Delaware County is taking the lead in introducing that legislation.
I didn't say who was taking the lead. I said, where is it at? What are --
It has not been introduced yet. All right. The other part in your statement, "The consolidation of decentralized departments' administrative functions," could you please go into detail, what are the departments that are going to be centralized and consolidated? How are they going to be consolidated? What, if any, people are going to be laid off? And what is going to be either the savings or the cost, the initial cost and then the projected savings?
I'll ask Ms. Davis to recap that. 102 2/10/03 - FISCAL STABILITY - RES. 030030
We will not be consolidating departments, but consolidating those non-core functions within departments such as the budget, personnel actions, payroll, time keeping, some --
-- has those functions. And they will be taken out of the Commissioner's -- each commissioner will give those functions up?
Yes. And we will create -- I believe we've looked at six service centers performing the functions for all the departments across the government. We anticipate that it will eliminate 400 positions. We don't know how many of those will result in layoffs because there will be hirings in conjunction with DROP. We anticipate that in '05 we will save roughly 50 percent of the money generated by this consolidation. And never do we take more than two-thirds of it in any Fiscal Year, recognizing that there will be costs associated with the implementation of the Administrative Service Centers. 103 2/10/03 - FISCAL STABILITY - RES. 030030
Do you have a chart of those departments and the positions that will be impacted in this consolidation? And could you give us each one of those departments with the positions that are going to be affected?
We've done a prototype for Finance and we can list the departments that will be involved in that consolidation. We have the anticipated clusters, but we've not identified each and every position within the rest of the departments. Once that is done, we will provide it to City Council.
Well, you said 400 positions are going to be eliminated.
If our experience with what we've seen in the prototype department holds true, it is roughly 50 percent of the positions involved in Administrative Services.
So right now we have 800 people working in the 10 departments?
876, assuming a little less of a reduction Citywide than we've seen in the 104 2/10/03 - FISCAL STABILITY - RES. 030030 Finance Cluster.
We have 4 departments, 10 administrative departments; is that 5 correct? 6
No, no. I'm saying 9 we have 10 commissioners -- 10 departments. In 10 those 10 departments, we have over 876 people --
I mean, we have 10 Charter departments, right? I mean, 10 commissioners?
But we're not just talking -- we're talking about every department, not just the operating agencies, so it's more like --
-- if you look at the back of the Five-Year Plan, there's an appendix that lists 105 2/10/03 - FISCAL STABILITY - RES. 030030 all the departments.
What happens to the 400 people that hold those positions?
We anticipate that a lot of those people will be able to be reassigned because of the DROP Program, and DROP happening at about the same time we're implementing.
How many of those individuals do you know are in the DROP program?
I don't know exactly how many of the people who will be affected are in DROP.
I'd like to see a detailed chart of all the departments, the positions that are going to be impacted and what the consolidation is going to look like. You're going to eliminate -- from 50, you're going down to 6; is that correct? 106 2/10/03 - FISCAL STABILITY - RES. 030030
No, we're not going down to six. We are not taking 50 departments and compressing them into 6. What we are doing is taking the functions that support --
That's what I'm saying. You've got 50 departments in which these individuals --
Groups of people. And you're going to put them into six clusters?
And those six clusters will have very defined functions?
Could you give us those functions and the definitions of what they are?
We will provide you with a written document that summarizes -- it will have more detail for the Finance Cluster and less detail 107 2/10/03 - FISCAL STABILITY - RES. 030030 for some of the other departments. But I think we will be able to identify for those other departments the kinds of positions where we think the opportunities are.
Councilman Ortiz. I'm sorry, your time has been up. I just wanted you to complete your question.
We have other Councilmembers that would like to be recognized. We'll be very happy to come back to you. I just have one question, if I may, Councilman Rizzo. On of the Plan you mention the new stadiums. The press has been running stories that suggest the stadium transaction is not producing the revenues the Administration projected at the time of the hearings and are, therefore, requiring the City to make cuts in order to pay for the stadium. For the record, will you please explain this transaction and what budgetary impact it has had on the FY '04 budget and Five-Year Plan?
Yes. First, just to get to the statement about the $5 to $6 million. That's 108 2/10/03 - FISCAL STABILITY - RES. 030030 not accurate. There are two sides, obviously. There are the costs, which is the debt service, and then there are revenues and avoided cost. Revenues will come in from wage taxes on construction, which has happened just as we anticipated; from the Phillies' salaries, which are going to be much higher than we anticipated; from the Eagles salaries -- and there's some dispute about whether that will meet what we said; from the car rental tax, which has been a little lower than we thought because of what happened after September 11th. And there are the avoided costs from not having to put what engineers told us was at least $160 million into Veteran's Stadium, so that it will be usable going forward. Our look at the numbers show that it's too early to draw a conclusion about a 30-year project, but that, so far, not only have the stadiums not taken money from the Plan, but that we've gotten revenues without corresponding expenditures so that they've actually helped us in terms of last year's Plan and this year's Plan. And the debt service numbers are actually lower than what we anticipated when we made our presentation to 109 2/10/03 - FISCAL STABILITY - RES. 030030 Council.
Thank you. The Chair recognizes Councilman Rizzo.
Thank you, Madam Chair. For a few years now we've been having conversations at these budget hearings about making the government more efficient. And after the budget hearing, lots of the ideas were just kind of dismissed and never occurred. One that we've been talking about for lots of years -- and maybe someone read the transcript from maybe three years ago from the budget hearing -- we talked about consolidating or at least trying to manage better the Fairmount Park Commission and the Recreation Department. You know, we talk about the line in the sand, but we have the line in the grass, where crews from the Recreation Department cut the grass to a line and won't dare step over it because that's the piece of grass that the Fairmount Park Commission cuts. So I would hope that after -- this is about my fourth year talking about this efficiency improvement. But somebody really takes it seriously. That's part of the problem that 110 2/10/03 - FISCAL STABILITY - RES. 030030 Administrations, that they say they're going to do things and they don't do them. So if you're really serious, let's get with it.
I'd like to ask Phil Goldsmith to come up. The Administration has been serious about looking at those relationships. We've gotten a grant from the William Penn Foundation to help us develop a strategic plan that actually gets rid of some of what you're talking about.
Thank you. Councilman, I agree with you. We do have a strategic plan going on. This is a national firm. They are in town. They've been in town for about three weeks now interviewing people. Part of what they will be doing is an operational review of Fairmount Park so we can really assess objectively how the park is being run and so forth. But having said that -- and before I took this position as Managing Director in the budget that I submitted for Fairmount Park, I have recommended and I believe that there are things that we should be doing right now and we need not wait for. In fact, a 1983 master plan for Fairmount Park had talked about the consolidation of recreation 111 2/10/03 - FISCAL STABILITY - RES. 030030 centers. Swimming pools, we have three swimming pools. The Recreation Department -- I shouldn't say we. Fairmount Park has three swimming pools. The Recreation Department has 80. I think the Recreation Department should run the additional swimming pools. I think they have an expertise. They will find economies. And the same thing with our Fairmount Park's Recreation Centers. There are eight. We're recommending in this year's budget that six of those eight recreation centers be put under the management of the Recreation Department so they can start to perhaps provide better programmatic skills than Fairmount Park has been able to, as well as look for redundancy in operations and move people around where people are needed, as opposed to where they're reporting on an organizational chart. I think the grass cutting is something we're going to look at and we're going to keep on working through these projects. But I think, frankly, the time has come to do it and I hope to use my perch as Managing Director to get that stuff done.
Managing Director, I'm going to taking advantage of you sitting in that 112 2/10/03 - FISCAL STABILITY - RES. 030030 seat. For years and years and years and years we've been talking about -- and I think I'll describe the situation. You drive through the City. You see a traffic signal that's not operational. You see a stop sign that is knocked down or a speed limit sign that is becoming detached from the location it's intended to be. You see intersections that require lane markings that have faded to the point where you don't know if you're supposed to be in this lane to turn left or that lane to turn right. And if you do it -- it's kind of like three years old that we've been talking about some responsibility of employees of the City, specifically the Streets Department, where we should have people that either it's part of their job or create a position as an inspector because I'm sometimes amazed, because I'm pretty focused on things like I just described, and I'll see that something is knocked down on Monday and I'll figure, oh, somebody other than a Councilman had to see this. Somebody in the Streets Department had to see it. The Police Department had to see it. The Fire Department had to see it. And I'll call on Friday from seeing it on Monday and be told that this is the first report they have of it. We don't 113 2/10/03 - FISCAL STABILITY - RES. 030030 need people, constituents, people that live in the various neighborhoods to really have to call a Council office to get a red light bulb re-lamped or a street light that's out. We should really have a group of people in each of those districts in the Streets Department out there looking and seeing the same things that I see, the constituents that I represent, you represent. We've been talking about this and everybody at the budget hearings says, "Great idea. That's something we should do to be more efficient." And guess what? It never happens. I'm still reporting the same stop sign knocked down a week after I see it the first time. And it's the first time that that particular issue has been addressed. So I would hope that the eyes and ears of the Streets Department district engineers, or whatever, highway people are out there looking at these things because that faded intersection that I described, they must see it.
Well, Councilman, I think I would ask all employees to be the eyes and ears for us and to be early warning signals. My own point of view is when we hear from a Member of 114 2/10/03 - FISCAL STABILITY - RES. 030030 City Council, it's because we haven't done our job. So I think we've got to be more alert on the field for those of us that are doing the job. So we're trying to be attentive to these. By the same token, we're going to have to prioritize a lot of this stuff because the needs far outstrip the resources. But we have to be attentive and let people know what we're doing and when we plan to do it.
I agree with you, but safety issues where you have a pole that's supposed to be in the sidewalk area indicating no parking and it's bent over where a person at night coming home doesn't see it and they get their head almost bashed because there's a pole that has been out of alignment for months and months and months. And I understand that we have to prioritize. I'm not suggesting that we hire additional people, but there ought to be a person in each district, if it's not everybody that works in that district, highway district, be a facilities inspector, if they see something that's not right. As a matter of fact, I see poles all over, metal poles with nothing on it. We talked at the last budget process about doing some audits of 115 2/10/03 - FISCAL STABILITY - RES. 030030 what's supposed to be there. Signs get taken away. As a matter of fact, in one particular area there were signs removed by some people that lived in the area because they didn't particularly agree with the message. They've been missing for five years and nobody ever noticed.
Thank you. The Chair at this time recognizes Councilman Nutter.
Thank you, Madam President. I did actually want to follow-up on one of the issues that Councilman Rizzo raised. You responded to Councilman Rizzo, I believe with regard to the strategic plan for Fairmount Park and said that -- did you say that people conducting it have been here in the City for about three weeks?
My only real 116 2/10/03 - FISCAL STABILITY - RES. 030030 question about that is, I seem to recall that it was during these budget hearings last year, I think in March, when the Fairmount Park was in for departmental hearings as a part of the Committee of the Whole. Do you have any sense of why months 7 later we're just now at a point where the people who 8 are actually supposed to do the work are doing the 9 work? 10
I can't give you the 11 complete history of it. When I joined the park in September, I think the process was that we were interviewing consulting firms based on an RFP that had been put out. Shortly after that, we interviewed seven firms, made the decision to select the firm that was selected. That was happening at about the Thanksgiving holidays and so forth. By the time the contract got signed and schedules opened up it was really January. So I think the good part is that we have an outstanding firm that's done work in major cities. They're in the process of interviewing. They will be working through Councilwoman Brown in terms of dealing with City Council and getting the input of City Council and so forth. So it's going to be a public engagement. 117 2/10/03 - FISCAL STABILITY - RES. 030030 We're still shy. We're going to do the public engagement and operational review, and then we have to find some more funds to complete the study to really get the full impact. We're out there now applying for some grants and hoping that the private sector and the business community puts up some money because I think Fairmount Park is a great asset.
I think it's about $600,000 total, so it would be about an additional $300,000.
Okay. Thank you. Madam Chief of Staff, I wanted to ask a couple questions directly related to the testimony, and then I have just a couple other questions. On , about the middle of the page, this was one of, I believe, three new spending proposals as outlined by the Mayor in his Budget 118 2/10/03 - FISCAL STABILITY - RES. 030030 Address back on January 28th. Can you tell us a little bit more about the $5 million Child Care Health and Safety Fund, and are those dollars identified in the Five-Year Plan?
Don't answer it. And as well as the $25 million and the $30 million?
On the same , under the heading of, "The City recognizes that future economic growth depends on the ability to attract and retain businesses in the City," can you tell us -- obviously, given our fiscal situation, it is more than appropriate to look at the number of facilities we have, and I know we've had this terminology that's being used currently about right-sizing the government. Can you tell me on the other side of that, I guess, what steps or what actions, or is there an operation, if you will, for 119 2/10/03 - FISCAL STABILITY - RES. 030030 population growth of the City to reverse the decline or exodus in population? Or is there a strategy here today somewhat similar to what, unfortunately, happens sometimes with patients in a hospital, where we just decide to try to make the person as comfortable as possible and send them back home and the rest will take its course? I mean, what steps are we taking to reverse the middle class exodus?
I think the Administration is doing a number of things. I think that until we get our neighborhoods to the point that they provide a reasonable quality of life, we'll continue to see the exodus of people. And one of the tenants underlying Operation Safe Streets, underlying NTI and dealing with a lot of these quality of life issues that have been lingering around for decades in some cases, is that you cannot expect people to remain in the City unless we get a handle on this. I think the schools are perhaps the largest example of that. We know from studies that have been happening over the years that people decide to locate where there are quality schools. And so I think we can never reasonably expect to see 120 2/10/03 - FISCAL STABILITY - RES. 030030 the population grow in a significant way until we get a handle on education, crime, and the quality of life in neighborhoods. I think that one of the other things that we've learned is that people want a type of housing that we don't necessarily offer in this City. And so with NTI, what we've attempted to do is harness the resources we have in our neighborhoods in order to put them back into productive use in a way that people tell us they want to live now-a-days. We think that there is interest in moving back in the City, but people don't want to live in little row houses in every instance. They want a selection of different types of housing. And so I think that attracting population back to Philadelphia in part turns on having a different type of housing supply. As the Mayor indicated in his speech to the Chamber, we are already reaping the benefit of being able --
Among other points that he made, he indicated that growing the Convention Center -- 121 2/10/03 - FISCAL STABILITY - RES. 030030
We should talk about that. That was actually one of my questions here. I'd love to engage in a discussion about the Convention Center.
That all the buildings that have been redeveloped in Center City, I think converted from industrial commercial to residential use is further evidence that if we can come up with a housing stock, we can grow our population. We also know that retaining students is an important part of trying to grow Philadelphia. And so the Administration, in collaboration with the universities, is working on specific strategies to try to keep those students in town. I think we complement our approach on bringing residents in addressing the housing stock with a strategy that looks at retaining and growing businesses. Under Jimmy Cuorato's leadership, the Commerce Department, together with Center City District and PIDC, has visited every business that is looking at an expiration of its lease, finding out what it is that the City can do to better address their issues, what would it take to keep them in the City. And I think Radian is one of our 122 2/10/03 - FISCAL STABILITY - RES. 030030 success stories. Radian had talked about moving into Conshohocken and has since changed its mind and is remaining in Philadelphia. We intend to pursue aggressively every business in Philadelphia. We're not conceding any yardage in this. And we think all of those things are important components to growing Philadelphia.
I appreciate your use of the sports analogy. I like a good sports analogy as much as the next person. Tell me a little bit, if you can, about -- and that was a starred item on my list. You made mention of the 60 largest local businesses whose leases expire. Can you give us any update on either how that's going or -- I certainly recognize the Radian situation as a success. Are there other successes or challenges out there that we should be aware of?
Good afternoon. I'm Duane Bumb with the Commerce Department. In response to your question, we are outreached to large businesses whose leases are 123 2/10/03 - FISCAL STABILITY - RES. 030030 coming due within the next five years. It's sort of an ongoing process. I would say that we are about halfway through that process. In many cases, when we meet with businesses, this group, as Joyce has said, The Commerce Department, PIDC and Center City District primarily meeting with business leaders, more often than not, sort of the good news is that many of those businesses are or have already renewed their leases. In other cases, we identified specific issues or concerns that we need to resolve for that business's satisfaction.
Without breaking any confidentiality, but kind of in general, what are the kinds of things that the business people are concerned about?
It's a broad sort of range of issues. At least when talking with us and maybe just as the negotiating point of reference, taxes often will come up, especially with businesses who cite dissatisfaction with their current location.
Incredibly, yes. They talk sort of almost evenly between the business privilege 124 2/10/03 - FISCAL STABILITY - RES. 030030 tax and the wage tax are the two large taxes which they focus on. Other than that, sometimes it's a matter of making sure from the lease perspective, making sure that there are sufficient resources available, whether that be for tenant fit-out if the business chooses to stay or move to another location within the City, making sure that we have sufficient resources to assist that business in that growth or that relocation within the City. Sometimes it is also other sorts of infrastructure improvements that that business is looking for whether -- in the case of one very large business in Center City, the major issue they brought to our attention was that they wanted a stop sign where one did not exist. And we put a stop sign in. They were very happy and stayed. So it can be a broad range of things.
I think that there are other challenges. For example, Budd Company is talking about withdrawing from -- will be withdrawing from the City, and this is part of their corporate strategy.
It's a national 125 2/10/03 - FISCAL STABILITY - RES. 030030 consolidation issue.
That's right. And so what we're looking at are ways of trying to make sure that that parcel doesn't lay dormant for a protracted period of time. We're also looking at the various resources that are made available, like the Keystone Opportunity Zone and its newest iteration. Or Innovation Philadelphia has worked with other players in the City. Also the Rendell Administration on the Keystone Incentive Program, which would co-locate businesses with universities. So we're trying to use a whole array of strategies to attract and grow businesses. We're also taking a real hard look at entrepreneurs in the City that -- particularly among segments of our population, not everybody's going to find a traditional job. And whether it's vending or day care centers or some other kind of opportunity that we can facilitate, we're looking at those as a way of trying to extend employment and give more families an opportunity to generate jobs.
Thank you. With regard to the Budd situation, I 126 2/10/03 - FISCAL STABILITY - RES. 030030 would certainly be pleased to work with you and anyone else in the Administration to make sure that that significant facility doesn't sit around for an extended period of time. And so anything that I can do to be of help, please let me know. Let me just ask a few last questions and then I'll be finished. On of the testimony -- and it may have been mentioned in other places in response, I believe, to a question asked by the Chair, Madam Chief of Staff. You talked about the CLIP program, and there have been continued expressions of interest, at a minimum, for expansion, when you talked in response to my question about quality of life issues. Can you give us a sense of a timetable of when we would see the expansion of the CLIP program in the course of the current Fiscal Year and going into the next Fiscal Year?
I think we plan on doing the actual expansion in '04. It's part of the '04 budget. We'll be talking with people over the course of the next few months trying to figure out exactly what is wanted in various districts or parts of districts so we can put together the program, 127 2/10/03 - FISCAL STABILITY - RES. 030030 have it ready to be up and running with the start of the new Fiscal Year.
And would that be a City Operating Budget funded or would that be NTI Budget funded?
The CLIP by and large draws on operating General Fund resources. It is a redeployment of people in the Streets Department, L&I, better coordination on the City side. For the most part, it involves very little NTI money. Although depending on the neighborhood, if you come across an abandoned building and it looks like the building needs to be renovated, we would be able to draw on NTI resources, but the actual quality-of-life-type issues are General Fund.
Well, let me ask about the NTI resources in the context of -- in the current NTI program. A statement. I think we've allocated $500,000 to each of the 6th and 10th Districts, and so it was from that perspective that I was asking about the NTI dollars. What's your sense of the timing of getting an NTI budget over here? Is that during this process or subsequent.
It will be during the 128 2/10/03 - FISCAL STABILITY - RES. 030030 process. Under the legislation, we commit to transmitting the actual resolution with the program and budget 60 days before the end of the Fiscal Year. I think it's 30 days prior to that that we commit to having a draft available. We've got people circulating now trying to schedule visits with Council offices and putting that together.
The last thing in testimony, you talk about the prisons system's population has stopped growing. I'll make a big leap and assume that somewhere else in the course of the Plan or possibly in the testimony, the assumption is, is that the prison population decline is directly related to the activities coming out of Operation Safe Streets?
We're not making quite that bold a causal relationship. We're looking at a number of things, trying to figure out exactly what's going on. In addition to the Operation Safe Streets, we've had a number of meetings between the Police Department, the District Attorney's Office, the Courts, the Public Defenders, trying to better manage the whole system. While we would like to say it's all Operation Safe Streets, we're trying to 129 2/10/03 - FISCAL STABILITY - RES. 030030 refine our analysis. We think that it probably does play some role. Because if you look at the timing of it, it appears to play some role, but we're not quite there yet.
But on the other hand, I think I at least want to believe that it's not necessarily a goal of Operation Safe Streets to arrest fewer people.
I can have the Police Commissioner speak more directly about how --
I mean, there are clearly some who need to be arrested. I'm just stating that for the record.
One of the main functions of Safe Streets is to make the quality of life much better in the community.
How does that play into the issue of whether more, fewer, the same 130 2/10/03 - FISCAL STABILITY - RES. 030030 number of people get arrested? I certainly understand that it's not good for us to have the prison system overburdened with people. It's not good for the system and at least a whole host of other issues. I'm just trying to -- are there fewer people being arrested because we believe that fewer people are committing crime or that crime is going down in general? Or because of Safe Streets, there are fewer transactions and activities that these knuckleheads are conducting out there and, therefore, we have fewer people to arrest?
We believe because of the added presence of the police officers there is less activity out there and that is part of the result for the reduction in arrest.
Okay. Thanks, Commissioner. Mr. Dubow, let me ask you this question with regard to wage tax revenues. This is on the attachment to the testimony. The second bullet says, "Wage tax revenues, including the PICA tax are projected to grow by 2.59 percent in FY '04. Without the wage tax reductions, those taxes would have grown by 3.5 percent." 131 2/10/03 - FISCAL STABILITY - RES. 030030 Do you recall in the current plan what the estimated growth would be in FY '04?
What do you anticipate them to be for '03 as compared to the estimate? I understand we're still in the Fiscal Year.
For '03 -- let me answer your '04 question first, and then I'll go to the '03 question.
You're a man on a mission. 132 2/10/03 - FISCAL STABILITY - RES. 030030
2.37 percent, sir, for '04. That's what we had in last year's Plan.
Yes. So it's just a kind of slight change. And for '03, I think we're still at roughly the 1.9 percent. I don't think we changed that too much.
Do any of you know how many people have signed up for the tax deferral program under Bill 020579?
No, we don't have those numbers yet. We just sent out the notification about the deferral, so we haven't gotten numbers yet.
Can you send me a copy? I'd just like to see what's --
Well, I'd generally ask if you could send all of us a copy so that we'd at least have it, so when our constituents call and say, you know, "What in the world is this," we might actually be able to answer the question. 133 2/10/03 - FISCAL STABILITY - RES. 030030
With regard to taxes -- last question. The Plan makes reference to last year's wonderfully engaging activity with regard to property taxes and the tax assessment situation, that the Mayor vetoed the percent cap bill and 9 allowed the 4 percent Bill to become law without 10 his signature, which also in that Bill is a provision requiring state enabling legislation. There is a Bill floating around in Harrisburg that would do that. And so I need to understand at the moment, is the Administration's position that, since the one Bill was allowed to become law without the Mayor's signature, that the City Administration is supporting the state legislation in Harrisburg?
I think that our position is linked to our capacity to absorb those cuts. I believe that was part of what the Mayor said at the time, that we would have to take a look at what it is that we could afford. As we move forward with a very challenging fiscal situation as we look at -- you know, we're always trying to look and scan the horizon to see what kind of risks 134 2/10/03 - FISCAL STABILITY - RES. 030030 there are for the City. We have to engage in that before making a final decision.
Not from a public policy standpoint, but at least from a financial standpoint, as I best understand the numbers, from the City's perspective, is a 4 percent cap better than a percent cap or vice versa? 9
A 10 percent cap would 10 cost less than a 4 percent cap, and either one of them -- our ultimate support for either one of them turns on our ability to afford them. To some extent it's almost like the wage tax. We prefer to really drive the wage tax down to the point that it could really be significant, but you can't afford to always do it.
Okay. Thank you very much. I appreciate all the answers. Thanks. Thank you, Madam Chair.
You're welcome. The Chair recognizes Councilman Ortiz.
Thank you, Madam President. Of those 60 leases, how many are we 135 2/10/03 - FISCAL STABILITY - RES. 030030 thinking about? How many have signed up and how many are still not there?
Duane Bumb with the Commerce Department. I'm going to have to get back to you with specific answers to that.
We talk about the problems that they projected and what they wanted to remain. I just want to know, of the 60, are there any ones that are actually moving?
Again, we're talking about -- we're being proactive here. We're talking to businesses whose leases may be up in three or four years in the future, which is to say they've not made a decision. We've begun a dialog with most of those.
Usually these cooperations make their decision three and four years before the lease is up.
That's right. And our purpose for getting to them early is to make sure that we are in a dialog with them before they make a decision that's negative for the City. Of those that we're talking to, it's my understanding that we have not lost anyone yet. And I think that that's 136 2/10/03 - FISCAL STABILITY - RES. 030030 sort of our approach to that. But I can certainly get -- I'll review that and get more information back to you.
I just want to know where we're at. Thank you. In terms of tax projections, there have been reports that, in terms of stadium and the stadium financing, that there has been a short-fall in terms of the rental tax that has increased the need for City contribution of to more or less $8 million. That's what we have seen in the papers and reports. Where do we stand on that?
Those reports weren't accurate. What the reports did is looked at several factors that have been coming below projection. One of those being the car rental tax, which has come in below projection because of what happened after September 11th. There are also things that have come in above projection. Phillies, for example, their salaries are much higher than anticipated.
The Phillies' salaries are much higher than we anticipated when we did the analysis so -- I think they made some investments. 137 2/10/03 - FISCAL STABILITY - RES. 030030
The Chairman wants to know, does that translate into winnings?
A couple other places where things have been better than projected, the debt service is actually lower than the debt service projections that we had when we came to City Council. The construction activity has been just what we expected it to be. And the other large component in the analysis was that, if we hadn't built new stadiums, we would have had to invest substantially in the Vet just to keep it operational. I think the architect's estimate was it would be at least $120 million, maybe more just to keep it up for 10 years.
Could you give us something in writing in terms of that, so that when we read something like that in the paper, we can have some figures and some documents that we can judge them against?
Yes. What we can do is, there's a letter in the Inquirer from Charlie McPherson and Janice Davis that laid out these issues and we will forward that to you.
I'm always intrigued 138 2/10/03 - FISCAL STABILITY - RES. 030030 about how language changes across the years. And Ms. Wilkerson has been speaking about right-sizing certain things. It implies that they were wrong-sized before. Is this a change in terms of that, we mean that we're downsizing certain government agencies and we use the word right-sizing? What does the word "right-sizing" really mean?
I think when a lot of the City's infrastructure was constructed, it was constructed when the planners were thinking that the population was going to grow 2.5 to 3 million. And so we built pools, we built recreation centers, we built fire stations, you know, at a time when we had a larger population. The population hasn't grown. We've never really stepped back and said, do we need all these facilities. What is the right number of facilities for a City this size? Would a different configuration better serve the City? We also want to -- I think what we intend by that term is also taking a look at, perhaps, providing those services in a different configuration. Perhaps it makes sense to provide after school and recreational facilities using 139 2/10/03 - FISCAL STABILITY - RES. 030030 school buildings.
In some situations that may make sense. I think what we intend to do over the course of the next year is engage Council and stakeholders across the City in a discussion and a review where we look at the various facilities we have. It's not just recreation centers. It's not just swimming pools. It's -- all together the City has over a thousand facilities out in neighborhoods. But really take a look at what we have, what condition they're in, whether there are opportunities to provide the services we provide better by collapsing the number of facilities. One of the big challenges we have in the out years is the decrease in the amount of capital funds we're going to have to address the challenges out in our neighborhoods. By the end of the Five-Year Plan, I believe we'll be down to $50 million -- $46 million by the end of the Five-Year Plan. And so we're going to have far fewer dollars, you know, and questioned whether we can afford to maintain all the facilities. 140 2/10/03 - FISCAL STABILITY - RES. 030030 We want to use this year as an opportunity to try to develop strategies to continue a high level of service, but do it in a more efficient way, both from the capital side and also from the operating side.
Do we have anything, any analysis of all of our facilities that we have and an analysis of what and where this can be replaced or an alternative situation in which the replacement can be if we are going to close a recreation center? How is the school going to be -- I assume that a school building is going to take over the recreation activities for that neighborhood. Do we have any analysis as to that?
We don't have the kind of analysis that would support a decision to close or keep open a specific facility. What we know is that when you compare Philadelphia to other jurisdictions, that we have far more in terms of recreational kind of facilities, for example, which leads us to believe that there are opportunities out there. Over the course of the coming year, what we propose is to do the kind of analysis that you're 141 2/10/03 - FISCAL STABILITY - RES. 030030 talking about so that we know exactly what the facilities are, exactly what the condition of the facilities are. Right now the School District has a very aggressive development program it's proposing. We want to make sure that we work with them so that we capture opportunities that they're creating as we go about trying to decide how to provide facilities.
Among those facilities that we have, besides recreation centers, are fire houses. And I remember a time in this government, not this Administration, within the City government, in which it was thought that we had too many fire houses and that some of them were extraneous. Are you looking at that?
We're going to take a look at it all. We have a lot of facilities out there. We propose that everything be put on the table, that we go through a process that involves engagement by Councilmembers, by other stakeholders to try to come up with decisions that work for the entire City.
Do you have a time line to present to City Council a plan in terms of 142 2/10/03 - FISCAL STABILITY - RES. 030030 the utilization of a thousand or so facilities that you have, that you mentioned?
I think we would like to have it reflected in the '05 budget, in the '05 to '09 Five-Year Plan and Capital Program and Plan. But I think it is going to take a year of hard work looking at these facilities, going around working with the School District in order to put together something that has credibility to it.
Are there any other questions from Members of the Committee? Are you finished, Councilman Ortiz?
Since there are no other questions from Members of the Committee, the Committee will stand in recess until Tuesday, February 24th at 9:30. Thank you very much. (Council adjourned at 1:15 p.m.) - - - 143 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 February 10, 2003, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: FISCAL STABILITY COMMITTEE FIVE YEAR PLAN ___________________________ Lisa C. Bradley, RPR and Notary Public