Good afternoon. Greg Heller. I'm a partner at Guidehouse Consultant with the city. Yeah, Council President, it's a great question. There are several factors that are connected to it. So Turn The Key program is based on trying to analyze what people within the target income bans can afford, what developers are building at, able to build at based on current construction prices, and making sure that those home sales reflect market values so that they don't unduly shift market dynamics. So there are several things that the Turn The Key program elegantly does address and has successfully. On the flip side, you're absolutely right that whether it's Turn The Key or not, when real estate prices start going up in a neighborhood that affects other properties. And so the city has a number of programs like Homestead, like Loop, and all the other programs that we know about that are intended to address those. But all of those things are interconnected, as you said, and so it's really important that as the city continue to shape these programs, that they change with changing market dynamics, that they reflect changes in income, in home sale values at the sub-market level, construction costs, and I feel confident that the city staff are incorporating all of these variables, so that the program can continue to be priced correctly, can do what it's supposed to do, assisting first-time home buyers, providing the right level of support for the contractors and developers in the program, and providing the tax support on the back end so that people can afford their property taxes. But you're absolutely right. These are all interconnected factors that these programs need to make sure they're sized and shaped correctly to be able to address.
And, Greg, we'll work with you on this two possible proposals: One, from an intergovernmental relations standpoint that we should be lobbying and advocating and maybe find someone to sponsor a bill, and I have a person that probably would carry the bill. We were talking to Representative Regina Young regarding carrying a bill to expand the criteria for senior citizens tax freeze, right? That's a state- related policy that has to change, right? To freeze the taxes of our seniors, and so we have to increase that criteria, right? So that's something I would like to figure out how we work in partnership with the state level. And then also, obviously, I'm a main proponent and chairman of Loop, long-term owner occupants program, which at one time it was only for years for long-term residents, but now, it's for the lifetime of you living inside your home based upon your income criteria. However, what happens when, and I know this happens a lot in South Philadelphia, when mommy or daddy pass away, and then the children inherit the home, and they may not even be -- have that opportunity to incur and pay those taxes, right? Because that just might be what they're dealing with in terms of some of our neighborhoods. So maybe looking at expanding LOOP, right, to also cover that next generation who inherit the actual property. So that's something we're going to explore as well, just to make sure we are -- we're being preventative and we all want, and I know about equity. So yes, I want equity in all the homes, definitely in my home, I would like to have it, but at the same time we want development without displacement, right? And so the more we think about it on the front end, we can be able to mitigate some of the issues that could possibly have unintended consequences down the line. And so --
And Council President, a decade ago when I worked for the Mayor as her executive director of the Philadelphia delegation with the Pennsylvania House of Representatives, when she was delegation chair, we were huge supporters of LOOP then, senior tax frees then, and even more now. So absolutely, yes, we are -- we are absolutely a part of -- in support of that, but also seeing the development happen without the displacement. We know that there's case studies around the country, including the Dudley Street Project, which is something that I love to, you know, read about and study about and we're going to see that here in Philadelphia as well.
Absolutely. Dr. Ahmad, any other questions before?
No, thank you. It was just my last question to the commissioner. Thank you.
Thank you. The Chair recognizes the Majority of the Gilmore-Gilmore-Richardson.
Do you need me to say it again? COMMISSIONER BETHEL: No, I think I got it, Commissioner Bethel.
Yeah. COMMISSIONER BETHEL: So the -- so one of the things you -- I share my frustration around cadets leaving and they have that continue, but this past year, you know, well this, in latter part of last year, Commissioner Healy on my team got good -- good counsel from the law department. We, for the first time introduce a MOU with the individual signed. So every recruit starting in December were required to sign a document that if they leave within the first year, they would owe us $58,000. That gets prorated over three years. So if they stay beyond within the three-year period -- if they leave policing, we do not go to recoup that funds, but if they stay in policing and opt to as one individual left the next day, and just to congratulate. We're hopeful, we're early in the process, we've had two classes now signing that memorandum. We don't -- can't go back in time for those who are in the academy already. We'll be able to see if that's at least holding them longer than the period of time that we're seeing. So we're hopeful that model will work and we'll be able to report out to you probably in this next budget cycle next year to see, yes, in fact, it's having an impact.
Well, thank you. That was a smart move, and I'm glad to see, you know, you worked on that in this budget cycle, so I appreciate that. COMMISSIONER BETHEL: Yes, ma'am.
You're welcome. Thank you very much. The Chair recognizes Majority Leader Gilmore-Gilmore- Richardson, then Councilmember Quetcy Lozada, then Councilmember Jeffrey J. Young.
Thank you. Thank you, Mr. President. I wanted to try to get this question on the record and this is for our finance and budget team. So you all recognize from following the markets that the U.S. Treasury yield curve which has been one of our most reliable signals of a recession is flashing red again. And you know that as of March of this year the spread between the 5 year and the two-year treasury 6 yields as well as the three-month 7 notes remains inverted. And so we 8 know what that indicates relative to 9 a market perspective. 10 And so I wanted to sort of talk about our overall financial picture around any concerns that you all may have with the bond market and any other indicators around our financial future in the short term because I heard you all talk about earlier that the borrowing you wanted that to happen very quickly. And so based on what's happening in the market I wanted to put that on the record. In addition to -- on of the testimony, you talked about having consideration for a number of those challenges and other potential risks as a part of the Mayor's proposed five-year plan, but that we are maintaining positive fund balances, and you notated that the BSR and the Federal Funding Reserve, you know, keeps us that we continue to make contributions to those reserves and that it'll be up to 280 million by the end of the planning. You know, we worked on that with my BSR legislation. But some of the takeaways that have been notated regarding the information that's being presented is that the general fund balance is projected to fall from 514 million in FY '26 to 41 million in FY '29. In addition to that, you know, that the city is anticipating operating in a deficit for FY '26 to 29 with an additional operating surplus projected in FY '30. And so as you take all of that into account, looking at the markets, thinking about the borrowing, and then you notated here that the debt service would add 33 million in FY '26 and then 263 million over the life of the proposed plan. As you all are taking all of that into consideration in addition to recognizing where the school district will be, in addition to recognizing where SEPTA will be, in addition to the continued federal uncertainty, as you know, we still do rely on federal for, you know, a good portion of our own city budget. Can you talk about this overall financial picture for this proposed plan?
There is -- and we've talked about this repeatedly there is a great deal of uncertainty and as you talked about, you can see that in the markets where there's a lot of volatility where markets are looking for signs of, you know, what federal policy is going to be, what tariffs are going to be, and, you know, move really quickly on kind of the smallest indication there used to be markets would move based on financial information.
And now they're moving on financial information and kind of the latest proclamation. So that definitely adds some uncertainty. We have tried, you know, working with our outside consultants and build that into their projections for what we see is happening with our tax revenues and with employment. And like I said, employment we're really keeping flat because we don't expect big expansion in the economy nationwide and worldwide. So we've tried to capture that in our projections while at the same time not losing sight of the fact that we're a city of great needs and we have to keep making investments. We can't be kind of paralyzed by the uncertainty.
And we tried to make sure in this plan that we weren't and we made crucial investments while including things like the budget, legislation, reserve fund, thank you. Putting reserve funds in, maintaining a fund balance. So it's all, you know, it's all part of trying to deal with the uncertainty while still moving ahead.
Right. And I wanted to mention that because even with the updated BSR legislation that we all worked on together, my bill. We know because of the anticipated low general fund balance that there won't be an additional contribution in the out years of the five-year plan, which is why I think it was important for us to do what we did in the last midyear, relative to the one-time Federal Reserve investment. But I bring that up because I want to go back to my other question around the vacancies, right? Because, you know, I'm reading all these reports and I did read the report from the PICA board, and they were stating that in FY '24 the city spent 130 million less on salaries for city employees than we had originally budgeted, and in FY23 $81 million less. And that our recent payroll actuals have been about five percent lower than budgeted. And so given the overall size and share of the spending on our employee wages, the variance of the five percent represents a significant fund that we could have used to redirect within the fiscal year. And so I wanted to blend all of that in together as it relates to our overall financial outlook, our picture and our fund balance, to ensure that we are appropriately looking at the vacancy rates and allowances as it relates to what we know will be true in the out years of the five year planning. And that we're really serious about that this year because it'll be more important than ever because of the volatility in DC.
And I mean, a couple of things there. You will see and that Candi talked about this, that we have been filling more positions. So we're hoping that those vacancy rates actually come down as we fill positions to provide the services that we have in our budget. You'll also see that vacancy rates are higher in this year's budget in divisions. We're trying to make them track more of the reality of what's happening. But the other thing is that, you know, those variances from budget were like in the three to five percent range.
So to the extent that we really do start hiring up, they could go away pretty quickly.
Okay. And that's -and I just want to reiterate this -- and I heard the bell but I think it's really important too for us to understand from a class 100 perspective, of the positions that are being proposed in the five-year plan, which ones address vacancies versus which ones are brand new positions to city government because that also has an overall impact on our pension obligation as well, you know, for further down the line.
Yep. That makes sense. And we can -- obviously as we go department by department we can -- we can go through that.
Thank you very much, and I just wanted to put this on the record for the Department of Labor. I know Cara Leheny was up earlier we had spoken about this and we continue to meet with law, with labor and have been very appreciative of the work that you all have done. But I wanted to go back to some of the work that happened under the tenure of Richard Lazer. And I thought he did an excellent job working with us around ensuring that there was public participation as a part of the FOP contract negotiations. And I just wanted to ask for the record, if there will be a continued commitment from the city to ensure that we have a community member on the panel before the arbitration board, which is what we did last negotiation cycle prior to the one year. So it was -- this is for the last longer term contract under the previous administration after we did the public comment legislation. We had worked with the Department of Labor and specifically with Richie and with law to ensure that there was a community person that could be on the panel that went before the arbitrator.
Specifically for arbitration. When it comes to Act 111, hearings are not open to the public unless the panel votes to do so. We did put in a request before the panel.
Okay. Yeah. No, not the hearing being open to the public. I meant the part where the city prepares the panel of individuals that will speak on behalf of the city during the presentation, it was -- I think it may have been one or two people. It was just someone that participated in the hearing process. I think labor chose the individual based on the, I think it was like 99 witnesses total.
Yes. Hello, Councilmember. Yes, we had two witnesses who presented to the panel who were representative of the communities. I'm remembering Pastor Waller and I am blanking on the name of the other person.
We are -- we are in -- we're discussing -- I know Adam Geer, our Public Safety Director is talking with community organizations. And certainly we can take that request under advisement and talk it through. We're certainly going to be having CPARK presenting to the -- to the panel in support of the proposal that is in our proposals to get them the various investigative and other authority that the ordinance gives them. So, you know, that is a focus of our -- of our case.
Okay. I just wanted to make sure we were going to at least, at the very least, do minimum what we did last time.
Councilmember, we'll get back to on that. And I do just want to note that previously we did not have the Office of Public Safety as a -- as a member of the -- of the administration. And Adam Geer is a part of our negotiations.
Okay. That's good. I just want to make sure from a -- like a community perspective that we do at least the bare minimum of what we did last time. Okay. Thank you very, very much.
Next, the Chair recognizes Council Quetcy Lozada.
Thank you, Council President. And I just have one question. In your testimony, it states that there are significant investments that are going to be made in the next -- in the next cycle. Riverview was mentioned to complete the new tower, a multi-year project to renovate the Fire Academy, critical improvements to the city's prison systems. And that made me think about the prison systems, right? Sometimes we don't -- we don't often hear about the issues around the prison systems until there is some type of crisis. And so my question is that given the ongoing challenges of the prison -- with prison staffing and security, are there plans to enhance staffing levels or security measures in conjunction with the facility renovations?
Thank you, Councilmember. I'll call on a Managing Director Thiel to answer that question.
Thank you, Council President, Councilmember. I think the short answer is yes, absolutely. We've had the best with Commissioner Resnick and his team on board. I mean, it's -- they're an absolute testament to how leadership matters, and with Mayor Parker's fulsome support we've had the best report from our court monitor of, you know, the past many years. And all of the security enhancements are absolutely integrated with the facilities enhancements. I mean, it really is, they're physical security, their staffing is improving greatly and has improved greatly over time at the same time that a lot of the proactive measures they've made to help, you know, keep the population where it should be working with the courts and others. It just -- things are really moving in the right direction and the investments here will help address issues that are specifically mentioned in the Remick settlement, as well as continue to institute best practices from the correctional industry that Commissioner Resnick and his team are bringing to our Philadelphia Department of Prisons along with a really dedicated and committed workforce.
What campaigns have you all done in order to hire more correction officers? And I ask because I've not heard of any, I've not seen any and so I want to -- I want us to figure out how do we keep our prison population safe, as well as those corrections officers that are currently there. I -- we hear from them often, right, that they -- that they need help, right? That they want to maintain safety as a priority in the system but they're -- they just -- they don't have enough bodies. And so what are we doing as it relates to making sure that those who are there have the support that they need in order to efficiently do their jobs? And how are we working towards increasing -- what kind of campaigns are we looking at to increase the actual staff?
Councilmember, I really appreciate the question and the attention. It's a really long list, and we do have -- we will have prisons here for their own session. So I would -- I mean, we have after page after page of enhancements that Commissioner Resnick and team have put in place in full consultation and in conjunction with the Law Department Managing Director's Office. So we could probably spend a lot of time answering those questions in a detailed way. We have a full-time recruitment officer with PDP now, we have a retained advertising firm and they're putting campaigns out there. And the proof is really in the pudding. We have our largest correctional officer classes, and again, in many years, onboarding almost continually just opened a new training and wellness space and on and on and on, Councilmembers. So I guess we certainly could go into great detail, you know, subject to your discretion and Council President or if you want us, we'll -- we could have all of that elaborated during prison's time here with you.
I look forward to hearing about that campaign Council President. Again, we get contacted by some of our officers in the prison systems who stress the importance of needing more support, right? And so I want to make sure that we're doing whatever we can through this budget process to ensure that they are safe as well as our prison population. Thank you.
Thank you. Chair recognizes Councilman Jeffrey J. Young.
Thank you, Mr. President. And I just have a question for Rob Dubow. But I -- before I get there I just want to, you know, set the record straight. I didn't want to make it seem like I'm minimizing anyone's efforts in this. We -- I know everyone's efforts, we're all working on it every single day. And I know you're working continuously to make sure that Philadelphia is the safest city and the city -- in the country, I understand that completely. And, you know, I just wanted to elevate that conversation. I just wanted to put that to the forefront because I know it's at the forefront of a lot of folks' minds. And not to say that, you know, my colleagues, you are not out there in the -- in the community doing the work. I know you are, but I just wanted to elevate that in the -- in the -- in the comments. And some of the answers we received, you know, talking about the programs that exist, that address that issue of public safety and gun violence in our city. There were a lot of different departments that had something to do with that. And that goes to my question that I have for Rob, can you explain to us this -- the type of budgeting method that the city uses?
Yep. We use program based budgeting. So we'll look at each program, what we spend, what outcomes we expect from it. And when you look at our budget detail, and you look at our five- year plan, you'll see that for each department we show what we spend, what we expect for that, if they're going to generate any revenues. So we put that all together so you can see what we're -- what we're getting.
And I guess how often are like programs changed or in the budgeting process, do you -- are you looking to see the effectiveness of each program as you're allocating more or less resources when, you know, we're looking at, I guess, certain particular outcomes that you're looking for?
We are. We are always looking at that. And there was a little discussion about this before with first Deputy Mayor Harris, where if a program is not meeting its goals, it doesn't necessarily mean that you should say we should give them less money, right? It could be that they actually need more resources to do what they're doing. And what your measures do is really raise questions for you and let you ask the right questions to decide, you know, what level of resources make the most sense.
And so when you're doing that and doing that evaluation, and I guess my point is because they're coming from so many different departments, it's not as transparent for the public to see like what's going on. And so -- and it's not as flexible, and so if we -- if we change how we budget, how we allocate resources, I believe to more outcomes based budget and process, where we're starting -- where we're aligning our resources with the actual results, right? Where we're starting from these are our goals and let's figure out how to fund our goals, right? Rather than each year just give and take from a particular program, do we need more money, less money? Like, let's -- what are our goals? And then what are our priorities? And how can we let our constituency know that these are our priorities? And I think if we change our budgeting system so they can clearly see what the outcomes are, what the priorities are based on the dollars that being allocated to that. I think it'll be -- you know, it'll help us in our city be more efficient as we look to, you know, to govern, you know, to improve these particular outcomes that we have for our constituents.
I understood that. And if you look through our five-year plan, you'll see that for each department in each program we start with what the goals are, what their mission is, and then they talk about how they want to meet those goals. So that's what we try to do in our plan, and we actually do it in our budget detail too.
And, Council President, may I just respond to one thing when you --
When you opened, Councilmember Young, thank you for that, but I want to assure you, I want to double down on it. We will never under this administration, under Mayor Parker's leadership, normalize gun violence. It will not happen. It will not happen. We will not normalize it and we hear you.
A very brief lightning question, Gauthier, Brooks and then we are wrapping up.
Thank you, Council President. I wanted to ask about immigration legal defense. For the past five years, Pennsylvania Immigrant Family Unity Project or PAIFUP funding has been indispensable to local immigration legal defense. Given the Trump Administration's ongoing campaign to create fear in and intimidate our immigrant communities including, but not limited to illegal deportations. I think we have a responsibility to expand services and resources for immigrants in our city. Advocates have been asking not only for more funding for PAIFUP, they've asked specifically for an increase the 1.3 million, but also to move PAIFUP to the Defender's Association, which already has skilled immigration lawyers on staff. So briefly -- two brief questions. Is the administration willing to increase funding to PAIFUP and is the administration willing to reallocate the funding to the defender so that they can take on PAIFUP under their umbrella. Why -- will you do it? And if not, why not?
So, to answer that question I have to kind of give a little bit of context first. So the -- and the context is of course Amy Eusebio who was historically the OIA director, you know, was in place when we received PAIFUP funding on the last -- on her last day in the administration. I'm told by our Chief Defender and the Defender's Office that there was discussion around that funding because no one else in the administration was privy to that conversation. What we said was, we're open to it with the caveat that we want to fill the OIA director position first. We've had a record number of people to apply for that role. My office under my leadership, as well as with our city solicitor, we're supporting our Managing Director's office and combing through those -- the record number of very impressive resumes might I add once we name that new OIA director which will not be a long drawn out process, I want to note that for the record. Once we name that director, we will then go back to Keisha Hudson and have that more fulsome conversation around PAIFUP funding and where does it sit, you know, does it stay within OIA or does it go over to -- over to that unit. We're not opposed to it, but we're not going to make a decision until we have the OIA director in place. They understood that when we met, in fact Rob Dubow and our budget director was a part of that conversation.
Do you think it's important that we have those conversations and make that decision within the -- the FY '26 budget process?
Yeah. The intent is to work on parallel tracks, name the -- name the OIA director and have the conversation with our Defender's Office, absolutely. During this -- during this process. So yes, absolutely.
Thank you. I'm probably going to ask more about this in future sessions, but thank you for that answer today.
Thank you. So last year, I was very disappointed to see the administration cut the Department of Labor Budget and for City Council to fail to fully fund the department. I heard this happened because the Finance Department refused to fund open positions. Something there are a lot more of this year. Is this administration prioritizing the Department of Labor the way it should be, particularly in light of what's happening with the Federal Department of Labor?
So I'm going to kick that over to our Chief Deputy Mayor, but I want to say that the Finance Department did not make a decision of void of the Mayor's office around cutting based on the reasons that you shared. But I'll kick that over to Chief Deputy Mayor.
And as I explained before, and there is not, there hasn't been a cut last year, and there was not a cut this year in terms of funding for wages and class 200, class 300. We still have the same compliment and we're still invested in the same services. They were either terminal leave payouts or in the -- for the instance for this year, because we're in the midst of active negotiations with five major unions. We have some funding needs around arbitration, interest arbitration and those negotiations specifically some of the costs. So that's what you see in terms of the difference between FY '25 and FY '26 and that will be in a transfer next Monday. But we are not cutting the Department of Labor, the work that they do between the Office of Worker Protection, the Office of Labor Standards, recovering over $5.1 million on behalf of 2,600 workers. The Office of Labor negotiate -- Labor Relations who is in -- helps us do all the negotiation and the research and making sure that we are responsive to our workforce. And then the Office of Employee Relations where, you know, folks who are city workers and have any issues in terms of potential workforce harassment and any of those complaints, they do all of that investigatory work. It's work we take very seriously and we are not cutting.
So when the strategic goal outlined in the five year plan states is that one of the goal is to better integrate staff into assisting existing city structures, that's not including this department that's other departments.
Well, we always aim to better integrate our workforce into the city structures. That's not any -- that's not indicative of any cuts or any deprioritizing.
Okay. Thank you very much. So to Deputy Chief Mayor, Sincere Harris to Vanessa Garrett Harley, Deputy Mayor, and the Chief of staff, Tiffany Thurman, I thank you for your presentation on the five-year plan. Give them a round of applause, y'all, right? Now I've been around -- I've been around for a little while and oftentimes -- and I've been an elected official in City Council since 2011. I also have been a state representative under Governor Ed Rendell and Tom Corbett. And so during Women's History Month, it's not often that you see three women in leadership, whether we agree or disagree, as we go through this budget process. But three women in leadership like leading the helm in a charge moving forward. So if you can say that we look forward to a robust discussion around the city budget as we move the city of Philadelphia forward. And I thank all my colleagues for sticking in this out today and making sure as we do every day show up. And so the Chair recognizes Majority Leader Katherine Gilmore- Richardson for a motion at the public hearing and meeting on the bills and resolutions before the Committee today stand in recess until Wednesday, March 26th, 2025, at 12:30 p.m. in room 400, City Hall.
Thank you, Mr. President. I move that the public hearing and meeting on the bills and resolutions before the committee today stand in recess until Wednesday, March 26th, 2025, at 12:30 p.m. in room 400, City Hall.
It has been moved and properly seconded that the public hearing and meeting on the bills and resolutions before the committee today stand in recess until Wednesday, March the -- March 26th at 12:30 p.m. in room 400. All those in favor will signify by saying aye. Those opposed? The ayes have it and the motion carries. This committee will stand in recess until Wednesday, March the 26th, 2025 at 12:30 p.m. at which time we will reconvene in this room. (Committee on the Whole concluded at 4:05 p.m.) C E R T I F I C A T I O N I hereby certify that the proceedings and evidence are contained fully and accurately in the notes taken by me of the above case, and this copy is a correct transcript of the same. _______________ Samanda J. Rios