To check that you're complying with the law because there have been many instances raised where we don't believe that it's been put in the contracts. And if it's not in the contacts, then essentially the employers don't have to comply. Once it's in the contracts, employers do have to comply, and then there are actual provisions for the employees to sue for backpay. I've -- I've -- the previous administration did not want to enforce the law; we had a battle getting it passed and getting it signed, even though it was passed unanimously. I gave this administration some time in terms of getting up to speed on compliance. There's other provisions of the ordinance not being complied with like the creation of a Living-Wage Advisory Committee. 298 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET As we move forward, particularly in the economic recession, this is a very serious issue for me, as it is for Councilwoman Sanchez. As we move toward July 1st and into new contracts, if this is not complied with, there has to be a lawsuit. COMMISSIONER ORTMAN: Oh, I can assure you that if it's a Procurement Department contract, a Procurement Department bid, that the lawyers quoting right there will be --
It should be in every contract -- COMMISSIONER ORTMAN: I --
-- that it's supposed to be. And after that, before that contract is executed, that employer should have to confirm with the City that each employee is receiving 150 percent -- as of July 1st, it should be 150 percent of federal minimum wage, which goes to 7.25, which will be 10.87, okay? COMMISSIONER ORTMAN: Yes, sir. 299 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET
Hi. Thank you. Good afternoon. COMMISSIONER ORTMAN: Good afternoon.
Great. How long have you been the Procurement Commissioner? COMMISSIONER ORTMAN: Since January of last year.
Okay, so you're new. COMMISSIONER ORTMAN: (Nods head.)
Okay. COMMISSIONER ORTMAN: I've been in Procurement for quite some time, though.
Were you working here, in Procurement? COMMISSIONER ORTMAN: I've been with Procurement since 1995. 300 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET
Oh, okay, all right, good. I want to get information on minority participation, and I know that here, you state that the Office of Economic Opportunity is responsible to set the ranges. How many -- I'd like to know how many contracts were given out through Procurement, period. How many of those contracts were awarded to minority firms, women, minority, disabled? And I'd like to know what was the total dollar-amount of the contracts. And also -- and what were the dollar- amounts of those contracts that were awarded to minority, women, and disabled firms? COMMISSIONER ORTMAN: All right. I know that Deputy Commissioner Stitt has some information relevant to what you're asking, but I can also assure you that most of this will be covered when the OEO 301 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET and Commerce have their testimony. But Mary does have -- Deputy Commissioner Stitt does have some information with her at this point.
I'm sorry. Say that again. COMMISSIONER ORTMAN: I said most of this will be covered by OEO and Commerce, when they make their own testimony, but we -- Mary --
So Procurment does not keep records? COMMISSIONER ORTMAN: I said we have some records right here with us, but OEO is responsible to keep those official records. We anticipated the question, so we have some data with us.
Right. Well, OEO just really started up, you know, recently. You've been around -- and I want these figures actually for 2007, 2008, and 2009. And I also would like to know if you have issued any waivers in the last 302 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET year. And if so, what were those waivers for? COMMISSIONER ORTMAN: So you don't need this information right now that we have with us?
No, I don't need -- I don't need it right now, but I do need it. You know, I was looking at the Internet, just doing some research. And, you know, it's amazing how some of the cities are actually improving with their minority numbers. And one city in particular increased -- actually, they awarded $650 million in contracts to minority- and women-owned businesses through July 31st, 2008, and that represented an $81 million increase compared to the same time in 2007. And I don't really have a feel for what we're doing and if there is a plan to improve or a plan to do outreach or what. 303 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET And whether you are Procurement or you're working with OEO and Commerce, then maybe the plan should be a joint plan, but there needs to be some type of plan, I think, and particularly since we don't have the numbers, I don't know what the data says. COMMISSIONER ORTMAN: Well, we are working on it on a weekly, daily basis with the Office of Economic Opportunity.
Okay. Well, that's a new office, though. I mean, you've been around for a long time. Procurement has been around. COMMISSIONER ORTMAN: Well --
So I just want to know what your information is and if you can get the data so we can look at it. COMMISSIONER ORTMAN: And what would this detail --
And maybe it's good. I mean, I'm not implying that 304 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET it's not good, but we just need to know what it is. COMMISSIONER ORTMAN: We'll get those details to the Chair within two days.
All right. Okay, thank you. COMMISSIONER ORTMAN: Thank you.
All right. Thank you, Madam Chair. (Councilwoman Tasco now chairing the hearing.)
Thank you. As it relates to the Local Business Entities Program, which was Mayor Nutter's bill in Council, what is process by which we're ensuring LBE qualifications right now since -- COMMISSIONER ORTMAN: It's quite a complicated process, actually. There's 305 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET a form that the vendors have to, of course, fill out. The easiest away is if their offices are located in the City of Philadelphia. And that, of course, has to be proven. They have to have a business-privilege tax form -- permit. They have to be up to date on their taxes. They have to -- if they're only -- if they're located outside the City, they have to be -- they have to have over 50 percent of their employees working within the City.
How many folks have we issued contracts -- awarded contracts to this year that fall under that classification? COMMISSIONER ORTMAN: I'd have to get that. I sent that over here on February 1st. I don't have it with me right now, but it's mostly under Public Works, and it's, I'm going to guess, around 15.
15? 306 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET COMMISSIONER ORTMAN: Or maybe 20.
of how 5 many contracts have we awarded? 6 COMMISSIONER ORTMAN: In Public 7 Works? I'll have to get that exact 8 information for you. 9 Sometimes -- well, an LBE 10 contract is often awarded to an LBE 11 because he's also the low bidder, so 12 that's not counted. So it's tough for me 13 to say exactly how many were awarded to 14 an LBE because we only keep track of the 15 ones where we had to change the award because an LBE and the 5 percent kicked in.
My issue is that both in the Controller's report and in the past, this was a bill that was passed by then-Councilman Nutter to provide some advantages to local businesses. COMMISSIONER ORTMAN: Mm-hmm.
And even 307 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET in the Controller's report, there's been some serious questions raised about our ability to identify local vendors for our procurement. It's been a problem from the beginning of its implementation. So my question is: If we're only doing 15, why? And what do we need to do, including changing the way the bill is written up, to ensure that we are giving opportunities to local businesses who do all of the things it says, which is have local wage-earners, their businesses here. How are we -- what are we going to do to make it better? COMMISSIONER ORTMAN: Well, Councilwoman, I'm not sure that I quite understand what you mean by "make it better." We've offered them 5 percent bid preference already.
But you're telling me that only 15 contracts of how many contracts did we award through Procurement? 308 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET COMMISSIONER ORTMAN: Well, several hundred in -- 300 in SS&E, and I'm going to guess 178, I think it is, Public Works or something like that. But, as I said, a number of LBEs are the low bidders anyway, so I don't have that figure. I would have to -- (Indiscernible; parties talking over each other.)
So are you telling me that the bill does not provide an advantage -- the way it's written, the bill does not provide an advantage to local businesses? COMMISSIONER ORTMAN: Yes, but if they're already the low bidder -- DEP. COMM. STITT: The -- the -- I'm sorry. COMMISSIONER ORTMAN: Go ahead. DEP. COMM. STITT: The preference isn't necessary if you're already the lowest bidder, so we would have to go back and check the data, but there are probably several businesses 309 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET that already get the contract and are awarded the contract without even needing the local business. COMMISSIONER ORTMAN: Right.
Right. So my question is: The bill's spirit was to try to give local businesses an edge. If they already have to be a low bidder, what's the language that's missing so, given this economy, we make it easier for local businesses to get to that point? COMMISSIONER ORTMAN: I'm -- I'm at a loss because they're already getting the 5 percent bid preference. I don't know what else we can do for them. I'm sorry.
I want to get more local businesses -- COMMISSIONER ORTMAN: I'd love to get -- yeah, if somebody could give me a suggestion.
Well -- COMMISSIONER ORTMAN: I don't have a -- we're already giving them a 310 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET preference on the bid. They're not losing any money because, say, if you bid a hundred dollars and the person who is not an LBE bids 96, the guy that bids a hundred, he gets it at a hundred, so I'm not --
Well, why don't we have more local businesses? COMMISSIONER ORTMAN: I can't -- that I can't tell you. I mean, we have -- we are pretty strict to make sure that you are in the City because we get a lot of people that open an office up in a South Philly rowhome and say, "This is our location of our business," and it's not. And we actually have reports from the Controller's Office that thick verifying that some of these people actually are, you know, City -- they should be able to get that LBE. I mean, it's a -- we're very tough on certifying 'em, but I don't know how much else we can do other than give 311 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET them this percent preference. I can say what they do in other cities, I what they do in Miami. They give a percent preference, but the bidder has to be willing to lower his price.
That is part of my question, that is part of my question. What is it that we need to do to strengthen the legislation to give more opportunities for local businesses to compete in our City procurement process? So if you're telling me that 5 percent is not enough -- COMMISSIONER ORTMAN: I didn't say that, ma'am.
Well, you told me that -- COMMISSIONER ORTMAN: I said in Miami, they gave you a 10 percent preference, but the vendors that has the 10 percent preference has to be willing to lower his price 10 percent; whereas, 312 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET in this case, in Philadelphia, you get the price you bid.
Okay. I'd like -- and if you could submit to the Chair your recommendations. There was a lot of work and thought that went into this piece of legislation. (Timer bell rings.)
If out of the hundreds of contracts that we're bidding, we only have 15, we need to do a better job of trying to entice local business. So you've got to give me a recommendation, unless you want me to give it to you. COMMISSIONER ORTMAN: Ma'am, I will certainly try and give you one, and I'll check on those numbers that I gave you to make sure that --
Could you please. COMMISSIONER ORTMAN: -- they're correct. And I'll send it to the Chair. 313 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET
Okay. Councilman Green -- yes, Councilman Rizzo. The screen says "Green." It's up to you two.
Commissioner, good afternoon. Since we're talking about possible obstacles in the work that you do, are there any -- are there any -- do you have a wish list of things legislatively that you would like to change to make Procurement an easier process? COMMISSIONER ORTMAN: Well, the procurement process in general could be made easier, Councilman. While we have to -- it's a give-and-take. Like we could give up the performance bond requirement that we 314 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET have, but then there's the give-up is that we're also giving up some income. It would make it easier for the vendors to bid because they don't have to come up with a bond. But in the end, we'd be losing the income from that bond. So that's just the one example. I mean, there's -- I could sit down and write you a --
Well, why don't you do that. I mean, we're here also not just to be a pain in the neck sometimes to you, but we also are here in a position to help you. So if you tell us obstacles that you have, maybe there's a way we can iron some of this stuff out. Like I had a meeting about possibly buying some used cars in the City instead of brand-new ones. You could maybe get three for the price of one, especially for police deep cover and that kind of work. You explained to me you can't do that because it's a violation of the City 315 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET Charter. Are there other things like that that are obstacles to you in saving the taxpayers in this city money? COMMISSIONER ORTMAN: I'll put you a list together.
All right, terrific. COMMISSIONER ORTMAN: Just things that may or may not make it difficult for vendors to deal with the City, I'll be glad to do that.
In other words, for you to be able to buy a used vehicle versus a brand-new one, it's like common sense if there's a need for that type of a vehicle, especially for law enforcement. COMMISSIONER ORTMAN: For your particular suggestion, yes, it is. But to change the Charter to allow that 316 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET would, in turn, not give us the control over a lot of other things we buy. Understand what I'm saying?
I understand what you're saying. But, again, give us a shot at helping you instead of just being sometimes critical of what you guys do. COMMISSIONER ORTMAN: Mm-hmm.
I'm not, but maybe sometimes. COMMISSIONER ORTMAN: Okay.
But I've got a specific question. You folks in Procurement and Purchasing always throw this term out. Could you explain what it means when you refer to the State contract? Is that a good thing, a bad thing? What is the State contract? COMMISSIONER ORTMAN: State contracts are any contracts that were bid by the State in a similar fashion that we can use anyway, that are bid in a similar fashion to the way the City bids 317 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET contracts.
An example. COMMISSIONER ORTMAN: When we need something that we don't have under contract, or if the State has a contract in which we can get it cheaper, we'll piggyback on the State contract.
So when you need to buy a new police car, 99 percent of the time I understand you buy it through the State contractor, assuming that that's the best deal we can get? COMMISSIONER ORTMAN: I haven't handled that contract in a while, but the last time I did, we put it out for bid. DEP. COMM. STITT: Right. COMMISSIONER ORTMAN: If it's not done that way --
Well, you bought vehicles from the State contract. COMMISSIONER ORTMAN: We bought -- I know we did buy a couple 24 of years ago, but that was a special -- 25 they were available and we could get 'em 318 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET cheap or something.
Well, give me an example of what we buy on the State contract today. DEP. COMM. STITT: Delivery services like UPS. We actually had put that out to bid at one point before, and we found that our buying power actually was not better that the State in that particular instance. So we actually went to -- I believe it was UPS, but let's just say "a delivery carrier."
Right. DEP. COMM. STITT: We went to them and asked them for actually the same contract as the State, and they would not give us that pricing, so we piggybacked on the State contract 'cause it was in the best interests of the City.
Well, that's good to hear, but when any -- but many of the things we buy, do we first check to see what the State contract is before we 319 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET put things out to bid? Do you do a comparison to see what's a better deal, the State contract? Because I assume there isn't much that we buy that the State doesn't. DEP. COMM. STITT: Right. COMMISSIONER ORTMAN: That's true, but we have totally different needs than they have because we're so centralized and they're so spread out. And so it's a different -- it's a different need.
Gas is gas, fuel is fuel, diesel, gasoline, cars. I mean, I can't imagine, Commissioner, a whole lot of difference. Maybe there's some specific stuff, but I can't imagine a whole lot of stuff that they buy that they don't, or we buy that they don't. I mean, that surprises me a little bit, your statement. But, you know, knowing you for a long time -- COMMISSIONER ORTMAN: But I didn't say "items"; I said "needs." 320 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET
You're talking in-house now. I don't understand what you mean, the difference. So explain it. COMMISSIONER ORTMAN: We all buy office supplies. They need 'em shipped to hundreds of different places all over the State; we just need 'em right here, in this area of Philadelphia.
We buy from Staples, don't we? DEP. COMM. STITT: Yes. COMMISSIONER ORTMAN: Yes, we do.
And they ship 'em UPS wherever -- COMMISSIONER ORTMAN: Wherever -- they have -- well, actually, they have a -- DEP. COMM. STITT: A minority -- COMMISSIONER ORTMAN: -- a minority delivery service they use.
Okay. COMMISSIONER ORTMAN: Which is 321 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET one of the other problems with going with State contracts: You do lose any minority participation that you have, which is always a problem.
All right. Good. So you will put that little wish list together? COMMISSIONER ORTMAN: Absolutely.
And we'll see if we can legislatively improve upon it, because some of that Charter stuff is decades' old that needs to be freshened up possibly. So we're not immune to tinkering with that. COMMISSIONER ORTMAN: I'd be glad to.
Thank you. You guys do a great job over there, by the way. COMMISSIONER ORTMAN: Thank you.
Thank you 322 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET very much. The Chair recognizes Councilman Green.
Thank you, Madam Chair. The last meeting that you were kind enough to have with my staff and me last year, I understand that the Procurement Department mails 5,000 bid announcements per year to vendors? COMMISSIONER ORTMAN: I did get that information for you, I believe, yeah.
I'm sorry? COMMISSIONER ORTMAN: Yes, I do believe I got that information for you.
Okay. How much staff time does it take to prepare 5,000 packages -- COMMISSIONER ORTMAN: It's --
-- and put them in envelopes, you know, do all of the things associated with sending 5,000 packages out? Do you know how much staff 323 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET time that takes? COMMISSIONER ORTMAN: I think it's done by Central Duplicating, so I don't know. It's done in the basement of MSB. We don't --
Oh, so you don't actually do the mailing out of your -- you do -- (Indiscernible; parties talking over each other.) COMMISSIONER ORTMAN: We just print the labels.
You do one package and then other people do it? COMMISSIONER ORTMAN: It's just an envelope with two pieces of paper in it. That's the package. DEP. COMM. STITT: It's not the entire bid. COMMISSIONER ORTMAN: It's not the entire bid.
Okay. COMMISSIONER ORTMAN: That's on the web. We tell 'em to please look at 324 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET the web for it. Or if they want a copy, we'll mail it to them.
Okay. So I'm still not sure I understand. It takes -- it's almost no time? COMMISSIONER ORTMAN: Within in our budget, no. 9
Whose budget is that in? COMMISSIONER ORTMAN: I don't -- whatever Central Duplicating falls under. I think it's Revenue. DEP. COMM. STITT: It's under the Records Department. COMMISSIONER ORTMAN: Records, Records.
Okay. So you reported that it would help to have department submit electronic reports on vendor performance rather than paper reports that they currently submit, which would result in efficiency gains and would also allow for easier and better review of past performance data when 325 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET considering new bids. We'd have a lot of information in one place in a central database or even dispersed databases, whatever, on different vendors. Has anything moved in that direction in terms of vendor reports? COMMISSIONER ORTMAN: It's one our wish-list things. It's part of our -- we're trying to do several things in Procurement, and that's a part of it.
Okay. COMMISSIONER ORTMAN: But it hasn't moved very far, no. 15
So let us -- I mean, I say here what -- echo what Councilman Rizzo said. What additional -- you know, let us know what additional support, in terms of funding, enabling legislation, you need to accomplish that goal. Also, you testified during last year's budget hearing that the Department was developing a vendor portal to give vendors on-line registration capability 326 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET as well as realtime access to their vendor file. What's the status of that portal? COMMISSIONER ORTMAN: We -- go ahead. DEP. COMM. STITT: At this time, the reform teams that our Managing Director had mentioned, the Administration and Technology Reform Team has been looking at the Procurement process from beginning to end, a very though process, a thorough review. And we are going to come up with many of the recommendations that will probably be a part of this wish list. We are looking at legislation that may be a obstacle. We certainly want e-procurement or electronic procurement, more automated systems. We have a very manual system at this time.
Right. DEP. COMM. STITT: And we want to change that over to be automated. 327 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET A vendor portal will be a part of that, even when speaking of the bid announcements. That may be something -- I'm not totally sure, but it might be something that we have to look at legislation to see if we can just put it on the web or if we can e-mail it to our vendors who are on our list so we can cut down on all those bid announcements being mailed. So many of the things that you just mentioned are being looked at very closely, and we are going to have recommendations, I would say, by the fall of this year, but we can still get you a wish list, of course, way prior to that. But by the fall of this year, that will be very solid and show how we can make breakthrough change and really streamline and make the procurement process efficient.
How many people would the Department need if we did simply e-procurement? 328 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET DEP. COMM. STITT: At this time, I don't know the number. We have what's called a "position questionnaire" that has gone out to every person in our department. We're trying to see what the a day in the life of everyone in the Department is. And we're trying to figure out not only how can we become more efficient but how can we make our workers and our staff members be more happy in their job and be able to do their job more efficiently. So we may not have a decrease in staff, but we may be working in a smarter way. So someone who may be putting a piece of paper in an envelope now may be able to focus their attention more on customer service and our vendors with their questions. So I don't know how much of a decrease in staff we'll end up with if we implemented a total e-procurement system if there would be a decrease in staff; it 329 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET might be just a change of skill level.
Well, I mean in order to pay for technology investments, we're going to have to recover some efficiencies. So I hope that, you know, that's being considered as you review this. Okay. So New York -- so I'm sorry. How many total purchases happen through your department every year? COMMISSIONER ORTMAN: We -- we don't actually purchase anything except our own needs.
Okay. I forgot that, that's right. So you don't cut the checks; that would be Revenue? COMMISSIONER ORTMAN: No. 20 DEP. COMM. STITT: Finance.
Finance. So you don't know how many checks are cut for the e-procurement system that you're looking at that would include automated payment systems so that we never cut 330 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET checks? DEP. COMM. STITT: We would certainly be working with Finance to see if that -- I mean, we certainly want the systems to speak to each other. And also DOT would be helping us make those decisions to make sure that all of the systems work together in the most efficient way.
Okay. So a lot of my questions are about the vendor portal and other things which we don't have data on, so lucky you. (Laughter.)
How much staff time is spent on data entry from paper forms? COMMISSIONER ORTMAN: Data entry from what? DEP. COMM. STITT: Paper forms.
Data entry -- COMMISSIONER ORTMAN: Excuse me, I'm sorry.
Data entry. 331 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET How much staff time -- DEP. COMM. STITT: Data entry on forms.
-- is spent on data entry? If you could report that back to the Chair. (Timer bell rings.) COMMISSIONER ORTMAN: I'd have to, yeah, because a lot -- it's very broken down as far as a lot of us reviewing bids that come in, that's all done basically by hand because you have to look at the quotes. But then the same person also enters the BPO into the system, so it's -- it's a little -- it's not just one person sitting there, doing data entry.
So how many bids do you review a year? COMMISSIONER ORTMAN: About 300.
Only 300 bidders? COMMISSIONER ORTMAN: No, no, 332 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET no, 300 -- DEP. COMM. STITT: Bids. COMMISSIONER ORTMAN: 300 individual --
How many bidders are there? COMMISSIONER ORTMAN: 300 bids go out.
How many bidders are there a year? DEP. COMM. STITT: Approximately three per bid.
Okay. So -- DEP. COMM. STITT: On average, that's an average. We could have two per bid, we could have seven.
-- bidders a year. Do you know the amount of time it takes to do the data entry for the thousand bids a year? 333 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET DEP. COMM. STITT: Unfortunately , we don't because it's broken up into each individual's position. And so, when we go through that day in a life, we're going to have to look at, well, how much time does it actually take you to do data entry as opposed to actually reading the bid and awarding it and doing the spreadsheet and things of that --
So is it -- COMMISSIONER ORTMAN: And the way the bid is entered -- excuse me, Councilman -- into the system, it's -- each line item has to be entered by data entry. Some bids can have one line item because it's just one item they're buying one time; or they could have 300 line items, like for safety supplies. So one contract could take somebody three or four hours to actually put the BPO into the system or one could take ten minutes.
Okay. COMMISSIONER ORTMAN: So it gets 334 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET -- it becomes very --
So we have -- there is no reason in my view we should have any member of our workforce doing data entry 'cause people want to buy from -- if people want us to buy from them, they will submit it electronically. COMMISSIONER ORTMAN: Oh, yes. That's our aim.
That's a significant savings. COMMISSIONER ORTMAN: That is our -- that is one of our aims.
You can come back. Mr. Ortman, can you tell us what 335 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET your legal advertising requirements are? COMMISSIONER ORTMAN: Many and varied. It depends on whether it's City Council, it depends on whether it's the sheriff's sales, it depends on whether it's Procurement advertising for bids. It all goes through Procurement. All the bids are -- because we have something called "CP Advertising," which was developed in 1981, the City of Philadelphia Advertising Agency, in order to get the percent agency discount 14 that is offered to advertising agencies 15 who are submitting ads. So we -- and some of -- the Records Department has one regulation, the Law Department has a different regulation, some are part of the Sunshine Act. And some are just our rules that we have, that are pertinent just to Procurement ads, which is two consecutive weeks in one newspaper, in one of the three top circulating newspapers in the 336 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET City, something that's -- they are many and varied, trust me.
On of your detail, you're showing that you're reducing your advertising account by $689,000, correct?
Yes. COMMISSIONER ORTMAN: Oh, of my budget, okay. I'm sorry. I was looking at my testimony.
Is that correct? COMMISSIONER ORTMAN: I'd have to look at it a little closer. Yes, that's correct.
Then my question -- COMMISSIONER ORTMAN: We're 337 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET attempting to. I'm sorry, I don't mean to interrupt you.
My question would then be: Will you still be able to meet your legal advertising requirements in FY '10? COMMISSIONER ORTMAN: My feeling is that at this moment, yes. We have been gradually chipping away because we found, as I said earlier, that people advertise in the Sunday newspapers, just -- we found that people advertise in three or four newspapers, when it was only required by their particular Sunshine Act law to be only be in one newspaper. Things like that. So -- and we're also waiting to see what happens with the legislation that Councilman Clarke introduced. And City Commissioner is doing a great job of trying to cut down on their costs, because they're our biggest expense, and they're like almost a million dollars out of 2 million last 338 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET year. So they're trying to get a better rate from at a -- what I understand in talking to PNI, they are going to get better rates; they just don't know what they are yet.
If the City were to receive funds from the Recovery Act, will you be able to prepare the bids and be able to advertise these projects, as required by law? COMMISSIONER ORTMAN: They will be advertised, finding the money from somewhere, because obviously, they have to be advertised. That was not actually considered as far as the total dollars were concerned. As far as the total people are concerned, yes, I'm working on that, and we should be okay.
So at the present time, you feel that you have ample funds? COMMISSIONER ORTMAN: Well, most 339 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET of the work is going to be coming through Public Works. And most of the departments are going to be responsible for the bulk of the content of their bids, and they're already hard at work on that.
And, Mr. Ortman, if the City were forced to go to Plan B, your budget would be cut by an additional $419,000. COMMISSIONER ORTMAN: Correct.
Of this amount, $170,000 would come out of advertising. If this were to occur, do you still think you would be able to meet your legal advertisement requirements? COMMISSIONER ORTMAN: Well, until I know how many ads I'm going to have, I'm not going to know how much it's going to cost me. So it's very difficult to put a number on that. We're just going to continue to do our best to monitor everything that comes through. And, obviously, as I said a 340 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET moment ago, if it has to be advertised legally or else we don't get it, it's going to be advertised. We're going to fine the money somewhere.
I think I'd put that on my wish list. Maybe there's a way to modify the requirement. Maybe with the Internet and other electronic media, that there's an opportunity. Again, the people that have an interest in this should pay attention. And this leads to my question, since technology is going to follow you. In-house, do you ever the expertise to look at how to avoid somebody sending out -- and forgive me for the terminology -- you said the pre-bid, two pieces of paper in an envelope? I can't imagine we can't compile a list of the vendors and e-mail. COMMISSIONER ORTMAN: Well, 341 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET that's on our list.
But, again, does technology come to the operating departments and take a look as a consultant and say, "Show us what you do, and maybe we can make your life easier." I mean, It doesn't happen if you don't ask. DEP. COMM. STITT: Technology is actually a part of our reform team, a big part of our reform team. So it's definitely going -- that would be something that I think would happen in the short term as opposed to the long term, e-mailing as opposed to mailing out the bid announcements.
Yeah. Licking envelopes is kind of like -- DEP. COMM. STITT: Right.
I just can't imagine we're still even doing that. DEP. COMM. STITT: Of course, we want to make sure our constituents, if there are some who ask us to mail it to 342 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET 'em -- which I'm sure it's going to be very, very few -- we would still have that option for it.
Well, I honestly would tell 'em no, I honestly would tell 'em no. And if they can't get with the program, then they're not going to do business with us. You know, you have to sometimes force the issue. DEP. COMM. STITT: Mm-hmm.
I don't know what the postage involved in that is and the man and lady hours involved in doing that, but it boggles my mind that we can be doing that in government. The private sector hasn't the done that in years. 18 DEP. COMM. STITT: Right. 19
So it just -- 20 I'm hoping that Technology and Procurement and some of the operating departments -- you know, I still get mail from one floor of this building to the other, with U.S. postage on it, and it's amazing to me to see that happen. 343 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET DEP. COMM. STITT: Technology has been a big support.
Okay. DEP. COMM. STITT: And they're going to continue to work with us.
All right. Well, you can understand how criticized I think people -- when people receive some of the things in the mail that they get, you know, a receipt for the fire alarm bill or, you know, just some of the things that we move around. DEP. COMM. STITT: Mm-hmm.
And to have you guys mailing pre-bid awards out, how many of those do you do? DEP. COMM. STITT: The bid announcements? There could be possibly 5,000 --
Okay. All right, thanks. 344 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET DEP. COMM. STITT: Sure.
You're welcome. The Chair recognizes Councilman Green.
Thank you, Madam Chair. You noted in your testimony you had concerns about, you know, bids related to the federal stimulus projects, and there may be a bunch of things that have to go out at the same time, but you had work underway to address that situation. What is that -- what's underway to make sure -- COMMISSIONER ORTMAN: Basically, we have been taking people that may not have a busy day and putting them over in the other -- and putting them in Public Works to watch what Public Works is doing. It's only clerical work. That's the main part I'm worried about, because 345 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET we lost two clerical people from the first budget cut. But they've been over there training as to what needs to be done so -- in order to get it out, and we will get it out.
What functions do those clerical people perform? COMMISSIONER ORTMAN: There's a lot of different forms that have to be checked to make sure that they're included in the bid documents. There's certain notifications that have to be sent for prequalifications to the vendors. For Public Works job, we prequalify the vendors before the bids actually go out to make sure that they're capable of doing the job and that they want to do the job, so --
And how much time is spent making sure all of the forms are ready and all that other stuff 346 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET that you're training -- how many people do that, perform that function in your office today? COMMISSIONER ORTMAN: When necessary, I have two people over there from other units that are doing that.
How many people in your office do it? COMMISSIONER ORTMAN: That actual work?
Yeah. COMMISSIONER ORTMAN: For Public Works? Two, unless we need more help, and those people -- like my secretary sometimes goes over and helps out to get the work done, if there's a lot of work to --
But you have people in the Procurement Office that do that -- COMMISSIONER ORTMAN: Sure.
-- without the additional help, right? DEP. COMM. STITT: No. The two 347 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET people are in the Procurement Department. COMMISSIONER ORTMAN: They're all part -- DEP. COMM. STITT: They're just from a different division. So they're from the Central Supply and Equipment Division --
Oh, okay. DEP. COMM. STITT: -- and they go over to the Public Works --
So there are only two people that do that -- DEP. COMM. STITT: As of now.
-- in the Procurement Office as of now, okay. DEP. COMM. STITT: For Public Works.
For Public Works. DEP. COMM. STITT: For Public Works. 348 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET
Okay. DEP. COMM. STITT: Which is where most of the Stimulus money will come in.
Okay. But in the other department, are there people that perform the function you've just described. DEP. COMM. STITT: Yes.
How many people do that? DEP. COMM. STITT: Oh, clerical staff. Probably about four or five.
Okay. If you had an e-procurement system, all of what you're discussing would be automated for every single bid. COMMISSIONER ORTMAN: Nobody's arguing with any of that.
Okay. I had very specific questions about e-procurement and other things, but nothing seems to have happened in the last year. 349 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET COMMISSIONER ORTMAN: Well, we are proceeding the best we can. I know we're working with DOT, and they some own Oracle suites, they own a Procurement Oracle suite, and we're --
When the position questionnaires for your department are done, if you could pleas provide copies to the Chair. Thank you. Thank you very much.
Thank you. I see there are no more questions. Thank you very much. COMMISSIONER ORTMAN: Madam President, I would like to thank Council for -- you remember last year, I couldn't hear to well in here? Well, you guys provided me with a hearing device.
Wonderful. COMMISSIONER ORTMAN: And I very much appreciate it.
Oh, 350 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET you're welcome. COMMISSIONER ORTMAN: 'Cause it helped a lot.
Thank you. MR. McPHERSON: The next department is the Division of Technology. (Witnesses come forward.)
Good afternoon. Please identify yourself for the record and proceed with your testimony.
I'm Allan Frank, the Chief Information Officer for the City of Philadelphia, and I'm pleased to provide this testimony.
Mr. Frank, if you can abbreviate your testimony.
We'll give a copy of it to the stenographer, 351 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET and it will be transcribed in full.
Well, I think with that case, I can just broadly say that I think the testimony itself covers a number of things both what obviously DOT is doing in the General Fund this year, but I think, more importantly, as has been discussed, that we have a number of initiatives that we're working on across the City primarily in three areas: One to lower cost and to reduce our ongoing operational run rate for IT across the City, and obviously that's very important from a budget perspective. The second is to ensure that we have a secure and stable operating environment from a technology perspective to support all of the departments, agencies, and boards. And third, and probably most importantly, which I think has been discussed throughout various hearings, to be an enabler for the business of the City. And I think that's really the 352 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET opportunity that we have. So with that, I'll dispense with the reading of the -- of my testimony, and, I suppose, take questions.
Fine, because we all have copies too. Mr. Frank, why is the bulk of the Communications function being returned to Public Property?
I had made that decision in the fall, after a few months of taking over. Number one, in Public Property, they had, as you know, historically run the Communications function -- (Timer bell rings.)
-- and it was also quite clear to me, given the amount of work that we had to do within DOT on a going-forward basis, to ensure that our future networks were in place and so forth, that at the time I considered it important to provide the focus around voice that I didn't feel that we could 353 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET provide. And the Deputy Commissioner in Property was very experienced in that area, and so I felt very comfortable in handing it to them, with the understanding that, as CIO, I have overall responsibility for the City. And at some future point, my plan would be to bring it back together but, as we talk about a future network, that brings both voice and data together on a single network. So in the short term, I felt it would be the legacy there.
The functions of DOT include the entire network infrastructure of the City. We maintain a data center, where we support over 250 servers and other equipment that runs the operations of various departments as well as citywide functions. We also provide program 354 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET management and business analysis support to departments and agencies to help them identify opportunities. And then to program-manage or project-manage and assist in implementation. So the voice communication piece is really a rather small part of the overall program.
Thank you. The Chair recognizes Councilman Green.
We have had an opportunity to review your presentation with -- I guess you made it yesterday in a Philly Stat session, or somebody -- there was a bunch of --
And I saw it on paper and it looked -- you know, I'm excited about what you're proposing for our city, and I'm glad that you're in the position, and I look forward to trying to get you resources more quickly than you're currently getting them. The investments you make today, rather than a year from now or two years from now, will have a return during our Five-Year Plan. And so, I just want you to be aware that if there is a business plan that can be developed, that demonstrates savings and ROI of two, three, four years for a particular expenditure, I would be very interested in helping you try to find the money for it, including looking at our Capital Budget for the purchase of capital goods that are a part of your plan, like the 40 servers you need to consolidate once you have the solid network.
There are 356 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET things we can do in the Capital Budget, limited things, but that would be one example of something we might get four- or five-year money on from a paid, using one of our outside authorities rather than borrowing through the City. Just as one example. So please don't think that City Council doesn't want to see -- you know, would not provide the resources for a solid business plan. That's what I have to say about that.
So the Reform Team yesterday articulated two five-year goals: Reduce ongoing annual IT budget by 15 percent. What is the annual IT budget?
-- not just the Division of Technology. 357 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET
Overall, if you added up all the numbers for the Fiscal year budget, it's roughly $102 million 6 across the City in information 7 technology. 8
Okay. And 9 so, you will be reducing FY '10 10 expenditures by that $15 million.
No, sir. Over the course of the Five-Year Plan, there's going to be increasing levels of savings. What we're going to end up with is, in my estimation, an ongoing spend rate. If we were going to use, let's say, a hundred million as just kind of a nice average, at around the 85 range going forward. What I'll be doing over the next several years is doing all the heavy lifting to get us there. So certainly, in the early years, one of the things that I think we mentioned this last week at a hearing is reinvesting savings. So what I will be 358 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET doing certainly this year -- and it's anticipated next year also -- is savings that I generate will be reinvested back. So you don't really see a -- you won't see an actual reduction in the budget, if you will. The ongoing run rate, though, is targeted by the time we get to Year 5 at ongoing at that 15 percent number.
So you can do that 15 times 5, and you get a number, once I get there.
Outside 359 4/7/09 - COMMITTEE OF THE WHOLE - 2010 BUDGET contracts.
And getting rid of all this legacy software we develop and maintain and --
Okay. So this is not an estimate of what those changes will save within departments as a result of changing workflow processes?
As I indicated during the Reform Team presentation, one was the operating goal of reducing 15. The other really is savings generated through the Reform Team process.