COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON LAW AND GOVERNMENT - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, November 16, 2005 2:15 p.m. - - - PRESENT: COUNCILMAN JAMES F. KENNEY, ACTING CHAIR COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN MICHAEL A. NUTTER COUNCILMAN FRANK RIZZO COUNCILMAN JACK KELLY BILLS 040769, 050014, 050613, 051023 and 051024. RESOLUTION 040817 - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2
Good afternoon, ladies and gentlemen. This is the Committee on Law and Government, and we have a quorum present with Councilmembers Goode, Nutter, Councilman Rizzo and the Vice-Chair/Acting Chair Councilman Kenney. We are here today to take testimony on a number of pieces of legislation. I will read them all into the record now. Any of the witnesses, feel free to comment that their testimony is relative to any or all of the bills. I think it may speed things along a little bit. First is Bill No. 040769, an ordinance providing for the submission to the qualified electors of the City of Philadelphia for an amendment to the Philadelphia Home Rule Charter relating to the creation, appointment, powers, duties and funding of an independent Board of Ethics, as approved by resolution of the City Council; fixing 3 11/16/05 - LAW - BILL 040769, ETC. the date of a special election for such purpose; prescribing the form of ballot question to be voted on; and authorizing the appropriate officers to publish notice and to make arrangements for the special election. Bill No. 050014, an ordinance 9 amending Chapter 20-1000 of The Philadelphia Code, entitled "Campaign Contributions and Expenditures," by requiring candidates for elective City office, treasurers of political committees and other persons to file 15 certain campaign finance reports with the Board of Ethics, by requiring the Board of Ethics to arrange for the publication of such information on the City's official website in a searchable format, and by making conforming changes to existing provisions of Chapter 20-1000, all under certain terms and conditions. Bill No. 050613, an ordinance 24 amending Title 17 of The Philadelphia Code, entitled "Contracts and 4 11/16/05 - LAW - BILL 040769, ETC. Procurement," by prohibiting persons from receiving City financial assistance if they or certain related parties have made certain contributions to elected City officers or candidates for City offices, and requiring certain disclosures by persons seeking financial assistance, all under certain terms and conditions. Bill No. 051023, an ordinance 11 amending Title 17 of The Philadelphia Code, entitled "Contracts and Procurement," by adding provisions requiring certain disclosures by persons seeking or awarded competitively bid contracts or concessions, and prohibiting persons from entering into such contracts or concession if they or certain related parties have made certain contributions to elected City officers or candidates for City offices, all under certain terms and conditions. Bill No. 051024, an ordinance 24 amending Chapter 20-600 of The Philadelphia Code, entitled "Standards of 5 11/16/05 - LAW - BILL 040769, ETC. Conduct and Ethics," by providing for the powers and duties of the Board of Ethics and the imposition of civil penalties, and providing for the compensation of the members of the Board of Ethics, all under certain terms and conditions. Bill No. 040817, resolution 9 proposing an amendment to the Philadelphia Home Rule Charter to provide for the creation, appointment, powers and duties of an independent Board of Ethics, to provide for annual appropriations for the Board of Ethics, and providing for the submission of the amendment to the electors of Philadelphia. I'd like to ask any members of the Committee if they have anything they'd like to say to begin. (No response.)
Thank you. The first witness on our list today is Mark Schweiker, President, Greater Philadelphia Chamber of Commerce. Good afternoon. Please 6 11/16/05 - LAW - BILL 040769, ETC. identify yourself for the record and proceed.
Thank you, Mr. Chairman. Good afternoon, Vice-Chair Kenney and members of the Committee on Law and Government. For the record, I'm Mark Schweiker, President and CEO of the Greater Philadelphia Chamber of Commerce. I come before you today in support of Bills 040769, 050014, 050613, 051023, 051024 and Resolution 040817. As a 200-year-old advocacy champion for the business community, the Chamber is pleased that this body has recognized the need for this type of oversight legislation and are taking the necessary steps to ensure full accountability and disclosure in dealing with City contracts. The authors and sponsors of this legislation can also be proud that they are doing what is best for the competitive profile of the City. The aforementioned bills and resolution, authored and sponsored by 7 11/16/05 - LAW - BILL 040769, ETC. many of you, would continue the good work that the citizens of Philadelphia endorsed through their overwhelming support for the "ethics" reform question approved on the November 8th ballot. In an election that produced a low turnout, over 70,000 "yes" votes for the question is an impressive number. The Chamber was one of some 50 groups that banded together in the last few weeks to raise awareness of the ethics question on the ballot and the urgent need to pass it. As you well know, this question called for a change in the Philadelphia Home Rule Charter on the way no-bid municipal contracts are awarded by the City of Philadelphia. In a statement released as soon as the vote was counted, my reaction was, "Clearly, the voters of Philadelphia have spoken and sent the message that ethics reform is a top priority in the City. Amending the City Charter to provide more 8 11/16/05 - LAW - BILL 040769, ETC. transparency in the awarding of municipal contracts goes a long way to ensuring that the playing field is level for all businesses. Hopefully now Philadelphia can begin to reverse the negative pall that pay-to-play has cast over our great City. The view around our nation must be that Philadelphia is above board in its ethical standards, and that the opportunity to bid for City business is open to all. " Headlines detailing alleged insider deals continue to reverberate. Just yesterday at our business leaders breakfast gathering in New Castle County, Northern Delaware, a woman, a commentator, expressed her discomfort with Greater Philadelphia region references and connections stating that they did not want to be associated with the Philadelphia pay-to-play image. You 9 11/16/05 - LAW - BILL 040769, ETC. get the point. The legislation we are considering today would carry the Election Day victory a few steps farther. In effect, it would apply the same standards adopted for no-bid contracts to competitively bid contracts as far as contribution caps, create an independent Ethics Board, provide mandatory training and education for City employees and organizations engaging in business with the City. I cannot stress enough the importance of independence when it comes to the establishment and operation of an Ethics Board. Short of that, the City government will be constantly dogged by question marks. The processes that you are hopefully about to establish with these bills create a unified standard for contracting in the City, a process that will be transparent and open to all, with a well-defined monitor to fairly judge questions or practices that may arise. 10 11/16/05 - LAW - BILL 040769, ETC. The creation of an independent Ethics Board, along with its powers, duties and funding, would require an amendment to the Philadelphia Home Rule Charter to be considered in the form of a ballot question, most likely in May. We believe that Philadelphia voters will embrace this effort just as they did the ballot question this month. An independent Ethics Board will give voters confidence that someone is responsible for oversight of the process and that lapses will be addressed in a fair and consistent way.
Further, candidates for elective City office, treasurers of political committees and other persons will be required to file certain campaign finance reports with the Board of Ethics to be published on the City's official website in a searchable format. These practices are standard at the state and federal levels and provide easy access for anyone who desires to see who is 11 11/16/05 - LAW - BILL 040769, ETC. supporting whom. This is how the process should work. It should not be as difficult as it currently is to review campaign finance reports for candidates for local office. Taken as a package, these bills will show that Philadelphia is working to address some of the critical open government challenges and criticisms that it has faced in recent years. You as the elected representatives are to be acknowledged for moving the process forward without waiting for mandates from the state or federal governments and making our City one that can demonstrate that business as usual does not work anymore. As you likely have concluded, the results of the November ballot question were telling. The electorate expects more, and they expect it now. Once again, if we are to keep up the momentum for positive change, it is incumbent upon you to pass these bills 12 11/16/05 - LAW - BILL 040769, ETC. soon and give the voters and residents of Philadelphia the prospect for major and lasting reform. Mr. Chairman, thanks for having me and considering those remarks.
Thank you very much. The Chair recognizes Councilmember Goode for questions.
Thank you, Mr. Chairman. Good afternoon, Governor. How are you?
I agree with most of your testimony, but I also want to put some things on the record mentioned in your particular responses. In your experience in politics, government and private sector and the concept of pay-to-play, have you found it to be public officials appointed/elected trying to corrupt private businesspeople or private businesspeople trying to 13 11/16/05 - LAW - BILL 040769, ETC. corrupt public officials?
My reaction is -- I'm not sure it's the Chamber's obligation to spell out particular behaviors, and I'm not able to --
I believe it is when you reference pay-to-play within your testimony as referenced by a businesswoman as if it strictly relates to government as opposed to a culture that involves both the public and private sectors.
It has nothing to do with my support or non-support for this legislation.
What I was raising was that among those -- and they may not be visiting City Council meetings, and in this case, the woman is not even a resident of the City, in all likelihood, but yesterday as we talked about what the region and cities must do to up its profile, the Greater 14 11/16/05 - LAW - BILL 040769, ETC. Philadelphia region, it was clear that she was uncomfortable with having to put the whole Greater Philadelphia image out there, and how can that help, I think, was the question in light of the headlines and the references to pay-to-play. So --
-- it merely is repeating what an ordinary citizen has concluded about the environment.
I'm not sure that an ordinary citizen has concluded that about the environment.
But you did mention headlines and you just mentioned perception. Is that in fact a media image?
Is that in fact a media image? 15 11/16/05 - LAW - BILL 040769, ETC.
"Both," what I mean by that is, it's probably -- you got to be living under a rock not to hear and see the regular references, whether it's on the part of a journalist editorially to a person at the counter at a dry cleaners, that the feeling and the reputation exists and let's clean it up. And we can give you some pretty tough talk through our connection with business operators and commentators on this as far as just their disgust at this point, and that's why I wanted to make clear today in my remarks that I don't think it ought to be a matter of contemplating what's necessary to be done. Get it done soon. I think residents, voters, expect it of you.
Last question. In the context of the 16 11/16/05 - LAW - BILL 040769, ETC. pay-to-play and usually when people deal with issues of corruption and crime, a famous saying is "follow the money." Doesn't the money actually lead to the private sector in terms of the big money?
Thank you very much for your testimony. Are there other questions from members of the Committee? (No response.)
Zack Stalberg, Executive Director, Committee of 70. Is Mr. Thornburgh here?
I didn't see you behind there. Okay. I want to 17 11/16/05 - LAW - BILL 040769, ETC. make sure you're here. Thank you. Good afternoon. Please identify yourself for the record and proceed with your testimony.
Good afternoon. I'm Zack Stalberg, President of the reborn Committee of 70. I'm accompanied by Chris Sheridan, who is Policy Director of the Committee of 70 and the brains of the operation. I want to express my gratitude to the Acting Chair and to the sponsors for moving on these bills so quickly. In our view, serious damage was done to Philadelphia's image and its self-esteem by the long delay and the contentious struggle over the legislation that was ultimately endorsed by the voters last week. It is essential that the government avoid a rerun of that. We have distributed formal comments from the Committee of 70 to the members and to the Clerk, and they're available on our website. But in short, 18 11/16/05 - LAW - BILL 040769, ETC. the Committee of 70 enthusiastically endorses all of the ethics bills in front of the Committee now, with a few minor concerns. And I would ask you respectfully to take a look at the issue which has arisen in the last hours or 8 so in which the Administration contends 9 that the original legislation does not 10 apply to bond counsel. I think that 11 needs to be addressed possibly by Law 12 rather than by Executive Order. So we 13 hope this Committee will take a look at 14 that. 15 The backdrop for your 16 deliberation is very clear now. 17 Corruption has left a stain on 18 Philadelphia that is recognized 19 nationally. The stain is quite likely to 20 grow in the coming months. 21 Secondly, Philadelphians do 22 care deeply about this issue. Last 23 week's ballot question passed by the 24 biggest margin in memory, maybe the biggest margin ever. The big win was the 19 11/16/05 - LAW - BILL 040769, ETC. result of the work of a broad coalition of groups, many of whom will testify today. We are prepared to aggressively support those of you who demonstrate support for honest government. And the non-political leadership of Philadelphia wants action, too. I'm sure you've heard of today's announcement that a number of very prominent business and civic leaders and that the head of the AFL-CIO have all joined the Board of the Committee of 70. Philadelphia is at a critical point in its history. I hope the members of this City Council will be able to look back and say to themselves, I did everything possible to clean up the stain and to clean it up quickly. Let me just make a few specific comments, and they relate directly to the official notes that were filed with the members of this Committee. Primarily we support a comprehensive approach to ethics reform. 20 11/16/05 - LAW - BILL 040769, ETC. November 8th was the first step. We need to finish the job by empowering an effective and independent Board of Ethics with sufficient teeth, increasing transparency in municipal contracting and campaign finance, reducing the cost of government by increasing competition for municipal contracts and making the whole system work through a sufficient investment in ethics education. Backing up for a second to the ballot question, I want to point out that the support for it was consistent, quite consistent, throughout the City. In the highest areas, it was 95 percent in favor. Even in the lowest areas, still four out of the five voters favored that ballot question. So to me, and I hope to you and I hope to Councilwoman Blackwell, that should answer the question of whether or not voters really care about this. On the independent Board of Ethics, we support the growing notion of 21 11/16/05 - LAW - BILL 040769, ETC. regionalism, but given the fact that this Board of Ethics has jurisdiction over workers who have to live in the City, I would ask you to consider whether the members of the Board should be required to be residents of the City of Philadelphia.
Does the Committee have an opinion on that, or the request to examine it?
I believe that our opinion would be that the members of the Board should be residents of the City of Philadelphia.
Clearly, the Charter amendments and the Philadelphia Code amendments should yield an independent and effective Board with an appropriate emphasis on education as a means of avoiding enforcement actions, with a balance between confidentiality and transparency, and with respect for due process and fairness to those 22 11/16/05 - LAW - BILL 040769, ETC. involved. On the campaign finance disclosure bill, the transparency initiative would bring Philadelphia campaign finance filings in line with Pennsylvania law and make it more accessible for the public to understand this via the website. On municipal contract reforms, these two reforms will promote increased transparency and competitiveness. Even competitive bid contracts can be subject to political considerations. Clearly, education avoids enforcement, and investing in education up front will save enforcement costs and maximize voluntary compliance. We believe that the time for action is now and that the voters should get a chance to take the next step and approve this comprehensive reform package on the May 16th, 2006 primary. The Committee of 70 reserves the opportunity to comment on amended 23 11/16/05 - LAW - BILL 040769, ETC. bills before the Council of the Whole, but we support the comprehensive package of reforms before the Committee today as a major step toward government which is not only more honest but less discriminatory and more efficient. Thank you very much.
Thank you very much for your testimony. Are there questions for this witness? (No response.)
Seeing none, we thank you for your time and your testimony.
Part of Mr. Stalberg's comments dealt with the issue of education and information that would be available to an employee or elected official in order to question themselves before the Board of Ethics would have to act, and I would like at this time to ask Amy McIlvaine to please 24 11/16/05 - LAW - BILL 040769, ETC. come up. She represents a company called LRN, which has done work nationally with large corporations on the issue of ethics and ethics training, and I believe is beginning to get into the area of government. So I would like her to give us kind of a brief overview of what's available out there in the way of tools for the average employee at their work station, or wherever, to access information when they have questions. Please identify yourself for the record. MS. McILVAINE: My name is Amy McIlvaine. Thank you very much. LRN Corporation is a global company headquartered in Los Angeles, California. We help leading organizations around the world foster do-it-right cultures. We provide everyone in an organization with the legal and ethics knowledge needed to make decisions and take actions aligned with 25 11/16/05 - LAW - BILL 040769, ETC. the laws and values that govern their organization. Our mission is to help organizations foster and strengthen corporate cultures that understand, respect and value both the letter and spirit of the law. For more than a decade, LRN has partnered with some of the most admired organizations to develop the knowledge, education and operational solutions to make our mission a reality. LRN has a team of more than 200 professionals, including attorneys, educators, system managers and implementation experts, all focused to ensure that our customers achieve their goals. LRN offers a comprehensive suite of tools. Beginning with our enterprise solution called GEMS, which stands for Governance and Ethics Management Solution, GEMS manages ethics and compliance processes across an enterprise. 11/16/05 - LAW - BILL 040769, ETC. GEMS incorporates our LCEC solution. LCEC stands for Legal Compliance and Ethics Center. The LCEC solution is for educating employees on the legal and ethical issues they face. LCEC also features tools for measuring program effectiveness. LRN's state and local government practice is dedicated to helping governments realize the idea of a transparent government. LRN helps government employees practice wrestling with legal compliance and ethical dilemmas so that they can make better decisions and take appropriate actions when it counts the most. Right now, LRN is working with the State of Illinois regarding their annual ethics training requirements for every single state and university employee, which exceeds 140,000 personnel. The state has achieved 100 percent compliance annually since establishing a partnership with LRN. LRN 27 11/16/05 - LAW - BILL 040769, ETC. was able to meet all of the state's requirements, including providing ethics education for those employees who do not require a computer for their work nor have access to a computer at home. The benefits to governments using ethics training solutions include the following: All targeted employees are reached, no matter their location or connectivity; comfort knowing that all employees know what is expected and how to act; protection is in place with proven legal content in the event of a problem; citizens are reassured about the ethical health of their government; employees feel trust and recognize their role in government is to do the right thing. LRN is dedicated to helping the City of Philadelphia succeed in this area by providing whatever assistance that will help mitigate the financial and reputational risks of ethics and compliance failures and building a strong 28 11/16/05 - LAW - BILL 040769, ETC. and enduring ethical City government. Thank you for the opportunity.
Thank you very much for your testimony. We intend at a future date to have either a Legislative Oversight or Law and Government Committee hearing on the tools available to accomplish the goals of giving employees the necessary information prior to any problems arising. So we look forward to having you come back. I wanted to get this into the record because I wanted to let people know and the record know that there is available technology and software and structure out there to accomplish that goal. So I thank you for taking the time to stay here today, and thank you for your testimony. Are there any questions? (No response.)
Thank you 29 11/16/05 - LAW - BILL 040769, ETC. very much. MS. McILVAINE: Thank you for the opportunity.
David Thornburgh, Executive Director, Pennsylvania Economy League. Good afternoon. Please identify yourself for the record.
Thank you, Mr. Chairman. I'm David Thornburgh, Executive Director of the Pennsylvania Economy League here in Southeastern Pennsylvania. I do have copies of my testimony. Thank you, Chairman Kenney and members of Council. If you don't mind, in the interest of brevity, I'm going to paraphrase from my testimony, and certainly you can read along at your leisure, but it's my delight to be able to share some thoughts with you about ethics and the bills that you have in front of you. This is an important issue for 30 11/16/05 - LAW - BILL 040769, ETC. the Economy League. Our Board at their October 8th meeting voted unanimously to support the passage of the ethics ballot question on November 8th and was also instrumental in raising in just three days about $30,000 to help support communications around that campaign, and we're pleased to join with others here today to make that happen. Four basic points that I wanted to make today. First, that I believe, based on some of the polling work that we've done, that Philadelphians have now what I consider a dangerously negative view of City government; second, that they want and expect more; third, that higher ethical standards matter to our economic future; and, fourth, that tough and independent ethics laws, while not sufficient to restore people's confidence in their government, are absolutely necessary as one step forward. First, the bad news. Philadelphia voters, as judged by two 31 11/16/05 - LAW - BILL 040769, ETC. recent polls, Issues PA/Pew polls, neither think City government is doing a good job nor trust you to do the right thing. A December 2004 poll asked Pennsylvanians to evaluate the performance of their local government. 57 of those outside Philadelphia rated their municipal government as excellent or good, but only percent of 11 Philadelphians, less than one in five, 12 said they're pleased with the performance 13 of City government. 14 More disturbing, a May poll 15 found that only 20 percent of 16 Philadelphians said they trusted local government to do the right thing at least most of the time compared to about half in the Philadelphia suburbs. What was more shocking is that 20 percent of the respondents went off the menu and volunteered an answer that they never trusted local government to do the right thing. Depressed, cynical, even surly 32 11/16/05 - LAW - BILL 040769, ETC. voters don't always make rational decisions at the polls, witness the response on November 8th to the pay raise controversy in the state legislature and judiciary. But in this last election, Philadelphians made, I think, a quite unambiguous statement when nearly, as we've heard and known, nine out of ten Philadelphia voters voted yes on the question. I can't imagine a more definitive answer to the question "who cares about ethics in City government" than the answer the voters gave on November 8th. Third, it's perfectly clear to me that the perception and reality of our so-called pay-to-play political culture has harmed Philadelphia both at home and across the country and around the world. Our future as a City depends on our ability to encourage people, residents, investors, entrepreneurs, business owners, students from around the world and in Philadelphia to choose 33 11/16/05 - LAW - BILL 040769, ETC. Philadelphia. It's a big world out there and there are lots of choices. As Robert Friedman notes in his book on the global economy, "The global economy is creating a much higher cost for any country that tolerates corruption, if for no other reason than that in a world where people have so many investing options, why bother investing in country X, where you have to pay off everyone and his uncle, when you can go to country Y, get the same labor rates and not have to pay everyone off? " Finally, let me remind us that the end game in this process is not better ethics laws, but higher and more consistent ethical standards in government.
In other words, if we have to rely on the laws to determine in every 34 11/16/05 - LAW - BILL 040769, ETC. instance what's okay and what's not okay, then we've missed the point. We shouldn't need a law to advise a public official that it's not okay to take a gift worth thousands of dollars from those looking for City contracts or that it's okay to rip off the public by getting paid for work that somebody else has already done or that will in fact never get done. In that context, ethics laws fall into the category of things that are necessary but not sufficient. Now, with a public that is as depressed and potentially surly as ours, and that clearly expects more, the measures you are considering today are important, because they serve as important milestones on a long, and maybe never-ending, journey. A powerful and independent Board of Ethics will help encourage and enforce ethical behavior. Additional steps to remove the real or perceived link between political contributions and 35 11/16/05 - LAW - BILL 040769, ETC. contracts will help save scarce tax dollars and open up opportunities. Increased transparency and disclosure will inspire confidence that government is focused on the public welfare. PEL encourages you to support these measures and look forward to the day when Philadelphia no longer has a national reputation as being content with corruption, when businesses are confident that they can do business in the City based on their competence, not their political connections, and when the citizens of America's Next Great City are proud of their government and you whom they elect to serve them. Thank you very much.
Thank you very much for your testimony. Any questions for this witness? Councilmember Goode.
Good afternoon, Mr. Thornburgh, and thank you for your testimony. 36 11/16/05 - LAW - BILL 040769, ETC.
Once again, not trying to suggest my support or non-support for the measures before us but rely upon your expertise, can you tell me if it's a valid statement that locally and nationally, most college-educated African-Americans derive their income directly from government employment or government contracts?
Is it a valid statement that locally and nationally, most college-educated African-Americans derive their income directly from government employment or government contracts?
Thank you 37 11/16/05 - LAW - BILL 040769, ETC. very much. Any other questions? (No response.)
Thank you very much for your testimony. Brett Mandel, Philadelphia Forward, please. Good afternoon. Please identify yourself for the record and proceed.
Good afternoon. Mr. Chairman and members of City Council, thank you for providing this forum to discuss ethics reform measures pending before this City Council. I am Brett Mandel, Executive Director of Philadelphia Forward and one of so, so many Philadelphians who believe that we must all work to ensure that the efforts of government benefit the general public and not just the special interests. Recent unfolding scandals and high-profile indictments are powerful reminders that public trust in City 38 11/16/05 - LAW - BILL 040769, ETC. government has eroded to a dangerous level. As David Thornburgh just told you, an astounding 76 percent of Philadelphians responded to a recent Issues PA poll that they only trust local government to do what is right some of the time or never. Philadelphians gave that response more than 50 percent more than other Pennsylvanians. But happily, Philadelphia's incredible resounding "yes" vote on the Charter change to help stop pay-to-play shows that a constituency for change understands that we must expect more from our government. Philadelphia Forward and a coalition of individuals and organizations from every corner of this City worked to help generate public awareness and support for the ethics reform ballot question. In the end, nearly nine of ten Philadelphia voters voted yes on the question, a greater yes vote than for any ballot initiative over 39 11/16/05 - LAW - BILL 040769, ETC. the past years, and almost two-thirds of those voters participated in the ballot question. That's the highest participation on a ballot question in at least years. The initiative passed by 7 a wide margin, ranging from 79 percent to 8 95 percent, in all neighborhoods of the 9 City. I sincerely hope that this 10 heartening demonstration of public voice 11 for change encourages this legislative 12 body to continue its important work on 13 this subject. 14 The measures pending before 15 this Committee today represent additional 16 steps toward reform. An independent and 17 empowered Board of Ethics will help 18 encourage and enforce ethical behavior by 19 our governmental officials. Additional 20 steps to remove the real or perceived link between political contributions and governmental largesse will help save scarce tax dollars and open opportunities for many individuals and firms. Increased transparency and disclosure 40 11/16/05 - LAW - BILL 040769, ETC. will inspire confidence that government is focused on the public welfare. Philadelphia Forward encourages you to support these measures, and we further encourage you to continue this important work to address the corrosive role of money in the political process, ensure that ethical conduct by government officials is clearly defined and free from inappropriate conflicts of interest, and that lapses are met with serious consequences. I thank you for focusing attention on this critical issue, and I am pleased to be a resource for this legislative body as you consider legislation to help restore our collective faith in City government.
Thank you very much for your testimony. I'm a little disappointed that there's no 23 musical presentation at this time, but I appreciate your testimony. Councilman Goode. 41 11/16/05 - LAW - BILL 040769, ETC.
I was proud to participate in a press conference with you in support of the ballot measure, but I'm still curious as to who was actually lobbying against the ballot measure.
I don't know. I do know that there were reports that some flyers were being handed out on Election Day.
But you're not aware of anyone who was actually against it?
I have no 23 definitive information who was against anything.
If there are no other questions, thank you very much for your testimony. Mark Steir, Vivienne Crawford, Gloria Gilman from Neighborhoods Networks, please. Please identify yourself for the record and proceed.
Good afternoon. I am Vivienne Crawford and I am here actually on behalf of two organizations. I'm here on behalf of Neighborhood Networks and the African-American Heritage Coalition. I'd like to give you our take on the overwhelming support for ethics reform and tell you a little bit about Neighborhood Networks, and I'm sure that you know about the African-American Heritage Coalition. Neighborhood Networks is a growing organization in Philadelphia dedicated to the organizing of progressives in Philadelphia neighborhood by neighborhood on a ward and division 43 11/16/05 - LAW - BILL 040769, ETC. basis. It's our mandate to educate Philadelphians on how they can push for progressive social change through legislation and advocacy. We are pleased to be here to commend the efforts that have resulted in the mandate by the voters of Philadelphia in which they ask that we look at and that the City government look at ethics reform. We are pleased that the electorate chose to endorse with enthusiasm ethics reform. Members of Neighborhood Networks were in the streets going door to door to discuss the issues with their neighbors. This was a City-wide effort, and as I said, the Neighborhood Networks embraced the African-American Heritage Coalition, so we had members throughout the City, members of Neighborhood Networks and members of African-American Heritage Coalition, going door to door, at polling places with materials speaking to voters to address the concern. 44 11/16/05 - LAW - BILL 040769, ETC. We know that the recent vote was only a small step in the direction of open government. We support the Council's efforts to go considerably further in creating an ethical environment for our City. We, therefore, wholly support the spirit of the proposed bill and urge Council to fully consider the details of this bill and to pass the most far-reaching and comprehensive efforts in ethical reform conceivable. We support the concept of an independent Board of Ethics that would investigate and challenge any ethical misconduct by City candidates or employees, whether elected or appointed, and by contractors for City work. And just in response to your question, Councilman Kenney, we wholeheartedly believe that the members of this Board should be residents of the City of Philadelphia.
We believe in 45 11/16/05 - LAW - BILL 040769, ETC. campaign finance and reform, and it's necessary to remove unethical incentives for candidates and their supporters. We want transparency in the contracting measures and contracting with the City so that the citizens can rest assured that contracts are not made for improper consideration. We applaud City Council's efforts to make our City government work for all of us, openly and honestly. There is much work to be done in this area, and we, your neighbors and constituents in Philadelphia, look forward to continued support of such efforts and to increasing our numbers to raise these campaigns. As I said before, Neighborhood Networks is a fairly new organization. We had over 150 people out on Election Day to get this vote, and we worked hard to do that, and Neighborhood Networks embraces any conversation with this body in terms of how we can be more effective, 46 11/16/05 - LAW - BILL 040769, ETC. but, understand, we are an organization that is growing in numbers and we intend to be out, and we are just pleased to be here to applaud the efforts.
Thank you very much for your testimony. Please identify yourself for the record and proceed.
My name is Mark Steir. I'm member of the Steering Committee of Neighborhood Networks. There's no joke about political conventions. By the second day, everything has been said, but not everyone has said it. Sometimes at hearings, you know better than I do, that's often true of the second hour. So I thought I'd take a different tack and rely on my expertise not as a committee activist but on my day job, which is a teacher of the history of political thought, and I'd like to put this ethics reform issue in some historical context. We all know that this country 47 11/16/05 - LAW - BILL 040769, ETC. was founded and is one of the first representative democracies and that the Revolutionary cause was no taxation about representation, but there actually was another cause as well, another theme of the Revolution, and that was that the government of Great Britain was corrupt, that the Parliament had been corrupted by the King and the King had what they called influence over the Parliament. The King would offer members of the Parliament executive positions or would increase their pay or would offer the equivalent of campaign contributions as a way of influencing what they did. And at the time when democracy was founded in this country, representative democracy, the question everyone asked is, Who do the representatives represent, because representative democracy is a complicated form of government. It's not always obvious who the representatives represent. And we looked at Great 48 11/16/05 - LAW - BILL 040769, ETC. Britain. They said the problem was the King corrupted the natural form of representation between the people and the representatives. So what they did in America was first not to have a King, and they called for publicity as a way of making government transparent so there would be undue influence between governors, the substitute for the King and the legislature, and they called for banning certain forms of influence, such as appointing people in the legislature to executive positions or raising their pay in between elections, which, by the way, is why we have those Constitutional provisions in the United States Constitution and the Constitution of Pennsylvania. And ultimately, in Great Britain, they decided to ultimately do away with the problem, which is to limit the King, make the King basically a tourist attraction and a source of 49 11/16/05 - LAW - BILL 040769, ETC. newspaper articles in the tabloids. We have to do the same thing here. The source of influence in our government that isn't the people nowadays is businessmen, lawyers, developers who seek contracts with the City, who seek other kind of financial benefits from the City and have used campaign contributions and other forms of influence to call into question the legitimacy of our government. And, again, there are three basic forms of reform. One is to publicize those relationships, make them public so people know of any possibilities of undue influence. The second is to limit these forms of influence by limiting campaign contributions, by banning people who get financial benefits or contracts from the City for making campaign contributions, and, finally, I think we have to take a third step, and it's not one of the laws under consideration. The ordinance is 50 11/16/05 - LAW - BILL 040769, ETC. under consideration today, but it's one that I hope will be soon, and, that is, of eliminating or going as far as we can to eliminate the power of the influence of people with a great deal of monetary resources, and that's by moving to partial public financing. I think that would be the equivalent of getting rid of kings in our current situation, and I think that's what we ultimately need to move. Thank you.
Thank you very much for your testimony. The Chair recognizes Councilmember Goode.
Thank you, Mr. Chairman. Is Neighborhood Networks a partisan, non-partisan or bipartisan organization?
Do you 51 11/16/05 - LAW - BILL 040769, ETC. happen to know whether the ballot measure was endorsed by the republican party?
So it's carried on both democratic party ballots and republican party ballots?
Thank you very much for your testimony. Any further questions? (No response.)
Seeing none, thank you very much for your patience and coming in. Daniel McElhatton, Vice-Chair, Philadelphia Board of Ethics. Good afternoon. MR. McELHATTON: Good afternoon, Mr. Chairman.
Please identify yourself for the record. MR. McELHATTON: Mr. Chairman, 52 11/16/05 - LAW - BILL 040769, ETC. members of the Committee, my name is Daniel McElhatton and I serve as the Vice-Chair of the Board of Ethics of the City of Philadelphia. Mr. Chairman, members of Council, I have prepared and have submitted to the Committee copies of my testimony, and I will not read the testimony, but I would like to share a couple observations. This is a great and wonderful City. It has been entrusted to the elected officials of this City to make it better, to make it brighter, to make its future for its citizens a better future. This legislation does that. It may not do it directly, but it does it indirectly. For two years, I have -- now this is the third appearance I've made before this Committee supporting various forms of ethics legislation. Some of these bills today create an independent Board, and I have advocated that since I 53 11/16/05 - LAW - BILL 040769, ETC. appeared here the very first time, because until and unless we establish a Board that's consistent with the powers that Boards have in other jurisdictions, all that we can do is what we've been doing, and, that is, trying to help the public servants by educating, by referring various ethical issues to the appropriate investigatory authorities, by trying to determine what resources we as a City need and utilize those resources to educate folks, whether they are vendors of the City or whether they are employees. But we are constrained in what we can do as a Board of Ethics by the fact that it's not a Charter-created entity, and one of these bills would do that, and that is essential if this legislation is to and this City is to move forward on the issue of an independent Board of Ethics. The other legislation which empowers the Board or which talks about 54 11/16/05 - LAW - BILL 040769, ETC. campaign finance reform and disclosure is consistent with what we have always talked about in terms of having accountability and having an open and accessible government. And there is absolutely nothing wrong with an open and accessible government. There are different requirements for sunshine requirements and other things like that, and the whole purpose of it is so that those citizens who have the level of concern to know what's happening with our government have the ability to get the information they need to make their judgments and to make their decisions. These pieces of legislation assist in that process. There are refinements, there are debates, and that is your function to be able to determine the best process, but rest assured, at the end of the day, it is your responsibility. No one else's, no community group, no civic association, not an independent Board of 55 11/16/05 - LAW - BILL 040769, ETC. Ethics. The responsibility and the authority and the power to move us forward rests in your hands. I ask you to use that power to move us forward in the right direction. I trust that you will. I trust that you have, and I think that the City, the Council and this community will be better served for an independent Board of Ethics. Thank you, Mr. Chairman.
Thank you very much for your testimony. I'd like the Chair to recognize that Councilman Kelly has joined us to the Committee. Any questions for this witness? (No response.) MR. McELHATTON: Good afternoon, Councilman.
Seeing none, thank you for coming in. 56 11/16/05 - LAW - BILL 040769, ETC. MR. McELHATTON: Thank you, Mr. Chairman.
Norma Van Dyke, Mary Ellen Weber. I have one other person on the list that was scheduled. By a show of hands, could you let me know if there's anyone else in the room that is interested in testifying on any or all of these bills? (No response.)
Okay. Thank you. Please identify yourself for the record.
I'm Norma Van Dyke of Philadelphians United to Restore Ethics, or PURE. We are a grassroots non-partisan citizens group who came together as a result of a letter I published in the Inquirer asking if people are interested in working on ethics reform in the City. We worked prior to this 57 11/16/05 - LAW - BILL 040769, ETC. election by contacting our civic association, talking to people on the bus, polling, you name it. We are also working with this great wide coalition of groups that worked on this ballot question. As you can see, it's been said repeatedly the response to the ballot question and also the response to the pay raise in Harrisburg demonstrate that the voters are really ready to insist that the government works on behalf of the common good rather than the special interest. To do that will require that structures be put in place to ensure transparency in government, that those who are awarded contracts or appointed to government positions be based on merit, and also that there will be an independent Board of Ethics to oversee this process of the government. We applaud the steps that you're taking today and want you to know that we will work on your behalf for good 58 11/16/05 - LAW - BILL 040769, ETC. government.
Thank you very much for your testimony. Please identify yourself for the record, if you have anything to offer.
I'm Mary Ellen Weber. I am a resident of Philadelphia for years, and I have worked on issues 11 and political campaigns for many years. 12 I come as a citizen, as a member of PURE, 13 as a member of Philadelphia Forward and 14 the broad coalition. 15 I would hope that the 16 Councilmembers would remember that you 17 see a small number of people here. 18 However, this issue is much, much larger than the visible numbers that you see here, and I think it's time in Philadelphia that people want good government and ethical government that they can be proud of. Thank you.
Thank you 59 11/16/05 - LAW - BILL 040769, ETC. very much for your time and for your civic interest. And if there's no 4 questions for these witnesses, thank you very much for coming. Joyce Wilkerson, the Mayor's Chief of Staff. Good afternoon. Please identify yourself for the record.
I ran up the stairs to find out that I'm not as young as I used to be. My name is Joyce Wilkerson. I'm Chief of Staff to Mayor Street. I want to thank you for the opportunity to testify regarding the contracting and ethics bills on the Calendar today. After the results on the legislation passed in spring, the Administration embraced the specific change. Pursuant to the recommendations of the Mayor's Transition Committee, the 21st Century Forum, the Mayor through Executive Order created an Ethics 60 11/16/05 - LAW - BILL 040769, ETC. Commission. That Commission has provided to the City an invaluable service. We've transmitted to City Council ethics reform legislation that would require lobbyist registration, an Omnibus Ethics Code that would limit gifts to City officials and employees, impose restrictions on nepotism and outside employment with businesses conducting business with the City, among others. I note some of this legislation has never even been listed for a hearing. While the Administration agrees with the need for massive reform in the area of campaign financing, the Mayor has supported a direct approach to the problem through state-wide reform. Notwithstanding our differences on approach, when the legislative process concluded last spring with the enactment of Bill 040772-AA, the Administration began the implementation process. The Mayor has been clear. We will implement both the letter and spirit 61 11/16/05 - LAW - BILL 040769, ETC. of the law, and for this, we have Susan Kretsge to thank. I don't know if Susan is here with us. Many of you in government know Susan. Susan has been working non-stop since last spring. This has been her only project. She volunteered to make this happen. Certain provisions will go into effect as soon as the election results are certified. In February, when the law is to be fully implemented, we will be ready. The ordinance upon which this is based is far-reaching. I do not know of any City department that will not be affected. In fact, this legislation reaches beyond traditional City departments to include City-related agencies, such as the Convention Center, the RDA, PHDC and PIDC. As a result of our aggressive approach, we've identified more than 500 additional non-competitively bid contracting 62 11/16/05 - LAW - BILL 040769, ETC. opportunities expected per year from -- as varied as insurance contracts to DA expert witness contracts. To address the complexity of the law, the Mayor directed staff to begin work in advance of the elections. To date, they've defined the rules for all contractual agreements, have begun the data system design, have sent information about the changes to all City departments, and are holding meetings to explain the new rules and are prepared to begin posting contract renewals on the City website. This has involved pulling together staff for many agencies to work on the various pieces of legislation and will involve many more. We've been working aggressively, because we not only have to design a new system but we have to ensure that the public vendors and our staff can use it. The implementation process has not been without challenges. The 63 11/16/05 - LAW - BILL 040769, ETC. legislation is extraordinarily complicated, because it applies different rules to contracts based on the type of contract, contracting entity and vendor. Therefore, a contract between the Water Department and a for-profit organization will have to follow different rules than a contract between DHS and a non-profit. As implementation unfolds, we should all be prepared for unexpected consequences. Our challenge has been to come up with a system that will support the myriad different combinations of contract types and vendors. We're developing an automated system that can do this, building into it automated notifications dissemination of information and required use and required reporting.
Using an automated system to support this effort makes the process uniform, ensures compliance and ensures that the system cannot be circumvented. I failed to mention Richie Fader. I would be remiss if I didn't 64 11/16/05 - LAW - BILL 040769, ETC. signal out Richie there. I think Richie and Susan were probably the two people in the Administration who have done the most to make this happen and have gone way above and beyond their normal responsibility.
Madam Chief of Staff, could we ask Mr. Richie Fader to please stand, which I know is really just going to kill him.
Yes. He labors quietly and does his best to try to stay in the background as much as possible. And when people do great work, they should be recognized for it. I mean with all seriousness, thank you, Richie.
Let the record reflect he never stood. 65 11/16/05 - LAW - BILL 040769, ETC.
Using an automated system to support this effort makes the process uniform, ensures compliance and ensures that the system cannot be circumvented. As of February 1st, the City's website will publish non-competitively bid contracting opportunities required by the legislation, include orientation materials for vendors and the public, and will show all vendor applications, including disclosure forms, for new non-competitively bid contracts. Furthermore, every vendor will have a secure portal which will include a list of their non-competitively bid contracts, including those that have been awarded and those for which they have applied or which are pending. Vendors must use their portals to submit all non-competitively bid contract applications and to submit and update 66 11/16/05 - LAW - BILL 040769, ETC. disclosure information. Because we have used technology to implement a very complicated set of rules, our vendors, large and small, must also use technology to participate in our system. We will work with them in an effort to assure they are not closed out of the system. There are five types of disclosures that applicants and contractors will need to report an application and, in some cases, annually for the contract term and one year following the end of the contract term: All subcontractors and the amount to be paid; all consultants used to secure the contract; campaign contracts, including, as applicable, contributions of immediate family members and, for-profit businesses, the contributions of their partners, shareholders, et cetera. Applicants and their contractors must also submit this information on behalf of their consultants. 67 11/16/05 - LAW - BILL 040769, ETC. Any City employee who solicited money or services on anyone's behalf and any City employee who advised the applicant contractor about vendors who could assist in meeting minority participation goals. In addition, the website will also post all renewals and amendment of non-bid contracts and link to reports of quarterly expenditures. Finally, we are developing and we'll be delivering an education and training program for the thousands of vendors who will be impacted by these changes and who want to learn how to apply. As easy and straight-forward as we have tried to make the new system, we cannot deny that our vendors will have to do more work to be in compliance. Individuals and businesses looking to apply for and enter into non-competitively bid contracts will be notified that certain information regarding that contract opportunity will be made public. Vendor applications and 68 11/16/05 - LAW - BILL 040769, ETC. disclosure forms will be publicly accessible on the City's contracting website. There are substantial costs involved. We cannot ensure that we will be in compliance unless we change and add to our existing staff and structure. It has been our goal and intent to try to make these changes as easy as possible for the existing and potential vendors. To that end, we're automating as much as possible. We're creating -- let me skip over some of this. These changes are broad and big, and the project will cost the City money. 5 million. Each year going forward will likely require an additional $750,000 to $900,000 a year. In identifying these figures, one of the things the City intends to do is create a special unit that will handle 69 11/16/05 - LAW - BILL 040769, ETC. contracting issues, provide information to both City employees as well as vendors that might have questions about how they comply. I provided that backdrop because it is the predicate for a lot of the legislation moving forward. I'll testify now off of concerning eligibility for competitively bid contracts. It builds on the contracting system set in place last spring to address problems of no-bid professional service contract issues -- pay-to-play, restricted availability of contracting opportunities, excess cost and secrecy -- and extends it to sealed competitively bid contracts.
The situations, however, are not analogous. The problems identified during the no-bid contract debate are closely managed in the sealed bid process. In 1951, the creators of the Home Rule Charter adopted a rigid set of procurement rules part and parcel of the 70 11/16/05 - LAW - BILL 040769, ETC. comprehensive reform undertaken at the time. It's not a modern procurement system. It, however, is a transparent and fair system staffed by professionals. Within the Procurement Department, the Purchasing and Standards units have professionals who are 9 responsible for the procurement of goods 10 and services and equipment. The 11 requisition from City departments comes 12 to the Standards unit, which is 13 responsible for putting together bid 14 specifications. Those professionals meet with the requesting department to assure that the specifications are general in nature so anyone can bid on the services. If the department requests a sole source requirement, the department must submit a justification that goes from the Specifications Analyst to the Supervisor to the Manager, then the Deputy Commissioner for final review by the Procurement Commissioner. The analysts will search the 71 11/16/05 - LAW - BILL 040769, ETC. request on the Internet to determine if there are other products that are just as good that can be used. They also contact the National Institute for Governmental Purchasing to research its libraries. They can also contact other city, county, state and federal governments to obtain information. They would also contact the State of Pennsylvania. They are required to provide a detailed justification which includes cost savings. This information, with the request, is forwarded to the Supervisor, Manager, Deputy Commissioner to the Commissioner for approval. After the analyst completes the document to be sent out for bid, it is sent to MBEC for participation ranges. It is the buyer who is responsible for placing the bid out for prices. The bid is advertised in the Tribune and the Procurement Department website. An announcement is also sent via e-mail to everyone under the particular commodity 72 11/16/05 - LAW - BILL 040769, ETC. on our bid list notifying them that we are seeking prices for the commodity. There may be a pre-bid conference if the requirements are such that an explanation is required. In most cases, it is routine and does not require the pre-bid conference. The bids are given a date by which they are due. m. on the due date. The City does not accept late bids. When the bids are open, vendors, a representative from the Controller's office who stamps all documents, and the Procurement Department are present. The numbers are not known until they are opened publicly. The bids are then given to the buyer, who is responsible for evaluation. The MBEC documents are sent to MBEC for a determination of responsiveness. If MBEC finds the bidders non-responsive, the low bidder will not get the award. Instead, it will go to the next bidder. There's a check 73 11/16/05 - LAW - BILL 040769, ETC. and balance in the process. A buyer is authorized to sign off on awards up to 75,000. Supervisor's approval is required for all contracts over 75,000 to 150,000. Managers must approve the award of bids between 150,000 and 250,000. The Deputy Commissioner must approve bids from 250,000 to $1 million, and the Commissioner must sign off on all contracts over $1 million. Once the buyer has finished in determining the lowest responsive, responsible bidder, the information is sent to the requester for their agreement. If they agree, then the award is made. The buyer must award to the lowest bidder. Awarding away from the lowest bidder must receive the approval of the Commissioner. I believe Mr. Gamble has only approved three awards to other than the apparent lowest responsible bidder in the four years he has worked for the City, and that was 74 11/16/05 - LAW - BILL 040769, ETC.
because the low bidder did not have the experience and the equipment. The contract is for one year, during which the vendor is required to hold its prices. If a renewal is granted, the increase is tied to the consumer price index. Recently, however, with the gas prices and certain other commodities, the City has received requests for price increases. Each request is evaluated on its own merit. This process follows a chain of approvals, as did the initial award of the contract. The contract renewal goes to the Standards unit which does the research to determine if a renewal should take place. The departments contact NIGP to determine if the prices we are receiving are the best prices, if service is needed, if the performance is adequate. The proposed legislation creates several problems and imposing 75 11/16/05 - LAW - BILL 040769, ETC. costs with no benefit. We will begin rejecting the lowest responsible bidder selected through a sealed bid process simply because he or she made campaign contributions. In some situations, we will discard the lowest responsible bidder and pay more. We will lose our ability to purchase off of contracts procured by other jurisdictions, an innovation initiated by Charter reform just a few years ago, an innovation projected to save the City millions of dollars. One example of that is the state computer contract. It's projected that the City is in a position to save a half million dollars annually if we purchase off of that. The third, the City will again need to modify its contracting software to address the new disclosure and disqualification and publication requirements of the bill. Because of the complexity of the legislation, the City 76 11/16/05 - LAW - BILL 040769, ETC. will need to increase substantially the size of the unit being established to monitor campaign contributions. Campaign finance reform is in order. We believe this particular bill 7 is the wrong approach. Finally, I want to say if enacted, the effective date should be amended to July 1st, 2006. It is not possible to adapt IT systems to reflect the requirements of the bill and the time allotted in the legislation. Moving now onto the Ethics Commission. The Administration supports amending the Home Rule Charter to create an Ethics Commission with jurisdiction across all of City government. The current legislation proposing to do that, however, is flawed in two respects. We recognize that a Board of Ethics to be truly independent needs to have a degree of independence from the structure of City government. The Home Rule Charter, however, makes the City 77 11/16/05 - LAW - BILL 040769, ETC. Solicitor the legal advisor of all of City government, so that the City speaks with one legal voice, and so that different agencies do not operate under competing legal opinions. The legal advice received by all City agencies is, and should be, consistent, and the positions of the City taken in court should be consistent, or at least reconcilable, with one another. In light of the independence of the Board, there should be some opportunity for the Board to seek and receive independent legal advice, but the bill in its current form goes too far in that direction, without a good public policy to do so. We believe the bill can and should be amended to provide the Board with necessary independence to do its job right, without doing unnecessary damage to the critical importance of a uniform legal advisor to the City as a whole. We would propose an amendment 78 11/16/05 - LAW - BILL 040769, ETC. to provide that the Board can use the services of its own counsel when pursuing investigations or enforcement, but only where the Board determines that it will conflict with the Board's independence to use the services of the City's Law Department. , to determine if an ethics violation has occurred, without regard to the views of the Law Department.
With regard to the budget of the Board, we are quite comfortable with the idea of a mandatory guaranteed budget for the Board to ensure that it can work adequately and appropriately without interference from either the Administration or City Council. That is 79 11/16/05 - LAW - BILL 040769, ETC. why in the Administration's proposed Charter change we proposed a mandatory minimum budget of $600,000 a year for the first two years of the Board's existence and then whatever amount is deemed adequate in future years. Importantly, the Board would be given explicit authority to go to court to enforce its right to an adequate appropriation in the same manner as the Charter gives to the City Controller. The proposed bill 13 creates a $2 million annual budget that does not appear to be connected to need. Moving onto electronic filing of campaign finance statements, the Administration supports the requirement that all campaign finance statements be filed electronically, the goal of this bill. It is, however, a change that should not be conditioned on the passage of additional Home Rule Charter reform. It should take place now. We're spending in excess of $1 million to implement by February 2006 80 11/16/05 - LAW - BILL 040769, ETC. reforms authorized by the electorate. The majority of these funds go to change IT systems. Requiring that all campaign reports be filed electronically and available to the public as a public record would enable the public to use technology for real transparency into campaign financing for everyone. We shouldn't wait for that. Finally, I want to talk about restricting financial assistance to certain individuals and businesses. Bill 14 No. 050613, building in part on the provisions previously enacted, restricts eligibility for financial assistance to certain businesses and individuals making campaign contributions above certain limits. Before enacting the bill, Council is urged to explore thoroughly its ramifications, because there are no 22 exceptions for situations where federal or state law could prohibit the imposition of these requirements or exceptions for assistance to authorities 81 11/16/05 - LAW - BILL 040769, ETC. or to non-profits created by the City. The bill in its current form creates substantial problems for vital developments in communities across the City. First, I wanted to talk a little bit about non-profit economic development CDC and job creation tax credits. Through both tax credit programs, the City is able to provide extraordinarily focused and efficient incentives for job creation and support for community development corporations. Both tax credit programs provide clear criteria for eligibility and awarded on a first-come-first-served basis up to a pre-established dollar amount. To date, businesses have 20 applied for 25 tax credit slots in 21 support of CDCs. Pending before the 22 Revenue Department now is a job creation 23 tax credit application that would bring 24 more than 450 jobs into Philadelphia. We 25 should not put these programs at risk. 82 11/16/05 - LAW - BILL 040769, ETC. Moving next to the housing development. The Administration is in the process of analyzing the impact of the bill on housing developments underway across the City. It appears that all developers must comply with contribution disclosures. For-profit developers are subject to eligibility disqualification rules. Contractors and subcontractors for both for-profit and non-profit developers are subject to disclosure and disqualification rules. Most affordable housing in the City is funded with Community Development Block Grant funds. Affordable rental housing developments are, for the most part, for-profit developments funded with tax syndication proceeds. Thus, they would appear to fall within the purview of both disclosure and disqualification requirements. Affordable homeowner housing is developed by both non-profit and for-profit developers. Affordable 83 11/16/05 - LAW - BILL 040769, ETC.
housing is almost, without exception, subsidized with CDBG funds that has its own procurement rules that require that federal construction be awarded to the lowest responsible bidder as defined by federal law. Additional research needs to be done on this issue. The second set of issues is practical. Even if eligibility restrictions can be made to apply to federally funded developments, it's impractical to do so for projects that have been in development for years. For example, it appears that if a developer competitively bids the construction of an affordable housing development as required by federal law but the lowest responsible bidder, general contractor, had contributed to a candidate in excess of the allowed amounts, that contractor would not be able to be hired by the developer and a higher bidder would need to be selected. This would drive up the amount of the financial assistance 84 11/16/05 - LAW - BILL 040769, ETC. required to be provided by the City at a time when the City is already confronted with $4 million in reduction in federal aid. It may also jeopardize the project's eligibility for tax credits issued by the PHFA. Because of the slow cycle of development, millions of dollars of development, much of it affordable housing, much of it in development for years, may be at risk by a February 2006 implementation date. The following table provides a partial list of potentially impacted developments. In addition, there are five or six low-income tax credit developments that applied for credits in the past year but did not receive credits and reapplied in October. If awarded, these projects would receive financial assistance in 2006 or 2007. All of these developments have received financial assistance. The next area that I think we need to know a little bit more about is 85 11/16/05 - LAW - BILL 040769, ETC. Airport Revenue Bonds. Airport Revenue Bonds are issued by the City to finance projects such as the construction of new terminals, runway expansion or the acquisition of security systems. Bonds are supported by revenue generated by airline carriers as a group. The beneficiaries of the funded projects are the airlines, the City and indeed the region. We need to proceed with caution in this area. S. Air Board would have on the ability of the airport to issue Airport Revenue Bonds. On a regular basis, the federal law requires the Mayor to authorize projects funded with Industrial Development Bonds. Invariably, these transactions are initiated by private parties. Frequently, bonds are issued by other jurisdictions for projects actually located in the City of Philadelphia. Almost without exception, these 86 11/16/05 - LAW - BILL 040769, ETC. transactions finance projects for non-profits, such as charter schools, colleges, universities, Academy of the Fine Arts and mental health facilities. Disclosure requirements would apply to the non-profit developer. Disclosure and disqualification requirements would apply to the non-profit's contractors and subcontractors. Finally, I wanted to turn to renewal community. In 2001, the City competed with other jurisdictions across the nation for a designation as a renewal community. Designation brought with it a minimum of $12 million annually in financial assistance through 2009 for businesses willing to relocate to City neighborhoods and to expand jobs. Benefits are awarded on a transparent competitive basis in a process that required and obtained federal approval. If the legislation had been in place at the time, some of the incentives would have gone unused. In 87 11/16/05 - LAW - BILL 040769, ETC. the early years, the City had to beat the bushes for businesses. To date, the program has created 1,870 jobs. A list of funded projects is attached to this testimony. Other areas of concern that we need to investigate more fully is the Commonwealth's Redevelopment Assistance Grant Program.
Nineteen grants recently approved for $113 million provided by the state, not the City, would fund a broad variety of City non-profit corporations. Disclosure and contractor disqualification rules would apply. A sampling of the most recent recipients include the University of Pennsylvania, Children's Hospital, Philadelphia Theatre Company, Please Touch Museum, Schuylkill River Development Corporation, Fox Chase Cancer Center, Beech Corporation and the National Museum of American Jewish History. TIF financing to businesses that contribute over 10,000 would be 88 11/16/05 - LAW - BILL 040769, ETC. prohibited. 5 million of TIFs to ensure retention of 800 Philadelphia jobs; $5 million TIFs to Tower Investments to promote retail development on North Broad Street; or 6 million TIF to Wesgold to promote retail development at 52nd and Jefferson Streets. At times, great opportunities such as the expansion of the Food Distribution Center come to the City on relatively short notice. The City should not adopt restraints that are so burdensome or so restrictive that we either lose opportunities for economic growth or drive them away. In putting this list out, we don't take any position on the policy thrust behind the bill. We simply urge caution so we don't move so hastily that we end up shooting ourselves in the foot. I also have with me Herb Wetzel. You may want to hear from Herb. Herb, as you know, runs the Redevelopment 89 11/16/05 - LAW - BILL 040769, ETC. Authority, and the legislation before you would restrict access to eminent domain to parties and would also, I believe, flow through to contracting parties' restrictions with respect to dollar amounts.
Would it be possible for Mr. Wetzel to elaborate for the record?
Thank you. Good afternoon. Please identify yourself for the record.
Yes. My name is Herbert Wetzel. I'm Executive Director of the Redevelopment Authority of the City of Philadelphia.
Could you please elaborate on what the Chief of Staff was saying relative to eminent domain?
Yes. There's a number of ways in which we provide financial assistance to the development 90 11/16/05 - LAW - BILL 040769, ETC. of affordable housing in the City of Philadelphia and also for business expansion, and in almost every case, we are conveying the real estate that we've acquired through eminent domain to the developer of affordable housing for a nominal consideration. In today's market, there probably isn't any assemblage of land now that we're conveying that isn't greater than $50,000, which is the trigger point for this. So, again, all the compliance requirements that are --
I'm sorry, Mr. Wetzel. I hate to interrupt you. Could you say that last part again?
Yes. We are conveying land for affordable housing for nominal consideration, essentially a dollar per parcel, simply because if we charge the fair market value, the City, which provides a subsidy to build the units, would have to increase the amount of subsidy to the project, and we would 91 11/16/05 - LAW - BILL 040769, ETC. just literally be paying ourselves for this. But the net effect of this is that this land, which is being sold for a dollar, is likely to appraise for more than $50,000 in today's market. So the disposition of those properties is now going to be a trigger point, because the financial benefit to the development is going to be in excess of $50,000. And, again, we're back to the issue of the implications for for-profit and the Boards of Directors and issues like that that were problematic before and I'm not sure if they're problematic in this legislation.
I think one thing that is clear, though, is that the 92 11/16/05 - LAW - BILL 040769, ETC. contracting opportunities of the non-profit all fall within the bill, so that if the construction contractor has made political contributions, the non-profit could not do business with the for-profit contractor or with any sub of that contractor that has made political contributions.
If they're in excess of the limits. I mean, I think that that is --
That's right. It's not just a restriction that stops at the City. It flows through to little CDCs out in neighborhoods, as well as at the City gate.
Right. If they exceed the limits after implementation, which in this case for contribution limits at least, would be January 1st of 2006.
And everyone would then be playing by the 93 11/16/05 - LAW - BILL 040769, ETC. same rules.
And I think an important one that we have to take a careful look that the Chief of Staff has pointed out, though, is that we're also obligated to follow federal procurement requirements. And you ultimately have the possibility that the lowest qualified bidder would be disqualified under this legislation, and how that gets reconciled is an important issue that I think is unresolved at this point in time.
In the coming week or two, we hope to also finish the analysis of the disposition of City assets. It appears that any asset that does not go to the highest bidder becomes an instance of financial assistance, and we're trying to figure out how that applies, and we'll get back to you with that.
Councilman, the other interesting thing that we talked about here is that there are place-based 94 11/16/05 - LAW - BILL 040769, ETC. community development corporations that we do business with, and by that being that they have a specific geographic area. And we have consciously assembled land that is blighted specifically for that entity, and will we now have to post the non-competitive availability of that land when we acquired it, in essence, to eliminate blight but also for redevelopment purposes by that place-based non-profit? Are we going to post this on the website that these 14 lots are available, but they're not 15 really available because we acquired them 16 with the specific intent to convey to 17 that place-based non-profit for 18 redevelopment? 19
-- we need to look at, in the initial legislation certain transactions are grandfathered in. It's not clear how the 95 11/16/05 - LAW - BILL 040769, ETC. grandfathering applies in the context of economic development projects, such as housing development projects that proceed in a piecemeal way, may or may not have been procured pursuant to an RFP, which is the trigger under the old legislation, and frequently will not have a contract in place by the time the deadline arises, although the project is frequently in the pipeline at PHFA or at the RDA or on the development level.
So your concern is about projects that are in some way, shape or form underway?
Because once they're underwritten, once they're underwritten and they're underwritten based on contract construction numbers, if you say no, you can't use this contract, you have to go to another contractor, all your numbers are in play now. It becomes an issue for the housing finance agency. It becomes an issue for CDBG funding. You end up in a lot of -- 96 11/16/05 - LAW - BILL 040769, ETC. we don't know how it plays out because we haven't encountered this before, so we need to take a look at that.
Well, I mean, I think we should at least be able to agree that we cannot retroactively affect a project. The limits and the provisions only go into effect, contribution limits in January and these provisions in February, so we cannot go back and affect a project that's already underway.
And I guess the challenge is coming up with an adequate definition. The definition in the current legislation that's been enacted uses RFP as the trigger point, and that will not be the case with developments, construction developments. Sometimes there has been no RFP. Frequently, there are no contracts in place, but, clearly, there's the expectation either because they've been carried in the CDBG application, but we need to be careful so 97 11/16/05 - LAW - BILL 040769, ETC. we don't throw the baby out with the bath water.
I understand that, and that's certainly not the intention. Let me ask this question: How would you characterize these various stages of moving along? Obviously we know on non-competitively bid, the bill 11 that passed already, we talked about RFPs. In the competitively bid, you've got has it been bid.
And we're having to kind of fudge on some of that stuff. Sometimes you have an RFP out there. But there's a whole continuum of development, and I think that what we need is some flexibility, and I don't know the catch language. We tried to come up with the perfect language for dealing with non-profits last time and we completely missed the boat on that, because we said if the contract goes to a non-profit, then it's not subject to all 98 11/16/05 - LAW - BILL 040769, ETC. the pre-notification requirements. But we have 46 for-profit businesses that also compete for social service contracts, and you don't know that the contract is going to go to a non-profit until you go through the whole solicitation process. And so I think we need to spend some time to figure it out. I don't want to just give you a quick seat-of-the-pants definition, because I just can't be accurate.
Okay. All right. I understand. I did have a couple of questions based on the testimony, but I think another --
What I'd like to do is recognize Councilmember Goode. He has short questions. Then we have more expanded questions on this side. Thank you.
Thank you, Mr. Chairman. 99 11/16/05 - LAW - BILL 040769, ETC. Very briefly, Ms. Wilkerson, can you walk me through how Bill 613 impacts my tax credit program?
The bill would appear to restrict financial assistance, and that's defined to include tax incentive, for any business making contributions in excess of the dollar limits in the legislation.
In the case of the CDC Tax Credit Program, those are slots that are filled per agreement. So it would limit specifically companies 15 who have already signed an agreement and 16 they could be notified that they are 17 limited; is that correct? 18
That's right. 23 And they would either have to comply or 24 back out. And they come up on an annual 25 basis and so they would be in the 100 11/16/05 - LAW - BILL 040769, ETC. position of having to make a decision.
But that's something that's very controllable, because there's only slots. 6
In the case 8 of the Job Creation Tax Credit Program, 9 how would that be impacted? 10
That would be 11 impacted if a business, and it could be a 12 business coming into the City, an 13 existing business in the City, wants to 14 take advantage of the tax credit, it 15 would have to agree not to make 16 contributions. The problem is, if you 17 have an opportunity where a business has 18 made contributions, the City would not 19 like to be in the position that we have 20 to turn down a business if it's going to 21 bring 400 jobs into the City because 22 there's been a contribution made. 23
They 24 essentially would have to create at least 25 25 jobs in order to be impacted; is that 101 11/16/05 - LAW - BILL 040769, ETC. correct?
They would have to create at least jobs in order 6 to be impacted? 7
I guess my 10 issue is, for any business that would be 11 impacted by the Job Creation Tax Credit 12 Program because of the amount of 13 financial assistance they are receiving 14 for tax incentive, it's my understanding 15 through how the program has been 16 implemented and utilized that they 17 probably are receiving some other form of 18 financial assistance. Is that correct? 19
I don't have 20 that information. I will undertake a 21 review, because I think we need to be 22 clear about what we're doing. So if the 23 votes are there to support this, people 24 need to understand what the restrictions 25 are on the City's economic development 102 11/16/05 - LAW - BILL 040769, ETC. tools. We've been successful over -- Duane can talk more extensively about it. We've been successful over the last five years, six years in keeping businesses in the City, and it might be helpful to hear from him about what kind of impediments the legislation would form for the economic development. Before we go any further, I want to acknowledge Susan Kretsge. Susan is over there. You want to stand up? We're making -- Susan has slaved for the last six months trying to make this legislation work, and I think probably every five minutes somebody is calling Susan saying, Susan, what does this mean, Susan, how is that impacted, and is a believer in what the legislation seeks to accomplish and has really bent over backward trying to make it work and at some point may come forward with recommendations for change that could 103 11/16/05 - LAW - BILL 040769, ETC. make the legislation more effective and more transparent and perhaps a little less complex than it is in its current form. Duane.
Duane Bumb, Deputy Director of Commerce. Councilman, I think to answer the question as I understood it, yes, there are many instances where the job creation tax credit is packaged with other incentives for large developments that are occurring, especially where at least jobs or more are being created. 18
Actually, I 19 was slightly wrong. It's $50,000 in 20 financial assistance, so it actually 21 would have to be probably 50 jobs 22 created. I'm wondering if the job 23 creation tax credit was ever used to spur 24 job creation at 50 jobs or more without 25 being packaged for some other financial 104 11/16/05 - LAW - BILL 040769, ETC. assistance. I just can't imagine from my experience that it would.
It's a good incentive, but generally not incentive enough for an economic development project that's creating 50 jobs or more.
Within the last six months, I think, as the Chief of Staff had mentioned, we have over the last three years had an aggressive effort to retain and expand existing office jobs in Center City. We're retaining about 89 of 90 companies whose leases were coming up. And within the last six months, there are at least two instances I can think of where the only incentive we were offering to businesses who were looking to grow and stay and grow in the City was the job creation tax credit. There was no other incentive, and so it does just get to the point of are there enough jobs --
The local job creation tax credit or state job 105 11/16/05 - LAW - BILL 040769, ETC. creation tax credit?
The bill is more successful than you ever dreamed it might be.
I don't believe you can move a business from one place to another and receive a job creation tax credit.
Thank you, Mr. Chairman. Ms. Wilkerson, I need to first say thank you for your testimony and your leadership and direction of the many staff people who have worked on this and 106 11/16/05 - LAW - BILL 040769, ETC. spent a lot of time.
Take whatever you can get. And, of course, to Susan, who we talked about earlier, and Richie in the back, and I saw Hal Fichandler running around here somewhere --
-- a little while ago. Okay. Susan gets the prize. I did want to ask a couple of questions or recognize some of the points that you made and propose back some fixes to some of the issues that you've addressed. On the competitive bid bill, I believe you have asked or you have suggested that the effective date because of systems issues should be pushed back to July 1st, 2006. I would certainly want to recommend to my colleagues on the 107 11/16/05 - LAW - BILL 040769, ETC. Committee that we adopt that particular recommendation for --
Susan. You might want to have Susan come up. I think July is the date you requested.
July 1st. Yes. I'd be pleased to recommend that to the members of the Committee to move the implementation date for competitive bid contracts back from February 1st to July 1st, which will give you probably about the same amount of time that you had for non-competitively bid contracts, which you started working on, to your credit. And, again, it's the only way there was ever going to be implementation, was that you started working on this before the voters approved it last week. So I think 108 11/16/05 - LAW - BILL 040769, ETC. time is a very legitimate issue. Second, with regard to the purchasing off of contracts procured by other jurisdictions, and you made reference to the Charter change from a couple years ago, I would recommend to my colleagues that we create an exception for that particular provision of the Home Rule Charter that deals with those purchasing opportunities. Certainly we need to make sure that we're trying to save as much money as possible. With regard to the resolution 15 to create the Board of Ethics, your testimony on , I do recognize there have been many, many conversations about the legal services issue, and I think we just fundamentally do have a difference of opinion, although I think there's been movement over time on that. With regard to the budget issue, I think your proposal with regard to the insurance that the Board has a set amount of funding at least for two years 109 11/16/05 - LAW - BILL 040769, ETC. by dollar amount and then, in essence, the mandamus provisions under the Home Rule Charter for adequate funding of the City Controller's office is a way to go, and I would recommend to the members of the Committee that particular method, probably a different dollar amount, which is going to amount to slightly splitting the difference between what the bill 11 would allow and the Administration's proposal, which I --
Yes, yes, yes. We'll have that tomorrow. But I would recognize that the $600,000 figure the Administration did increase from a previous proposal some time ago. With regard to the electronic filing of campaign finance statements, I 110 11/16/05 - LAW - BILL 040769, ETC. agree with you. That bill was, of course, written at a time when a number of bills were anticipating moving at the same time. I would propose a change or an amendment to that bill to allow for it to go into effect immediately and not have to wait for a Charter-created Board of Ethics. There are some other provisions that I know the Administration was interested in, and I would propose to incorporate those into the bill.
I know the Law Department had identified issues -- with the electronic?
I think what the recommendation would be, to keep all of the language that was already in the bill and add to that section "and by any other means determined by the Board by regulation." I think it would provide 111 11/16/05 - LAW - BILL 040769, ETC. maximum flexibility. With regard to the financial assistance bill, the exception for situations where federal or state law could prohibit the imposition of the requirements. Because that bill is amending the same section that is now covered by Bill 772-AA, that issue is covered by Section 17-1206(1).
We need to take a look at that. It's not clear that that works, and we just need -- if you're in agreement, that needs to be double-checked so we don't end up jeopardizing --
Well, there's an exception that reads "any provision of this Chapter may be waived if the Finance Director certifies in writing that compliance with such provision may lead to the loss of federal, state or similar grant funds or if the City Solicitor certifies in writing that application of such 112 11/16/05 - LAW - BILL 040769, ETC. provision would violate federal or state law." That's already in Bill 772-AA. Financial assistance is going into that same section of the Code.
I think we've talked about the rest of the provisions regarding financial assistance and their not going backward, but at the same time, I would suggest taking your recommendation with regard to competitively bid contracts and moving that effective date back to July 1st, 2006. Because of some of the issues that you raised, I would be willing to propose that we move the implementation date for financial assistance for any systems issues or other concerns back to July 1, 2006. Of course, the campaign contribution requirement or limits would still be in effect for January 1st, 2006.
Just so our position is clear, I tried to highlight 113 11/16/05 - LAW - BILL 040769, ETC. things that I thought were -- that if it passed ought to be there. We are not at the same place on the competitively bid contracts, nor are we at the same place at this point on the financial assistance. We believe that we are in the process of doing more work. We think that some of the language is too restrictive, but I appreciate your willingness to amend what's on the floor.
Okay. Well, just so I'm clear, are you saying that there are other issues that you have concerns about that have not been articulated in the testimony?
We're still taking a look at that. One of the things that we learned is that it plays out in unexpected ways. And the last time, from my perspective, there was a lot of debate about the policy, but it gets to be very tricky in the implementation, and I think Susan, I think, at one point said she's 114 11/16/05 - LAW - BILL 040769, ETC. had to get legal guidance from the Law Department on over 100 occasions. This is very, very complex legislation, and we need to be sure about what we're doing so that we -- what we don't want to have is legislation where every day it's an exception. Then you don't have any reform. We will have adopted a whole lot of pieces of paper, but if people are making exceptions on a daily basis or case-by-case basis, you don't have anything. So we are proceeding slowly, trying to evaluate, figure out what's real, what's at risk, what's not. And I have presented to you everything I've gotten from people in this room, but they've done that in about three days.
Okay. I appreciate that. Thank you. Thank you, Mr. Chairman.
Thank you very much. Any questions for these 115 11/16/05 - LAW - BILL 040769, ETC. witnesses? Councilman Kelly.
Thank you, Mr. Chairman. Ms. Wilkerson, I just have a question here, and it has to do with your testimony on , 5 and 6 in which you mention that you are going to develop a program which will educate and train thousands of vendors about these new changes and how to apply. You also mention in here that you will make sure that materials are available to vendors and you will explain the changes to them. You also mention a staff person will be dedicated to managing the website, all of these changes. What department is going to oversee the operations of this program?
Susan can address that. Susan has committed the rest of her life to this.
Had you 116 11/16/05 - LAW - BILL 040769, ETC. identified yourself for the record previously?
I'm sorry. No, I hadn't. My name is Susan Kretsge. I'm a Deputy Managing Director.
Right now I'm heading the implementation team on this, which involves staff from all of our central agencies, and obviously we're also doing sessions with what I would call user or operating departments. Ultimately --
I assume that once this is all set up and in place and needs to be managed, yes, there will be a centralized unit, perhaps not a whole department, a centralized unit doing this. As you know, the legislation speaks in particular about the Procurement Commissioner having responsibility for this. So that 117 11/16/05 - LAW - BILL 040769, ETC. certainly would seem a possible place for this to be. Right now we have an executive team that has representation from Procurement, Finance, MBEC, Law.
Do you think the Procurement Department is adequately staffed to handle the added responsibilities that they're going to have?
No. I don't think any department at this point, frankly, is adequately staffed, particularly if this continues to grow. So what we have right now is, we have started to have some staff devoted to this. I believe we have plans to add staff to that, and once we have a sense of how large this is going to get somewhat impacted by the new legislation here, we will probably have to add additional staff to it. I think particularly in year one, because this is new, it's new for 118 11/16/05 - LAW - BILL 040769, ETC. City staff, it's new for vendors, there are bound to be lots of questions, there are bound to be lots of things that we have missed that we didn't think about. There's going to be -- year one is going to be hard, and there's going to be need for a lot of resources to help people do this. We will need a resource bureau when people call with IT questions, legal questions, business process questions.
I'm sure we're all going to have to get some training and education in this whole system. I'm sure of that. Good luck. Thank you. Thank you, Mr. Chairman.
Thank you very much. If there are no other questions, thank you for your testimony. Is there anyone else here to testify on these bills? (No response.) 119 11/16/05 - LAW - BILL 040769, ETC.
That will conclude the public hearing of the Law and Government Committee. We will convene the public meeting, and the Chair recognizes Councilman Nutter for the purpose of offering amendments to the various bills.
Thank you, Mr. Chairman. Mr. Chairman, we did circulate a little earlier today what at the time was the best version of any proposed amendments to the bills in front of us. Subsequent to receiving testimony from the Chief of Staff and some of the discussion that ensued during the course of this hearing, there have been other proposed amendments to accommodate a variety of issues and concerns. So a couple of these proposed amendments will not be exactly the same as they were circulated earlier today. What I'd probably try to do, Mr. Chairman, is go in the order of the 120 11/16/05 - LAW - BILL 040769, ETC. hearing list with these. There's a proposed amendment to Bill No. 040769. That is the ballot question, which hopefully will not generate the reaction that the last ballot question generated. It is very short. I think it's very straight-forward. The issue here is, this bill needs to be amended for the date of the election and changed from May 17, 2005 to May 16, 2006. So there is one change in Section 1 and there is one change in Section 4. I would --
I can do that. So that's that. There's a proposed amendment to Bill No. 050014. That is the bill for electronic filing. All of the amendments are on . It incorporates a variety of suggestions that are of concern to the Administration. It adds filings that are 121 11/16/05 - LAW - BILL 040769, ETC. required related to the Secretary of the Commonwealth. Sometimes there are required filings of the City Commissioner. Sometimes there are required filings at the Secretary of the Commonwealth. For flexibility purposes, with regard to the usefulness or user-friendliness, rather, of the information, in Section 2 there is a broader statement that allows the Board to determine other means by which the information can be made user-friendly. In Section 3, the word "treasurers" needed to be added twice, and in Section 2, to address the issue of originally this bill would not have gone into effect until a Board of Ethics was created under the Home Rule Charter. The amendment is to make the bill effective immediately and until such time as a Board of Ethics were to be created, the duties under this bill will be carried out by the Department of Records. 122 11/16/05 - LAW - BILL 040769, ETC. Bill 050613 is the bill related to financial assistance. There are reporting requirements that were the subject of Bill 040772-AA. Similar reporting requirements are inserted into this bill for consistency purposes on , the same on , and there is a period after which financial assistance would have been received where the recipient would have to make ongoing disclosures of campaign contributions and would have to stay within the contribution limits so as to not violate the campaign contribution limits that were established in other legislation. Because of other issues of implementation that were raised, the effective date for this particular bill 20 is proposed to be changed from February 1, 2006 to July 1, 2006 in Section 2. In Bill 050123, the competitive bid contract bill, similar provisions with regard to reporting requirements that are consistent with the previously 123 11/16/05 - LAW - BILL 040769, ETC. passed bill, a change to create an exception for utilization of the cooperative procurement arrangements that was authorized in Section 8-200(4) of the Home Rule Charter, which was a relatively recent Charter change. Again, in addressing the concern of the Administration regarding implementation, the original February 1, 2006 date would be changed to July 1, and in order that there are again no 13 unintended consequences, it would only apply for contracts that have not been advertised for bid as of July 1, 2006. With regard to Bill 051024, the powers and duties of the Board of Ethics, an issue was raised with regard to Council's authority to direct an executive branch employee known as the Inspector General, and for that purpose, on , reference is deleted regarding the Board of Ethics directing the Inspector General to take certain actions. We believe the most the Board 124 11/16/05 - LAW - BILL 040769, ETC. can do is refer alleged violations to the Inspector General, and then what that person does with that information after that is in their discretion. There is consistency, clean-up language on related to competitive bid contracts which are covered by Chapter 17-1300 to ensure that the Board of Ethics has jurisdiction with regard to any violations of misrepresentation or omissions in disclosures, and also giving the Board responsibility with regard to failure to file information as required under Section 20-1006 related to campaign contributions and expenditures. Lastly, the Charter change for the Board of Ethics, which is Resolution 19 No. 040817, on the last page, there is a provision that ensures that not only ordinances related to ethics are enforced by the Board of Ethics but also any provisions of the Home Rule Charter. There is one other change. On , in accordance with the discussion 125 11/16/05 - LAW - BILL 040769, ETC.
that had taken place earlier, it is proposed that the Board of Ethics would, for the first two years of its existence, would have a guaranteed minimum budget of $1 million for the first two years and then subsequently utilizing language that's already in the Home Rule Charter regarding adequate funding for presently the City Controller's office, the Board of Ethics would have the same protection with regard to any failure to appropriately fund the Board of Ethics. They would have recourse to petition the Court of Common Pleas for a mandamus to require the funding that they believe necessary to carry out their duties. That is language that is copied from the Home Rule Charter for the City Controller's office to ensure funding and a certain level of independence. Those are all of the amendments, Mr. Chairman.
Is that a motion to move them? 126 11/16/05 - LAW - BILL 040769, ETC.
Would someone like to make a motion to move the amendments?
I would move that the amendments as read into the record with regard to Bill 040769, Bill 10 050014, 050613, Bill 051023, Bill 051024 and Resolution No. 040817 be adopted. (Duly seconded.)
There are none opposed. The amendments are adopted. The Chair recognizes Councilmember Nutter for a motion on Bill 25 040769. 127 11/16/05 - LAW - BILL 040769, ETC.
Thank you, Mr. Chairman. I move that Bill 040769 as amended be reported out of this Committee with a favorable recommendation and further recommendation that the rules of Council be suspended so as to permit first reading at our next session. (Duly seconded.)
There are none opposed. Bill No. 040767 as amended reported out of this Committee favorably and a request made for rules suspension to allow first reading at our next Council session. The Chair recognizes Councilman Nutter on the next bill.
Thank you, Mr. Chairman. I move that Bill 050014 as amended be reported out of this Committee with a favorable recommendation and a 128 11/16/05 - LAW - BILL 040769, ETC. further recommendation that the rules of Council be suspended so as to permit first reading at our next session. (Duly seconded.)
There are none opposed. 050014 as amended reported out of this Committee favorably and a request made for rules suspension to allow first reading at our next Council session. Please proceed.
Thank you, Mr. Chairman. I move that Bill 050613 as amended be reported out of this Committee with a favorable recommendation and a further recommendation that the rules of Council be suspended so as to permit first reading at our next session. (Duly seconded.)
Moved and 129 11/16/05 - LAW - BILL 040769, ETC. seconded. All in favor? (Aye.)
Hold it. One opposed. Councilman Goode is recorded as voting no. 11 Bill No. 050613 as amended reported out of this Committee favorably and a request made for rules suspension to allow first reading at our next Council session. Please proceed.
Thank you, Mr. Chairman. I move that Bill 051023 as amended be reported out of this Committee with a favorable recommendation and a further recommendation that the rules of Council be suspended so as to permit first reading at our next session. (Duly seconded.)
Moved and 130 11/16/05 - LAW - BILL 040769, ETC. seconded. All in favor? (Aye.)
Councilman Goode will be recorded as voting no. 10 Bill No. 051023 as amended reported out of this Committee favorably and a request made for rules suspension to allow for first reading at our next Council session. Please proceed.
Thank you, Mr. Chairman. I move that Bill 051024 as amended be reported out of this Committee with a favorable recommendation and a further recommendation that the rules of Council be suspended so as to permit first reading at our next session. (Duly seconded.)
Moved and seconded. 131 11/16/05 - LAW - BILL 040769, ETC. All in favor? (Aye.)
None. Bill 8 No. 051024 as amended reported out of this Committee favorably and a request made for rules suspension to allow for first reading at our next Council session. The final bill, please -- resolution.
Mr. Chairman, I move that Resolution No. 17 040817 as amended be reported out of this Committee with a favorable recommendation. (Duly seconded.)
There are 132 11/16/05 - LAW - BILL 040769, ETC. none opposed. Resolution No. 040817 as amended reported out of this Committee favorably. That concludes the business of the Law and Government Committee. I'd like to thank Councilman Nutter for all his hard work and the members' attention. Thank you very much.
Thank you all, members. (Committee on Law and Government adjourned at 4:10 p.m.) - - - 133 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on November 16, 2005, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)