with me, Commissioner, because we had these long discussions on the telephone about these issues which I raised earlier. This is -- I think you agree because you are supporting the bill -- extremely important, to ensure that not only do we get the best value -- I won't say that -- the best value for our dollar, but also people get a wage they can raise their families on. COMMISSIONER APPLEBAUM: You are correct.
Thank you very much. Any questions for these witnesses? Thank you very much. DEPUTY
Thank you. Mr. Gillespie. And if Mr. Shields would like to come up, too, if he is here, or 83 BILL NO. 960823 Mr. Harris. Could you please identify yourself for the record and proceed.
My name is Pat Gillespie. I am the Business Manager of the Philadelphia Building Trades Council. And I am here to, firstly, applaud you, Councilmen and women, in endeavoring to correct and improve on an Ordinance that will, hopefully, prevent the city from being bottom feeders when it comes to contracting services and contracting work out. The object, and the stated object, of the prevailing wage law is to see to it that a standard is followed, that wages and fringe benefits are paid, and that the work that you are contracting out to have performed are performed by men and women who are trained and qualified to do that work. So the impact of these curative steps in the Ordinance that will help the city's prevailing wage procedures, we applaud and we support. Also, I would like to encourage you to pursue the service work. Because by merely 84 BILL NO. 960823 saying, well, it is hard to administer, or that it is going to cost more money, kind of flies in the face of an ethical approach to running government. Again, on a smaller project where -- and smaller work, where you have people doing janitorial service, which I guess the hourly wage rate may be or dollars an hour, it is kind of 9 difficult to pay the mortgage and pay the tuition 10 payments and pay other things on 9 and 10 dollars an hour. But what the city is saying by saying they can't, that would be too expensive for them to pay for those janitorial services, they are saying, well, then, these folks, we have to pay them less. I mean, I always laugh at the objection -- the standard objections initially by the procurement officer was that it would hinder utilization of minority contractors. I mean, that's been stated against Davis Bacon since Davis Bacon was enacted. And we have proven that that is not a fact. As a matter of fact, especially in the service sector of industry in Philadelphia, I would think that it would do more to -- how would 85 BILL NO. 960823 you say? -- raise everyone's boat if we start looking after folks who tend to our services, like the janitorial things. So I applaud you for doing that. And, if need be, I am willing to be interrogated.
"Ethical approach to running government." "Hinder utilization of minority contractors." Would you say that there is absolute equality among qualified workers to membership in the building trades?
Is there any bar based on race or gender to people being card-carrying union members in building trades? 86 BILL NO. 960823
I am not hearing you, I guess. Would you ask the question again.
Maybe I can speak for Mr. Gillespie when I answer this question. I carry a card in Local 98, which is the electricians union. When you are busy working on the job, it don't matter if the guy next to you or woman next to you is black, white, or Puerto Rican. You have to do the work, and you do it, and you get done.
But you have that luxury. I want to talk to Mr. Gillespie. And he has building trades, and he has an idea of who constitutes the membership of the various constituent unions. And now, Mr. Gillespie, I ask you whether, in your estimation, minorities and women are fairly represented in the constituent unions of the building trades.
Are there any bars and barriers still up that prevent their free interaction into the unions?
Not that I am aware of. We made great strides in including people into the building trades unions.
This is relatively new, or has it always been like that?
No, it is not relatively new. I have been working at this since 1982. And the percentage makeup of the Philadelphia Building Trades right now is, there are 42 percent African-Americans in the Philadelphia Building Trades membership.
Where are they in this room to? Where are they? Out there working? So are you going to say to me --
Well, excuse me a minute. Is your point that -- because I am hearing a tone in your voice, Councilwoman. And if the tone is that the building 88 BILL NO. 960823 trades is just a bunch of white guys from the suburbs, that is not correct.
Let me help you before you put too much on this record and attribute it to me. Okay? You better work on what I say, not what my tone seems to say. I need help on a lot of things, fighting, running, and things physical; not thinking and not talking. So I can make you understand me. I am asking you whether you have minorities and women represented in your union in the same rates as they participate in the work force? What we in affirmative action call work force utilization data.
Yes. As a matter of fact, I think we have a pretty good -- I am kind of taken back by the question because of all the strides that we have made in this regard, as I stated for the record. 89 BILL NO. 960823
The impact, this gives you an opportunity to brag a little bit. Put upon the public record where we were and where we are now, and you can take credit for the games.
There is always credit and blame enough to go around. Don't worry about that.
Well, the blame gets put upon the Business Manager of the building trades when things go on. I have to include the credit to the various Business Managers in the trades who have their apprentice coordinators going out weekly in the evenings to various schools to let children know what this is they have to study --
-- in order to be candidates for apprenticeship. 90 BILL NO. 960823
Will you share with us, perhaps at a later date, a written record of where you were ten years ago, where you were five years ago --
-- and where you are now? Then that way we won't have your opinion versus my opinion; we will be working with some facts.
Fine. I would be happy to do that. Also, just for your edification, you can look to our program with the Philadelphia Housing Authority that we instituted. It was an initiative of the Philadelphia Building Trades Council member unions that has put through a training program a number of residents, most of whom are women, to familiarize themselves with the construction industry, as they help repair apartments and make them habitable for other tenants.
And I am aware of that, and I applaud you for it. It is the kind 91 BILL NO. 960823 of thing, in fact it is the exact kind of thing, that I think needs to be talked about, put upon the public record so that it can be replicated. Now, I don't want you to interpret my tone. You interpret my words. Calm yourself down. This is not a fight. You and I may be on the same side of this issue. But I am going to ask the question, and then I am going to listen to your answer. But I am going to ask the question.
Well, the other project I could point to, where the building trades made commitments for inclusion, especially neighborhood inclusion -- which is a little more difficult because you have to select members who not only are of a certain gender or race, but who then live in a certain zip code. And we are down to that kind of sophistication, without jeopardizing other members' rights to a job.
Now, we raised this issue years ago -- it might have been me who raised it -- about how offensive it is to be an 92 BILL NO. 960823 unemployed resident of public housing, and watch some guy get out of a raggedy car, with a Jersey tag, and carry gallons of tar to the top of a 5 two-story public housing development. So we are not -- and that has been as recently as in the last few years that I have said that.
Well, more than likely it was a non-union roofing contractor, too, if he was getting out of a raggedy car.
They are probably cheating him. The other project I would like to point to, of course, is the Convention Center, where we received national acclaim for our inclusion program, and it is used as a model. The CoreStates Center, the --
Wait a minute. Let's talk about the Convention Center. Because the Convention Center was slowed down as we fought over participation of race from this Council. I do not say, I do not say, that 93 BILL NO. 960823 gains have not been made. These gains have always been hard fought and bitterly won, and we have miles to go before we sleep. This work is not yet completely done.
Well, the point of this ordinance that we're discussing --
Yes. The proposal will be to ensure that the policing of the prevailing wage statutes is done more efficiently, and will, hopefully, prevent -- at the risk of offending gypsies -- the gypsy-type contractor who doesn't have a root or any kind of substance in our communities. And that's why we embraced this. Quite frankly, there is a whole school of thought -- and I don't want to get into this -- that one of the problems that organized labor is having is that we are becoming victims of our own success. Because we come before governing bodies and say, look, everyone, regardless of collective bargaining, should be paid a fair wage. That's, in effect, what we are saying here. 94 BILL NO. 960823 Now, there is a school of thought saying, you know, maybe we should just go out and organize them, and then demand it from someone else and make everyone union. And I know there are a lot of people who subscribe to that. But insofar as inclusion into the building trades of multi-cultural work force, it is there, and it has been there for quite some time. And it is something that I am proud of.
I am proud of the effort that we have begun. I assure you that there is much work that remains to be done. And this record is an opportunity for us to again publicly commit to the ideal of inclusion and removing barriers which do still exist, which have historically existed, and which have kept people out of labor unions. I wish it were otherwise. I wish it were otherwise. But it is not so, and it will not be different because we sit here and revise history.
Well, Councilwoman, I am not revising history; I am just stating the facts of what we are and who we are, and what we do to 95 BILL NO. 960823 accommodate that problem that you stated.
Thank you very much. Any other questions for Mr. Gillespie? Mr. Harris. Mr. Gillespie, the request was made that you send any written documentation reports to the Chair.
Good afternoon. Please identify yourself for the record.
Good afternoon, Mr. Chairman and members of the committee. My name is Robert Harris. I am the Assistant to the President of Service Employees International Union, Local 36. We are the union in Center City that cleans all the office buildings. And, actually, we clean City Hall, the Municipal Service Building.
You do a very 96 BILL NO. 960823 good job, too, I must say. Thank you.
Thank you very much. Those are our members. I have with us one of our organizers.
My name is Joe Shields. I am an organizer with SCIU, Local 36.
Mr. Chairman, I would love to see a perfect world, and I would love to see this ordinance passed in its original state. But I know that's not the real world, and I know there are amendments and things that happen during the course of the political process. I would just like to refute some of the things that were said by Mr. Appleman.
I'm sorry, Mr. Applebaum. I really don't know the gentleman. And I believe that he is not totally representing the people who really need the representation, and those are the people in the service industry. These are the people who can least afford not to have a prevailing wage or not to have a living wage. I feel that this bill, or this 97 BILL NO. 960823 Ordinance, should pass in its original state, and have the service portion of this Ordinance intact. We represent about 4,500 members throughout the Center City and surrounding area. And once Mayor Rendell took over and put into his -- into place privatization, we picked up City Hall, we picked up the Municipal Services Building, and some of the other city services that were privatized. And, fortunately, we do have a prevailing wage set in the City of Philadelphia that provides our members with a living wage and benefits. I can't see having an Ordinance 15 passed that would jeopardize that type of activity that we already have in place. So we're asking that the committee look into putting this bill through in its original state. And, Councilwoman Clark, on behalf of Brother Gillespie, Service Employees International Union, Local 36, we are part of the building trades. Our membership is about 65 percent black. And out of that 65 percent, maybe 70 percent 98 BILL NO. 960823 are female. So on behalf of our Brother Gillespie, yes, the building trades do have a block of minority participants that participate in the building trades. So I just wanted to put that on the record in support of our brother.
Before I recognize Councilwoman Clark, what I would like to talk about, obviously the perfect world of having this bill passed intact is in jeopardy. So one of the issues that we have been discussing is the issue of threshold. The Commissioner and Deputy Mayor Murphy indicated a number of about $200,000 threshold. Could you comment on and recommend, if you feel a need to, another threshold, or discuss the issue of thresholds in general?
Well, we feel that $200,000 is a little steep. We could probably agree to support a bill where that number may be cut in half. That's stretching it. 99 BILL NO. 960823 But in a nonperfect world, we would probably have to lick our wounds and keep getting up. I just think $200,000 is a little steep, especially in the service industry. They spoke about a company called Team Clean, Donna Ali. You know, $200,000, you know, would probably put Donna Ali out of the ballpark.
Councilwoman Verna is suggesting, would like to know, of your 4,000 members, how many work under current city contracts, and what are those contract levels? Are they all within the prevailing wage, $200,000 or more?
All of our contracts -- to answer your question, Councilwoman, we have about, I would say, upwards numbers of 200 to 250 people who are members who work under city privatized contracts. All of those contracts are over that number of 200,000.
Mr. Harris, how 100 BILL NO. 960823 does your union compare to sheet metal workers? Do you think the sheet metal workers are 65 percent black and 70 percent female?
Does the fact that your members are concentrated in janitorial services suggest anything to you?
I would just like to say that unions in the Pennsylvania area are made up of a lot of different organizations. The building trades, the actual trades, the sheet metal, the glaziers, those kinds of trades, are predominantly in areas where females may not be a part of that.
How about minorities? How about black men sheet metal workers?
Then you really 101 BILL NO. 960823 don't have an informed opinion, do you, Mr. Harris?
My opinion is that I know my membership of 4,500 members are predominantly --
I can get you a better number than that. 1199C is probably 95 percent black and 97 percent female. But I am talking about building trades.
We are affiliated with the building trades, and I would not be on record in telling you something that's not true.
Okay. Well, lets you and I discontinue this conversation. Because we are just spreading opinions; we are not spreading facts. We are spreading opinions. And I am not likely to persuade you, 102 BILL NO. 960823 and you are not likely to persuade me. You will go away thinking what you think, and you have not told me one thing that causes me to think otherwise.
Sure you were. Sure you were. You addressed the comment to me. You were trying to change my opinion.
No. No. I was trying to state to you that Local 36 is part of the building trades, and that we have about --
And that you are 65 percent black. And of the 65 percent who are black, 70 percent of them are women. So --
You said 70 percent of your -- 65 percent of your membership is black. That's what you said to me.
So how is that 103 BILL NO. 960823 different than what I said? Why are you saying no?
I don't believe I said no. 5 If you want to run the tape or the record back, you will see that I did not say no. 7
So your union is comprised of large numbers of black men and women who clean buildings.
And who do an outstanding job of cleaning this building, which is the only one that I can speak to.
And I think that is admirable. And I am certainly glad you are making a living wage. Nothing about whatever we do to this is going to require anybody to roll you back to less than what you are making. Nothing about anything we do to this bill will require any employer to roll back your wages. Nothing. Did you think so?
Is that what's keeping you up? Are you afraid that that's about to happen to you?
I am not afraid of anything on that line. It is just a matter of making sure that you protect the interests of your membership; that's what I'm here to do.
Thank you, Councilwoman Clark. Do you have anything, sir, to add?
My name is Steve Lashinski. I am an organizer at ACORN. It is always tough being the guy at 4 o'clock, so I will try to go quick. I am from an organization called 105 BILL NO. 960823 ACORN. It is a 5,000-member, community-based organization a lot of people are familiar with. We have been working at this issue of wages for a long time. We have organized the Philadelphia Jobs and Living Wage Coalitions, a coalition of over 30 organizations of union, religious, community-based, and other organizations. So on behalf of ACORN, we definitely want to congratulate this committee for bringing this issue forward. I think it is a great issue, and one to be raised, and a really important one, especially now at this time. We want to just sort of touch on briefly, since the issue has been raised, an opportunity to talk about the issue of wages, and as it relates to neighborhoods, neighborhood development, and the relationship it has to issues of city assistance, contracts that are given out, both, you know, service contracts as well as professional contracts in general. And to do that, I am going to submit -- I am not sure how to do this -- a report that many of you have seen, called Left Behind: The 106 BILL NO. 960823 Minimum Wage and the Real Cost of Living in Philadelphia. And the point of it is to point out, to take a typical family and look at what kind of wages they would need to make in order to pay for things in Philadelphia, like health care and housing and transportation. And we give three examples. For a family the size of a one parent and one child, in order to pay for things in Philadelphia, like food and clothing, they really would need to be making almost $10 an hour. Anything less than that shows that they would not be able to afford just basic necessities. And this doesn't take into account movies, going on vacation. It doesn't take into account like a sick day that you don't get paid for. This is just five days a week. For a family size of three, a parent and two children, that's 13.30 an hour. And for a family size of four, it is 16.59 an hour. And the reason to bring that up is to really talk about the perspective of what happens with wages in community, and what happens when people don't have, don't make those kind of wages. 107 BILL NO. 960823 Which is why the issue of service contracts and service work is really, really important and really fundamental in what you are talking to. So we believe that the service contracts have to be included in prevailing wage, especially with the transition our economy has been making from, unfortunately, white collar, maybe building-trade-type jobs, as you have seen, to a very high service-based industry that's happening in Philadelphia.
Okay. Really, we know that there has been a lot of discussion about where this bill is going. And, frankly, the testimony that I submit may or may not have anything to do with what finally happens. The only thing we want to raise is the point about thresholds, and what that is. Because the question that's being asked is, well, at 108 BILL NO. 960823 what point do you want to trigger this in? And I think that takes further examination. I think you really want to look at how many contracts are given out for that trigger at 5,000, 10,000, 50,000 dollars. We appreciate SCIU being here to and representing their membership. We would like to speak on behalf of the people who may not be part of that membership, but are still doing service work and part of this. And what you are doing when you allow a company to come in and pay somebody 7, 8 bucks, 9 dollars an hour, what that person is going to do -- you all know, with Welfare Reform, people are required to take these jobs. That's why employers can offer work cleaning toilets at $6 an hour, because people have to take it. So they take it. And yet what they also do in order to survive is, they go on Food Stamps and they get medical assistance. And who pays for that? Well, we do, because we are taxpayers. So not only are we paying taxes to give to the company to have the contract, but then we end up subsidizing their employees through these 109 BILL NO. 960823 tax breaks. And not only in terms of receiving medical assistance or Food Stamps, but people who don't pay utility bills, and we have to subsidize them. And nobody would want their gas cut off in November, but a parent has to make a choice. We would like you to look at this report to see what happens when a parent ends up at the end of the month making that kind of choice. So we subsidize not only publicly through Public Assistance, but we subsidize privately by paying into these other areas. And so that what you are considering is very, very important. And we really advocate taking a really hard look at thresholds, and who you leave behind and who ends up paying for that. At a further time we would love to talk about the earlier testimony you heard from the Mayor's Office. And maybe to quote Councilwoman Clark, is to compare facts, not opinions. A bill similar to this that passed in Baltimore did have requirements with contracts. And they did a study to see what happened to those 110 BILL NO. 960823 contracts. So, in fact, the position that the Mayor is taking is false with regards to the effect of the contracts driving those businesses away. And we would really encourage members of the Council to take a look at that study. We would be happy to provide that. The last thing we would like to do, besides wishing you luck on the League of Cities this week -- and we know that you will make Philadelphia proud -- is continue to work with you on Bill 970586, which was submitted two months ago. And that makes reference to a living wage. Because, really, the question -- and I think, Councilwoman Verna, you have asked this before -- is, well, how many workers is this all affecting? And the number compared to the overall work force is small. With the living wage ordinance you have an opportunity to impact a tremendous number of workers. And what those workers do when they get paid a dollar, 2, 3 dollars an hour more is, they go home to our districts, to their 111 BILL NO. 960823 neighborhoods, and they buy more food at local grocery stores, and they take their children to movies in our neighborhoods, and they build up our neighborhoods. Really the strength of the city's economy is its workers. And you have an excellent opportunity to help that work force by passing this and other related ordinances. So we thank you for your time, putting up with that speech that I promised I wouldn't make. I am open to questions, or I just want to thank the committee.
They will get those. If you leave them on the table, they will circulate them for you.
Circulate them? Oh, yeah? I am probably going to find them in the waste basket. All right. Thanks a lot. 112 BILL NO. 960823
Thank you very much. Is there anyone else in the room to testify on this bill? Commissioner, come on up. COMMISSIONER APPLEBAUM: Procurement Commissioner Louis Applebaum. I would just like to comment on the testimony of Mr. Harris of the service industry as it relates to Donna Ali and Team Clean. My comments and thoughts were to assist Donna Ali, who is a minority owned -- owns a minority-owned company called Team Clean, to not have her go to the extent of maintaining the records and the administrations of a prevailing wage such as certified payrolls, monthly audits, submitting documents. And I know Donna Ali very well. She is doing a very good job. And that type of a requirement upon her company would be hurtful, and not helpful, and that's why I mentioned that. So my comment was to assist Donna Ali, and not to hurt her at all. Thank you.
Could you explain 113 BILL NO. 960823 Donna Ali's contract with the city. COMMISSIONER APPLEBAUM: Donna Ali is a minority subcontractor to Collin on this particular building. And her employees, as they relate on this building, are paid the rates that we have indicated in our contracts. So there are no 9 problems there. But if Donna Ali goes out and gets a smaller contract, a direct bidder with the City of Philadelphia under a smaller contract, if this Ordinance was passed as it is to, she would have to maintain and submit to us certified payrolls, be audited by the Deputy Mayor's Labor Standards Department, and it would put a major burden on her company that she really doesn't need.
What's the level, if you know, of Donna Ali's contract now as a subcontract with the city, if you know? COMMISSIONER APPLEBAUM: Well, she is part of the contract here and also -- well, she had the MSB Building of last. All of those contracts that she had as a subcontractor were all in excess of 200,000. 114 BILL NO. 960823
As part of the general contract? COMMISSIONER APPLEBAUM: Right. We are not talking about carving hers out; we are looking at that as one.
So if she came in, her or any other minority or nonminority contractor, came in as a sub to a contract above $200,000 -- COMMISSIONER APPLEBAUM: They must comply to the prevailing wage. It is only when they are direct bidders, not part of a big contract, that we are talking about.
Commissioner, just one question. Maybe I am asking this for both of us. If she is a sub to Collin, he has to fill out the things anyhow; right? COMMISSIONER APPLEBAUM: Collin is a million-dollar company who has all of the accountants -- 115 BILL NO. 960823
But he fills them out for her employees; correct? COMMISSIONER APPLEBAUM: He maintains the record in his house, under his computer. Donna Ali doesn't do that; it is his responsibility to submit the information. He is responsible for it. He does it. He pays the payroll for her. DEPUTY
I think I can clarify that. The responsibility of filling out the certified payroll is the subcontractor. And the prime's responsibility is to submit those, make sure they are correct, and then submit them to our office.
But what you are saying is that the level of her contract makes it appropriate for her to do that. COMMISSIONER APPLEBAUM: Right.
Because of the 116 BILL NO. 960823 amount of money involved. COMMISSIONER APPLEBAUM: Right. But under where she would go direct, under smaller contracts, she would not have that obligation.
But under the current bill, with the $2,500 threshold, she would have a problem? COMMISSIONER APPLEBAUM: Every job that she would get direct with the city, she would have to go through hoops. We are trying to prevent her from going through the hoops. DEPUTY
Plus, in addition, if I can, in response to Mr. Harris, since this Administration has been in, almost all of the contracts that his companies have been awarded have had prevailing wage included, even without it being required by law. Along with the Procurement Department, we have come up with a wage for that and a benefit package. So all of them do require that, even without it being required by the Ordinance.
Thank you very much. 117 BILL NO. 960823 Is there anyone else? It is the consensus of the committee, we would like to apologize to Miss Ali for putting all her business information on the record. We could use Miss Smith or Miss Jones. But she does do good work here in City Hall. Identify yourself.
Yes. My name is Harry Foy. I am the President of the Electricians Union, Local 98. And just in respect to the minority issue -- and I just want to clear the record so that we have an understanding of the way we actually access people into our local union -- we have two methods of coming in. And that's through the normal channel, which is the apprentice training facility, which is always open every year, and which we are more than willing and we always do accept a great number of minorities. But we also attack that on another avenue, and that is through organization. And just to point out, in this last year, Local 98, just as 118 BILL NO. 960823 of about three weeks ago -- and I don't know where the situation stands right now -- offered memberships to Bell Atlantic technicians. I believe there was 47 people involved in that organization. 42 of them, I believe, were African-American men. As well as that, we have had an active campaign to organize -- we have organized Chism Electric, an African-American-owned company, all African-American employees. I believe I swore in seven gentlemen about a month ago. Towns Electric, another African-American contractor, with all African-American employees, on an active campaign to organize that entire shop and give all those men representation at the collective bargaining table. So we do make a very honest attempt to make sure that every walk of life is represented in Local 98. And I feel the same matter is true of the building trades.
Could you just add one other thing that I happen to be aware of -- because I have a close contact with your union, and I do recommend a lot of people over there. And you 119 BILL NO. 960823 guys have helped a lot of community issues and community improvement projects. Your apprenticeship, your formal apprenticeship program, I believe when Mr. Dougherty took over as Business Agent and your Administration came in, was it the minority apprenticeship -- or the minority membership was about 7 percent, 8 percent.
We are on a constant mode to make sure that all walks of life are represented in our local union and represented under our collective bargaining agreements.
Mr. Foy, I thank you for coming to the table and for putting numbers on the table. Three years ago your membership was 7 percent, and now you are 14 percent. That's a 200 percent increase.
That is exactly the kind of hard measurement that we need to do. Now, I don't want you to get angry, and I don't want to be angry with you, because that's not going to solve our problem. But between us, if we are well motivated, we can increase those numbers even further, can't we?
It is not a problem. We are on the same side of the issue. What you want to do is recruit and work 121 BILL NO. 960823 people who are skilled electricians.
Now, let me give you a personal story. My daddy was a member of the United Mine Workers. And in our house John L. Lewis was pretty close to God. When my father worked in the coal mines, he worked 39 years sometimes up to his waist in water. And minutes were spent when he came 15 top side just coughing up dust. So I know the difference that union labor makes on a family's outlook. I am not against paying a living wage. I would be stuck in the woods of West Virginia, trying to get to the hard road, but for the living wage that United Mine Workers paid my father. I am absolutely for it. But I am equally certain that it is not as easy to be a union card-carrying member if you are a minority. 122 BILL NO. 960823 And until that playing field gets level, we are always going to have to ask these questions, how are you doing toward reaching the ideal.
And it will not change the legitimacy of the question.
Thank you, Councilwoman. Thank you, Mr. Foy, for your testimony. That will conclude our group of witnesses for this bill. What I would like to do now is to formally offer the amendments that Deputy Mayor Murphy had made in his statement, and recognize Councilman Mariano for two amendments that he would like to add to this bill.
Thank you, Councilman. The first part is include, the first amendment is include, "service contracts above the threshold of $100,000." And the second -- 123 BILL NO. 960823
So the record is clear, the suggestion is being made that all of the amendments that Deputy Mayor Murphy offered to the bill, with the exception of the exclusion, which is now going to be included, the issue of service contracts at a threshold of $100,000. And do you have a comment on that?
Councilmember Clark has made the record clear that she would like to see it fixed at 200,000. And in the public meeting we will have that vote. And the second amendment deals with , Section E of the bill. And Councilmember Mariano would like to offer that amendment, also.
, Section 19 E, Contractor Contracts. "The contractor contracts on the performance of city work entered into by the city with any contractors and all contracts entered in and between such contractors and subcontractors for such work."
That's the way it reads now. The amendment will be added to include 124 BILL NO. 960823 the following language.
This is the amended part. "Including contracts or subcontracts requiring the off-site fabrication and/or manufacture of nonstandard items produced specifically for city work and work performed at fabrication plants, barrow pits, job headquarters, tool yards, et cetera, which shall be deemed city work for coverage purposes of this ordinance; the fabrication of sheet metal ducts or similar products for heating, ventilating, and air conditioning systems shall be deemed to be work directly upon city work whenever they are custom fabricated for a specific city work project over such fabrications within the scope of work covered by prevailing working conditions."
Those are two amendments that are being offered at the hearing level. I would like to give an opportunity for the Administration to put on the record what I suspect will be opposition. But in fairness to the Administration, we would like to have that record 125 BILL NO. 960823 clear, if you are willing to or if you are interested in offering rebuttal to the amendment. DEPUTY
I am sorry. I am Gerald Murphy, Deputy Mayor for Labor, City of Philadelphia. That issue was brought to our attention earlier and reviewed by the City Solicitor's Department, and found that it is not applicable under Davis Bacon to enforce -- do any enforcement off the construction site, fabrication or any supply. It would technically be considered a supply or service, because it is materials. And Davis Bacon doesn't govern materials; it only governs the construction work on site, not away from the site. And since this is off site, one, Davis Bacon wouldn't be applicable. Two, it would basically be a material contract and a supply contract, not a construction contract. 126 BILL NO. 960823 Three, we wouldn't be able to enforce it because it is away from the site. So my inspectors couldn't go out and do the enforcement of the site, especially if it is located outside of the city or outside of the state. And, four, there would be a difficulty for us to determine a wage for that. We would have to revert back to the Service Contract Act. And if you look at the Service Contract Act, the total package per hour for that job would be about $21, including benefits, which is about $19 lower per hour than what the local sheet metal union pays their employees here. So we have a problem with that amendment to the bill.
So the record is clear, the rationale for, at least my support for, that particular amendment is that on specific public work sites, when you are dealing with other trades, carpentry, plumbing, wiring, electrical work, the raw material is brought to the site and actually fabricated there. The shelves are built, the walls are built, the pipe is laid, the wires are laid. 127 BILL NO. 960823 The problem that we find with the particular sheet metal issue is that almost 100 percent of the product to be installed arrives on the site pre-prepared. And that, I think, makes it a different situation than the raw material lumber being delivered and having the carpenters build the shelving, as opposed to the finished duct work product arriving by truck and being installed. And that's where we believe there is a bit of a difference for this particular trade. DEPUTY
Well, the plumbing, there is plumbing that is fabricated away from the site and brought to the site, and there are union shops for plumbers. So you would have a lot of unions or different suppliers coming by and saying, "Ours is customized, as well." So that is not necessarily true, that they are the only trade doing that.
I don't want to make the record unclear. I am not saying that is the only trade. This particular trade expressed this specific serious concern that they feel is part of 128 BILL NO. 960823 what their problem is. And we can, again, have discussion, as long as the record is clear. And if you want to make comment on the threshold level, that's -- DEPUTY
It is one we just basically couldn't enforce, because it is not applicable under Davis Bacon.
The service, again, as Commissioner Applebaum said, the 200,000 is where we currently do it, even without anything requiring us to do so. And anything with service included, obviously, the Administration would like the record to read that they would like deleted anything referring to service.
Thank you very much. The Chair recognizes Councilman Mariano for a motion to amend Bill No. 970591. Or at least not to make the formal motion, but to read into the record what the amendment will be to that bill. 129 BILL NO. 960823
This is the gas station. Section 1, 970951. What we are changing, pursuant to Section 14-103 of the Philadelphia Code, the Philadelphia Zoning Maps are hereby amended by changing the zoning designation of certain areas of land located between the block bounded by Roosevelt Boulevard, Ramona Avenue, Adams Avenue, from the existing partly Class R-15 residential and partly Class C-2 commercial, as indicated in Map A set forth below, the single designation of Class R-5 residential, as indicated on Map B set forth below. This Ordinance shall take effect immediately." That's it.
Thank you very much. That will be formally voted on in our Public Meeting. That will now conclude our Public Hearing. (Public Hearing adjourned.) - - - 130 COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC MEETING of the COMMITTEE ON RULES - - - Wednesday, December 3 1997 - - - Public Meeting conducted by the Committee on Rules, held in Room 400, City Hall, Philadelphia, Pennsylvania, on the above date, to consider action on the following: BILLS 970740, 970670 970591, 960512, 960823 - - - PRESENT: COUNCILMAN JAMES F. KENNEY, Vice-Chair COUNCILWOMAN AUGUSTA A. CLARK COUNCILWOMAN ANNA C. VERNA COUNCILMAN RICHARD T. MARIANO - - - 131 PUBLIC MEETING
The Chair recognizes Councilwoman Clark for a motion to approve Bill No. 970740, the North Philadelphia Health System Ordinance.
Mr. Chair, I move that we report this bill out with a favorable recommendation and that the Rules of Council be suspended so as to permit first consideration at our next Stated Meeting of Council. (Duly seconded.)
Moved and seconded. All in favor. There are none opposed. Bill No. 970740 will be reported out of this committee with a favorable recommendation, and a request will be made for Rules suspension to allow for first reading at our next Council session. The Chair recognizes Councilwoman Clark for a motion on Bill 960512, with a Rules suspension. 132 PUBLIC MEETING
Mr. Chairman, I move that Bill No. 960512 be reported out of this committee with a favorable recommendation, and that the Rules of Council be suspended so as to permit first reading at the next Stated Meeting of Council. (Duly seconded.)
Moved and seconded. All in favor. There are none opposed. Bill No. 960512 will be reported out of this committee with a favorable recommendation, and a request will be made for Rules suspension to allow for first reading at our next Council session. The Chair recognizes Councilman Mariano to approve the amendment to Bill 970591 as offered by him.
Mr. Chairman, I offer the amendment to 970591 as amended. I offer 970951 as amended.
You want to approve the amendment to 970591. 133 PUBLIC MEETING Do I have a second for that motion? (Duly seconded.)
Moved and seconded. All in favor. There are none opposed. Bill No. 970591 will be amended accordingly. The Chair recognizes Councilman Mariano for a motion to approve the amended Bill 12 970591, with a Rules suspension.
Mr. Chairman, I make the amendment to approve 970951 with the amendment, and with a suspension of the Rules. (Duly seconded.)
Moved and seconded. All in favor. There are none opposed. Bill No. 970591 is amended and will be reported out of this committee with a favorable recommendation, and a request will be made for Rules suspension to allow for first reading at our next Council session. 134 PUBLIC MEETING The Chair recognizes Councilwoman Verna for a motion to approve Bill No. 970670, with a Rules suspension.
Mr. Chairman, I move that Bill No. 970670 be reported out of committee with a favorable recommendation, also a recommendation that the Rules of Council be suspended so as to permit consideration at our next session of Council. (Duly seconded.)
Moved and seconded. All in favor. There are none opposed. Bill No 970670 will be reported out of this committee with a favorable recommendation and a request will be made for Rules suspension to allow for first reading at our next Council session. The Chair recognizes Councilman Mariano to approve the amendments to Bill No. 23 960823, which includes, in this particular motion, the inclusion of "service contracts" in the bill, with a threshold of $100,000, plus the amendment to 135 PUBLIC MEETING , Section E, which includes "fabrication of sheet metal products off the work site." I will ask for a motion on that.
Mr. Chairman, I make a motion to approve the amendments as read to 960823. (Duly seconded.)
Moved and seconded. So we understand what we are voting on, this is a motion on all Deputy Mayor Murphy's amendments, with the exception of the service contract exclusion, with a threshold level of $100,000, including a provision for fabricated sheet metal products off site. Do I have a second? (Duly seconded.)
This motion now is a motion to approve the amendments offered by Councilman Mariano only for Deputy Mayor Murphy's proposed amendments, with the exception of the exclusion of the service contracts at a threshold level of $100,000. It has been seconded by Councilwoman 136 PUBLIC MEETING Verna. And all in favor signify by saying aye. (Councilman Kenney, Councilman Mariano and Councilwoman Verna vote aye.)
There are three ayes. Councilwoman Clark votes nay, opposes that.
And she wishes that exclusion to be raised to 200,000.
Let the record reflect that Councilmember Clark is voting against that because she requests a $200,000 threshold. So that motion to approve those particular amendments is approved. Now I recognize Councilman Mariano to offer an amendment to , Section E, relative to sheet metal fabricated products off work site.
I am going to make a motion to pass Bill No. 960823 as amended.
You make a motion to approve the amendment to , Section E. Councilman Mariano moves the 137 PUBLIC MEETING amendment to , Section E, as previously read. (Duly seconded.)
It has been seconded. All in favor. There are none opposed. Now the Chair recognizes Councilwoman Verna for a motion to approve Bill No. 960823 as amended.
Thank you, Mr. Chairman. I move that Bill No. 960823 be reported out of committee with a favorable recommendation as amended, and further that the Rules of Council be suspended so as to permit first reading at our next session of Council. (Duly seconded.)
Moved and seconded. All in favor. There are none opposed. Bill No. 960823 as amended will be reported out of this committee with a favorable recommendation, and a request will be made for Rules 138 PUBLIC MEETING suspension to allow for first reading at our next Council session. Let it be clear for the record that an entire, completed, amended copy of this bill will be available for Councilmembers tomorrow before first reading of this bill, so that all the amendments will be clear, newly marked and clear, on what the amendments are for tomorrow's first reading. That concludes the business of the Rules Committee. Thank you for your attendance. (Public Meeting adjourned at 4:15 p.m.) - - - 139 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Wednesday, December 3, 1997, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COMMITTEE ON RULES _____________________________________ DEBRA A. WHITEHEAD, RPR