Committee Hearing, March 21, 2003

COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMERCE AND ECONOMIC DEVELOPMENT - - - Room 696, City Hall Philadelphia, Pennsylvania March 21, 2003 10:20 a.m. - - - BILL 020816 - an ordinance amending Title of The 9 Philadelphia Code, entitled "Miscellaneous," by adding a new chapter creating The Economic 10 Opportunity Task Force, to develop plans for..... BILL 020827 - an ordinance amending Title 17 of The 11 Philadelphia Code, entitled "Contracts and Procurement," to improve compliance with certain 12 participating, affirmative action and reporting..... BILL 030125 - an ordinance repealing Chapter 17-500 13 of The Philadelphia Code, entitled "Goals for the Participation of Minority, Female and Disabled Owned 14 Businesses in City Contracts," and enacting a new... 15 - - - 16 PRESENT: COUNCILMAN MICHAEL NUTTER, Chair 17 COUNCILMAN FRANK DICICCO COUNCILMAN DARRELL DARRYL CLARKE 18 COUNCILMAN DAVID COHEN COUNCILMAN ANGEL ORTIZ 19 COUNCILMAN W. WILSON GOODE, JR. COUNCILWOMAN BLONDELL REYNOLDS-BROWN 20 21 V A R A L L O Incorporated Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, PA 19103 215.561.2220 215.567.2670 2 I N D E X BILL 020816 BILL 020827 Anthony Fullard, African-American Chamber of Commerce................. James Roundtree, Minority Business 6 Enterprise Council.................. 20 Marla Hamilton, Phillies/Eagles Stadium 7 Oversight Committee................. 25 Judith Robinson...................... 81 8 BILL 030125 Thomas Corey, City of Baltimore...... 99 Reverend Bruce Edwards.............. 157 Ron Armor, Community activist....... 172 Bruce Crawley, African-American Chamber of Commerce........................ 178 Jihad Ali, APEX Builders, Inc....... 186 Jamal Johnson, Contractors Roundtable......................... 191 Anthony Fullard, African-American Chamber of Commerce................ 203 William Gamble, procurement commissioner....................... 221 Tyrone Reed......................... 222 3 3/21/03 - Commerce - BILLS 020816 and 020827

Good morning. We do not yet have a quorum. Councilman Nutter is en route. He was somewhat delayed this morning. I'm councilman DiCicco and with me this morning is Councilman Clarke. We will at least get the hearings underway, and at the time of any votes that need to be taken, I'm certain we'll have a quorum. So in the interest of time, and we appreciate your patience, we would like to get the hearing underway. The Chair recognizes Julie for the purpose of reading the first bill.

Bill No. 020816, an ordinance amending Title of The Philadelphia 15 Code, entitled "Miscellaneous," by adding a new 16 chapter creating The Economic Opportunity Task 17 Force, to develop plans for increasing employment 18 for minorities, women and disabled persons in 19 connection with publicly funded construction 20 contracts and increasing contracting with 21 minority-owned, female-owned and disabled-owned businesses for such projects; and creating an Economic Opportunity Resource Council comprised of representatives of government departments and agencies to support the work of the Task Force; all 4 3/21/03 - Commerce - BILLS 020816 and 020827 under certain terms and conditions. And Bill No. 020827, an ordinance 4 amending Title 17 of The Philadelphia Code, entitled "Contracts and Procurement," to improve compliance with certain participation, affirmative action and reporting requirements, including by amending Chapter 17-500, entitled "Goals For the Participation of Minority, Female and Disabled-Owned Businesses In City Contracts," by imposing reporting requirements on the Minority Business Enterprise Council relating to the participation of Minority, Female and Disabled-Owned Businesses and Socially and Economically Disadvantaged Individuals in Contracts of the City of Philadelphia, its Agencies and All Quasi-Public Agencies and by prohibiting Council approval of certain City or Quasi-Public Agency projects; by amending Chapter 17-900, entitled "Neighborhood Benefit Strategy," by barring from participation in certain City contracts contractors that fail to comply with certain Affirmative Action requirements; and by amending Chapter 17-1000 entitled "Employment of Low- and Moderate-Income Persons By City Contractors," by barring from participation in certain City contracts 5 3/21/03 - Commerce - BILLS 020816 and 020827 contractors that fail to comply with certain low- and moderate-income hiring requirements and adding certain reporting requirements; all under certain terms and conditions.

Thank you. The Chair recognizes Councilmember Clarke, who has an opening statement.

Thank you, Mr. Chairman. Mr. Chairman, we introduced these bills. They are actually companion bills for a particular purpose. One bill to create an additional mechanism to allow government, particularly the procurement commissioner, an opportunity to either disbar or terminate, prohibit individuals or contractors who do not comply with some of the existing regulations associated with the participation of low- and moderate-income individuals in particular areas throughout the City of Philadelphia. Additionally, it requires certain reporting requirements that will better enable us to determine whether or not these particular contractors are complying with the existing regs. The other thing, the companion bill that 6 3/21/03 - Commerce - BILLS 020816 and 020827 created the Economic Opportunity Task Force, was put in place as a tool to not only give the City of Philadelphia, but also individuals and agencies who are interested in this particular issue, an opportunity to participate at a level that will allow them not only to access but also to monitor and suggest to government as to what needs to happen. One of the reasons that I thought it was important to have this Economic Opportunity Task Force is, having participated on the Stadium Oversight Committee, although it didn't achieve the ultimate goal, I found it to be a tool that, at a minimum, allowed us to access information as it relates to contracts and contract opportunities for MBE and WBE. It, in fact, in our most recent estimation achieved numbers that surpass any other municipally sponsored project, although it didn't achieve the goals that we sought as 50 percent. So I thought we'd need to mirror that type of format and take in an opportunity to take advantage of some of the mistakes that were made on that particular task force, understanding in 7 3/21/03 - Commerce - BILLS 020816 and 020827 retrospect some of the things that we need to do to take corrective action to make sure that some of the things that were essentially not done on that particular task force will be done in this one. By providing a resource council, it will also put in place a series of resources that will allow that task force to better do its job. Traditionally task forces such as this that are set up are normally done at the behest of the owner of a particular company, as in the Eagles and the Phillies Oversight Committee, the monitoring agent was, in fact, hired by the Eagles and the Phillies. In this particular aspect, we think the resources should be provided by the taxpayer, so ultimately we are the ones responsible for that task force. So it is my hope with these two bills in place that we will be in a position to better access and better implement a program that will allow opportunities for low and moderate MBE, WBE and DBE participants.

Thank you. Thank you, Councilman. The first witness, Jihad Ali, APEX 8 3/21/03 - Commerce - BILLS 020816 and 020827 Builders, Inc.? (No response.)

Not here. Anthony Fullard, director of economic development, African-American Chamber of Commerce? Mr. Fullard? (No response.)

Someone else on his behalf? (No response.)

And Marla Hamilton? Marla Hamilton from the Philadelphia Eagles Oversight Committee? (No response.)

Mr. Fullard?

Yes.

Please approach the witness table. And Jihad Ali, APEX Builders, not here? (No response.)

Reverend, you're not going to be testifying on these two?

No. 25

You're going to be 9 3/21/03 - Commerce - BILLS 020816 and 020827 testifying on Bill No. 030125?

Yes.

Good morning. Please identify yourself for the record and proceed with your testimony.

Okay. My name is Anthony Fullard and I'm from the African-American Chamber of Commerce. I'm the chairman of the Round Table and also the economic development director for Chamber as well.

Do you have testimony, sir?

Yes. I don't know if we're speaking to both bills here now or just one bill. I see Councilman Clarke here. I don't know if Councilman Ortiz's bill is --

Actually, you can speak to both bills. It's your decision. Councilman Ortiz is running a few minutes late, as is Councilman Nutter. We just wanted to get the hearing started. So you can speak to either one or both of them at the same time. Whatever you feel comfortable with. Why don't we start with Bill No. 020816. 10 3/21/03 - Commerce - BILLS 020816 and 020827

Okay. Could I have that bill, because I was in a meeting and I left my information...

This is the bill 6 that speaks to the adding of the new chapter 7 creating the Economic Opportunity Task Force.

Okay. And as far as the Chamber, we have looked at this bill, and there was a lot of things that we've seen that is pretty much already in place even though it speaks to the effect of some task force and some committees and a process of following with these task forces in order to enforce some direction on minority participation and to ensure that we get the right numbers on these job sites and to assure that it is being done within compliance. But, however, I believe that we do have some of these things in place even though that we do not have a task force, but it does not speak to the effect that if there is not a -- if someone is not in compliance, what will be the end result and how do we get the --

Compliance that you want.

-- compliance enforced at 11 3/21/03 - Commerce - BILLS 020816 and 020827 that time. Because you still will have people out there trying to get contracts, trying to get employment, et cetera, but it just doesn't speak to how do we enforce that. And I think that if we raise or if we put in this bill what the enforcement is going to be and how we can enforce that, then I see that it could be something that could help this whole process.

My guess is that once the task force is in place, that that will be one of their tasks that they would be charged with, to provide some sort of remedy if, in fact, the conditions of the task force are not adequately met. My colleague, Councilman Clarke, may have a little bit more information on that.

Yes. One of the issues in the companion bill that we speak of is the potential for disbarment or prohibition of individuals or companies who have traditionally participated in municipal contracts. We will receive when Ms. Hamilton gets here some additional testimony that speaks about the possibility of every department providing an EO plan that will, first of all, set a threshold for 12 3/21/03 - Commerce - BILLS 020816 and 020827 participation that can potentially be used as a mechanism to set the tone for what level that contractor should meet as it relates to participation. And we also ultimately have the ability of the procurement commissioner to disbar that individual if they have not met those goals. The reason for the task force is to not only be dependent on government, I wanted to make sure that people who were interested in the issue out of government had an opportunity, had a seat at the table to participate in the program and have a resource council in place to get information that traditionally is either not available or it is very difficult to obtain by the individuals in the public. So we wanted to put these two pieces in place to better allow us to access not only the information, but the opportunities, but then have in place a method and a mechanism to disbar anyone who does not fully comply with the participation regs that are currently on the table.

Okay. But then it also -- and it is good to hear that there will be some kind of form of disbarment as well, but it does not speak 13 3/21/03 - Commerce - BILLS 020816 and 020827 to an immediate resolution to a problem when you have a contractor that really needs the work or he really wants to be a part of this project, because it seems like that will be a process that may take up a few months in order to get some type of resolution to the problem. So I think that's missing as well. Then how do we speak to as far as the task force and as far as the goal setting? I mean, how are we sure that we're going to get the accurate numbers and to show that that is the true amount of participation that is on these projects? And I didn't see anything that's speaking to that. As far as saying, for example, if we set it for 35 percent and then we get reports back that we had around 28 percent, how do we validate that to ensure that that's what it is?

That's the purpose of having the resource council. The resource council has all arms of government through procurement, finance, MBEC that should, in fact, have information that can verify those numbers. The earlier part of your statement with respect to opportunities in terms of its immediacy, 14 3/21/03 - Commerce - BILLS 020816 and 020827 I think that it's important having participated to some degree in some of these oversight committees at a minimum as a result of having the City departments who are ultimately responsible for procurement, I think that that task force will have available to it information on all contracts early on in the process that will be let or there will be bid solicitations for contracts in OHCD, Department of Commerce and all municipal contracts. That information will be available early on. It is my hope in terms of some of the participants that we like to see on the task force that they will then be in a position to make sure that that information is available to low and moderate income and MBE and DBE contractors. That's why I thought it was important to have you as a part of that process early on, so you can make sure that that's available. Because I agree with you, too often that information is not as forthcoming as it should be. I think with the task force having the ability to act as the resource council, we will, in fact, have that information at its earliest opportunity. 15 3/21/03 - Commerce - BILLS 020816 and 020827

Okay. And my other concern is that -- and I don't think it's spelled out, and I'm just assuming that it's probably too early to spell it out, but what is going to be the process and the selection of the people that will sit on this task force?

In the bill I think it mentions that all of the participants will be appointed by the Mayor. We have an amendment to change that as a result of some conversations with some of the individuals in the industry. So we will be an offering that amendment. And it's not too early on. This is the time to talk about some of the things that people think need to be changed in the bill or altered or added or deleted. So if you have anything that you can help us better implement a bill that has some teeth, we're more than willing to take that into account and be in a position to implement it at this particular time in this particular public hearing.

Well, our only concern is -- well, not only concern, but we do have some other concerns, but we just -- it just seems, though, that when we have arms that are still 16 3/21/03 - Commerce - BILLS 020816 and 020827 connected to city government, that we just don't get the due diligence as far as the accurate reporting and also being sincere about addressing the problem no matter who it may rub in the wrong way, but when you have those arms that are the individuals that are to do the reporting or do the -- as far as getting the information out or whatever the process is. But if that arm is still attached to city government, we find ourselves always coming up short. And we don't have the community that is not attached to city government directly as far as an employee or being paid where at the end of the day, I didn't get to this part right now, but I'll come into work tomorrow and then I'll pick up from where I left off. But when you have someone that is not attached to the city government and they understand the severity and they understand the seriousness of this, then you tend to get more of a due diligence and a more response to the problem. So I would like to see more community groups involved that are not attached to the government. I would like to see agencies such as our agency, the African-American Chamber of 17 3/21/03 - Commerce - BILLS 020816 and 020827 Commerce, involved in that process and some more organizational groups from the grass roots level as well involved in this process, because I just believe that you will get a more sincere and due diligence process when you have different people from the community at the table. And I see that throughout the whole city, throughout any major projects, these grass roots and these organizations are not at the table until something happens or until there's an announcement, and then we start to hear people's displeasure.

I agree with you, and I understand your concern. I guess the translation is that a lot of people out there just don't trust government. And I'm okay with that. I understand the cynicism associated with government and things that have happened in the past. It is our full intent as a result of the formation on this task force to have people, grass roots, people who are familiar with the industry, people who traditionally play the advocacy role for those that have been left out to fully participate at not only equal level of government, but, frankly 18 3/21/03 - Commerce - BILLS 020816 and 020827 speaking, I'd like to see ultimately the chairperson of that task force be a person who is outside of the government. So I agree with you, and hopefully we will make sure that we will have those individuals participate at its fullest on this task force. I agree with you.

And I wouldn't say that people just don't trust government, but I think that we look at the results and we look at the historical information that has been provided and then we look at the end results of what was the outcome of what has been going on, and then when we as the African-American business community look at these results and we see 0.6 percent of the value of business that we have been involved in, then that's when things get alarming and when you start to hear about the distrust, because of the historical information that we look at when we start to add up these numbers and see that African-Americans are getting less than percent of the business here in Philadelphia.

I agree with you.

So I think that's where 19 3/21/03 - Commerce - BILLS 020816 and 020827 that comes from.

I understand, and I agree with you 100 percent. And that is the intent, and we will make sure that people are at the table in the process involved in its entirety. That is the intent of the bill. And I would -- obviously, I can't commit in the hearing, because that's not my responsibility to select your organization, but I would have to believe that your organization, at a minimum, will be on the short list of organizations that will be selected that will participate.

Okay, Councilman. Thank you very much. Also, I would like to see if I could reserve to come back and speak to Councilman Ortiz's bill. Is that okay?

We are expecting him. I just can't give you an exact time.

So if I could come back.

Yes, absolutely.

Okay. Thank you.

Any questions for this witness? 20 3/21/03 - Commerce - BILLS 020816 and 020827 Councilman Clarke.

Mr. Chairman, I'd like to, if at all possible, either ask Mr. Gamble or Mr. Roundtree to respond. There's one question with respect to verification of numbers that they may be able to respond to. Commissioner, can you respond to that or would that be better served by Mr. Roundtree?

Mr. Roundtree.

He can't hide, that's for sure.

That's true.

He's around here somewhere. There he is. Good morning, Mr. Roundtree. Please identify yourself.

Good morning. I'm James Roundtree. I'm deputy finance director, one of the deputy finance directors, and I'm the director of the Minority Business Enterprise Council.

Councilman Clarke?

Good morning, Mr. Roundtree.

Good morning. 21 3/21/03 - Commerce - BILLS 020816 and 020827

Mr. Roundtree, in Mr. Fullard's earlier testimony he had expressed some concern about our ability to verify numbers as it relates to participation. Particularly individuals from outside the process need to be confident that the numbers that we submit are accurate. Could you speak to us about the verification process?

Yes. I can say based on what I've read from your new ordinance, one of the things that we will be able to do is to provide confidence to people outside of the system. We're meeting with the controller of the department and the finance department to get a system in place where we can identify when a contractor is being paid, when their last payment is due, and prior to any final payment that the MBEC or its successor agency would be able to sign off to denote whether or not the firms had complied with all the MBEC or the city requirements. Currently we do what is called a desk audit and we contact both the prime contractor and the minority subcontractors at various times during 22 3/21/03 - Commerce - BILLS 020816 and 020827 the year to determine if, in fact, firms are complying with the requirements.

Okay.

That's how it's done now. It was done purely, from a professional standpoint, purely from a desk audit. It's not one in which is a site audit where we would go out to the company, review their records. In most of our inquiry we ask for, at a minimum, a copy of the subcontract or the final invoice. And if this bill passes into law, what we would ask from the controller and the finance department is to put us on their distribution list for all final payments, and prior to anyone receiving a final payment for completion of a city contract that has participation on it, we would be responsible for signing off and determining whether or not the firm was in compliance, and then we would notify the procurement commissioner also. So if there's any legal ramifications that should take place, it will go through him.

Mr. Fullard, does that response put you at more of a comfort level? I'm not going to say at a comfort level. 23 3/21/03 - Commerce - BILLS 020816 and 020827

I think that's a great comfort level there. I just don't know why we haven't had that in place up until the year 2003. But if I heard you right, Mr. Roundtree, you will also be requesting a company of the subcontract to the subcontractor?

Yes.

I mean, from the prime once he executes a subcontract, you would have a copy of that subcontract, right?

Yes. What we plan to do based on all of the inquiries that we have been getting is to complete a circle. What we do now is, we request information. The procurement department may send us a draft of their bid. We set ranges when it comes back. We contact individuals to see if they know that they were on the contract or at least listed with a firm. Then at the end of the year or during some portion of the year, we send out information requesting verification of that. What we're proposing to do now because of some of the issues that have arisen is, to complete that loop, we're going to request from the 24 3/21/03 - Commerce - BILLS 020816 and 020827 controller that we have a system from the controller and the finance department about the payments. And the reason why it's taking so long is because we would like to automate this system. That is a tremendous amount of paper. And although we would prefer it at this time, I think going into this millennium, we need to automate that system. And so we will be meeting with the consultants on how we can link up to all the city departments' financial systems and know when contracts are going and being paid.

Mr. Roundtree, in terms of your ability to automate the system, should that be a part of the current budget deliberations that we find ourself in? I mean, if there's some additional resources needed to put you on-line or have the ability to access information, should we now talk about that while we're in the midst of the budget?

Yes and no. Yes because it would give us an entry point, but the no part comes because we need to truly define what this entity is going to be after you pass. I don't want to get into a financial 25 3/21/03 - Commerce - BILLS 020816 and 020827 situation where we updating and reinventing every time we go through the process. So once we find out what the total or the end product will be, then we will put together a plan that will technologically answer any requirements that Council or the administration would need.

We can just come back and do a transfer ordinance at that time.

I'll leave that to the secretary of finance.

All right. Thank you. Thank you.

Thank you very much for your testimony. Just for the record, I'm Councilman Nutter. I'm Chair of the Committee. I want to thank my colleagues, Councilman Clarke and Councilman DiCicco, for getting this hearing started. I apologize for being late. We'll continue with our list. Ms. Marla Hamilton? Please identify yourselves for the record and proceed with your testimony.

Good morning. My name is Marla Hamilton. I'm vice-president of the 3/21/03 - Commerce - BILLS 020816 and 020827 Philadelphia Industrial Development Corporation, and with me this morning is my colleague.

My name is Paul Deegan, D-E-E-G-A-N. I also represent the Philadelphia Industrial Development Corporation.

Please proceed.

Good morning. I am here at the request of Councilman Clarke regarding Bill 10 NO. 020827 and Bill No. 020816.

Good morning, Ms. Hamilton, Mr. Deegan.

Good morning.

Ms. Hamilton, you in particular, we have had discussions with respect to both of these ordinances and have in the past had opportunities to work with you in your prior role. And I don't know exactly what the specific title was when you worked at City Council, but you were involved in making sure that there was MBE and DBE participation, and prior to that, I think you were the director of MBEC, so you obviously have a vast knowledge of this particular issue. Could you just kind of speak to some of the things that these two bills can possibly provide 27 3/21/03 - Commerce - BILLS 020816 and 020827 an ability for us to enhance opportunities for individuals, and particularly with respect to the task force, what you envision it possibly to be in place to do and if there needs to be any additions or deletions in terms of our opportunities as it relates to this particular issue?

Obviously any effort on behalf of government to increase contracting opportunities and level a playing field for minority and female and disabled-owned businesses is encouraged and supported. In the past, my greatest level of experience besides the MBEC had been in working on TIF projects that were coming before the City Council and working with developers to ensure that there were substantial opportunities for participation. One of the mechanisms that enabled the economic opportunity plans which were a part of the TIF projects to work was the establishment of oversight committees, and I think with few exception each of the oversight committees on these TIF projects included entities or user groups from all over the city. That would be grass root groups, 28 3/21/03 - Commerce - BILLS 020816 and 020827 business groups, representatives from the unions, representatives from government. The intent was to try to get as rounded of input into the process as you could. Although the appointments onto these committees came through the Council, I believe, the intent was to get as broad of input as possible. And I think with the establishment of the oversight committees and having that broad level of participation by groups that have differing interests, that we have been able to have a reasonable level of success on non-city projects. To the extent that the establishment of this task force does the same thing on city projects, I think it is a good thing. Through the oversight committees and through negotiations, most of these TIF projects with these oversight committees have achieved levels of participation greater than what we have been able to establish or achieve within the city. So I think the establishment of the task force will only improve and increase opportunities for minority, female and disabled-owned businesses, and on the employment side also. 29 3/21/03 - Commerce - BILLS 020816 and 020827

Ms. Hamilton, in the earlier testimony there were some concerns raised about our ability to reach certain goals, what, in fact, would be the threshold for those goals, what will be the entity that will determine those goals if it were as a part of government. As you mentioned earlier, it was a part of a process that involved outside entities. What agency and how will we go about determining goals? I know I had spoken to you earlier about the possibility of holding departments accountable or for establishing certain economic opportunity plans for those individual departments and, therefore, setting potential thresholds.

Earlier goals had been established through Chapter 17-500 where there were goals for minority participation of 15 percent and women-owned business at participation at 10 percent, disabled at two percent, and that pretty much became the standard or the bar by which most departments or agencies measure their levels of participation. One of the things that started happening with the TIF projects, we believed or I would believe, because I really was working most times 30 3/21/03 - Commerce - BILLS 020816 and 020827 alone with Mr. Roundtree in the MBEC, and the developers, we believed that we needed to test the availability market to see if we could get more than and percent. And as we tested the market, we 6 increased the levels of participation. We increased 7 the levels of participation and in some instances 8 met those levels. In some instances we were not 9 able to meet the levels. 10 But we were convinced that the time had 11 come and gone to limiting participation by minority 12 and female and disabled businesses to 15, 10 and two 13 percent, and so we started stepping out and 14 increasing those levels to see what the market, in 15 fact, could bear. And in most instances, we found that the market could bear increased participation by minority businesses far in excess of the 15 percent. It has never been an effort to reach WBE goals, whether they were 10 percent or higher. It's never been an effort. And disabled businesses has been more of a challenge, but particularly with minority businesses, I believe -- and this is just my personal opinion -- that the levels of participation have always been less than the 31 3/21/03 - Commerce - BILLS 020816 and 020827 available market, and so we've always tried to increase those numbers.

Ms. Hamilton, let me ask you a question. What would prohibit a department from determining its own goals? I mean, is the department -- when you said earlier 17-500 established certain goals, does that not allow a particular department to establish higher goals since we're --

17-500 was only designed to measure the City's participation in a fiscal year. We may have limited ourselves in the application of 17-500 in applying rigid goals. There was never anything in 17-500 that prohibited any department from having higher levels of participation, and, in fact, the goals established in 17-500 were floors. They were minimums that were to be achieved, but, in reality, they ended up being maximums. They ended up being the ceiling. And so most levels of participation, the greater the commitment there is from the person who owns the project, the more likely you are to get a greater level of participation. And so increased participation, I 32 3/21/03 - Commerce - BILLS 020816 and 020827 believe from my experience, is also tied in to the commitment of the owner of the project to increasing participation in an effort to level the player field, particularly for minority businesses.

Okay. Thank you. Mr. Deegan, did you have anything to add?

Well, I would like to just add that we have reviewed the bill and we're looking forward to working with Council and with the Minority Enterprise Task Force. I notice we're on the resource council in the bill, and we're anxious to work with the administration with City Council in achieving the goals of the legislation.

Thank you.

Any other questions?

Thank you. The Committee has also been joined by Councilman Ortiz as a member of the Committee. Ms. Hamilton, I just have a couple of questions. The Committee has been extremely busy here recently --

I see.

-- in the past few 33 3/21/03 - Commerce - BILLS 020816 and 020827 months, so I may mistake which hearing it was, but there was a hearing somewhere in the past week, ten days and there was discussion about the economic opportunity plans that were developed for both the Eagles and Phillies stadium and ballpark respectively. Can you, to the best of your recollection, give us a bit of the timetable during which the economic opportunity plans were developed? And I know that you had a professional transition from Council staff to either the Mayor's office or it may have been direct to PIDC. Could you share with us some of the timing and the work that went into the development of these plans? When did the process start?

The process for both stadiums started around 1998. Probably around 1998 or 1999 is when I had my first contact with both of the teams, and at that time, we were in a very, very early stage. I don't believe the state had yet approved the financing for the stadiums. But this was an attempt by the City Council working with the administration at that time to get a jump on what the potential opportunities 34 3/21/03 - Commerce - BILLS 020816 and 020827 could be in the stadiums, both in the design, the construction and the employment. One of the impediments to participation historically has been that the participation has been an afterthought on so many construction projects, and the opportunities were missed, because you just were not addressing this particular issue early enough in the process. And we did not want that to happen -- and when I say "we," I was on the City Council staff at the time -- we did not want that to be the case with these stadiums. And so we started before all of the financing had been approved. We started with the owners of the teams and the design firms of the teams. I think at that point the construction managers had not even been selected, although there was probably some discussion about which of the construction management firms would be selected. There was a period of inactivity as the discussion moved around the actual financing of the stadiums. Once the financing was in place, then the negotiations resumed with each of the teams. I think by then, we were into the year of 2000, and I had by then transitioned from City Council to the 35 3/21/03 - Commerce - BILLS 020816 and 020827 Mayor's office. And we, again, resumed negotiations directly with both of the teams.

Tell me when the drafting of the economic opportunity plans for the two stadiums started.

I would say mid 2000. And I'm really guessing, estimating at that time.

I understand. Let me try to help you with any of this. We approved the stadiums in December of 2000. Do you think the economic opportunity plan work started prior to that and then was subsequently completed after the legislation and the financing had been approved by Council?

We would have had to start drafting the document before submitting it for approval. What we did not want to do, if I recall correctly, is submit something that had not been confirmed nor agreed upon between the administration and the teams. And I do remember at that time there was some concern on the part of the teams because we were then -- and when I say "we," at this point I was in the Mayor's office -- we were contemplating 36 3/21/03 - Commerce - BILLS 020816 and 020827 goals of participation that exceeded anything we had ever done in the City. And we knew the goals were aggressive, and the teams were concerned about their ability to meet the goals and the appearance in the public realm if they were not able to meet what we knew were very aggressive goals.

Who are the members of the Stadium Oversight Committee?

We generally have representatives from the same user groups on both oversight committees.

I'm sorry?

The same user groups on both oversight committees. On both committees you have a representative from the City Council.

How many people are on the Oversight Committee?

Approximately ten on each. One ten-person committee for the Eagles and one ten-person committee for the Phillies.

So two separate committees?

Correct.

Any overlap between? 37 3/21/03 - Commerce - BILLS 020816 and 020827

Yes. There is overlap in that City Council has a representative on both. In fact, there were two City Council -- actually, on the Eagles there are three representatives. The City Council president is on both and sends a representative. There are two representatives on the Eagles besides the Council president, and there is one Council representative on the Phillies besides the Council president. The Philadelphia Building Trades Council is represented on both. The African-American Chamber is represented on both. The Minority Business Enterprise Council is represented on both. PIDC is represented on both. There are training providers, but separate training providers, that are on both. On the Eagles it is Top Win. Top Win is represented on the Eagles, and Congreso is represented on the Phillies.

Why don't I ask you this: If you could submit to us a complete list of the participants by name and either affiliation or organization or entity that they're representing, that will be helpful. 38 3/21/03 - Commerce - BILLS 020816 and 020827 How often does the Stadium Oversight Committee meet?

Each committee meets monthly.

And when we received copies of the economic opportunity plan as you were putting them together, the one thing I noticed in both plans, and maybe there's another provision somewhere in the seven inches of various documents and leases and subleases, there was no provision in the economic opportunity plan for either enforcement or compliance or penalties for non-compliance. Can you tell me why that is?

Because there basically is little that you can do other than --

I'm sorry?

There is basically little that you can do.

Why?

Because there is no -- there is nothing that legally compels the contractors. I mean, you can cajole, you can encourage, you can hope, you can beg, you can negotiate, and that's what we've done. 39 3/21/03 - Commerce - BILLS 020816 and 020827

Well, as a very free person, I don't really want to particularly be in the position of having to beg anybody to do anything.

Well, we tend to do whatever it takes to get minority participation increased. If you have a better way, please tell us, we'll use it.

I hear you. I'm not making a criticism or judgment. I guess what I'm saying is, no one had to beg me or I think any other member -- well, possibly with the exception of possibly Councilman Ortiz and Councilman Cohen, I don't remember anybody begging us to vote to support the two facilities in the first place. So I'm not exactly sure why we would now find ourselves in the position to have to beg for support and inclusion. (Applause.) Now, I'd like to go back to this issue of what we can do. If the private entities receive public support in terms of the financing, it would seem to me that somewhere in our contract with them, at a minimum, we should seek to have provisions that not only spell out some kind of compliance and 40 3/21/03 - Commerce - BILLS 020816 and 020827 enforceability provision, but it would seem it certainly possible to build in either what are referred to as claw-back clauses or some financial penalty for non-compliance. What is your position on that?

Well, we do have within each of the lease agreements between paid and each of the teams, we made the economic opportunity plans a substantial portion of the lease agreement, which means they are legal and binding documents. And we purposely included it in the lease agreement because we had no other direct agreement with any other entity.

Well, I understand that, but what's the penalty for non-compliance?

Technically there is a review of good-faith effort, and if after that review a determination is made that the teams have not demonstrated good faith, then there could be a default in the contract between the teams.

What is the definition of "good faith?" Tell me the definition of "good faith" and then tell me how you would determine that good faith had not been made. 41 3/21/03 - Commerce - BILLS 020816 and 020827

Good faith is typically measured by actions and the length of actions that you take to try to identify, to try to work with, to try to negotiate, to try to outreach. You look at the media outlets, the opportunities that you've provided to have an open process, the type of bid language that you include, the way you structure the bid packages, the specifications in the bids. So it is a review of several factors to see if those factors were utilized in an effort to reach out to minority and female and disabled-owned businesses.

Let me suggest this to you: If I were in school and I took my books home every night and I did my best to do my homework and I studied hard and I went to class and I was on time and I just did all the things that I was supposed to do. If I get a 69 on the test, do you think the teacher is going to give me a passing grade on good faith?

I don't know.

It's not likely.

I don't know.

I've gotten a few 42 3/21/03 - Commerce - BILLS 020816 and 020827 69's in my time and I didn't get a passing grade. I guess the point is, and maybe through this experience all of us may seek to raise the bar a little bit, I think folks have figured out how to do good faith, and you can go through all the process, all the procedures, all the motions. I mean, if I were trying to get a billion and a half dollars worth of work done, I mean, I'd make it my business to at least go through the good faith so that no one could say anything to me about it. I think what we're now talking about is results. I have my faith, live it every day of the week, try to go to church every now and then. We're talking about jobs, contracts and opportunity and results. They can keep the good faith. I think most of us want to get to the results stage. So it seems to me that if you have a contract that says -- and as you put it, it's a legally binding document, and if people are willing to sign it and it says that you're supposed to be at a certain performance level and if you fail to meet those levels, there is a financial penalty to you, oh, now I think you're talking about a different story. I think you're talking about a different 43 3/21/03 - Commerce - BILLS 020816 and 020827 level of good faith, because now you're messing with the money. Folks don't like messing with the money. You can talk about all the good faith you want, but if their lawyers can figure out, You do these five things, you've met the good-faith test and there's no penalty to you, that's one thing. You do these five things, you met the good-faith test, but there's a penalty for not performing, that's a different kind of story. So was there ever any discussion about penalties for non-compliance?

Well, the greatest issue for achieving a level of participation from my experience has come through working with the building trades and the contractors themselves. And so to the extent that there are penalties imposed on the contractors or the trades, I don't think any of this will change.

Well, I appreciate that. I mean, we can have that discussion, but we didn't give the money to the building trades. We gave the money to the two teams.

Then you need to have the teams answer that question. I can answer for my 44 3/21/03 - Commerce - BILLS 020816 and 020827 role and what I see as --

I'm asking your opinion about the prospect of having those kinds of provisions in place with the people that we give our money to and whether or not, in your opinion, that might be helpful in this process to say, You have a contract with us, we gave you $304 million, total value over the years is $394 million by which you 10 claim if we didn't give you that money, you couldn't 11 build your two stadiums to make all of yourselves 12 rich. That's fine. We live in America. We're not 13 in Afghanistan. We believe in people making money. 14 For which you have now agreed in good faith and 15 under penalty of law to do certain things. We hope 16 you perform, but if you don't, we want some of our 17 money back that you claim you needed to build these 18 facilities. 19 Now, you can go do whatever you want to 20 do and never really have to talk to us if you don't want the $394 million, because then that's your business. But if you want to have a conversation and a relationship financial with us, these are the terms and conditions. We want you to perform. You said you want to perform. Everybody wants to 45 3/21/03 - Commerce - BILLS 020816 and 020827 perform. But if there are no penalties for non-performance, what difference does it make? I'm asking you in your professional capacity, if a person is under penalty of law and can lose money, do they have more incentive to perform than not?

Councilman, I have always supported and believe that with the lack of consequence, you always get less than what you desire. You will not get a disagreement from me on either punitive, financial consequences. I tend to be -- I think I tend to be aggressive.

I've heard.

I recommend not making awards. I recommend rejecting the low bidder. I recommend holding back payments.

So let me ask, in the course of the development of the economic opportunity plan, was there a discussion about financial penalties in the contract for non-compliance?

There are always those discussions, because you always want to use the greatest amount of leverage that is available to 46 3/21/03 - Commerce - BILLS 020816 and 020827 you.

I understand. Was a decision made to not include those provisions in the economic opportunity plan as a part of the contract?

I think the decision was based on what was available to us legally, what was available to us legally.

I don't understand.

If you can legally get money back for a project, if you can legally withhold financing, then if those avenues are available to you, then use them. If they're not available to you --

Wait a minute. That's about the terms and conditions of how we decide we want to turn over the money. I mean, we weren't required to give them $394 million.

Then get it back. Then get it back if you're not happy.

And they weren't required to take it back from us.

Then get it back if you're not happy. I would suggest if this Council had to do that and it has got that ability to take 47 3/21/03 - Commerce - BILLS 020816 and 020827 the money back and you're not happy with the level of participation, then get the money back.

But I asked that question just the other day. I mean, at least as explained to me by other parties, I mean, our money was the first money out the door, has been spent and it now serves as a foundation for both of the facilities. We bought property. They built stadiums on top of them. I don't think we're getting money back. I don't think we're going to take the land back. What I'm saying is, if you have those provisions up front -- I mean, look, this is not necessarily my business in the world that I operate in. I consider you to be an expert and a professional in the area. But I think that we have some ability, even as a government, unlike the private sector, to put some reasonable terms and conditions on the expenditure of taxpayers' dollars. I mean, in the private sector, if two companies are involved in a mega merger, I mean, there are penalties for not completing the deal just for not going through with a merger. 48 3/21/03 - Commerce - BILLS 020816 and 020827

I think our greatest effort when we talk about getting money back is not with owners of these projects who receive the funds and get one project built and then you don't hear from them again. I think our greatest ability is to work with the actual contractors and the building trades who will work on that one project, simultaneously work on five others and once that's complete, work on ten others, and that's just within the city. It's not even talking about those same contractors and those same building trades that are also working in the counties surrounding Philadelphia. So I think our greatest leverage is if you're talking about penalties and sanctions -- and one of the things that we've always talked about is, you don't see a vast variety of contractors on any of these projects. You can go from public project to private project and it's the same contractors from job to job to job.

What mechanism --

At some point there should be some penalty or some understanding that a contractor has that if you are not able to comply 49 3/21/03 - Commerce - BILLS 020816 and 020827 with what we're trying to do here, then don't expect to be on the next job. Now, we have nothing to do with the private jobs, but we at least can say, If you can't help us on this job, don't come to us for the next public job. And the same thing with the trade unions. If we can't get more opportunities for employment by minorities and females in the trades and apprenticeships, then don't keep coming to us looking for opportunities in the public sector.

And what mechanism would you suggest that we utilize to ensure that message and enforce that message?

The message that they all understand is economic. If it's not economic, the response is less.

I understand that, but I need you to be more specific with me in terms of what actual tool or mechanism. We've already gone over the fact that we don't actually contract with them directly and don't give them any money. So I need you to give me a specific and concrete example of what we would do.

I think in reading one of 50 3/21/03 - Commerce - BILLS 020816 and 020827 these bills, there is a provision. If a company is not submitting a plan and ostensibly there's some monitoring and some approval process of a plan that a company or developer submits and then reporting of that compliance over -- I think there's a provision for two reports in a year. If they haven't complied, I'm not sure there is much you can do on that current job, but there is certainly something that you can do going forward, which is, I think you call for debarment of a company on future jobs. I think when we -- and the City has always had debarment in a lot of instances available to it, but if we don't utilize what we have --

Why?

It takes will to debar a company. It takes will to not award to the apparent low bidder. And so there's got to be a measure of will and determination and guts.

Are you saying that some companies have been recommended for debarment but the government was reluctant to actually take the action --

I don't know how often --

-- or they don't 51 3/21/03 - Commerce - BILLS 020816 and 020827 even get to the recommendation stage?

I don't even know how often recommendations for debarment -- I mean, I think it is prudent on behalf of the City to exhaust measures prior to debarment. And so if the City can do that, I think they should, but I believe that there are some contractors who have probably participated on very public projects and have not reached the levels of participation that we think are possible and just continue to get work.

One last question. It was reported to us by GPUAC again in one of our many recent hearings, I think about a week ago, that the employment goals for the Eagles' and Phillies' facilities were established at 45 percent for minorities, five percent for women and that the current numbers have both for both facilities somewhere in the 28, 29 percent range for minorities. Now, having put so much time and effort, especially as you detailed up front, in trying to put together economic opportunity plans, you didn't want things to be as an afterthought and the like, what's your perspective given the amount of time, 52 3/21/03 - Commerce - BILLS 020816 and 020827 effort and serious attention to this when you hear these particular numbers?

It's difficult to accurately assess the market of available tradespersons without real data from the trades. What we do know is, we have at least 75 to 100 graduates of the pre-apprentice programs who are available for processing at least into the trades.

So why aren't they working?

Some of the feedback that we get from the trades is that a commitment to sponsorship is longer than these particular jobs.

I don't understand.

Sponsorship in some of the trades is a four-year endeavor, and there is not four years -- now, I'm telling you what they tell me. I'm telling you what they tell me. That a sponsorship of four years extends beyond the term of the construction projects, and so a contractor not only --

You don't have to stay on the one job that you're going to work to, do you? 53 3/21/03 - Commerce - BILLS 020816 and 020827

No. 3

Does anybody believe that there's not going to be work the next year or the following year or the following year?

Most tradespeople once they -- most tradespeople, most tradespeople stay fully employed from job to job to job.

Right. There aren't many four-year jobs.

Correct.

I don't know what you're building that would take four years. I mean, maybe the World Trade Center or something, but I mean --

Correct. So that is --

So I don't understand how the answer has any relevance to the situation. No one expects to, quote/unquote, be sponsored for four years on one job. But the tradespeople are working every year somewhere for those four years, whether in Philly or the surrounding counties. So how is that answer even relevant?

We absolutely agree with 54 3/21/03 - Commerce - BILLS 020816 and 020827 you. And what our position has been is, we would rather get someone -- we would rather get someone on a job for two or three years, and even if they become unemployed after the completion of these two stadiums, they at least will have skills and experience that they have for two years. So we'd rather take two years of work and opportunity than no years of work.

Well, is there any requirement that the people who come out of our various training programs actually get sponsored or go to work? I mean, what's the purpose of getting trained if you're not going to go to work?

That's a question that you have to raise with the trades. That's not a question that I'm appropriate in answering. That's a trades question, because what we have done is worked to make sure that the pool is available. So when the trades say, Well, we don't have enough persons to take a test, we make sure that we've created the pool so that is no longer an argument. The next step for us now is to get the trades to open up their doors for those persons that have come through the pre-apprenticeship programs. 55 3/21/03 - Commerce - BILLS 020816 and 020827

I hear what you're saying. I guess personally I would say -- you're absolutely right, it is a trades question, but it's not just a trades question. Again, it is a question of how we spend the taxpayers' dollars and what requirements we put on those dollars. And why would we engage in a process where the money goes to the owners, we've already established that the work is going to be done by the trades, but have no ability to ensure that Philadelphians, to a greater extent, who take the time, who have the self-reliance, who put forward their good faith and best efforts to go through a training program and we can't, to the best of our ability, ensure that there's going to be something for them to do once they come out of the program, after we give the folks the money, who then turn around and decide not to employ our folks? I mean, it's the worst of a self-fulfilling prophecy.

What I would say to then, in addition to the trades, then the Council has to do more. And this is all due respect, but these are projects --

I appreciate it. You're not going to hurt my feelings. 56 3/21/03 - Commerce - BILLS 020816 and 020827

It takes -- because we're out here on the front lines.

I understand. What would you suggest we do?

It takes a certain level of political will to deal with the trade unions and with the contractors. (Applause.) And we do all that we can do within the confines of the authority that we have. And so we are the worker bees who are drones trying to make these economic opportunity plans happen. But the real authority and the power is political. It is absolutely political.

Well, I absolutely agree with you, and I think that whatever we can do from the contract side in terms of what comes into us and how extensive our process is and what --

May I make a suggestion?

The Chair recognizes Councilman Cohen.

I suggest we subpoena the leaders of the building trades unions to come to 57 3/21/03 - Commerce - BILLS 020816 and 020827 a Council hearing and explain their position. And if our original resolution does not contain the subpoena language, I would suggest that a public meeting that we hold today, we authorize the Committee to subpoena them. I think it's an absolute disgrace what's going on. (Applause.)

Thank you, Councilman. We'll figure that out in the course of the --

If I may, I would agree with the Councilman. I mean, we have to start acknowledging where the problem lies.

I understand. I think that in the contracting process and the public hearing process and in the public and private conversations that take place around these projects, one, you're absolutely right, this Council can and should and must do more. I think that our ultimate involvement in this is the approval, usually by way of an ordinance, sometimes by resolution, of these projects and the funding that goes with them. But I guess I would also say to you that 58 3/21/03 - Commerce - BILLS 020816 and 020827 as the Council has a certain level of involvement and responsibility, you also know having worked on this side of the house we don't sign contracts. Because we are often reminded, most of us as active legislators, usually by the Law Department, when they say "the City," and they're very clear in reminding us that when the Law Department says "the City," they're not talking about us, the City Council. When they talk about "the City," they're also talking about and only talking about the Mayor. You can't sign a contract with City Council. You sign a contract with the City. So the absolute ultimate -- and that is no shift in responsibility, because you don't get a bill and the Major doesn't get to sign a bill unless it comes through this place first, and so we have our fair share of responsibility, but the ultimate hammer here is the lack of signature on a contract. And that's only done by one person. So I think that there's a mutual responsibility here and there needs to be an extensive discussion about what any of us are willing to do or not do in this regard, but I think we have to be fair, we have to be honest, we have to 59 3/21/03 - Commerce - BILLS 020816 and 020827 be legitimate about who plays what role or what entities play what roles in this process. And if both components of this government are working in sync on these particular issues, we can actually get some progress done. I got a point of order from Councilman DiCicco and then I know Councilman Clarke wants to respond to some earlier information.

Thank you, Mr. Chair. I just need a little bit more clarity on this sponsorship issue. Are you saying that if I am a member of a particular union and if I wanted to bring along my friend, Wilson Goode, Jr., to become a tradesperson, either a carpenter, a electrician, a cement mason, what-have-you, that I would sponsor him to be a member of that union, that local union?

You sponsor him for his apprenticeship period until he has the requisite time to become a journeyman or a journey person.

But there is no 23 guarantee that he will be employed; is that correct? I mean, you get a card and you have a card that says, I'm a member of a particular local. 60 3/21/03 - Commerce - BILLS 020816 and 020827

Councilman, I don't know all of the nuances. That's why I think some of the trade-related questions are better addressed to the trade unions.

Because getting a card is one thing, but getting work -- I can live without a card. It's the paycheck that matters in the end. But I think Councilman Cohen is correct, we probably need to bring some of trades folks in to get some of their background on this. Thank you.

And not just the trades again. I want to add, it's the contractors also, the contractors and the trades.

And the contractors as well. And the contractors as well. Thank you.

Thank you. Any more questions?

Thank you, Mr. Sitting Chair. I actually wanted to respond to an earlier question to Ms. Hamilton with respect to the 61 3/21/03 - Commerce - BILLS 020816 and 020827 oversight committees on the two stadiums and the formulation of an economic opportunity plan leading up to the final passage of the bill. Having participated on both stadium oversight committees, I must say it's been an experience and a learning experience as it relates to some of the problems associated with getting access, and I'm a little bit more knowledgeable as a result of that. With respect to the formulation of the equal opportunity plan, as you know, there are things that happen sometimes that are not always public as it relates to the ultimate formulation of the legislation. There were a number of things that happened, particularly around that particular aspect of that project, early on in the process. Traditional numbers were put on the table. I think it was the 15, 10, maybe the 20, 15 numbers that we traditionally felt were inadequate. Leading up to the final passage of that vote, there was some very, very aggressive deliberations on both sides of the table by a couple of members of Council. There was actually a letter submitted to the teams and the administration as it 62 3/21/03 - Commerce - BILLS 020816 and 020827 relates to what we thought was the appropriate requirement for participation both in contracts and in employment -- and I guess I can reference the authors of that particular bill, Councilman Goode, Jr. and Councilwoman Miller and myself -- that requested 50 percent both in terms of contracts and employment, because we thought that it should be equivalent to the population of the City of Philadelphia. As Ms. Hamilton earlier stated, there was some reluctance by both the teams to agree to those goals because they didn't think they were achievable and they didn't want to, in fact, agree to a goal that they believed was not achievable early on in the process. We insisted on those participation levels, and the deal almost got derailed as a result of that. As recent as the last day, the day of the vote, there was actually a requirement to include in the minority participation plan the concession stands on the Eagles, a deal that was done prior to the submission to the City Council of Philadelphia, a requirement to include participation 63 3/21/03 - Commerce - BILLS 020816 and 020827 goals on that particular portion of the Eagles stadium. And there was a heated discussion in the hallway outside of the chambers where one of the Eagles spokespersons, or I don't know if you want to call him an owner, said the deal is off, they were moving. And these are things that were not reported in the public. And that person was simply told to pack their bags and leave. People got the individuals together and calmed everything down, and there was some further discussion and there then was an agreement to include the concession stands as a part of the equal opportunity plan. So there were a lot of things that were done. And understanding all throughout the course of this process, we were told by our advisors, both Council lawyers and the administration lawyers, that what we were attempting to do was not a legal requirement by the teams, but in spite of that, we continued to insist on that. As a result of that, there were some commitments made. One of the concerns that we had is that our ability to ensure that those commitments were kept was not going to be very easy, 64 3/21/03 - Commerce - BILLS 020816 and 020827 particularly for elected officials, who tend to find ways to do other things during the course of the day, get involved in a number of different things and not have the ability to monitor adequately that process. So as a part of that negotiation, it was agreed upon by both teams to hire an entity, monitoring entity, which was the Greater Philadelphia Urban Affairs Coalition, to provide that assistance.

In addition to which there was also a commitment to set up oversight committees, because we believe based on earlier projects that were not government sponsored that the ability to have, at a minimum, an oversight committee that was reflective to some degree for the people and the citizens of the City to have access to information. I must say as a result of that process, we got -- and I have to believe we got more than we would have gotten had that earlier request not been made for the high levels of participation or having in place some entity that could help us in terms of monitoring the process and ultimately achieving some levels that have surpassed any levels that we had gotten prior to. 65 3/21/03 - Commerce - BILLS 020816 and 020827 But I must say we were not, at the end of the day, not satisfied with the ultimate levels, particularly on the employment side. And I agree with Ms. Hamilton that the difficulties associated with having people in the trades, and not only having them in the trades, but also being sent to the site, is something that we got to figure out a way to get in place, because that, at the end of the day, is the difficulties we envision. One of the reasons that I introduced these bills and I will be soon introducing another bill was as a result of my experience in those oversight committees where I saw -- in fact, we on the City level and the municipal level as it relates to our contracts weren't doing nearly as well as what we were requiring other individuals to do. And I thought that, frankly speaking, that was pretty amazing, that we required the Eagles and the Phillies to have 50 percent participation and we were hovering around five percent participation, which is why I thought it was appropriate to introduce some legislation to, first of all, create a mechanism that will allow people access to a process to sit on a task force, an oversight task 66 3/21/03 - Commerce - BILLS 020816 and 020827 force, have that information available to it so it can determine and get credible numbers as a result of the contacts that we are letting and increase our ability to have information to get additional contracts, but also another piece of legislation that creates a disbarment process that, at the end of the day, hopefully that task force will be in a position to encourage our procurement commissioner and the finance director to, in fact, disbar organizations that don't comply with some of these goals that we set. So a lot of times in this process there are things that you don't see that happen behind the scenes. And I just want to say it is a very difficult process. It is our responsibility, I agree with you, Ms. Hamilton, that at the end of the day, we're elected to provide leadership as it relates to dealing with this very troublesome issue, and I want to say that I'm going to do the best I can, starting with these two bills here, and hopefully get them passed so, at a minimum, it can put people at the table to try and access information and then ultimately get programs implemented that had the participation of MBEs and 67 3/21/03 - Commerce - BILLS 020816 and 020827 WBEs and DBEs across the board.

Councilman, one of reasons with the oversight committee, when you see the compositions of the oversight committees, we have had a conscientious effort to include all groups, irrespective of how you think and how you feel and your philosophies. We have never been afraid of people who have differing opinions. So there have been in each of these oversight committees efforts to include participants from all areas. Because you need -- often times when we get accustomed to doing the same thing all the time, we can sometimes lose focus and not keep the broader picture in mind. So we have, again, on both of these oversight committees and on every oversight committee that I've been involved in, we've always had representatives from the building trades. We've always had representatives from the business community. We've always had representatives from the African-American Chamber of Commerce, from the Hispanic Chamber of Commerce, from training providers. This is not something that has only happened one time. 68 3/21/03 - Commerce - BILLS 020816 and 020827 These are groups that we have made a conscious effort to make sure they are at the table. And if they are not at the table, it's not because they are not formal members of these committees. It's because for whatever reason they don't make it to the meetings. But they're on these committees. And what I've said to some contractors is, rather than us beating up on each other, each of us has a role to play. I will never tell the contractors that if their desire is to protest somewhere they shouldn't do that. They've got their role. I've got my role. And what I try to do, because it's not what you do doesn't mean I'm not working on your behalf. So there are three and four and five different constituency groups that are working for the same objective. So don't tell me I've got to do it your way, and I'm not going to tell you you've got to do it my way. Because as long as there is pressure to bear from five different groups, we've got a better chance of getting something to happen. And with these oversight committees, I think we've been fairly successful in accomplishing that.

Thank you. 69 3/21/03 - Commerce - BILLS 020816 and 020827 Thank you, Mr. Chair.

We've got three things. Councilman DiCicco needs to leave some information on the record. Councilman Goode has a question and Councilman Cohen wishes to be heard as well. Councilman DiCicco?

Thank you, Mr. Chair. I need to leave on Council business. I'm not certain if I'll be back before the end of these hearings, so I'd like to have my vote recorded as yes for any bills and/or amendments. Thank you.

Thank you, Councilman. Councilman Goode.

Thank you, Mr. Chairman. Good morning, Ms. Hamilton. I guess it's still morning.

Good morning.

You testified that it was a lack of political will in terms of gaining access for minorities and women into the building trades. And I would think that that political will 70 3/21/03 - Commerce - BILLS 020816 and 020827 needs to be exerted the point at which you're actually talking about whether it's going to be a union job and whether that is a short or long discussion. But moving beyond the issue of whether that's a short or long discussion, I want to deal with the issue as relates to contractors and debarring contractors. Is that a matter of political will also, or do you feel that's a matter of legal consequence?

I don't think it is the latter. I'm not convinced that it is solely the former. I think, again, as I said, we become so accustomed to operating in a certain manner, that we try to resolve issues prior to taking a really hard line and hard position, especially if it's a contractor that has been responsive. I mean, one of the reasons the same contractors get the business all the time is because most of them are good, they perform. I mean, you ask them to build a building, they're going to do it well, they're going to do it on time, on budget.

The question I'm really getting to is -- 71 3/21/03 - Commerce - BILLS 020816 and 020827

But if they're not meeting our objectives --

The question I'm really getting to is, what is the role in terms of a legal engagement that should be played by the City? For example, the city solicitor came into budget hearings and testified that 52 percent of the contracts that come out of his department go to minorities, and basically said that it's because he's not afraid to be sued, because he has a team of lawyers, he's a former judge, he's a good lawyer himself, and so he's going to give as many contracts as he wants to minorities and women, unless someone tries to force him not to. And at that point, there began a discussion of whether the Minority Business Enterprise Council should somehow maybe be under the Law Department, if it's a matter of legal consequence in terms of forcing people to be in compliance with contracts, enforcing people to be in compliance with what they said they were going to do in terms of good faith. And so how might we use the City Law Department and solicitors office and a legal strategy to pursue what we need to pursue in terms 72 3/21/03 - Commerce - BILLS 020816 and 020827 of contractors beyond what needs to be done in terms of political will?

Well, the mechanisms are in place, but I think I said earlier unless you have the commitment from the person who is in charge of or owns the project to take a hard line and a hard position -- it is, I will tell you, not easy from experience. I can tell you, it is not easy to look at an apparent low bidder and there is a dollar difference between the apparent low bidder and the second low bidder and the second low bidder and everyone else has met all of the objectives, your goals, and the apparent low bidder is significantly lower than everybody else and hasn't met what you think is a substantial level of participation. Do you toss the bid? I'm telling you, it takes a substantial level of will and commitment to do that.

I'm asking whether that political will is also a matter of legal authority, whether people feel comfortable they have a legal authority to exercise a political will? I mean, already we've made it clear that when people talk about the City in terms of contracting, they're not necessarily talking about 73 3/21/03 - Commerce - BILLS 020816 and 020827 City Council, because we don't sign contracts. We talked about the systems that are set in place in terms of monitoring compliance. I'm asking to what extent do people think they have the legal authority to institute the political will and how involved the Law Department should be and whether, in fact, MBEC perhaps should be placed under the Law Department and we should be pursuing legal strategies as a result of passing these three bills.

I believe that department heads should not be concerned about legal ramifications. That's why we have lawyers. That department heads should worry about getting done what needs to be done, provided they are not being reckless. You can't operate under the threat of legal action. That's why you have a law department. So I'm going to do all that I can do, even if it seems like it's risky and it's on the edge.

So you think it's really a problem of department heads actually giving the business to who they've always given the business to, as opposed to being afraid to reject 74 3/21/03 - Commerce - BILLS 020816 and 020827 low bids, legally?

I think you try to be as prudent as possible with your bids and you try to minimize the amount of litigation. I mean, because there's some time and effort and real money involved in litigation, so you've got to have the resources to go into court. And you don't want to go into court every time you make a decision, but I think --

Well, I'm not so sure --

Well, you've go to be able to make a decision.

I'm not so sure we don't want to go into court if the decision we make is what we want to make. I mean, that's why basically the solicitor said he'll give contracts to whoever he wants to give contracts to, because he can legally defend it and willingly defend it. So I'm really asking the question, how big of a factor are legal consequences?

I think we have made them larger than reality.

Okay. Thank you. 75 3/21/03 - Commerce - BILLS 020816 and 020827 Thank you, Mr. Chairman.

Thank you, Councilman. Councilman Cohen?

I've spent 32 years in active efforts to deal with this situation. I believe, Ms. Hamilton, you are absolutely right. The situation can be solved over night if people who had the power wanted to solve the problem. Getting everybody at the table is meaningful only if people want to achieve a common goal. But when you bring people to the table who don't want to achieve that common goal and who have assurance from the top authority that they don't have to meet that common goal, of course you won't meet it. But what's important apparently to the city administration was getting these stadiums built. If they could along the way help the youngsters and give a small amount of money to a children's fund, if they could make a little bit of progress so long as their basic rights were not interfered with, the building trade unions would go along. 76 3/21/03 - Commerce - BILLS 020816 and 020827 All that's needed to solve this problem now that the democrats in Philadelphia control the government is for the whole government to be united in an effort to reach this goal. I submit to you on the record, as a lawyer, I find the City totally delinquent, not your committee. You're trying to do the best you can do. (Applause.) And because of your efforts, the bar has been moved up a tiny bit. But we're not talking about tiny bits. We're talking about opening up the process so that everybody in the City of Philadelphia enjoys the benefits of democratic rights. And all the Mayor has to do, instead of rewarding the people with chairmanships to the Redevelopment Authority and other important agencies when they fight democratic principals, instead of rewarding them, he ought to punish them. He ought to take those jobs away. Everybody here, we're just fencing when we talk about setting goals and passing legislation. Sure we should pass the right kind of legislation, but that's going to do us absolutely practically no 25 good, because the people who have to enforce the 77 3/21/03 - Commerce - BILLS 020816 and 020827 legislation are not going to be moved by it. Apparently finite campaign contributions and goals of wanting to get projects completed is more important to the leadership of the City than seeing to it the democratic rights are carried out. All the Mayor has to do -- it's easy, you know who the three people are, maybe five people who lead the building trades. Call them in and say, It's over. From now on, you're going to have democratic procedures. (Applause.) You're no longer going to tell us that if a councilman wants a minority firm employed in a job we'll pick the minority firm because you're not going to pick them, because you're going to have a democratic process. It's going to be open to everybody. And we're going to see that the goals are met. You know, we're wasting our time really here at the hearings. I welcomed, even though I was very embarrassed to have to tell you, on Monday of this week when going -- I'm a democratic ward leader, one of 69. And when I went to the democratic meeting on Monday, the place was rigged 78 3/21/03 - Commerce - BILLS 020816 and 020827 in front and back with pickets of color, protesting unfair treatment. And I said, How could they be doing this to the democratic party? The democratic party is supposed to be the party that wants democracy. Yet, the people finally took off their gloves and they unveiled the real threat. The real threat is a lack of political will. All that the Mayor has to do is call in the leaders of the building trades union and say, History is over now. From now on, we're going to operate democratically, and there will be no 13 projects built with your membership unless your membership is conducted in a democratic way, unless it's open to everybody. You know, doesn't the government pay for the apprenticeship programs? Isn't the government supporting it?

Some.

In the face of that and in the face of total government support that no 22 other unions in the country have or ever had, that is the guarantee of a prevailing wage. No union has that. These big powerful unions that claim 79 3/21/03 - Commerce - BILLS 020816 and 020827 they're for independent action, they're not independent. They're more dependent than the welfare mother is on government action guaranteeing their wages. How dare they confront American democratic principles and say, We're so big and powerful, we can abuse those principles and act in the contemptuous manner. Let's hold them to account. We hold everybody else to account. And in this case, we'd be holding them in account for the most noble of all purposes, and, that is, to make America a country that really operates on democratic principles, and the best place to start is where this nation started, here in Philadelphia. So I urge, let's subpoena the leaders of the union, and if we don't get the answers from them, let's subpoena the Mayor of the City of Philadelphia, because they're the ones that make all the decisions on this. And then we'll have the people at the table who have the power.

I just wanted to --

Don't feel compelled that you have to respond. It can't do you any good. It's up to you. 80 3/21/03 - Commerce - BILLS 020816 and 020827

Well, I just wanted to add that none of the efforts that we're talking about, increasing opportunities for minority businesses and women businesses and disabled businesses, nor increasing employment opportunities for minorities and females, none of this disenfranchises anyone else. There is enough opportunity in the City for everyone.

We understand that, Ms. Hamilton. Let me say --

The Chair recognizes Councilman Ortiz.

We've been through this. 1968 the Operating Engineers lawsuit. Philadelphia plan came out of that lawsuit. 1985 Councilman Cohen and I, with his lead sponsorship, sponsored a bill called 649. That was going to try to open up and re-claim at least 50 percent of all employment in every project done by the City be inclusive of all of the people of color in this city. 649, we had a huge crusade during that period of time. We're talking 1985 now. This is the year 2003 and we're still talking about this 81 3/21/03 - Commerce - BILLS 020816 and 020827 issue. And this is all about political will. And we got legislation and we're going to pass Councilman Clarke's legislation and we're going to put my bill through, but it doesn't and will not have any impact until the leadership, political leadership of this city, stand up and say, Enough, there's the line, no more, from now on we will not take it. There will be no work in this city unless these things happen. And that has to be -- that doesn't even have to be written into law. You come in here, you don't have it and don't come back again if you're a contractor. Don't come back again. But we have to be able to tell them that. And let them then take us to court, but that's where we're at. And I think finally we have enough of a grouping of people that are willing to stand up and say, Here's where we stand, we will not go back.

Thank you, Councilman. Thank you.

Thank you.

Judith Robinson. Ms. Robinson? 82 3/21/03 - Commerce - BILLS 020816 and 020827

Yes. Good afternoon.

Please identify yourself and proceed with your testimony.

Yes. My name is Judith Robinson and I'm here to speak on all three bills. I am happy to have the opportunity to speak on all bills, and I understand right now we're at --

Presently we're taking testimony --

020816.

Yes.

I did read this bill, and I will say regarding all three bills, and this one in particular, this process, this problem that we have has been going on for a very long time. There are only a few developers, and they do most of the work. Are all the members of this Committee here?

No, Ms. Robinson.

Okay. How many people are on this Committee?

There are, I believe, nine members on this Committee. One is 83 3/21/03 - Commerce - BILLS 020816 and 020827 ill. We've read about that member. But you've had, I believe, six of the eight members who could possibly participate have been in this hearing. Some will be listening on their conference.

Because this is very, very, very important.

I understand that.

And I just think if all the Committee members would focus that could possibly be here will be here, then that will show the importance and the seriousness of this issue.

I got you. Why don't you give us your testimony.

Over the past eight years I have attended these hearings, various hearings of various committees, and I contend negotiation is important before you start to even sign contracts. Negotiation is important before these bills come out of these committees to the City Council. I agree with Ms. Hamilton, the political will is very important. Over the past eight years I've watched the tax incrementing finance process come through this group; OHCD, every one of their hearings over 84 3/21/03 - Commerce - BILLS 020816 and 020827 the past eight years; and various other developments. All of the development that goes on in this city comes through City Council and then is signed by the Mayor. So definitely political will is important. I have over the years requested information from MBEC, also from OHCD, Kevins Brooks, their affirmative action office. Also, Mike Bell, I've requested information from RDA, from the Commerce Department, and also I took time to go down to SEPTA. They have a whole affirmative action department. All of these folks have information. I had no problem getting any information from any of these entities, but what I always found, even after receiving the information, the information was always stating the same thing. It was fair -- I'm sorry; it was very unequal, out of order, and African-American participation and women and so-called minorities -- I don't even like to use that word -- were not participating in an equitable way in most of the projects. I really am concerned that at this late date, here we are trying to figure out how to handle 85 3/21/03 - Commerce - BILLS 020816 and 020827 a situation that's been going on for years. I really am concerned about it, because it's only every 30 years or so that you build a stadium, and I understand that's 75 percent completed. It's only every 30 years, from my research, that you do total implosions of PHA and do all of this building all over the city. It's only every 30 years or so that you rebuild your schools. So now while we're over here in this body talking, shuffling papers, trying to re-figure how we're going to come up with a new committee, the work is going on. I contend, because I want to have something to add of value here, I contend that the problem is with the developers, the unions and the politicians. Let me tell you why I say that. Pay to play, I contend, is like the foundation of where some of these problems lie. December the 15th, the Philadelphia Inquirer did a breakdown of all of the contributors to Mayor Street, Sunday, December 15th, Inquirer. I can just go down this list and see where you have Dale Construction, for instance -- I'm going to give you that as an example -- gave 86 3/21/03 - Commerce - BILLS 020816 and 020827 $100,000 to the Mayor's campaign. Dale Construction does a substantial amount of work throughout the City. They have down here this Dale Construction replaced a non-donor on a no-bid contract to renovate the Mayor's office. But I know Dale Construction because Dale Construction is right in my neighborhood at 20th and Diamond putting up PHA properties, and use no African-American identifiable contractor on that job. Now, I live in the fifth district where all of this building is going on, so-called construction industry. I went to my councilman over four years ago and said, Listen, if this job is coming to our community, how come we're not training people and getting them all prepared to work on this job? You know, I come down here, take time away from my schedule, try to contribute. I feel like it's my civic duty. I have a background where I think I can really contribute.

But when you contribute, when you go beforehand to these politicians and you say to them, Things are out of order here, and then here we are five, six years later, the work is going on and we don't have very 87 3/21/03 - Commerce - BILLS 020816 and 020827 many African-Americans from the community involved with that project, nor do we have any of the contractors that's from the fifth district, I said I thought that we should have sort of like a district-first type of opportunity if a project is in a community. Like when the executive order came down back in 1998 that a neighborhood should have a benefit strategy, I thought that was a great idea, but the neighborhood benefit strategy executive order was sent down by Rendell in 1998. So, I mean, we have all these things on the books already and we're still acting like we can't figure this out, you all. None of these ordinances, except one, I'm sorry, this one, this economic task force ordinance, say that the unions should be at the table. All of the hearings you all had last week and before, no union members were here to talk about any of the problems. In addition, I'm very concerned with that connection to the unions and the developers, because Dale Construction was able to reject a bona fide contractor from the fifth district that's certified, bondable, everything, because that 88 3/21/03 - Commerce - BILLS 020816 and 020827 contractor was not interested in being part of some formerly corrupt roofer's union. So I think that's an area where you need to start. I understand from an article in last Friday's Daily News Ms. Amina Young, who is on this task force for the stadium, said that when they call for workers, the union doesn't send them, African-Americans or so-called minorities. I really, with all due respect to this Council, think that this is really like -- I don't want to say a waste of time and energy, but I think it's disrespectful to have so many people come here and think that we're going to have some impact on this issue, when we have pay to play being a foundation of how work gets done in Philadelphia, and everybody knows that. Okay? Also, the unions are allowed to be disrespectful to black folks, and we know it's true. They do not want to allow as many African-Americans in their union as are seeking to get in there. I don't know what you can do about that as a Council, but I know that you can stop City work from going to union-only shops, because it's unfair. There's no law that says that unions have to do all 89 3/21/03 - Commerce - BILLS 020816 and 020827 the work. If there is, then I think that would need to be abolished. I am concerned that when you do have a contract such as the contract that's in the fifth district or maybe part of -- yeah; the driving range at 33rd and Oxford. In this contract for the driving range, it states within the contract that there should be golf plans, a golf program for all children, and it also says it should be in cooperation with the local community group so as to create a hiring plan. You have a chance to do that per this agreement, per this contract, but as I have asked my councilman about it, it seems to be, Oh, that's something we'll deal with, we'll handle it. But there's a board there that's supposedly going to make sure that the community gets a fair shake as it relates to that. I contend, you law makers -- and I know this is true because I've been here throughout these hearings -- you have an opportunity to stop voting 16 to zero to make sure things just get done. You know, you're not the Senate. You don't hardly ask any questions. You don't get the information. And 90 3/21/03 - Commerce - BILLS 020816 and 020827 then when you pass these bills, like with all these TIFs, they claim they're going to do hundreds of jobs. How are you all as law makers -- you all have some responsibility, I should say, to make certain that if they say they're going to create X number of jobs, that they are, in fact, creating.

This is not a mystery, because the same about contractors or developers do all the work. 10 I mean, over and over again. So it's not like you 11 can't figure this out and stop them at the pass for 12 the next one. And this has been going on for eight 13 years that I've just been watching myself. Probably 14 longer. 15 I think if you really think this is an important issue, have some guts, you all. And this is for the Mayor, Mayor John Street. People want to know why now. The Mayor just didn't come to town yesterday. He's been around for years or more. 20 Do something about this. Do it now. I heard a suggestion that you stop taking the money from the unions, and that means we would have to give you more money and we would have to guarantee you that we would support you. I would say yes, we would guarantee you that if you stop 91 3/21/03 - Commerce - BILLS 020816 and 020827 your pay to play, we'll make sure you get back in office. Have some guts. Trust us, like you ask us to trust you all. ) Stop taking the money. Stop taking the money. Do you all have enough guts to do that? And do you all have enough guts to stop voting to one 9 on the next project? It's a little late, but 10 there's still a lot of building that's going to go 11 on in the next five, seven, ten years. But have 12 enough guts, you all, to say, Hell, no, you're not 13 getting another contract because you're out of 14 order. 15 That's the only way it's going to work. 16 Deal with the unions. But you can't deal with the unions when you're in bed with them. Thank you very much. )

Thank you, Ms. Robinson. I will display a certain amount of guts as Ms. Robinson indicated by at least letting her know for the record the driving range is actually in the fourth councilmanic district, not the fifth 92 3/21/03 - Commerce - BILLS 020816 and 020827 district. And all that's going to get me is a visit from Ms. Robinson. But I want to make sure the record is clear. I take my whippings like a man. Councilman Goode -- Ms. Robinson?

Yes.

There was a question, actually. Councilman Goode had a question.

I just wanted to know whether all of us are crooks. I just wanted to 13 know who you were accusing of being part of the pay 14 to play system, if you were accusing all 17 members 15 of Council being crooks. 16

I would say yes. I have 17 not looked at --

Thank you for your testimony.

Excuse me?

Thank you for your testimony.

I have not looked at every councilperson's campaign contributions, but I would venture to say -- 93 3/21/03 - Commerce - BILLS 020816 and 020827

I just wanted to know whether you were accusing all members pay to play 4 that we were crooks. 5

I would say this: Let me 6 talk about the Mayor, because I have his list of 7 contributions here. Okay? I have not looked at 8 every councilperson's -- 9

If you come to 10 testify and you make a statement, you should be 11 responsible for your statement. I'm just asking you 12 to clarify your statement. 13

Yeah. And I will say 14 this: You certainly are responsible when it comes 15 to your votes 17 to zero over and over again. 16

I vote against every 17 TIF project that's come through this Council since I've been here on 16 to one votes. So you have to be responsible for the comments that you make.

Mr. Economic Development?

Yes, ma'am.

When did your ordinance 23 for the CDCs to get money, did you put anything in there more African-Americans and minorities to participate and make sure that they got a part of 94 3/21/03 - Commerce - BILLS 020816 and 020827 that money that the sponsoring agents gave to them?

Citizens Bank just gave Universal Companies a million dollars. I can run down the list of --

Is anything in your legislation, okay, that says minority participation should be a part of this, any projects that the CDC does, because they're getting this tax break?

CDCs are not getting a tax break.

I know the CDCs are not. I said the entity.

Get it straight.

What is in your legislation that says minorities should participate with any project that a CDC does --

Legislation is very direct. What it does is bring $15 million into low- and moderate-income communities, economically stressed communities, from the private sector. The check is cut from private businesses community development corporations. No money ever passes through the government.

I understand that, sir. 95 3/21/03 - Commerce - BILLS 020816 and 020827 I asked you, was anything in your legislation that said that CDCs must deal with minority contractors because they're getting this money?

That wouldn't go into a bill dealing with money flowing directly from a private business to a community development corporation. So you can try to add confusion about what should be included in a specific piece of legislation, but it would not be in that specific bill.

Ms. Robinson --

Thank you very much. It was not in there, and thank you.

Because it wouldn't make any sense to be in there.

Anything can be in a bill 18 if you put it in there.

That's a ridiculous statement.

I'm not trying to cut you off. I do want to suggest on a separate piece of legislation if you'd like to send specific questions about that piece of legislation, that would be more than in order. I appreciate your 96 3/21/03 - Commerce - BILL 030125 testimony. We're now going to hear testimony on Bill No. 030125. The title of the bill is repealing Chapter 17-500 of The Philadelphia Code, entitled "Goals for the Participation of Minority, Female and Disabled-Owned Businesses in City Contracts," and enacting a new Chapter 17-500 of The Philadelphia Code to establish City Contract participation goals for Disadvantaged Business Enterprises, which are businesses owned by socially and economically disadvantaged individuals, and which presumptively include businesses owned by women, minorities and the disabled. There is a fairly extensive list of witnesses. Councilman Ortiz is going to make an opening statement. He is the prime sponsor of the legislation. I am going to have to exit the room 19 for a few minutes. The first witness who is listed for testimony is Thomas Corey, chief of the Office of the Minority Women in Business Opportunity from the City of Baltimore. I would ask if Councilman Ortiz in my absence, as this is his bill, would manage the witness list in my absence, and I shall return. Thank you. 97 3/21/03 - Commerce - BILL 030125

Thank you, Mr. Chair. Let me say that I think we've had a good discussion, and I think it comes down that no matter what we approve, it comes down to where is the will that we have as leaders of this City to be able to see it through. The proposed ordinance 030125 is a policy that has been close to my heart for many years. The last three years my office has been seeking ways of improving the City's performance with regard to its capacity, to be more inclusive in its contracting with socially and economically disadvantaged firms. In that time, we as a City Council conducted investigatory hearings, collected statistical and anecdotal data from affected and concerned contracted citizens and city administration officials. In January of this year, I, along with other members of this Council, participated in round-table discussions involving community representatives, local, state and congressional legislators to discuss how we can improve what has been described by the City's finance directors as a 98 3/21/03 - Commerce - BILL 030125 dismal record in our efforts to include minorities and women in our contracting process. We have collected and reviewed many reports and studies. These have helped to provide evidence of past and present discrimination against minority and women-owned enterprises. For the record, some of these reports, and which I would like to include into the record and submit for the record, reports and studies include the DJ Miller report issued April 1998, a comprehensive disparity study -- that is these two booklets right here -- the Illusion of Inclusion, a report by my office, which provides an overview of the status of affirmative action in Philadelphia, a minority and women business state-wide task force report issued in March 2002 by the Department of State and the auditor general, which highlights the lack of fairness and equality in government contracting, and an August 2002 report by the Pennsylvania Advisory Committee of the U.S. Commission on Civil Rights titled Barriers Facing Minority and Women-Owned Businesses in Pennsylvania. And they do make mention, very specific mention, of Philadelphia and the studies that we have done in this Council. 99 3/21/03 - Commerce - BILL 030125 Added to that are the recent Council public hearings on Resolution 02023038 and the resolution presented by my colleague, Councilman Wilson Goode, in terms of the GPUAC and the hiring aspects in construction projects. I am entering for the record the available transcript of the February 27th public hearing. These hearings, which will be continued in April, have provided significant updated information about the persistent under-utilization of disadvantaged business enterprises in our city. The bill before you seeks to provide a legislative remedy to discrimination. It basically replaces Chapter 17-500 of The Philadelphia Code, and although the bill focuses on increasing the utilization of DBE, a by-product of the bill will be to increase employment opportunities for minorities, women and socially and economically disadvantaged persons. Mr. Corey, Mr. Thomas Corey, is from the City of Baltimore, who will share that city's experiences. Our bill is loosely modeled after their legislation, and Mr. Corey will be sharing with us the experiences and the framework that they 100 3/21/03 - Commerce - BILL 030125 have used to increase the participation of DBEs in the City of Baltimore. Mr. Corey, welcome to the City of Philadelphia.

Thank you.

Please identify yourself for the record.

Good afternoon. My name is Thomas Corey. I'm chief of the Minority and Women's Business Opportunity Office for the City of Baltimore. I appreciate --

Mr. Corey, you've got to pull the microphone close to you.

I'm here this afternoon to share with you the experiences that we've had in Baltimore City with our Minority and Women's Business Opportunity or Business Enterprise Program. We've had what we consider very good success with this program, and we are slightly flattered that you've decided to model your bill after ours. Our program started, as a matter of brief history, we had a prior ordinance that was struck down by a court challenge.

So have we. 101 3/21/03 - Commerce - BILL 030125

And as a result of that, we went out and we had a disparity study done and we came up with the current law. And we think this law meets pretty well with the requirements that were set out in the Crossen decision, and some of the features of it I would like to share with you so that you can see how we do things. Now, there's one thing I would like to say prior to these comments. One is, in our city, we have a Board of Estimates, which ratifies or approves every contract that comes out of the city.

New York had something like that, right?

Right. That means that if we're going to fix a curb or a sidewalk or repair or buy a multi-million-dollar computer system, the Board of Estimates approves that contract.

So every contract in the City of Baltimore, does it go through the Council of Baltimore?

No. It goes to the Board of Estimates. The Board of Estimates is comprised of the Mayor, the president of the City Council, the comptroller, the director of Public Works and the 102 3/21/03 - Commerce - BILL 030125 city solicitor. And all the contracts are presented to this Board, and they decide or approve that contract.

Every single contract?

Every single contract, including those instances where the city is providing tax-incentive financing, pilots or below market sales to developers on private development projects. All of those projects come before the Board of Estimates.

No matter how much the contract is for?

It has to be for $25,000 or more. Now, as I just said before, the scope of our law involves every contract that comes before the Board. And we think that it works well and we've had success for a number of reasons. Besides the actual content of the law, one of the reasons that it works well is because the Mayor of the City of Baltimore, Martin O'Malley, is steadfastly behind the program. In addition, the president of the City Council, the comptroller and 103 3/21/03 - Commerce - BILL 030125 all of the other members of the Board of Estimates are behind this program. So that when an issue comes up, then from my vantage point coming before this Board, asking that a contract not be awarded, as long as I have a legitimate basis, then I can be assured that I will get a fair hearing and possibly the contract will not be awarded to the bidder. Now, in our program, we have annual goals. We set annual goals each year, and we look at and in determining the annual goals, we look at the availability of MBEs and WBEs versus the number of contractors in a particular industry that's out in the business community.

Explain that. How do you determine that --

Well, let's say for the construction industry.

Because we have that in the bill.

Right. In the construction industry, every contractor that wants to do business with the City of Baltimore directly as a prime contractor must be pre-qualified. 104 3/21/03 - Commerce - BILL 030125

By your office?

No. There's a Boards and Commissions office that pre-qualifies them. My office certifies minority business enterprises and women business enterprises. We take a look at the number of pre-qualified businesses out there and the number of certified businesses that are willing, able and available to do the work, and we look at the utilization statistics of those companies from past years and determine an annual goal. This annual goal is a maximum. Then we set a goal on every contract. Each contract is evaluated individually, and we look at the availability of the certified contractors at that time to determine the goal. Thus, a goal can be anywhere from zero to the maximum goal. As an example, in the construction field, the goals now are currently 27 percent for an MBE and eight percent for a WBE. If we, for example, were looking at a contract where we're repairing the curbs and gutters in a community, we will take a look and see how many firms are available, certified firms are available at that 105 3/21/03 - Commerce - BILL 030125 time, to perform this function.

Because when it goes to federal court, one of the things that they said, you cannot put those goals in your legislation, those percentages that you're using.

Well, we do put it in our legislation. We put the text that there's annual goals and the -- they're not quotas.

No. I understand that. You say annual goals, but you don't specify the numbers?

No, we don't specify the number, but what we have are annual goals that are set by the Board of Estimates and then ratified by the City Council each year.

Based on a disparity report that you produce?

The disparity report, the utilization statistics that we collected in my office, and the availability of the MBEs and WBEs. From those figures.

Yes, Councilman Clarke.

I didn't understand 106 3/21/03 - Commerce - BILL 030125 the testimony. You said you set annual goals and then you said you don't set a number?

We set annual goals.

Is there a number associated with the goal?

Yes.

I thought I heard you say you don't set --

No, no. I said the legislation. Like the legislation here doesn't say you've got to use a certain percentage. It says that the city will set up an agency that will set up annual goals per area.

Okay. So it's not a pre-determined goal number-wise; it's just pre-determined that there will be a goal?

There will be a goal, but it's set by his office by the legislation. The legislation gives him the authority to do that by area. So in the construction business -- and they set it up on the availability in the construction area of how many minority contractors and women contractors are available in the City of Baltimore. Is that right? 107 3/21/03 - Commerce - BILL 030125

Right. Let me make sure I can answer your questions directly. In our legislation, there is a provision that the office that I run will set annual goals for each industry category, construction, commodities, architectural and engineering and services. That's the provision that said that annual goals will be set. Then outside of that law, I go in or my office goes in and we make a determination of what the annual goals will be for that year, and we come up with numerical goals. We then submit then to the Board of Estimates, and then it goes to City Council, and they're enacted for that year.

Okay. I understand now.

And then on a contract-by-contract basis, we take a look at every contract that's going before the Board of Estimates for ratification and we set a goal. And we do that by having the agency, the procuring agency, submit to our office or my office a sheet that says that if you're going to repair the curbs and gutters in this neighborhood, what are the tasks associated with it, 108 3/21/03 - Commerce - BILL 030125 and tell me what the percentage this task is of the whole job and the dollar amounts as an estimate, best estimate by the engineer or the contract administrator. We then take a formula that we devised and come up with a goal for that particular contract. And then that contract is then put out for bid. A responsive bidder must agree to meet that goal. He can be the lowest bidder, but if he has not put in his bid that he will achieve this goal -- and there's proof because there is a statement that he and the MBE or WBE must sign and submit with this package. If that sheet is not in there, it's now the lowest bidder.

So as a part of the qualification for lowest responsible bidder, you have a category that speaks of participation as realistic goals?

Exactly.

That's a part of the lowest possible bid?

Exactly. As a part of the bid. Just like the technical specification that's been drawn up by the engineer, if you do not 109 3/21/03 - Commerce - BILL 030125 identify who you're going to use and what you're going to use them to do and how much you're going to pay them and it does meet the goal that our office has set on that contract, then you're not the responsive bidder and your bid is tossed out. Now, it's important to note that, because if you have a mayor or a board of estimates that doesn't agree with that, when you come before the board and you have a contract that's, say, the lowest bidder is $100,000 and the next bidder $130,000, you have to have the political will, as I've heard here today, to throw the lowest bid out and take the next one, because the next one has the MBE and WBE participation goals that's been set on that contract. And that's the way we do it in Baltimore. The responsive bidder must meet the goals set on the contract or else this contract is not awarded to him. We find that bidder in non-compliance, and then the agency then will to send to my office the next lowest bidder and we will review that contract. We review them one at a time, not all at a time, because we never see the second bidder until we have found, if that's the case, the 110 3/21/03 - Commerce - BILL 030125 first one is non-compliant.

Councilman Goode.

Thank you. Can you give us an example of the different -- you set goals every year in terms of the availability of minority contractors in different industries. Can you give us an example of different ranges? Like some of the goals have been set for this year?

Yes, I have them right here. For this year, the current year, 2002, for construction, the MBE goal is 27 percent and the WBE goal is eight percent. For architectural and engineering, the MBE goal is percent and the WBE 16 goal is 13 percent. For the services industry, the 17 MBE goal is 17 percent -- I'll give you a copy of 18 this afterward this. The MBE goal is 17 percent and 19 the WBE goal is nine and a half percent. And for 20 commodities, MBE is five percent and the WBE is two 21 percent. Those are maximums. As we evaluate each contract, as I said before, that's the highest goal that can be put on a contract. And based on the availability, it can be anywhere from zero to that 111 3/21/03 - Commerce - BILL 030125 maximum.

So your construction goals for this year in terms of availability in terms of where you max out would be 35 percent between MBEs and WBEs?

I don't like to say it that way. The goal for the MBE is 27 percent and the WBE -- because women do not like to be lumped in to one group. It's just a better way of saying it because --

Right. I agree with you. I lumped it that way for a purpose.

Right. The total is 35 percent on the contract. That's what the -- the successful bidder is actually having that amount of participation on the contract. You were right in that.

Thank you.

The one thing that's in our law and it's also in your proposed bill that meets squarely with what's required in the Crossen decision is waivers, the waiver provision. The Crossen decision requires that any type of program shows that it's flexible. And one of the ways of 112 3/21/03 - Commerce - BILL 030125 showing that you have a flexible goal and the way we do it in the city is waivers. And waivers are granted on a contract where in the instance there is only one contractor that can perform -- subcontractor that can perform the service, then a waiver is in order. If there are no contractors available to provide the particular service at all, a waiver is granted. For instance, last week I had a contractor that came before me where the police department, they were ordering patrol boats. Well, there are no minorities in the United States that make police patrol boats. It's funny, but -- so there is --

So we waive that.

So the contracting agency, the procuring agency, asked my office to grant a waiver on this, so that when the contract goes out for bid, there are no goals on it, and that's a legitimate basis for granting a waiver.

But there has to be a request for a waiver?

There has to be a request for a waiver submitted to my office. It's reviewed 113 3/21/03 - Commerce - BILL 030125 by me or some member of my staff and most -- I review them all, I'll just put it that way.

Councilman Clarke.

You said it jokingly when you talked about any minority making police boats. Is your bill limited to the City of Baltimore proper?

Yes. One of the other areas that the Crossen decision spoke about is that you have your program narrowly tailored to remedy the discrimination within your geographic area. In our instance, our disparity study conducted says that we did 75 percent of our construction business in three counties, Baltimore City, Baltimore County and Howard County. So that became the market area for the construction industry. So if you want to get certified by my office, you have to have an operating office in one of those jurisdictions.

Okay.

If you're outside that jurisdiction, you cannot be certified by the office. And what that means is that if a contractor, a prime contractor, is bidding on a contract, he doesn't have to be certified or she doesn't have to be 114 3/21/03 - Commerce - BILL 030125 certified, and then wants to use you as an MBE sub, the participation of that sub cannot be counted if that subcontractor is not certified by the office and has an office in the jurisdiction.

Okay.

So that's how we do that. So that's what we call the Baltimore City market area. And we have a market area for each one of the business categories that I spoke of earlier, services, architectural and engineers and that sort of thing, and that came about through our disparity study. And in your program, I noticed that you've identified your area as the Philadelphia metropolitan statistical area, and presumably that's a defensible position.

I think it is.

All right.

We have researched it well. If we don't find it within boundaries of Philadelphia County, we can go to one of the suburbs possibly.

But the other aspect that I'd like to bring to the attention, one other thing 115 3/21/03 - Commerce - BILL 030125 that we do is that when we grant TIFs, pilots or even sell a playground or a lot to a developer at a below-market rate, our law provides that the program is invoked, meaning that we can then set goals on that project. For instance, there is an $80 million development project going on in the west side of Baltimore. That project is getting a TIF and perhaps a pilot from the City of Baltimore. So that means when that happens, that we can set goals on the entire $80 million project. And the way that we do that is, once the developer applies for a pilot, we then bring him into my office, they submit to my office a budget consisting of the hard and soft costs.

The contractor?

The developer. The developer is the person that is responsible for achieving the goals. Now, who he hires to develop his project is his own concern or her own concern. We then hold the developer responsible for achieving the goals. We bring them in, we look at the budget and we take out those items within the budget that 116 3/21/03 - Commerce - BILL 030125 we consider non-discretionary types of costs, taxes, interest, some insurance payments and some other fees, similar fees that are associated with doing a project. We'll remove those and then we'll apply goals to the entire project. And then as the project proceeds, what the developer has to do is, when the developer is about to retain a contractor, a subcontractor, on the project and wants to count that subcontractor's participation, they have to send to us what we call a statement of intent form, and that statement is signed by both the subcontractor and the prime contractor. And on that form, it identifies what the contractor is going to do and what he's going to be paid. And the participation is only counted, one, if the subcontractor is certified, he's certified to perform the tasks that's put on that form, and then we monitor the whole project through that. Now, there was a question earlier that was raised by, I think, Councilman Nutter about what to do if you have someone in non-compliance. We have a very simple straightforward way of handling that. 117 3/21/03 - Commerce - BILL 030125 Here's a good example: We gave one developer a TIF or a pilot, I can't remember which, of about a million dollars. He sent in two notebooks the size of those and said he couldn't find any minority and women-owned businesses to participate on this project. So we called him up and invited him into the office and told him that he did not have to comply with this law. He did not have to make the goals, but on the way out the door, leave the million dollars on the table. It works every time. And that's not an exaggeration. That's actually the way we do it. We don't go through the negotiation, we don't go through the begging and the cajoling and whatever. It's the authority vested in this office that I run to say, If you're not going to meet the goals and you have not put up a good-faith effort, you don't have to meet the goals, but you do have to leave the money on the table. And I can show you three examples --

Don't you wish you had that authority, Roundtree?

And I can show you three examples of three very large projects whenever you 118 3/21/03 - Commerce - BILL 030125 come to Baltimore where we've had to do that. But once we've done that, the gentleman that had the two large notebooks, he had a goal of percent MBE 5 participation and five percent WBE participation. 6 He submitted his last report to me and his 7 participation of the MBE was 35 percent, his WBE 8 participation was 12 percent. I'd say he was a 9 convert. 10

You better believe he 11 was a convert. He wanted that check back. 12

But that's it. And those 13 provisions are in the law; that is, you have that 14 enforcement provision because you can take the 15 contract, the pilot, back to the Board of Estimates 16 and say the developer, or whatever, is not complying 17 and that we are now asking him to return the money. 18 In some instances, the way that we've 19 been able to do it is that we will not release the 20 money. They will get to a certain phase in their 21 project and they need that particular type of 22 financing, and that's when we take at that point, we 23 review all their participation up to that point, and 24 if they're up to snuff, then my office will sign a 25 form or send a letter to the lender saying that they 119 3/21/03 - Commerce - BILL 030125 are meeting their goals up to that point and that you should feel free to go ahead and give them the rest of that financing. So I've become a very popular fellow at times and someone I really have to worry about whether or not someone is going to come after me.

You can be a very feared individual in the City of Baltimore.

You have to do that quietly.

Councilman Cohen.

Does your city have a prevailing wage rate?

Yes. Yes.

Does your city also have a law that requires you to employ union laborers?

Yes. There is a union labor provision. What we do in our bid packages, though, is that the responsive bidder must put in there, agree to a first-hiring program; that is, if he or she is going to hire new personnel to perform this function, then he has to agree to go to certain sources and give them first opportunity to be hired, which would include some folks that are in the 120 3/21/03 - Commerce - BILL 030125 journeyman program or in the apprentice program, and there's one other program that they also have to agree to. And without that, they are not the lowest responsive bidder.

Well --

It's the tone and the way that you do it. Once you set it up, if you stick by it, everybody will come to abide by it. They may not like it.

Does your mayor support you?

The mayor is the person that is my backup. He is 110 percent behind this program. And what we both between us generally say is that I will pull out the whip, but if I need the big dog, I will call him up or e-mail him and say, Get this person, they're not in step with the spirit and intent of this law. Because before they get to me, they've already sent signals saying, let's say a developer, that I can't meet the goals. That's how it happens. But once they accept the contract by the Board of Estimates, they're in. That's an agreement. And what we require in our office is that you sign a 121 3/21/03 - Commerce - BILL 030125 commitment to comply that's put into your agreement. So then if you don't do it at that point, you're in breach of contract.

That's right.

What role do the construction unions play in the political life of the city? Are they very close to the mayor? Do they contribute funds to his --

I'm sure they contribute funds, but it doesn't help them when they have a contract in front of the Board of Estimates and they're in non-compliance. Once the law is there, it's absolute.

DO --

Excuse me, David. In terms of this first hiring program, that is within the City of Baltimore?

Yes.

The people have to come from the City of Baltimore?

That's right.

So the apprentices that they're going after, they've got to go to the City of Baltimore and say these are the people that 122 3/21/03 - Commerce - BILL 030125 we have available in the City of Baltimore?

Yes. There's a program that's run by the Office of Economic Development and some other program and --

Well, we had testimony the other day here in which Mr. Jones, who was the president of GPUAC, who was the monitoring agency for hiring in some of these contracts that we've given out, in which he stated that there were over 100 people, apprentices, that they had available and they never get called. So in your situation, that developer, that contractor, that laborer would be in breach of contract --

Right.

-- if those apprentices had not been called?

Not the developer. The contractor that's won a city-owned project through the bid process. They will be non-responsive if, for instance, they're going to do a job and they have to hire five additional people. In order for them to be in compliance, they have to go to their first source hiring program and get somebody from 123 3/21/03 - Commerce - BILL 030125 there before they go to any other source.

And if they don't do it, they're in breach and you can take the check back?

They're in breach. You can take the check back, you can take the contract back. There are all kinds of penalties that you can wage against them. But generally once they're in, they usually comply. They may not like it, but they comply. But then there are some that it's just a part of their business life.

Do you know what the composition of your construction unions are from a diversified point of view?

No, I do not.

Do they admit membership freely to people of color, to Asians, to African-Americans, to Latinos?

No, I do not. I do not know what the makeup is.

Do your unions have a reputation for being democratically operated so that any member in the Baltimore work force can join them, or are there bars? We're told that in 124 3/21/03 - Commerce - BILL 030125 Philadelphia it's extraordinarily difficult in the first place for anybody to get into the apprenticeship program. Government pays for the apprenticeship program. It's run by unions. We're told it's extraordinarily difficult for African-Americans, for example, or any minority or for women as a minority to get in. Then we're told if they do manage to get in, because they have to let a few in so that it's not 100 percent white, they let a few in and then those few find that it's a tough life to lead, so that they get thinned out in the process of the apprenticeship. Then if they finally survive in the apprentice program, they then got to seek membership in the union. And very few of those that seek membership get the membership. But, again, they can't bar everybody, because that would be so obvious. So what they do is, they let a few in, and then they get few jobs and in the worst locations and under the worst working conditions. And so that when the call comes for minority workers from the contractor, often the union says, We don't have any available, or they seem to have a group of minority subcontractors so that if they feel the heat is on 125 3/21/03 - Commerce - BILL 030125 and the public is really protesting, then the position often taken by the unions is, If you insist on a minority firm, we're going to pick the minority firm. We, the union, will pick it. Not the contractor, nobody, but the unions control which minority firm, and often it's a very select group. Some people think there might be some minority firms that play ball with the unions and they're on democratic policies. Now, do you run into that kind of situation in Baltimore? See, we applaud what you do, but what we'd like to know is, do you do it under our circumstances, or what can we do in the face of a continual opposition by the labor organizations? And I speak as -- I say it, I'm held without fear of contradiction -- the strongest laborer supporter that the City of Philadelphia has ever had in its Council. And yet I am horrified at the fact that the labor movement, which to me seemed to offer a road to democracy for everybody, is being subverted from that purpose. It's to the point where contractors and workers felt it necessary to picket the democratic party, because a major force in the construction trade unions is the treasurer of 126 3/21/03 - Commerce - BILL 030125 the democratic party and they accused him of being very undemocratic in his policies.

Councilman Goode has a point of information.

Councilman Cohen, one second. As you frame your response --

Councilman Goode.

As you frame your response to Councilman Cohen, could you tell us the racial demographics of Baltimore and/or the area that applies to your law, and then tell us the geographic area that the trade unions are pulling from in terms of membership?

Baltimore City is 65 percent minority population. It has a 65 percent minority population. The trade unions, I don't know the demographics of that. What I may have to correct myself on, that the electrical union and the steamfitters unions, those are the two real dominant unions there in the city. Now, a contractor can be a non-union contractor, whether it's a prime or a sub, and they 127 3/21/03 - Commerce - BILL 030125 can get a contract with the City of Baltimore without being a contractor. If I said anything different than that, let me correct myself. But what happens is that there are some contractors that are electrical that are a union shop and some that are not a union shop, and either one can get a contract.

I guess the question really was, in view of the racial demographics there, really some sense of how broad a geographic area the unions are pulling membership from.

My understanding -- I have a limited understanding of that, but my understanding is that they get their members from the surrounding -- from Baltimore City and the surrounding counties. And that's Baltimore County and Anne Arundel County and some from Howard County. But from Baltimore County and Baltimore City and Anne Arundel County predominantly. And in the last ten or 12 years, there has been an exodus of a lot of union members, particularly white union members, to move to a northern county, Howard County, in order to move away from the city. 128 3/21/03 - Commerce - BILL 030125

In Baltimore and those surrounding counties, what is the racial demographics --

In Baltimore County, the minority population in Baltimore County is about 7 percent, and Baltimore County is about the largest 8 county that surrounds the city. It makes the big 9 area -- 10

I didn't get that. 11 What? 12

It's about 12 percent. There's a 12 percent minority population in Baltimore County, which is the largest county that surrounds Baltimore City. The other counties, Anne Arundel County, and the next one that's outside of Baltimore County but close to Baltimore City is Howard County. But most of the folks that work in Baltimore City come from Baltimore County and a few from Howard County.

So the city is 65 percent minority, the county is 12 percent minority?

In the county. 65 percent in the city, 12 percent in the county, Baltimore County. 129 3/21/03 - Commerce - BILL 030125

Thank you. Thank you, Councilman Cohen.

Councilman Cohen, do you have --

I have to leave at this time and I wanted to leave my vote in support of the bill and of all the bills before the committee on this subject matter and any amendments that may be proposed today by the sponsor of the bill.

Thank you, Councilman. Mr. Corey --

May I just say one thing? The good part of the demonstration at the City Committee was that it seemed to me for the first time in my long political history in Philadelphia, I felt the gloves were taken off and people were beginning to address directly without fencing or beginning to face directly the issue. I think until we talk plain and say that if the Mayor of this city, and that's no matter who the mayor is, unless the major of the city under the city's Home Rule Charter, takes a strong position, 130 3/21/03 - Commerce - BILL 030125 nothing much will happen despite any legislation passed. We ought to pass the legislation to give the framework so that the Mayor can operate fully legally. But if he does that, then everything depends on the will of the Mayor. And the way the Mayor expresses his approval, he has many ways of disagreeing with people if he thinks they're wrong. For example, you don't want to appoint labor leaders who you think are flouting the law and democratic principals to the top positions in the city. You don't wink. You know, when you say we want this law passed and followed, you don't then wink to the building trade and say, Of course there's an exception for you. Everybody must be held to account. And to that end, I'll pledge to continue my work, and before the Lord removes me from the scene, I would like to see success come. And, frankly, I don't have another 32 years. So I don't have the same comfort that some of the younger members of Council have that can take a longer approach. I would like to see this thing done, Wilson, in the next two or three administrations. 131 3/21/03 - Commerce - BILL 030125 If possible, before the May 20th primary this year would be a great time for success. Thank you very much. (Applause.)

I read your proposed bill. I think one of the things you may want to consider, and I don't know how you're going to do this, is whatever office that's created by your bill to administer this program, that that office has the authority to set goals on every contract led by every agency within the city. Unless you have that, I really believe you're going to have chaos. You're not going to have an effective program. You have to have some mechanism where if your personnel department is letting out a contract, that that contract comes through the office that's created by this program to set a goal on it. Without it, from what I've heard this morning is that the agencies will have too much discretion on where the goal is going to be and whether or not they're going to be complied, what's going to be in the contract. I think, if I may, that every contract that let by a city agency should come through some 132 3/21/03 - Commerce - BILL 030125 central point and the goals are put on the contract before it's awarded. Thereby you would have greater control and a way of monitoring the participation on each and every contract. Because it's not -- and I've talked to a lot of jurisdictions around the country, and what I've heard is they're always focusing on the big one-time project, the stadium or the bridge. What makes small businesses, minority and women-owned businesses, grow are those contracts that are smaller in dollar amounts but are consistent year in and year out, the curb and sidewalk, the sewer contracts, the commodities contracts to provide the papers and pen, the computer contract, those things that come every day. The business of the city is the biggest business in the city, and it has a lot of money to spend. And if you're consistently putting goals on every dollar that the city spends, the contractors can grow. If you wait for some big project like a stadium and have that one big shot, they only eat for a day. You have to have some mechanism --

That seems like very sound advice you give, but I think you need one 133 3/21/03 - Commerce - BILL 030125 final ingredient, and that is the support of the top person who controls everything.

But that's your challenge.

The Mayor is a very powerful force. Unless you have his whole-hearted support, unless he makes it the top priority to say, What I want to see when I'm done is agreement by everybody that jobs have become open to everybody, all discrimination has been removed, the quality of life has thereby been improved because more people are working. And I agree with you. You've got to give them the contractual mechanism to do it, but what I think we're lacking currently is the policy of rewarding those who are doing the wrong thing. And they ought not to be rewarded. They deserve to be punished. And I think that's the direction the City of Philadelphia has to go. But there's nothing wrong with the city that the Mayor can't clear, and we're very hopeful he's going to do it.

Well, you know, in the City of Baltimore, we not only have this law, this is the law, but the mayor himself put out an executive 134 3/21/03 - Commerce - BILL 030125 order to all his city agencies and it says that you will try to spend at least 35 percent of your dollars with MBEs and WBEs over the course of the year. That's not law. That's saying that your raise may be tied to how well you spend your money and where you spend it.

Maybe get a copy of that executive order. I think that's a great idea for the City of Philadelphia.

Sure. I'll e-mail it to --

Mail it to me. Continue, Mr. Corey.

Thank you for coming from Baltimore.

Well, that's basically it. I did want to say that thus far, we've had what I considered a tremendous amount of success with the program, both in the public contracts that we let and the private development contracts. And last night I took a look at that and I decided to look at some statistics just to see how we were doing on some of the projects. And I've always -- my pet peeve is that if you're going to give money to a developer to build a high rise or a -- 135 3/21/03 - Commerce - BILL 030125

Right. A hotel, for example.

Those are big numbers. And I looked at projects, we have about 62 private development projects that are in the mix now that started in year 2000. And they total about $775 million worth of work. And thus far, MBEs have made $126 million of those dollars and the WBEs have made $16 million off it. Now, at the -- and we intend that it happens. At the end of the day, the MBEs will have made $237 million and the WBEs will make $40 million.

As a by-product of that, and you were talking about how you build the small businesses, do you have the number, for example, of small, first, contractors? You started dealing with businesses other than just the construction areas. Do you have one the prior, how many contractors there were prior to this? Has there been a growth in the number of contractors within the city limits of Baltimore City of minority contractors?

Oh, yes. Yes. Right now in 136 3/21/03 - Commerce - BILL 030125 my database we have roughly 1300 MBEs and WBEs that are certified. That's up from roughly, when I took over the office, about 900. We have more prime contractors that are moving into the area, simply because Baltimore now happens to be a big building boom town. There's a lot of private construction that's going on and so there's a lot of work there.

Of the prime contractors, are any of those prime contractors owned by African-Americans or Latinos and so on?