Sitting25 48 1 down with the members of the Economic2 Opportunity Cabinet.3
Can you5 invite Mr. Kevin Dow to the witness6 table?7 Thank you, Councilman Jones.8
Good11 afternoon. I asked the question how many12 times has the office of EOE --13
Right.15 There you go. They change the acronym so16 much. Have they met with the cabinet?17
Right. On a formal18 basis, we've met -- the cabinet has met19 twice on a formal basis. We've met20 individually with a number of the cabinet21 members themselves. Certainly the22 Administration has been very involved in23 the activities of the Office of Economic24 Opportunity.25 49 1
So your2 office has met once with the Mayor's3 Economic Development Cabinet?4
All right.6 How many contracts have been put on the7 fast track based on the stimulus package8 and "shovel-ready" projects that are9 going to be in the next 120 days10 implemented in the City of Philadelphia?11
I would14 go -- and what would be the total dollar15 value of those contracts?16
In some situations,17 like you have Water and Streets18 Departments projects that are on one19 sheet. And I didn't have that20 information in in front of you, but I can21 get it back to you. But some of the22 aviation projects could approach a23 hundred million, and that could be five24 or six projects. But for Streets and25 50 1 Water, it's approximately 40, unless you2 have something different.3
You're4 close. And I'm saying to you that in the5 next 120 days, we are going to see the6 largest amount of construction we've7 probably seen in the past decade8 undertaken.9
You should11 be on speed dial with the Economic12 Development Cabinet, because this is13 going to move so fast that your 15-member14 staff will not have an opportunity to set15 itself to be able to take advantage of16 some of this. And so my point is that I17 question -- and I'm not trying to18 micromanage. I'm not in a position to do19 that. But there needs to be a higher20 priority and frequency of those kinds of21 interactions, because these22 opportunities, as we found out yesterday23 when we were presented the list of the24 stimulus money for the projects within25 51 1 our respective districts, it happens2 quickly, and if you're not in that3 communications loop, having sat where you4 sat, if you're not in the room, if you're5 not at the table, you don't have an6 availability of firms that can get the7 information in a timely fashion to be8 able to make preparations to make a bid.9 To make a bid, it takes hundreds of man10 hours sometimes, thousands of dollars11 just to submit a bid in a timely and12 professional fashion. So the quicker13 that information goes to a pool of14 minority and female firms, the more15 effective the amount of participation is.16 Second thing --17
Councilman, can I18 just say, there have been economic19 stimulus working group meetings comprised20 of various City departments.21
But just to3 highlight what Councilman Jones is4 saying, it's my understand that the5 Recovery funds are actually being6 organized to run through the Deputy7 Mayors.8
And the10 Economic Opportunity Cabinet is made up11 of Deputy Mayors?12
So in other17 words, all it takes is a connection18 between OEO and the Economic Opportunity19 Cabinet. And I would suggest that the20 next meeting probably should be strictly21 on the Recovery funds that are coming.22
And you should23 understand, Michael is about to go there24 with the projects that are coming down25 53 1 and the projects that you're talking2 about are primarily in there with federal3 money in it, are involved with the Deputy4 Mayor of Transportation and Aviation,5 Rina Cutler. We hold monthly meetings.6 We are involved with Michael's team7 there. So that's where we are very much8 involved and integrated into the process9 to make sure that the minority10 participation is being considered,as well11 as taking care of in that role.12
Thank you,13 Mr. Chairman.14 What is the number of minority15 and -- give me a number for certified16 minority and certified female17 contractors.18
I can get that. I19 don't have that right here, but I can get20 that for you.21
And you're talking24 about prime contractors or25 54 1 subcontractors?2
Contractors.3 Just certified. Not prime or sub, but4 just contractors.5
I can go into our6 database and I can get that information7 to you.8
Based on9 your study, what was the pool of minority10 contractors that you looked at and11 female? We should have that within the12 body of the study.13
But, Councilman14 Jones, it's not just contractors that are15 in our database. It's also professional16 services firms and other entities.17
Yeah. What2 is the number of minority contractors,3 female contractors, in the City of4 Philadelphia today that are certified?5
Certified. I can6 get that to you. I don't have that in7 front of me right now.8
About a13 third of them are women-owned businesses.14 So it's roughly 400.15
Okay. I mean, I16 would need to get you a definite, because17 I know you don't want me to speculate.18 So I'm going to go back to our directory19 and pull out the actual number of20 minority and women-owned contractors.21
The22 disparity study says it's 34 percent23 white female and the rest, 66 percent,24 minority, 45 percent African American, 1125 56 1 percent Asian American, eight percent2 Hispanic, two percent Native American.3
What is8 important, as we start to talk about the9 disparity, it is critical to understand10 the exact number based on what you11 anticipate by way of participation at the12 end of the day.13
You15 mentioned in your testimony that in some16 cases we are overutilized.17
I'm making a22 point here that says there's a direct23 correlation between the number of24 available firms to the number of firms25 57 1 that were financed by agencies like PCDC,2 like PIDC and their available access to3 capital which allows them to be eligible4 to bid on jobs.5
To get the7 things they need, like insurance,8 equipment and those things. There is a9 direct correlation between the two.10 These things aren't, as you even put on11 testimony, separate and distinct things.12 These are a part of a total puzzle.13 The solution lies within that14 kind of matrix of problems; therefore,15 solutions. You can directly correlate16 the amount of new firms that are coming17 into the pipeline -- that's a word that18 I've learned to use recently by way of19 being a freshman for housing projects.20 But the pipeline, if you build fun21 companies, then you won't have them22 available for work. And so the notion23 that PIDC or PCDC aren't directly related24 to your success at what you do, you guys25 58 1 need to be meeting -- how many times have2 you met as a collective between PIDC,3 PCDC, the Commerce Department, the4 Procurement Department and the Housing5 Director? How many times have you sat in6 a room with those individuals to talk7 about participation?8
Approximately four9 times. I will have been in the office10 about eight months, and the focus on11 specific projects, like the Verizon12 project, we coordinated with PIDC and13 PCDC, and then also my staff is involved14 with Commerce Department staff, PIDC15 staff, maybe not as much PCDC on the16 commercial and cultural corridor17 projects, and they're focused18 specifically on participation. Those19 meetings probably take place at least two20 to three times a month.21
Humbly22 submitted -- and I do mean this, because23 you have the toughest job in government.24 I know you do.25 59 1
No. But3 understand this, you need to not just4 meet in that body for project specifics.5 You need to take a step back at a time --6 and I know sometimes it comes at you fast7 and furious, but in a way to talk about8 strategic planning and not just project9 specific. Because there is a correlation10 again between the Finance Department, the11 Treasurer's Department and ability to pay12 for firms that participate. So there is13 a solution that can be designed based on14 the availability of capital in short-term15 working capital within those departments.16 So you guys need to be -- I always use17 this term -- solutionaries, not just18 reacting to putting out the fire or19 dealing with the immediate project. So20 my suggestion, humbly submitted once21 again, is that you as a working group22 kind of meet quarterly to set systems in23 place. Like, for example, you should be24 able to provide to this body a process25 60 1 evaluation review chart on how a2 contractor gets paid and where those3 systems are and how much time it takes in4 each department, so that we as a body can5 evaluate that and help you. But as we6 start to look at budget times -- and we7 know we're in tough budget times right8 now, but at some point, God willing, we9 will get some revenues in here and we'll10 be able to know how to apply them better11 based on what your needs are, what your12 needs are to accomplish your task. So my13 hope is that you guys kind of -- and14 women get together to try to put your15 arms around some of the solutions to the16 problems that are being brought up by17 Econsult by way of the pool of available18 firms to create that pipeline.19 Very quickly, and I'll pass20 this along. To what degree do you employ21 joint ventures by way of satisfying22 participation goals and how are they23 structured?24
Well, we don't25 61 1 employ joint ventures. We encourage2 joint ventures to be certified. And we3 haven't had any joint ventures4 certification applications recently, but5 we have not seen any on the projects6 that I had mentioned in my testimony that7 we selectively monitor.8
So we don't employ.10 That would be contractors that would hire11 joint ventures. And in terms of the12 report that we submitted, I have not seen13 evidence of joint ventures.14
I mean,15 joint ventures have their supporters and16 detractors, and I'm familiar with that.17
But by way19 of the ability to give capacity to a20 firm, if it's equitably monitored in a21 way that they benefit from it, it's22 probably your quickest way to achieve23 some of the goals by putting an outfit of24 office supply with another company, even25 62 1 though the outfit can be a prime on its2 own, but using that as an example is a3 quick way to solve some of your immediate4 goals, particularly as we start to look5 at construction projects like within the6 Water Department and being able to put7 small contractors with larger contractors8 to do some of the excavation, the9 backhoes and things like that.10 So my question becomes, I need11 to see a plan -- and I would ask that you12 submit that to our Chairman -- to talk13 about how we're not going to be talking14 about these same issues 12 months from15 now.16
No. I would19 like to see a holistic plan and maybe led20 by you, Mr. Dow, that pulls together all21 of these entities that are acting kind of22 independent of one another to come up23 with an economic development plan for24 inclusion that takes advantage of some of25 63 1 the -- and my former employer used to say2 he sees the analogy of having a quiver of3 arrows that he would use to use that to4 hit the target of participation. So if5 you view some of your economic6 development organizations as resources7 then to put them all in a room and8 strategically say how are we going to get9 from Point A and, as Councilwoman10 Reynolds Brown points out, Point B.11 Second thing in that plan is12 that that plan has to be communicated by13 department. She is absolutely right, and14 I saw the frustration in her face when15 department after department came up here16 and was not clear about what their17 responsibility to DBE and MBE18 participation was and wasn't clear about19 how to apply it and to what pool of20 contracts to do so. So there needs to be21 like an orientation for departments so22 that they are clear about what the23 expectation is of Councilwoman Reynolds24 Brown and this body for participation.25 64 1 So that next year -- I mean, I watched2 her and Chairman Goode use a great deal3 of restraint and patience with4 departments. I don't think that they5 will use that same restraint next year,6 because we're not new anymore.7
I heard the same8 testimony, and like I said, Kevin and I9 in our planning meetings had talked about10 the fact that we need to meet with City11 departments early on to talk about the12 goals, because, like I said, it galled me13 too, but it's like I'm not going to take14 any of this personally. I'm just going15 to go back and work on improving it.16 Because it is a shame, we're all City17 departments and we could go 12 months18 without even thinking about minority19 participation. That's not good.20
So we'll come back to21 you with a strategic plan in that regard,22 and we feel comfortable --23
We will have some2 sort of draft -- excuse me; not some sort3 of draft. We will have a draft to the4 Administration by June 30th.5
Thank you.6 Last question, requirements contracts7 start on the fiscal year?8
Yes. You have9 contracts that are being let throughout10 the year, but I look at January -- I mean11 July 1st as like the starting point for12 really implementing the changes that we13 have made at OEO and that we want to14 disseminate to the various departments.15
May I make,16 humbly submitted again -- and I leave it17 to you to implement, but your18 requirements contracts are your way that19 departments allow the status quo to exist20 year after year. Your evaluation of21 those requirements contracts, those big22 contracts, are a way to include more23 people in the process. So you need to24 get a department-by-department calendar25 66 1 of when those requirement contracts begin2 and are sunsetting and begin to work a3 plan around that.4 Thank you, Mr. Chairman.5
Yes. I8 know we are pressed for time. There's9 another hearing. We haven't spoken at10 all about the Convention Center, and I11 would be remiss not to get some feedback12 from the office in light of the fact that13 on a weekly basis we drive to City Hall14 and there's a weekly protest of African15 American construction workers. Where are16 we on that?17
I've only been to18 one oversight meeting on the Convention19 Center. I just haven't been able to make20 them, because, like I said, over the last21 couple of months, just getting my hand22 around understanding City departments, I23 haven't been there.24 I don't know. Kevin, have you25 67 1 been to any?2
And I would say, with3 all due respect, that's a state program4 and --5
Time out.6 We actually had a huge fight when the7 Convention Center officials and state8 officials came in here without an9 Economic Opportunity Plan, and we held it10 up, and then we were actually pushed to11 approve the legislation before it should12 have been approved, with the13 understanding that there was going to be14 a Mayor's Commission on Construction15 Industry Diversity. And that in addition16 to that, when that Executive Order was17 signed, there was also the creation of18 the Office of Economic Opportunity and19 the Economic Opportunity Cabinet.20 And so there definitely is a21 connection between what happened with the22 Convention Center and what needs to23 happen in terms of follow-up by local24 government. But the biggest issue is25 68 1 this: Even if we're not in charge and2 even if we don't control it, are we at3 least making sure that they follow4 provisions in the ordinance that say that5 we're supposed to get monthly reports?6 We're not getting monthly reports. And7 technically at the very least, the Office8 of Economic Opportunity should demand9 monthly reports. Because the other thing10 about it being, quote/unquote, a state11 project was that the bonds were supposed12 to be defeased and then it was supposed13 to become strictly a state project. That14 didn't happen because of the financial15 markets. So those bonds were never16 defeased. So right now we actually still17 have a piece of the Convention Center.18
We will request those19 monthly reports. And I do want to20 comment that we had the Mayor's Advisory21 Commission on Construction Industry22 Diversity. They met. They issued a23 report. We have that report. That's24 been submitted to Council and the other25 69 1 follow-up. As a result of those2 negotiations with their approval of the3 Convention Center was the creation of the4 Office of Opportunity Opportunity that5 has been created, as well as as the6 creation of the Economic Opportunity7 Cabinet.8
But if they9 think they don't even have to give us10 monthly reports, that's ridiculous.11
And we will advocate12 on your behalf to receive those reports.13
So, in16 other words, the Administration has not17 intervened despite the fact that on a18 weekly basis there are protesters out19 there? There has been no official20 interaction with the Administration about21 that?22
I can't answer the23 question. I don't have the -- I don't24 know. I'm not at liberty to answer the25 70 1 question of whether or not the2 Administration has intervened. I know3 that it has been a high priority, that4 has been on the radar screen. We too are5 concerned about the daily protests out6 there and the weekly shutdown --7
We are embarrassed as10 well. You should know that the11 Administration -- it is a high priority12 of the Administration. I know that we've13 had some conversations with the Mayor,14 with Clay, with all of those that are15 involved about those protests, about the16 participation. There's an oversight17 committee, which we do have involvement.18 The City has involvement on the oversight19 committee. There's persons from the City20 who participate there. So there is21 involvement. There is some interaction,22 and the Administration is very much23 involved there.24
I think25 71 1 it's important that if -- because I'm2 assuming, knowing this Administration,3 that there has been something done and4 that that should be articulated to folks.5 Because there's an appearance that6 without a public statement or something,7 that we're just sitting back.8 And going back to Councilman9 Goode's point, there was a lot of10 frustration and hostility around11 accepting the legislation and passing it12 in light of the fact that we had a number13 of votes not to do it, and we worked with14 the Administration, with the15 understanding that not only will the16 Diversity Board issue plan, but that17 there would be some action.18 So I'm very concerned that we19 are probably halfway through the20 completion of that project and that we're21 not aware of what their numbers look like22 or what the projected numbers are going23 to look like and that in the next year24 we're faced with a public outcry of, Here25 72 1 we go again.2 So I think we need to be3 prepared for that in light of the fact4 that we're having the discussion. It5 would be good if we could get officially6 some word from the Administration about7 where we are with that.8 I'll leave it with this,9 because I know we talked about the10 outreach plan. As soon as the11 Administration approves this Econsult, I12 am going to assume -- and, if not, I want13 to put it on the record -- that I'd like14 to see what the outreach plan is going to15 be with departments, vendors and16 potential certification for OEO, and I17 don't want to wait until September to get18 that. I'd like to be -- I think there's19 a series of monthly events and activities20 where we could infuse some of this if it21 is a high priority. So I'd like to get22 that before September so that we don't23 have to have a discussion in a formal24 hearing, but that we know what are our25 73 1 next steps. I know people have worked2 very hard for that Econsult report, and I3 think it's a great first step, but,4 again, if we're not doing action steps in5 the next three or four months, we're6 going to be in a situation where budget7 year 2011 we're still talking about8 aspirational goals. And, quite frankly,9 I'm a little frustrated with the role10 we're setting aspirational goals and we11 don't see the needle, as my Council12 colleague uses. We don't see the needle13 moving.14 Thank you.15
I would18 simply like to underscore how important19 it is for us to actually work together on20 sending a message to the Convention21 Center that what's happening over there22 is not acceptable. I mean, Councilman23 Goode only touched on how very24 deliberative we were in reading every25 74 1 single piece of word that they sent over2 to us around this issue. And even the3 appearance of benign neglect is4 unacceptable.5 So given that we are disturbed6 and irritated by what we see, this may be7 an opportunity for the Administration and8 us to work together to send a clear,9 clear message that it needs to be fixed.10 So that's my comment on the Convention11 Center.12 On the preparation for 2011,13 it's going to be important to us that OEO14 is not viewed as the agency that didn't15 get it right. That was the appearance in16 budget hearings. I was disturbed by17 that, as Councilman Jones indicated,18 because OEO wasn't hear to defend19 themselves with the progress to say --20 because ultimately we want to know who21 ultimately do you hold responsible for22 not achieving goals, and everybody said23 OEO. No one said, Well, really my24 department and OEO.25 75 1 So as we anticipate your2 testimony next year, do what you can to3 make it clear and make it plain, we've4 done our part, the leadership on this5 issue, and department heads,6 commissioners, need to do their part.7 Because ultimately we're going to listen8 to what they say, but then we're going to9 watch what they do, and what they do will10 be reflected in those numbers. Thank you11 very much.12 Thank you, Mr. Chairman.13
Lastly,16 before we adjourn, do we have numbers yet17 in terms of the goals for18 Philadelphia-based DBEs or non-profit19 contracts?20
You want us to get21 that, right? We need to get that back to22 you.23
If you don't24 have the goal for Philadelphia-based DBEs25 76 1 or non-profit contracts, just forward it2 as soon as you have it through the Chair3 and I'll forward it to the Committee.4
I'll6 actually ask that question for the7 record. There is going to be a separate8 OEO report in terms of what happened9 during the last fiscal year? I mean,10 normally there's a disparity study with11 goals within it, but there's also12 reporting that OEO does separately on13 contracting?14
Now, what is it that15 you want? This is the end of my first --16
MBEC used to17 issue an annual report in terms of what18 has been accomplished over the year. So19 in addition to the disparity study, which20 is required under the Charter, there also21 was a report that's issued by MBEC and22 now OEO in terms of -- like to some23 extent the information is contained24 within the disparity study in terms of25 77 1 utilization, but usually there's a formal2 report that actually gives the final3 numbers on what happened for --4
So essentially an5 annual report for the last year's6 activities. We will provide that.7
That's it.12 Thank you very much.13 Is there anyone else to testify14 on this resolution?15 Please come forward.16
You're19 welcome.20 (Witness approached witness21 table.)22
Good23 afternoon. Please state your name for24 the record.25 78 1
Yes. Clarice2 Williams.3 I have in my hand that I was4 given from leadership from Charlotte,5 North Carolina a 65-year plan in which6 the budget from now to 65 years.7 I'm running for City Council8 At-Large 2011. My proposal is that9 instead of waiting in such terms,10 everything is already mapped out for each11 stockholder --12
Excuse me,13 ma'am. Are you here to testify on the14 annual participation goals?15
Yes, I am. What16 I am proposing is, I've been listening to17 what is being said, and since I do have18 the key in my possession now, I'm ready19 to share it with the panel, if you want20 to see it. If you don't, that's up to21 you.22 Now, I've heard what the Mayor23 and everyone else is saying about all the24 stockholders and the budget --25 79 1
Two things.6 Could you first state your name for the7 record.8
Clarice9 Williams. I was sent by the White House10 also --11
Excuse me,12 ma'am. Have you read a copy of the13 resolution?14
I have sat into15 session and I have read some of it, but,16 like I said, I hold the key right here17 from this year on up to 65 years from18 now.19
I will be20 glad to review those documents if you can21 send them to me. We actually have22 another hearing scheduled that was23 supposed to start at 2 o'clock and I need24 to adjourn this hearing at this time. Is25 80 1 that fine?2
This hearing6 is recessed to the call of the Chair.7 (Committee on Commerce and8 Economic Development recessed at 2:309 p.m.)10 - - -11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 81 1 CERTIFICATE2 I HEREBY CERTIFY that the3 proceedings, evidence and objections are4 contained fully and accurately in the5 stenographic notes taken by me upon the6 foregoing matter on June 4, 2009, and that7 this is a true and correct transcript of same.8 9 10 11 12 13 ______________________________14 MICHELE L. MURPHY15 RPR-Notary Public16 17 18 (The foregoing certification of this19 transcript does not apply to any reproduction20 of the same by any means, unless under the21 direct control and/or supervision of the22 certifying reporter.)23 24 25