Hmm. And no one in the City has this level of expertise out of 25,000 110 9/20/01 LAW & GOV'T RES. 00476 employees?
I -- I'm sorry if I'm not making myself clear. The negotiations for medical coverage --
-- have been handled for the past few years pretty much soley by the City's personnel director.
I am not commenting on whether that individual did a good job or a bad job, because I personally -- except to say that I personally believe that the coverage in the City-administered plan is good coverage But because the health care market is so volatile and costs are escalating, I believed strongly that we needed to bring an outside assistant to help us ensure that we were getting the best coverage for the lowest possible cost.
Okay. One last question. This -- the advertisement that was in the 111 9/20/01 LAW & GOV'T RES. 00476 newspaper --
-- was for -- that obviously was not for consultants 'cause you didn't advertise for that.
Potential respondents to the RFP. It was a notice basically saying that the City intents to issue an RFP for medical coverage, and it was requesting that people notify of their intent to respond; meaning that they were requesting an RFP.
I understand. 112 9/20/01 LAW & GOV'T RES. 00476 How many people have responded?
It is -- so far, twelve have expressed an interest in submitting a proposal.
No, I am not. And I don't know who they are. And as I explained before to Councilman Cohen, it is a competitive process.
No, I understand that. That's -- I mean, you may have no appreciation for the question; it is why I did not ask you who they were.
I didn't ask you if you were in a position to say who they were because I thought there might be some sensitivity.
Okay, that's fine Councilman, for the moment, I think I'm done. Thank you.
Miss Berkowitz, I'm looking 113 9/20/01 LAW & GOV'T RES. 00476 at the RFP, I'm looking at , which says, "The plans must be consistent, if not identical, with the current offerings that we have now." My question is: You understand that this -- this investigation started because the City -- we were concerned that the City-administered health plan did not offer the same level of benefits yet alone at the same price -- at a higher price than DC 47. So what I'm interested in is if these benefits -- is this RFP -- are the RFP responses going to be limited to the benefits that have been offered this year or less? Or how -- who -- how -- what kind of benefits -- we certainly are not going to -- it doesn't seem that we wouldn't -- if I were a respondent to put out an RFP, I certainly wouldn't add more than what the current benefits are now. So my question is: Who decided and how was it decided what specific benefits would be included in the medical RFP?
That language is meant to imply a threshold, not a ceiling.
But wouldn't it be common sense that the respondents would offer exactly or less -- I mean, they would not offer more -- 114 9/20/01 LAW & GOV'T RES. 00476
Not necessarily, and I anticipate that that might be one of the questions. We're going to be having a pre-respondent session, which I would invite representatives of Council to observe, on September 28th, at 2 o'clock.
Conference Room C, on the 16th floor of the Municipal Service Building
Yes. That session is limited to potential proposers and Council staff.
Thank you. The other question I had, you at previous hearings saw the diagram, the chart that was prepared by DC 47 that compared our level of benefits with the -- "our" meaning the City-administered plan -- with their plan. Our -- you have seen that chart. Did you see that in the previous hearings we've had?
I was not at the hearings where that chart was presented. I understand it was presented and I believe that the committee had asked for the City's comparison, and I believe that that 115 9/20/01 LAW & GOV'T RES. 00476 was given to the committee.
Well, I'm only asking, and we would be happy to provide it again for you, that those -- the elements that were part of the DC 47 plan are elements that this committee has indicated would be good components for a future medical plan, some components, which have not at this point been ever included or have been eroded from previous medical plans. I mean, I think Councilman Cohen has alluded to the fact that he probably would like to see the medical coverage of several years ago when the copayments were lower and the employee contributions were less. So I'm wondering if those considerations will be a part of this RFP, or are we just expected that the cost to the employee will be going higher and higher each year, with no cap in sight?
We -- it is our intent to negotiate coverage that is the best possible coverage at the best price both for the City, for the City's General Fund, and for the employee.
Miss Berkowitz, what arrangements are you making to have Council input in 116 9/20/01 LAW & GOV'T RES. 00476 determining what the benefits ought to be?
As I expressed to you, Councilman, I mean, I have not -- I have not heard from Council, and I would certainly be open to hearing from Council, any specific recommendations for coverage that is not currently provided in the City-administered plan. The issue of copays is a cost-determinant factor. And I -- I -- I appreciate the fact, I have heard it here, I think everyone is sensitive to rising health care costs. I am covered under the City-administered plan, so I pay those copays just like you do, and I remember the day when I paid a co-pay of $1 for a prescription. But I also understand that times are different. We believe that the City-administered plan is an excellent plan and is superior to DC 47's. People may disagree. That is one of the things that the controller's office is looking at. I understood the mission of their audit and -- because I -- because I also want to know --
If I could just finish this, please. Because I also want to know, not 117 9/20/01 LAW & GOV'T RES. 00476 being an expert in this field, how we compare with not just DC 47's plan but the plans of other jurisdictions as well. My office, in terms of the review that you had alluded to earlier, the review that I was undertaking this summer, my office had contacted a number of jurisdictions around the country to get an understanding of how they structured their plans, what kind of benefits were paid, whether -- whether all of the jurisdiction's employees were covered under a plan administered by the jurisdiction, or whether they had union-administered plans, and what the costs looked like, what the menu of options looked like. And we were -- we were -- we had already gotten a fair amount of information. When I -- when the controller's office first asked me for information -- and we have turned all of that information over to the controller's office and I have expressed to them my desire that they get those -- that they continue on with that cost comparison, plan comparison, and that they be able to share with the Administration best practices that they come across in terms of health coverage for governmental employees. 118 9/20/01 LAW & GOV'T RES. 00476
Have you furnished that information to the Council Committee?
I have not. I have given that information to the controller's office.
'Cause I understood that we received the same thing that the controller has.
As I said, the controller has -- everything they requested of us was the same information that you had requested, and they have that. In addition as part of the review that my office was doing, we got some comparative information, which we have turned over to the controller's office.
Now, we have very -- in 119 9/20/01 LAW & GOV'T RES. 00476 talking about time, I can telling you, you are facing a terrible situation if you hold this meeting on September 28th without first having had a meeting with the Council Committee and the Council President at one meeting to discuss what the request should be, and you may need the opportunity to meet with the Mayor on the subject too, or maybe it has to be a member. I don't know who is going to make the final decision as to the Administration proposals. But I believe that before there is any decision made as to the benefits requested -- now, if you're going to have a competitive plan, people have to be competing for the same thing. I think the proper procedure is for us to decide what we want and then to have all of the companies, all of the competitors to bid on that program. I don't know how else you have competitive bidding if people are going to bid on different proposals and one person's going to say, Well, we'll give you this extra benefit but it will cost you this much, or whatever it is.
Councilman, I would encourage Council staff to go through the RFP, look 120 9/20/01 LAW & GOV'T RES. 00476 at the coverage that is discussed in the RFP, and share with me any information -- any requests that you do not see included there. I am open to that.
If you will look at the RFP, there is a reservation of rights expressed in the RFP that allows the City to amend, modify the RFP at any time, in any way it chooses.
But if it's going to be competitive in the bidding, then it seems to me that they'll all have to bid on the same thing.
When we amend the RFP, which is one of the reasons that we want intent to respond. When we amend the RFP, we send the amended language to everyone who expressed an intent to respond so that they are all responding to the same RFP.
And the RFP -- I think there's a provision that sets the broker's fee as a percentage of the expenditures.
That is not -- that is not 121 9/20/01 LAW & GOV'T RES. 00476 in the medical RFP. And that is not in the dental optical -- that is not in the dental, prescription, or life RFP. We did not wish to put a percentage or a specific dollar amount because we did not want to influence the proposed rates.
Well, you know, it's one thing to say the City is not paying. If you mean that it's not the City but it's the City employees who are paying, I can understand that. But I can't understand either the City or its employees paying for Mr. Katz's services because all it means is if he gets the actual money, however it is determined to be, if he gets it from the company, obviously, the company's going to get paid back in the terms of the cost of the services it offers.
That is why we are not discussing compensation in specific terms until the rates have been proposed.
I don't see where that has anything to do with it. It seems to me that it's quite clear that the compensation of the broker is going to be influenced by the amount of business his company gets; his company being the finally-selected provider. And, therefore, the 122 9/20/01 LAW & GOV'T RES. 00476 bigger the contract, the bigger the payment's going to be, whether it's figured on a percentage basis or in a dollar amount.
Please listen to me I would much prefer to change the provision entirely to eliminate -- I would want Mr. Katz, if he is going to be the City's consultant, to be in fact the consultant for the City, paid for by the City, controlled by the City, influenced only by the City, with the City as his client, not for him to be the -- to act as a client to the company providing the services. (Applause.)
Because if he's the City's client, then he will be more inclined to work on behalf of the City. If his client is the company that is the provider, he is going to be working in their interest. Now, the -- so I think that is a very bad 123 9/20/01 LAW & GOV'T RES. 00476 arrangement to have the salary or compensation, whatever it's going to be, determined by any company. The company ought to be not in it. We need a consultant, if there is to be one, we need people whose sole interest is the City really aiming to get what you said -- the most efficient plan for the least cost And I can tell you, you don't get it by getting the compensation. It isn't the City's getting anything free. Either the City is going to be paying for, or more likely what the City will do is say, That's easy, whatever Mr. Katz's compensation is. If it's a half a million dollars a year or $2 million a year, whatever it may be, we'll just divide that among the City-represented employees, we'll just increase the copays I'd like the City to, frankly, put the person on a basic simple compensation package. He's get to be our man; otherwise he is not the City's representative and he cannot and should not be able to City's consultant. I think that's very, very clear. He does not act in the interest of the City under the present proposal. So I offer to you directly today one very 124 9/20/01 LAW & GOV'T RES. 00476 basic change that I believe, in fairness to all of the employees, has to be made, and that is if Mr. Katz's status has to change in that he's got to get paid whatever that amount is, it's got to come from the City treasury and from no other place. It's just like where your salary comes from. I wouldn't want your salary to come from some selected provider because then you'd have to work for them. Follow the money -- just as we're doing in the crisis involving the terrorists, follow the money and you find where things happen. And so that's the number-one suggestion to you Number 2, let's go back to the Doyle report. And, incidentally, I think Mr. Katz would find himself in a terrible conflict-of-interest situation where he's ostensibly the City's consultant, when he works for the company, and the company he's going to be working for is the company -- you know, it's terrible to say to him -- to put him in a position where he's going to get paid by the selected provider. Who knows what discussions these various providers are going to make to him? Say, You know, if you pick us, Mr. Katz, we'll see that you're really taken care 125 9/20/01 LAW & GOV'T RES. 00476 of. He ought not to be in that situation; nobody ought to be in that kinds of a situation So I suggest that that proposal be re-thought, because the City -- one way or the other, the City or its employees are paying for it. Please think about that carefully over the weekend.
Now, secondly, with respect to the Doyle report, what is the status? I had a separate conversation with the City Solicitor, he then sent me a formalized legal opinion. I don't know whether -- I've circulated that legal opinion among other people and they agree with the opinion of the legal staff of the City Council that there's absolutely no merit to the letter that Mr. Trujillo sent to me with respect to its legal standing up. We're going to get that report or we're going to get a statement that no such report exists, and I think you're causing us and the Administration to engage in unnecessary battling, and I wish you would get that report back to your supervisors, whether it's Joyce Wilkerson or the Mayor, because I think our limit of patience in playing around for 126 9/20/01 LAW & GOV'T RES. 00476 more than a year in trying to find out, was there a basis for the statement made by the City to the negotiating team last time. We're trying to fight for the credibility of the City, Miss Berkowitz. You don't understand what it is to hold an office as a councilmember and be told by a group that deals with the City that the City lied to us. When they came and told me that, I said that that cannot be true. I said I'm absolutely certain that the City must have had some basis for it, and we'll get you the basis, and we've been trying to do it, and so far, I've come up blank and am being forced to the conclusion that maybe after all, maybe the City was guilty of fabricating when it made that charge to the union. Now, I think we've got to clear it. If there's a Doyle report, if it exists, whatever it is, whether it has facts, whether it has data or doesn't have any, it ought to be made available, and I wish you would take that up very seriously because I think it's not going to be waiting at any point beyond our next session, which is going to be scheduled after today -- this committee will be recessed until Thursday, October the 4th, at 127 1 9/20/01 LAW & GOV'T RES. 00476 o'clock. Now, I would hope by that time, we can work out all of these problems.
-- because there ought to be no reason for the Administration and the Council not to be cooperating. We have a feeling -- Miss Bricklin stated a part of it, but there's a very serious part in which Councilmembers feel that the benefits are not adequate. And we're going to want to have those considered, and we will see that they're presented to you. I don't know how soon it can be, whether it can be in time for September 28th or not, and we may be asking you to hold that date, push that date back a little bit.
We cannot push that date, Councilman. As I explained, we are on a very, very tight time frame. I am sorry but we are And I just want to let you know that I appreciate the fact that you want to have another hearing on the 4th; I just want to let you know that I will not be in town that week. I am scheduled to be in Atlanta that week. It's a vacation.
Well, I'm a little 128 9/20/01 LAW & GOV'T RES. 00476 stunned about the idea of a vacation.
I appreciate you're entitled to a vacation but it would seem to me that on this tight schedule, I don't know how you'll work that in.
Well, it was scheduled and my fare was bought long before much of this. And I will be out that entire week.
Tim, could you check Thursday, the 11th? You know, I think we're going to get some things done and they can get done the easy way or the hard way, and if it's going to be done the hard way, I guess that's the way it's going to have to be. I just hate to see the energy and time consumed in these battles when frankness -- there can't be anything conflict in the Doyle report; it either exists or not. Whether there are facts or data in 129 9/20/01 LAW & GOV'T RES. 00476 it or not, there's nothing confidential, there's no 3 secretive work process or attorney-client privilege. You're not in the middle of a case where a document is prepared for the purpose of a lawsuit. We don't even begin to understand the different legal theories that are being expressed.
Councilman, I cannot second-guess the City Solicitor. The City Solicitor has given you his opinion concerning the Doyle report, and I certainly am not in a position to second-guess him.
Well, I guess the only one that's in a position to second-guess him is the Mayor or the courts. And you give the -- you know, you limit the possibilities very much because you're telling us that --
Why should we believe that there is any evidence whatever that supports the statements. Do you have anything that would support -- let me put it this frankly --
Is there a -- no, no, no, don't -- please don't -- please wait for my 130 9/20/01 LAW & GOV'T RES. 00476 question and then please answer the question.
And make whatever comments you want at that time. Let me ask you this question: Is there anything known to you which you can submit to this committee which would tend to indicate the existence of some kind of a study or report that would authenticate the City's contention that uniting these plans, the four union plans and the City representative plans, would be more efficient and economical? Is there any such thing that you can show to us?
Councilman, I don't know what else to tell you other than what I have already said.
And you have said the only thing that exists is something performed by an agency called Doyle, a mysterious agency about which we know nothing.
It's not a mysterious agency. They are a consulting form and they do do health care consulting and the --
The City Solicitor has expressed his opinion to you on the ability of the Administration to share that information with you. I don't know -- I mean I'm -- Councilman, I understand that you're frustrated --
Miss Berkowitz, I have to tell you that if that that is your position, I'm going to be recommending to this committee that it issue a preliminary report in which it finds that there was no basis whatever for the statement that was made by the City Administration, and we find there was no support whatever and the statement was obviously a fabrication. We're going to -- we don't like to do that with respect to the City, but I think we have to do that 'cause you're telling us that the only thing that exists is this one item, and we can't even see it. I think a fair conclusion of that is that it's something that if seen, would produce no 21 information. I think for the credibility of this committee, for the credibility of City Council and for the credibility of the City, I think on some occasions, you're compelled to call a spade a spade. 132 9/20/01 LAW & GOV'T RES. 00476 You can't say is a spade is a blonde. If it's a black spade, it's a black spade; if it's a blonde ace, it's a blonde ace, whatever it may be. You're telling us that there's nothing that the City can put forth that can support the City's contention -- and I think that the workforce and the City of Philadelphia is entitled to the conclusion of this legislative committee. I'm going to be raising that at a committee session to get such a finding made because -- and then we will make a determination as to whether or not we're going to pursue the matter further with respect to a subpoena, 'cause I don't know whether there's anything worth subpoenaing from what you're saying. 'Cause if it were something, if it were proof, I think it's absolutely clear that you would not only be showing it to us but probably flaunting it. And I'm very, very disappointed. Is February the 11th okay?
October. Gosh, I'm hoping we're not going to go into February. Does anybody here have any questions that they feel ought to be answered? 133 9/20/01 LAW & GOV'T RES. 00476
1 p.m. on October the 11th. This committee stand in recess until that time. (Retirees indicate desire to speak.)
Yes, would you come forward. And I would like you to stay, Miss Berkowitz. The question -- maybe there will be a question that you could be helpful in responding.
My name is Joseph Goldberger, retired City employee. Many months ago, we started the process for retired people in terms of our pharmaceutical plan, which we received in -- supposedly in January. That plan has since been changed in May. The process by which that plan was devised was heavily criticized by us before this committee 134 9/20/01 LAW & GOV'T RES. 00476 on several hearings. One of the reasons we felt the process was flawed was because the individual who proposed that plan, who developed that plan for us, who was responsible for that plan was a, quote, consultant who was not paid by the City. The consultant received his funding from the prescriptions that were written for retired City employees. My question is: Are we heading down the same path? are we going to have the same type of consultant? what was in the RFP for pharmaceutical services that affected retired nonunion personnel? It is not clear to me that that has been covered in this hearing, and I think it is an absolutely mandatory thing that we know before November. That's my question.
Were you addressing it -- would you like Miss Berkowitz to reply to it?
Yes. I would like an answer that I can communicate to other retired employees who have been faced with the same situation that I have. My benefits under Plan H Medigap for pharmacy have run out, $1250. I am now paying the 135 9/20/01 LAW & GOV'T RES. 00476 full amount of my prescriptions. My last bill was, for example, $307 for 2 prescriptions. This is something that is of vital concern to us and is somewhat different from the pharmaceutical plans that are developed for active employees.
What is the City's plan with respect to retirees? Is there a plan formulated yet?
Well, let me just clarify something. Are you talking about post-City credit retirees?
You're talking about post City credit. It's my understanding that the reason that the coverage was changed was because under the former plan, the cost -- the copays would have been equaled the benefits. There was absolutely no 20 longer a benefit to an individual. And so the City's personnel director negotiated a different coverage with Independence Blue Cross. As you -- and if I can just comment that that is independent of any agreement that the City -- that's independent of the work performed by 136 9/20/01 LAW & GOV'T RES. 00476 the City's consultant on prescription coverage. There is no compensation to a consultant for that. That was negotiated -- because the City does not pay for prescription coverage for post City retirees, post City credit. The City only contributes for active employees and employees within the five years after retirement. So ...
Wasn't there some arrangement before that had special coverage for retirees, say, after they finished four years? Wasn't there a plan that had existed?
Post City credit retirees can participate in a plan that the City makes available, but the City does not pay for the cost of that. The City is only obligated to pay for -- to contribute to the cost of health care for active employees and for those individuals within five years after retirement.
Just -- we're coming back to that, but let me ask a side question, which I've been plagued by. What happens in my case if I pass away tonight? Does my wife get any prescription coverage? She now gets it, but I'm not here, so there's no five-year plan. Does she get 137 9/20/01 LAW & GOV'T RES. 00476 any coverage from the City, the spouse?
Councilman, I don't recall -- I believe in one of the responses that we sent you, you had asked that question, and I believe that spouses and other eligible dependents are covered for the five years. I am not sure that they're covered for the post.
Yes, but I believe that's already on the record. I wish I could remember the answer, but I believe that's already on the record because we've responded to that.
You might want to check the record. 138 9/20/01 LAW & GOV'T RES. 00476 (Witness comes forward.)
Sit down and pull the microphone close to you and identify yourself for the record.
You're going to have a chance. Let Louise Simpson say something for a minute Speak into the microphone. Give your name first, please, for the record.
Louise Simpson. As a retired employee in a non-represented class, I pay for my own medical. I have been getting Personal Choice, and although the controller's office was not able to provide it, here it is, it says "old." Here, it is, the new one, okay? All of the information is there.
These are the plans, the medical plan that included prescription in January -- or rather, December, all non-represented employees who would --
Miss Berkowitz, before 139 9/20/01 LAW & GOV'T RES. 00476 you leave --
In January, all of the plans that the City offered, which were all Blue, had a statement under them that said "All prescription plans are cancelled." The Mayor's assistant got a copy of that when she was here. And, unfortunately Mrs. Berkowitz forgets that in 1999, we weren't all Blue. We also had Aetna, US Health Care, and then that was dropped. Those people that had it had to pick up something else. I wasn't. Four times this year, the prescription plan has changed. The first time, when we were notified in December that the prescriptions were cancelled, Council President Verna called a caucus hearing. Linda Seyda was there and said something would be done. We were supposed to get a special card; we didn't. 140 9/20/01 LAW & GOV'T RES. 00476 On March the 14th, we got something that said "revised health care options." And it noted what the Personal Choice High option plan with prescription drug would be. Then in August the 17th, we got another one that said "discontinuance of PC," which is for prescriptions. I was very confused because it was -- it did not make sense, and when I called the Board of Pensions and Retirement and I talked to Olivia James, who penned this thing, she said to me, "Well, I really can't give you any information, I don't have anything." District Council 47 has advocates. If they need somebody, they call them, they get some information, they get some help. We have nobody, we have to call the Board of Pensions She said to me, "I think you call the Blue Cross help number," so I did and I spoke to a gentleman by the name of Paul Clark. I asked him some very pertinent questions pertaining to this piece of paper and I sent a fax to him and I asked him very specific questions. You know, I need to know from you how a subscriber is supposed to be 141 9/20/01 LAW & GOV'T RES. 00476 reimbursed in a timely manner, okay? We're talking about senior citizens. I sit before you today as somebody who has my faculties, thank God, but there are people out there who don't.
Anyway, I sent this to him and I sent to him a printout of all of my prescriptions. They owed me over $500. I'm still waiting for it. Then I called again and I spoke to another person, and I said to her, "I would like to have what you have said to me put in writing and I want you to send it to me," and she did. And she says something that Mr. Clark did not say. Mr. Clark said I needed a card because when I went to get a prescription filled, the pharmacy said I had to pay full price because I didn't have a card. This lady says I don't need a card.
This lady is from Blue Cross, Independence Blue Cross. 142 9/20/01 LAW & GOV'T RES. 00476 And Mr. Clark said to me that to be reimbursed, I would have to send in a form and he would send me a supply of forms, and here they are, Personal Choice out of network forms. These are used when you go to a doctor that is out of network. There is a tiny little place here that is marked "drug." Nothing else on the form relates to prescriptions. How, I ask you, Councilman, is a senior citizen supposed to figure this out? And here is the amount of money that I paid from January on through because they said in the last thing they sent they were going to make a one-time exception and they were going to count in all of the money that you pay to your pharmacy.
And have you been back to the Board of Pensions to tell them that what they said wasn't so?
Yes. It gives the Personal Choice high option, which I have, and it tells me all the wonderful things it's going to do for me. 143 9/20/01 LAW & GOV'T RES. 00476
The City of Philadelphia that's administering it through the Board of Pensions.
Yeah, and they told me to get in touch with Blue Cross. Now, I've been in touch with Blue Cross and I sent them a copy of this, which is a printout of all the prescriptions. The last page, which has the final number. They owe me over there $500. I have not gotten it yet and I'm still waiting. I think what they're trying to do -- "they" being the City -- is to discourage as many people as they possibly can.
Now, at this time, are you under any City-administered health plan?
Yes, I am. I have my health benefits, and the health cost is deducted from my retirement.
I am under Blue Cross 144 9/20/01 LAW & GOV'T RES. 00476 Personal Choice. And there are several other plans that are available. The other thing too that happened was Miss Berkowitz said --
Yeah, but the City said they're not covering anybody past five years now.
But you have to pay for it. You have to pay for it. You have to pay for it. Now, Miss Berkowitz said that the open enrollment period was going to be November. It has never been November; it has always been December, and this piece of paper proves it So why people have not been able to get information, I don't know, because all you have to do is take the amount of money that people are having deducted from their pension for any one of these plans and add them up and you can see how much money they're getting and then find out how much money they're paying these people. I don't think it's all that difficult.
Yes. The point that I was trying to make was, looking into the future, I 145 9/20/01 LAW & GOV'T RES. 00476 think the past has been thoroughly contaminated by the people who have been doing the negotiating in the past.
You know, that's a question, Miss Berkowitz, I was going to ask you. I know you referred to negotiating, but who does -- what kind of negotiating is there? I don't understand the negotiating. You put out an RFP, people give you the proposals, but there's no negotiating, is there?
Yes, there is, Councilman. Let me just also make sure that you understand that the last medical benefit RFP was issued in 1995. That was a very long time ago. And in the -- between that time and now, the negotiations for health benefits -- for medical benefits was handled by the City's personnel director.
Well I have to tell you, she had testified many times, and we never could find out whether there ever was anything we could call a negotiation.
I understand that, Councilman, I do understand that. An RFP process is not a bid process. In a 146 9/20/01 LAW & GOV'T RES. 00476 bid process, you do not negotiate. You put -- you advertise your specifications and it is the price that determines it if the bidder is responsive.
We're using a request for proposal which has much more flexibility in it because price is not the sole determinant in an RFP process. What you strive for in an RFP process is to negotiate the best deal, which is the best service for the best price.
Well, let ask you that. You said that when it came to getting a personnel consultant, you went to the Mayor's Office for their advice. I am concerned that what you're going to be doing at the very end is you're going to submit a few plans to the Mayor's Office and say, Pick whichever one you want, and the choice may or may not -- because you won't be there when the choice is made and you won't know how it's made, but it may or may not be made on merit. We are very concerned, for example, frankly, that Mr. Katz is best known in the political community for his financial contributions. 147 9/20/01 LAW & GOV'T RES. 00476 In the recent mayoral election, the records show that he was a supporter in the Democratic primary of Martin Weinberg, who was running in opposition to Mayor Street, and he contributed $50,000 to Martin Weinberg's campaign. Shortly after Mayor Street was determined to be the winner of the Democratic primary, Arnold Katz made up for his contribution to the loser; he contributed $55,000 to Mayor Street. That's been published in the Philadelphia newspapers. You're going to probably find stories at various times in the media suggesting that the choice of Mr. Katz among all other third-party administrators was largely influenced by those contributions. Was it true or not?
Well, among people who are providers in one or another, you indicated he has a number -- isn't Concept Brokerage a third-party administrator? That's what I'm told. 148 9/20/01 LAW & GOV'T RES. 00476
It is a brokerage firm, but he is not our third-party administrator.
Isn't he very heavily a representative of many different kind of companies? There's some stories that he represents some 50 insurance companies, and I don't know whether that's true or not. I'm just suggesting that the direction we want to go is the direction which leads to fewer, rather than more, of these kinds of stories. The choice ought to be clear for everybody, that it's a good arrangement that the City gets and that it's influenced on -- the choice is influenced only by the content of the proposal, not by whether or not somebody contributed or by how much that person contributed.
I do not believe that political contributions have any impact on this process.
Well, you know, that's 149 9/20/01 LAW & GOV'T RES. 00476 the basis for lots of discussion throughout the country.
Mr. -- Mr. Katz -- Mr. Katz' role is to give us guidance, but the decision will not be his. All of the proposals will be reviewed by experienced professionals within the Administration.
Councilman, I would be very happy to continue to have a dialogue with you, but I'm going to ask that when I am speaking, you at least ask the other people at the witness table to refrain.
Yes, I would certainly hope that. That's a fair request, that's a fair request and I hope it's complied with.
Thank you. I believe that there is a committee -- there is a committee made up of people in the City who have experience with insurance -- Joe Perillo, 150 9/20/01 LAW & GOV'T RES. 00476 who is the City's risk manager and has insurance, who runs the City's compensation programs for disability, Workman's Comp is experienced. He is not a health care expert, but I believe that there is sufficient professional expertise in the City to help us sort through the counsel and advice that we will be getting from Mr. Katz.
Miss Berkowitz, when the previous mayor, Mayor Rendell, was the mayor, the reason it wasn't an all-Blue City at that time because everybody knew who knew anybody about it knew that it would have been cheaper to the City. The reason it was not all Blue was that Mayor Rendell said to people in the Administration, I want a sizeable amount reserved for another company. The company happened to be a company headed by somebody, a well-known contributor to Mayor Rendell's campaigns. Whether that was the reason Mayor Rendell said it or not, they happen to be the facts. Now, everybody in the City administration, because Mayor Rendell was the mayor, accepted that as a fact; that is why we did not have an all-Blue policy prior.
Councilman Cohen, if that 151 9/20/01 LAW & GOV'T RES. 00476 was going to have -- if that same kind of scenario was going to have taken place in this administration, it could have taken place last year, and it did not.
Why didn't you go to Mr. Perillo, for example -- I'm Using names you supplied -- for the advice as to a personnel consultant. You obviously -- I don't know the gentleman, except by reputation, which is good.
Well, why didn't you go to him for the personnel consultant. You don't know the basis that the Mayor's Office used --
He has been involved in the discussions with Mr. Katz, he has reviewed the RFP. He is comfortable with what he has seen, as are other people within the administration, who, I believe, have experience and integrity.
Yeah, well, you see, you have to accept the integrity of a man chosen by the Mayor because the Mayor is your employer. 152 9/20/01 LAW & GOV'T RES. 00476
No, I was asked to speak with Mr. Katz. I went looking for some recommendations and it was made very clear to me that if this individual could not provide the services that we needed, I was under no obligation to enter into an arrangement with him.
But maybe there were a number of other people who might do it better, I don't know, maybe they wouldn't. But if you had been given the name by the Mayor of a half a dozen people who had contributed various sums of money more or less or maybe not contributed at all, we would feel much more comfortable than your getting the name of a single person, unless that single person came from somebody who clearly could not have been influenced --
Councilman Cohen, I received his name, I talked with him. I was comfortable. I have -- until you told me now because there are certain things I pay attention to and certain things I don't, and one of the things -- this is my third administration, and one of the things I do not pay attention to is who contributed what to whom. 153 9/20/01 LAW & GOV'T RES. 00476 I am not political in that sense. I am a professional public administrator; that has been my -- that has been my career. And I was asked to talk to this individual. If I believed that he could meet the needs that I was expressing, it was I who made the recommendation to go outside and get some assistance. I was given his name, I was advised that if I talked with him, if I looked at information concerning him, and I did not believe that he could meet the need that I was expressing, then I was under no obligation to enter into any kind of agreement with him. And I was satisfied. It was my decision, no one else's.
But you knew all along that it was the person recommended by the Mayor's Office.
But I had to be comfortable with it, and I was, and it was my decision.
It's the kind of formal disclaimer that occurs often -- when police say give 154 9/20/01 LAW & GOV'T RES. 00476 a Miranda warning to a defendant, it's done for the record, everybody understands it's being done for the record. I'm just suggesting to you that it would be far better if the recommendations came from sources that could not be influenced by political --
It's my impression, Councilman, that that is a very difficult task in Philadelphia.