COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, 9/20/00 10:20 a.m. - - - BILL 000535 - An ordinance authorizing the creation of a loan, or loans, to provide funds for and towards various capital municipal purposes; authorizing the Mayor, City Controller, and City Solicitor, or a majority of them, to sell bonds at public and private negotiated sale; setting forth the capital purposes and the amounts for which the proceeds of the loan, or loans, will be expended. PRESENT: COUNCIL PRESIDENT ANNA C. VERNA, Chair COUNCILWOMAN JANNIE BLACKWELL, Vice Chair COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK J. DICICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN RICHARD T. MARIANO COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 9/20/00 WHOLE COMMITTEE - BILL 000535 I N D E X Folasade Olanipekun, City Treasurer. . . . . . 3 Joyce Wilkerson, Mayor's Chief of Staff. . . . 9 Richard Tustin, Acting Director. . . . . . . . 11 Capital Program Office William Hankowsky, President, PIDC . . . . . . 20 Linda Berkowitz, City Budget Director. . . . . 46 Greg Grillone, Stadium Director. . . . . . . . 57 Paul Rucci, Esq., City Solicitor's Office. . . 113 3 9/20/00 WHOLE COMMITTTEE - BILL 000535 P R O C E E D I N G S
The Committee of the Whole is recessed until a.m. 5 - - - 6
Good morning, 7 everyone. This is the public hearing of the 8 Committee of the Whole. Today, we are considering 9 Bill No. 000535. I would ask Mr. McPherson to 10 please read the title of the bill.
Bill No. 535, an ordinance authorizing the creation of a loan, or loans, to provide funds for and towards various capital municipal purposes; authorizing the Mayor, City Controller, and City Solicitor, or a majority of them, to sell bonds at public and private negotiated sale; setting forth the capital purposes and the amounts for which the proceeds of the loan, or loans, will be expended. (Witnesses come forward.)
Good morning. Kindly identify yourself for the record and proceed with your testimony.
Good morning, members of City Council. My name is Folasade Olanipekun, 4 9/20/00 WHOLE COMMITTTEE - BILL 000535 and I serve as the treasurer of the City of Philadelphia. With me this morning is Linda Berkowitz, Budget Director and other members of the Finance Department. I'm here today to testify in support of Bill No. 535, which was introduced on September 14, 2000. The City currently lacks sufficient authority to issue certain general obligation bonds that are necessary to finance the $162,135,000 local tax supported portion of the proposed Fiscal Year 2001 capital budget. The loan authorization, if approved, would finance capital projects classified for the following purposes and in the following aggregate amounts: 1. Transit, in the amount of $5,262,000. 2. Streets and Sanitation, in the amount of $17,114,000. 3. Municipal Buildings, in the amount of $93,649,000. 4. Parks, Recreation & Museums, in the amount of $25,267,000. And 5. Economic and Community Development in the amount of $20,843,000. 5 9/20/00 WHOLE COMMITTTEE - BILL 000535 Of the $162,135,000 local tax supported portion of the proposed Fiscal Year 2001 capital budget, $40 million was originally designated to make certain repairs to the City-owned Veterans Stadium, as demonstrated in the recently produced Ewing Cole Cherry Brott Engineering report. The City has determined that funding of the $40 million would best accomplished by issuing debt through the Philadelphia Authority for Industrial Development ("PAID"). Funding of this debt through PAID would permit to City to facilitate certain immediate and necessary repairs to the Veterans Stadium. Also, funding through PAID would preserve the City's remaining capacity under its constitutionally set debt limits. There is a potential timing issue with respect to issuing debt through PAID. In the event financing is not facilitated through PAID, the Administration will have to finance the Veterans Stadium's repairs through general obligation debt, as approved by the electorate. As such, this is the reason behind including the original source of the Veterans Stadium financing and the $162,135,000 authorization request. 6 9/20/00 WHOLE COMMITTTEE - BILL 000535 Should City Council approve this Bill 3 No. 000535, a subsequent request will be made to City Council to amend this loan authorization to reduce the original amount of the authorization from $162,135,000 to $122,135,000 and, in effect, extinguish the $40 million that of the originally requested local tax supported portion of the proposed Fiscal Year 2001 capital budget. To do this, the Administration would return to City Council and introduce an ordinance 12 with requesting amendment of this Bill No. 535. Bill No. 535 would have Section 1 reduced by $40 million, Section 2 reduced by $40 million under the category of Municipal School Buildings, and Section 6 reduced by $40 million. Notwithstanding the requests being placed on the ballot and any subsequent approval from the electorate, the amendment would permit the City to issue only $122,135,000 in tax supported general obligation debt. The electorate approved the City's last loan authorization in 1997 in the amount of $121,956,000. State law permits the City to increase its borrowing authority by placing a 7 9/20/00 WHOLE COMMITTTEE - BILL 000535 question for the electorate during an election. To place this loan authorization question on the ballot, the Administration must obtain City Council approval, with such approval being in the form of an ordinance. Passage of such ordinance 7 requires the affirmative vote of at least two-thirds of the members of Council. City Council's approval of this proposed bill would permit the City to place the loan authorization question on the Tuesday, November 7, 2000 General Election Day ballot. The ballot question seeks to obtain electorate approval to increase the City of Philadelphia's indebtedness in the sum of $162,135,000.
Enactment of this bill and the subsequent approval of the November general ballot question by the electorate of the City of Philadelphia would permit the City to implement the Fiscal Year 2001 capital program in a timely manner. Without approval of additional authorization to the City, there could be disruption of the capital program and related City services. In order to have the ballot question placed on the November 7, 2000 General Election 8 9/20/00 WHOLE COMMITTTEE - BILL 000535 Day ballot, it is critical that this bill be enacted by City Council as soon as possible, or no 4 later than October 5, 2000. If the bill is not enacted by this date, the City will be unable to legally advertise it and print the ballot question in time for the November 7, 2000 election. To facilitate the passage of this bill, we respectfully request a suspension of the rules. Finally, I have attached as part of my testimony the proposed ballot question requesting an increase in indebtedness from the electorate of the City of Philadelphia. This concludes my written testimony, and I'm happy to answer any questions you may have at this time.
For the record, would you mind reading what the ballot questions is.
Yes. The ballot question: "Should the City of Philadelphia borrow $162,135,000 for and towards Transit, Streets and Sanitation, Municipal Buildings, Parks, Recreation & Museums, and Economic & 9 9/20/00 WHOLE COMMITTTEE - BILL 000535 Community Development?"
Thank you. Miss Wilkerson, did you want to add anything?
Yes. My name is Joyce Wilkerson. I'm Chief of Staff to the Mayor. Earlier this week, the Administration has passed out to City Council a draft assessment report that analyzes the conditions at the Vets Stadium. What I want to do is make clear that this is simply a planning document. Last spring, Council adopted Bill 82, which anticipates the Administration coming back to City Council with a detailed list of repairs that have been negotiated with the teams in the event there are no new stadiums to be constructed and the City has to undertake the long-term renovation of the Vet. That will be a different submission that is made to City Council. That is not intent of the document that was disseminated to City Council this week. This is simply a planning document. It enables us to think about the kinds of decisions we have to make if we have to undertake the 10 9/20/00 WHOLE COMMITTTEE - BILL 000535 long-term repair. It enables us to think through the kinds of issues we'll encounter if we're in the Vet for a shorter period of time. As I said, we will return to City Council later in the fall once we've had the opportunity to negotiate with the teams the specific repairs that need to be made. If you're interested, I would like to have Rick Tustin come up -- he's from our Capital Program Office -- and give an overview of the kind of repairs that we think will probably need to be made at the Vets Stadium over a long-term period over the next ten years if in fact that is to remain open, and that is what we're seeking authorization for, in the event we don't have actual deals with the stadium.
I think it would be appropriate to hear that testimony now. (Witness comes forward.)
My name is Richard Tustin. 11 9/20/00 WHOLE COMMITTTEE - BILL 000535 I am the Acting Director for the City's Capital Program Office. I've written down some notes as a result of our briefing yesterday. This is not formal testimony per say, but it -- I just wanted to use it as part of my briefing. On July the 10th, we were asked to proceed with the facility assessment of Veterans Stadium. We commissioned the engineering firm of Ewing Cole Cherry Brott to perform the assessment because of their past involvement with the City, the Phillies, and the Eagles on projects at the stadium. In the short time required in order to complete the assessment, the draft report, which was distributed to Council two days is a result of that assessment. Before I present an overview of the report, I'd like to stress the fact that this is a draft document and it's still being reviewed by the teams as well as our office and the Administration. In addition, it should be understood that the cost of the items contained in the report are on an order-of-magnitude basis, which, in some 12 9/20/00 WHOLE COMMITTTEE - BILL 000535 cases, are based on replacement of building systems because they are near the end of their useful life. At this point in time, we'll review this report as a working tool and that the individual construction bid packages will be thoroughly evaluated during the design phase in order to provide only that level of restoration required to keep the facility in a safe and good operating condition through the term of the teams' lease. The report is broken down into the following sections: It includes an introduction and executive summary in the beginning; an architectural and general facilities section; a structural systems section; mechanical systems; electrical systems; fire protection systems; capital requirements, which are the costs estimates on a line-item basis; and schedules. Some of the major renovation work listed in the report includes: removal and replacement of the entire metal roofing down to the structural deck; and selective replacement of steel angles and girders, gutters, capital 13 9/20/00 WHOLE COMMITTTEE - BILL 000535 braiding, and soffet panels; selected restoration of precast concrete panels and columns where cracking and (inaudible) has occurred; re-coating of the waterproof system on the seating (unintelligible) and expansion joints; repairs to (inaudible) and scaling concrete surfaces; replacement of the telescopic seats and railings; replacement of all 700-level fire sand pipe system valves; replacement of all 700-level fire alarm speakers and strobe lights; replacement of the field turf; replacement of selected electrical substations, panel boards, feeders, and emergency generators; replacement of heating boilers and and their associated balance controls and circulating pumps; replacement of selected sections of heating piping on the 500 and 700-levels; selected replacement of the HVAC unit and duct pre-heat coils; addition of ADA toilets on the 300-level; and general repairs to all bathroom toilet partitions, doors, and hardware; replacement or refurbishing of the elevators --
Excuse me, excuse 14 9/20/00 WHOLE COMMITTTEE - BILL 000535 me.
Thank you, Madam Chair. I may have missed the gentleman's opening statement. It is very difficult to either follow what he is talking about or understand the context of what this testimony is about. What is -- what is he talking about?
The reason we're providing this testimony is just to provide some background information that underpins our requests to, you know, to seek funding for the renovation of the Vet. It's more an informational item. We understand that we will have to return to City Council with a specific list of repairs, having negotiated that with the teams, but there has been a lot of interest generated about what's going on at the Vet, what needs to be done, and we just wanted to give some kind of 15 9/20/00 WHOLE COMMITTTEE - BILL 000535 overview of that. In the coming weeks, as I said, we'll be negotiating specifically and hope to return to Council with something more specific.
No, I understand that. I mean, as he was reading through whatever it is that he's reading through, which I don't have a copy of, it sounded like he was reading from, you know, one of the exhibits in the report. I didn't understand what the point was.
I think what he has pulled out of the report -- what I have asked him to do is to extract from the report the highlights of it that begin to identify in a descriptive way the kinds of repairs that will need to be made at the Vets Stadium. These are some of the items that will be funded out of both the first part and second part of the financing that ultimately will have to be put in the place in the event the City undertakes to renovate the Vet and keep the property operational for the next ten years.
When you talk about the first part and second part, it's with the anticipation of 40 now -- 16 9/20/00 WHOLE COMMITTTEE - BILL 000535
Councilman Kenney, did you want to be recognized?
Madam Chair, I have questions when the testimony is completed.
Again, it should be noted that the costs outlined in the report were based on the need to operate the facility for at least ten more years, or through the term of our lease, the present lease. The construction schedule shown in the report is based on the work being completed without interference to the team game schedules. Within the last week, we've asked our design firm, Ewing Cole Cherry Brott, to reevaluate the costs based on a five-year period and to identify those items which require immediate attention. This information was 17 9/20/00 WHOLE COMMITTTEE - BILL 000535 distributed yesterday at Council's briefing. Lastly, I think it's important to stress the importance of ongoing maintenance at the facility. It is recommended that a minimum of $1.6 million be set aside so that the kind of deterioration and repairs that we see now will not repeat themselves in the future. Thank you very much.
Thank you. Councilwoman Tasco, did you want to be recognized?
Okay. Can we have the City Treasurer come back to the witness table, please. (City Treasurer returns to witness table.)
Can you tell us what the City's current debt-incurring capacity is?
Currently, the remaining available capacity is $342 million.
What will the remaining balance be if the voters approve the 18 9/20/00 WHOLE COMMITTTEE - BILL 000535 proposed ballot question?
In your testimony, you indicate that the Administration will ultimately use PAID to finance Veterans Stadium repairs. Why are you including the $40 million in the proposed ballot question?
In the event that the Administration is unable to secure financing through PAID, we would still need to perform the repairs and improvements to the Veterans Stadium notwithstanding. And we don't want -- the Administration does not want to be in the position whereby it removes -- or does not include the $40 million, is unable to secure financing through PAID, and then has in effect an inability to fund the repairs and improvements to the Veterans Stadium.
For the record, can you tell us what the deadline is for the adoption of the PAID Vets Stadium ordinances? And when do you anticipate submission of the PAID Vets Stadium ordinances to City Council?
Madam President? 19 9/20/00 WHOLE COMMITTTEE - BILL 000535
If I might answer that. We would seek to introduce that legislation later this spring and have it -- I'm sorry, later this fall, in order to have it adopted finally before November 30th. It would be at that time that we would be returning to City Council with something more itemized that identifies -- you know, having resulted from the negotiations with the team, spelling out specifically the kind of repairs that had to be made, and there would be costs associated with them.
The Administration requested that City Council approve legislation that requires the City to undertake additional financial commitments of approximately $103 million if new stadium financing ordinances are not approved by November 30th. Do we have any guarantees that the Eagles will use the practice facility in the event we do not proceed with the new stadiums? 20 9/20/00 WHOLE COMMITTTEE - BILL 000535
I'm going to ask Bill 3 Hankowsky to come up and address that question.
Madam President, I'm Bill Hankowsky, President of the Philadelphia Industrial Development Corporation. I think, as you might recall, in the spring, this issue was discussed at some length, both in these chambers and in other venues. The final decision that's, I think, embodied in the legislation was that should we need to exercise our obligation to buy it, that PAID would buy it. There's a lease in place between PAID and the Eagles, which currently allows them to construct on the site, as they are. That lease provides for them one of two eventualities: Either the Eagles could elect to negotiate with the City a new lease, because, as you recall, there was concerns about what would the rent be, who might have the naming rights, there were a bunch of issues that people weren't comfortable agreeing to in the spring. So we would need to negotiate a new lease that could 21 9/20/00 WHOLE COMMITTTEE - BILL 000535 provide for the, quote, long-term occupancy of that facility by the Eagles, and it would have to be agreed to, obviously, by the Eagles requires by the City and requires, I believe, by resolution, though it might be by ordinance, I'm -- that I'm not exactly sure of. Then it would come back to this chamber for approval. In the eventuality that that did not occur, that we were not able to do that, then the Eagles could remain there, I believe, for 12 months -- I'm doing this slightly by recollection, 13 I think I'm right, for 18 months -- and then could 14 leave under the terms of the current lease. 15
Can anyone up 16 there tell us what is the Administration's 17 position on new stadiums once the November 30th 18 deadline has come and gone and the City is then required to spend $103 million?
The City is committed to developing or to pursuing the development of two new stadiums. As you know, there are no 23 current negotiations ongoing. The Administration is focused on concluding the contact negotiations with the Federation of Teachers. We also have an 22 9/20/00 WHOLE COMMITTTEE - BILL 000535 arbitration outstanding with our firefighters. Until the negotiations with the PFT in particular is concluded, we're not going to be entering into -- or continuing on with the negotiations with the teams. It's our expectation that we are -- our goal to have successful negotiations concluded with the teams. It's our goal to meet in some capacity the November 30th deadline with the teams.
Thank you, Madam Chair. Ms. Wilkerson, in the five-year plan that was presented by the Mayor and passed by Council on January 25th -- presented by the Mayor on January 25th, on , under "Economic Development," the last sentence reads: "The City intends to use revenues from the proposed increase in the rental car tax to either fund the acquisition of the practice facility and some of the repairs to Veterans Stadium, or for debt service related to the possible construction of 23 9/20/00 WHOLE COMMITTTEE - BILL 000535 new stadiums. This agreement ensures the Eagles' continued presence in Philadelphia without adversely affecting the City's General Fund." On June 12th and June 13th, two letters were sent to the Mayor, one from Hank Salvatore and Joe Loper, the Majority Leader of the Senate, and one from Matt Ryan, the Speaker of the House, and John Perzel, the Majority Leader of the House of Representatives. The Salvatore letter reads in the first paragraph, "This tax" (talking about the rental car tax) "was authorized to help the City of Philadelphia to build new stadiums and for no 15 other purpose." The Ryan-Perzel letter reads in part, "This letter is to remind all concerned that the General Assembly authorized this tax at the explicit request of the City of Philadelphia, the Philadelphia Phillies, and the Philadelphia Eagles, with the understanding that the proceeds would be used for new stadiums. Any intent now to divert these revenues to other purposes, including the reconstruction of Veterans Stadium or the buy-back of the Eagles practice facility, would, 24 9/20/00 WHOLE COMMITTTEE - BILL 000535 in our view, constitute a breach of faith and could result in the repeal of the tax." Has there been any indication or plan on the part of the Administration to use car rental tax monies to do renovations to the Vet and/or to purchase back the Eagles practice facility in light of the fact that the November 30th deadline might not be met, and we would be statutorily required to do both things, both buy back the practice facility and begin to spend $80 million for Veterans Stadium? Is there any concern -- first of all, is there any plan to use the car rental tax for that purpose and is there any concern about its repeal?.
There is no plan to use the proceeds of the rental car tax for the renovation of the Vet -- I know of no specific. I believe that there is nothing that constrains the use of the rental tax proceeds for things other than the construction of the new stadiums, although I'd have to get the City Solicitor's opinion on that. It is our plan to construct new 25 9/20/00 WHOLE COMMITTTEE - BILL 000535 stadiums and we -- it's our intention to use the rental car proceeds in connection with that transaction. I can, you know, get specific opinions from the City Solicitor. I don't have that detailed information right now.
I can't understand the answer totally. Is there a plan to potentially purchase the Eagles -- the remaining value of the Eagles practice facility post November 30th by using any of the proceeds of the car rental tax?
I think, Councilman, as you recall, in the spring, material was prepared and -- hope I'm doing this right -- and transmitted to Council, City Council. There were, in fact, briefing books that were done where we did look at the value of the car rental tax and showed Council that that tax could cover the debt service that we would then incur should we buy the facility for the $23 million. It also looked at how much of this, again, potential up to $80 million number could get covered to provide Council with that information. So that -- and, again, I'm not an 9/20/00 WHOLE COMMITTTEE - BILL 000535 attorney either, so I would again defer to, as Miss Wilkerson said. But I believe that legislation provided that the rental car tax could be dedicated to any capital project; It doesn't use the word "stadium." I appreciate that the spirit of it at the time in the legislature was a tool to enable us to build new stadiums, I don't dispute that. But the mechanics are there, and, as has been stated, I mean, obviously, the intent is to build new stadiums and use it for that.
But we did analyze what would it mean if we had to use it for this default scenario.
Well, the default scenario is clearly opposed by four prominent members of the State Senate and the State House, who have clearly indicated that they would repeal the tax in the event that any effort is made to divert that money than for any other purpose other than the construction of two new sports facilities. I mean, so there is some -- there's 27 9/20/00 WHOLE COMMITTTEE - BILL 000535 been some planning, according to your testimony, in the doomsday scenario, that we use some of the proceeds to defray the cost of the re-purchase of the practice facility. There's at least been some planning or thought to it.
Yeah. But, again, only for clarity and to be responsive, that planning was aired publicly in this forum, in this Council chamber, when we presented that scenario in the spring. I'm not saying that anybody -- we simply said, That's an alternative, here's how it could look. We have gone no further in --
-- that it was not expanded upon publicly. What I'm saying is, in light of the fact that these letters from June indicate very clear that that revenue stream or source will not be available in the event we try to divert it for any other purpose other than to construct new sports facilities, what does that do to the impact of the General Fund on the potential purchase of the practice facility and the 28 9/20/00 WHOLE COMMITTTEE - BILL 000535 $80 million that needs to be put into the Vet, at least $80 million, what does that -- how does that impact the General Fund if there was some plan to utilize a portion of the rental tax or all of it to defer those costs?
I am not familiar with those letters. I do not know whether or not the tax can be appropriately spent, whether or not the tax is repealed becomes a political issue. We'll develop alternative scenarios; I don't have those available right now. But, clearly, we have an obligation to fund the repairs of the Vet. It will either be done out of the bond proceeds from the GO issue or through PAID, in which case we would have to pledge, you know, a source of revenue if the rental car tax is not available, you know, or if, you know, we wouldn't be using that and would have to find --
But there is a -- there's a potential impact on the General Fund: In the worst-case scenario, re-purchase of the practice facility and repairs to the Vet in lieu of this, I guess, threat or promise or both of the 29 9/20/00 WHOLE COMMITTTEE - BILL 000535 repeal of the car rental tax.
That's right. If those revenues aren't available, you know, of course, we have to find other revenues, and the most likely source would be (unintelligible) out of current revenues in the General Fund.
Let me ask you a question about the renovations to the Vet as it relates to the Cole Ewing study and this $80 million that may, as of November 30th approaches, be required for us to spend.
I understand that the $80 million is really a kind of a spit in the ocean to the concern and the problems that are related to Veterans Stadium and its infrastructure and esthetics and other problems. What do you think, or has there been any analysis as to what it would cost to maintain and improve and continue to maintain the Vet after the $80 million is expended over the course of the 10-year life expansion, which is what is estimated to be, after the 80, it's estimated that 10 years more of life is there at the Vets Stadium? What 30 9/20/00 WHOLE COMMITTTEE - BILL 000535 additional cost, besides the 80, would be incurred on an annual basis, and what would the aggregate cost of the 10-year period be, $80 million, plus what's necessary over the next years to keep 6 the facility safe and clean and attractive, 7 relatively attractive? 8 I mean, it's just not the $80 million; 9 am I correct. 10
Well, that's right. I mean, it has been recommended that we spend approximately $16 million in preventative maintenance on the building, once we've made the investment of $80 million, in order not to have the building deteriorate the same way it's deteriorated currently. I think your question had a second set of -- you know, a second set of questions: What would it take to bring the amenity level of that stadium up to a higher level if we were to use it beyond a 10-year period anticipated in the current lease? I don't have the amenity level questions. I know there have been previous reports that evaluated the feasibility of staying in the Vet and using that as the professional team 31 9/20/00 WHOLE COMMITTTEE - BILL 000535 facility moving forward. I don't have those numbers right now; I can make them available.
With the lack of those numbers, I do admit -- I do ask, is it safe to say that after the $80 million in the doomsday -- the worst-case scenario, the $80 million is appropriated and put into the Vet, another $60 million would be required to keep it at a minium standard over the course of 10 years, is that $140 million over 10 years?
No. I think what the recommendation in the Cole Ewing is $16 million, not $60 million.
That's right. It's approximately $1.6 million annually of preventive maintenance.
So that would be 90 -- 90-something -- $100 million over 10 years, as opposed to -- it's really not $80 million, it's actually more than $80 million.
If we move towards the 10-year extension of the life of the Vet, it's 32 9/20/00 WHOLE COMMITTTEE - BILL 000535 not simply the $80 million agreed to.
There is an additional sum of money that's going to be needed to be put into that building over the next decade in order to keep it minimally safe.
And could it be -- would it be possible to obtain that number? And will there be other things that the teams, I expect, will be asking for?
One of the things that we'll be coming back with before the end of November is the detailed breakdown. The report provides a fairly comprehensive assessment of the conditions in the building. It is not the result of negotiations with the teams, the kind of negotiations that are anticipated in the -- in Bill 82. And when we come back in November, there will be that fuller description of exactly, you would, what would have to happen if there are any additional amenities and what they might be, what the specific costs are, and we will have a better idea of what the associated preventive maintenance 33 9/20/00 WHOLE COMMITTTEE - BILL 000535 costs might be.
I know I've gone long, but just one final question. I understand the Administration's position vis-a-vis the teachers' contract and the firefighters' arbitration that's outstanding. Though that crunch time with those two issues just really happened recently, what was the reason why there was no discussions from January, February, March, April, May into the -- at least during the course of the summer, absolutely no discussion, as far as I understand, unless I am misinformed, with the teams and PIDC or the Administration relative to new stadium locations and infrastructure?
I'll be able to partially respond. Just for the record, there were a series of discussions. As you recall, when the Mayor announced the site selection, he simultaneously appointed a negotiating committee of public and private -- private citizens and public officials, and there were a series of 34 9/20/00 WHOLE COMMITTTEE - BILL 000535 discussions with the teams that ran through July -- I'd have to check exactly when, but I do know we had conversations after the 4th. And then to the degree we were unable to make further progress at that point and, I guess, the beginning at that point of -- we also had just some raw scheduling issues. I think, if you recall, we had a Republican Convention and then we had the Democratic Convention, so we actually had people not around a lot. But notwithstanding that, the decision was made to simply suspend those further discussions and focus on the teacher contract. But I just want to -- for the record, there were a series of discussions and dialogues and fairly intense discussions that ran through at least, I'd say, roughly mid-July something.
That means your position is that the RNC and the DNC --
I'm simply saying we about got to that date, and then in addition to people just not being around, so there was sort of 35 9/20/00 WHOLE COMMITTTEE - BILL 000535 a natural break. And at the time that you might have naturally come back to the table, the decision was made, Let's not come back to the table. That's all I'm saying. I just want to give a kind of chronological --
It's been rumored that -- and it's only a rumor -- that the committee established by the Mayor to discuss the -- examine the feasibility of 12th and Vine, as reported back sometime during the midsummer, that, in fact, 12th and Vine is not feasible and probably cannot work. Are you aware of any of those type the reports or meetings or discussions with the Administration?
I think it would be totally inappropriate, for myself at least, on behalf of that committee, to, you know, to characterize their sort of private discussions. I think it's fair to say and I think, as you know, Bill Rouse, who chaired that committee, at the point where we presented the cost of the site -- again, I'm losing track or chronology, but there we -- they went public with 36 9/20/00 WHOLE COMMITTTEE - BILL 000535 the costs and the fact that we had done a lot of technical analysis, you know, did say it was a viable a site, it's a site that could work. I think it is no surprise to people that the fundamental questions deal with financing.
You're welcome. The Chair recognizes Councilman Nutter.
Thank you, Madam Chair. I'd like to go back to the testimony with a couple questions. I have just a few hundred questions this morning, but I'd like to talk about the testimony first. On the first page, we are to assume that the $40 million for Veterans Stadium is Item No. 3, listed as "Municipal Buildings," $93,649,000, that's where the Veterans Stadium $40 million is?
And was there any 37 9/20/00 WHOLE COMMITTTEE - BILL 000535 particular reason that the Veterans Stadium specifically was not mentioned, that it was just kind of lumped in the general category of "Municipal Buildings," like a rec center or a library or a police station or fire station, something like that?
Historically, when we posit a question to the electorate, we don't provide a breakdown specifically as to line items for each of the buildings that are owned by the City. So when we say "municipal buildings," the Veterans Stadium is considered a municipal building since it is owned by the City of Philadelphia.
I understand. In previous questions, are you aware that we put upwards of $40 million in any municipal building at one time?
Okay. Are you aware as to whether or not in any previous ballot question upwards of percent of the borrowing 25 was going toward one particular item? 38 9/20/00 WHOLE COMMITTTEE - BILL 000535
I haven't had a chance to look at it, Councilman Nutter, so I couldn't answer that question. As to whether or not --
Oh, yeah, 40 million 12 is about 25 percent, but I don't know if 40 -- if 13 that was in -- comparable in prior ballot 14 questions. 15
Okay. On , 16 there's a sentence about which I have two 17 questions. It reads: "Although the City has 18 determined that funding of the $40 million would 19 be best accomplished by issuing debt through the 20 Pennsylvania Authority -- Philadelphia Authority 21 for Industrial Development ("PAID"), because it 22 will permit the City to preserve the City's 23 remaining capacity under it's constitutionally set 24 debt limit, there is a potential timing issue with 25 respect to issuing debt through PAID." 39 9/20/00 WHOLE COMMITTTEE - BILL 000535
My first question is, when was it determined by the City that this was the best route to go?
My understanding is that back in the spring, there was a general sense that this ought to be financed through PAID. There are questions about whether or not it can be accomplished through PAID. We didn't want to take any chance, and so we're asking that it be included in this authorization while we also put together the PAID financing strategy.
My recollection from the spring was that maybe it could be done, maybe it should be done, we could kind of take a look at it and see what was going on. I think that was back in early March. Have we learned anything from that time to this time as to whether or not it can be done? And what are the outstanding questions on that particular issue?
There has been some discussions about the structure of the PAID financing, and we've sort of -- the Administration 40 9/20/00 WHOLE COMMITTTEE - BILL 000535 has kind of come to an idea of how this would be facilitated. And so we believe that we can do this through the PAID financing. If you want, we could go into details about it, but it's very preliminary in terms of the structure of the financing. And I'm not sure if I've answered your question.
Have the outstanding questions been resolved? Is there a doubt in your mind as to whether, from a legal standpoint, this can be done?
We think that it can be done through PAID. We're trying to put together the transaction. Now -- the questions outstanding now tend to be tax kinds of questions, whether or not it can be a tax-exempt or a taxable issue. But we are -- you know, we're not positive yet, but we think it probably can be done through PAID. Until we're certain and have that in place, we want to continue on with this financing strategy. If there is no specific provision for 41 9/20/00 WHOLE COMMITTTEE - BILL 000535 renovating the Vet, the City still has a legal obligation to maintain the facility. And if one of these two mechanisms is not in place, then our default position is to finance it through the General Fund, the operating budget, and we don't have that capacity. And this may seem overly cautious, but it's a decision that was taken. In fact, if the PAID strategy is put into place, as Olanipekun has testified, we'll rescind the authority for this specific authorization and actually do the financing through PAID.
Let's go back for a second. The tax issue, is this a function of some concerns about the '86 tax code, either changes or the nature of our relationship with the teams? It's a public facility primarily used by private entities, and that raises some tax questions about whether it's a taxable or nontaxable?
That's right. I mean, they're just structuring questions. It's our understanding that the laws have changed since the time that, you know, it was constructed initially, and so it's those kinds of issues that we're 42 9/20/00 WHOLE COMMITTTEE - BILL 000535 taking a look at. There have apparently been a number of revenue rulings and other things that changed the permissible uses particularly in connection with stadium construction. And so, you know, we're revisiting a lot of those issues as we moved forward.
And there are a couple of outstanding issues that you have not resolved.
But you also anticipate that you're going to send us legislation still this fall to essentially reverse out this authorization should this happen?
Okay. So now the second part of the sentence is, there is a potential timing issue with respect to issuing 43 9/20/00 WHOLE COMMITTTEE - BILL 000535 debt through PAID. What is the timing issue?
If the legal analysis results that we're unable to facilitate this transaction to PAID, since we have not completed the analysis, we would have to finance the repairs to the Veterans Stadium through some vehicle. And in this instance, it would be through the authorization. As I stated earlier, the Administration does not want to be in a position where it determines that it is unable to finance the repair fundings through PAID, does not have the authorization to do it through the electoral approval, and then is in addition where it is not sure where it can get the funding so --
I mean, I think your question is if we had done the analysis sooner, would we in the position of having to pursue both strategies? (Unintelligible, parties all talking at same time.)
Yes, I think that had we tracked it on a different time schedule, that we would not be trying to ride both horses 44 9/20/00 WHOLE COMMITTTEE - BILL 000535 currently. We're in a position now where we have -- you know, we're trying -- until we complete the PAID analysis and transaction, we don't want to be in a position of not having any funding available in order to do the renovations.
Let's talk about the bond side of this transaction, which for some reason, you end up not (inaudible). If the transaction is approved, when would you expect to be in the financial markets and when would you have actual cash for the 2001 capital budget? Not just for Veterans Stadium, but for all of it.
Okay. Well, first of all, once we get approval from the electorate, which we hope would be on November 7th, it is then certified. Arguably, we could be in the market as early as January of 2001, February of 2001, to float the bonds. This is for the total --
We could arguably finance or float the bonds in January or February of 2001. It's the earliest we could probably 45 9/20/00 WHOLE COMMITTTEE - BILL 000535 float these bonds.
Oh, yeah. Once -- I mean, you could do it in six weeks and have the cash in hand. And in the event if it's delayed, it's not an issue in terms of a cash flow problem. The tax laws allow you to put up money in advance of a perspective bond financing and then reimburse yourself from the proceeds of the bonds, but we anticipate going to market in January.
But the one thing that has unfortunately resulted in, we don't have the 2001 capital budget dollars at this point in time; and, therefore, any of projects that are in the capital budget for 2001, I'm pretty much assuming nothing is going on with those projects because generally, the departments don't start working on projects, even design activities, unless they know they have the money; is that correct? I mean, we're -- I mean, you're -- you won't have 2001 capital dollars until March. It will be three months before the end of the fiscal 46 9/20/00 WHOLE COMMITTTEE - BILL 000535 year at that point. (Witness comes forward.)
I'm Linda Berkowitz, City Budget Director. Most of the new projects -- there are approximately 200 new projects in the 2001 capital budget. I think it's safe to say that those are on hold. There are approximately 75 projects in the 2001 capital budget that are continuation projects. And there is still money in prior-year capital budgets that are supporting those projects. In addition, we moved forward, on a very limited extent, with a small handful of 2001 projects that were considered critical because of the timing -- primarily street repaving, because of the sensitivity to the weather and to the seasons. But it is safe to say that without the 2001 loan authorization, we, in essence, will have placed almost 200 capital projects in advance.
Do you anticipate during the 2002 borrowing in the spring or in the fall of next year?
Typically the City 47 9/20/00 WHOLE COMMITTTEE - BILL 000535 goes out into the market every other year. The last time we floated bonds, GO bonds, was in 1998. So after the 2001 bond financing, we probably won't go back into the market for another two years, eighteen months to two years.
Especially with the seriously declining debt capacity.
What does the -- if you go this route and you have dollars in hand in March, what does that to the schedule of construction laid out in the report that we received? What's the earliest you'd be able to start any renovations to Veterans Stadium, whether there's a three-year life extension, a five-year life extension, or if we're going for the whole --
We don't have a detailed schedule. When we come back, you know, in November we'll have that worked out in some detail.
Mr. Hankowsky, you, in response to a question earlier, if you've had any moment to search your memory, could you bring us up to date a little bit on the current stadium 48 9/20/00 WHOLE COMMITTTEE - BILL 000535 situation? I think you were asked a little while ago about negotiations, or the lack thereof. Do you have any specific recollection as to -- the defining moment, I guess, back in the spring, I think the Mayor had an address on citywide television kind of announcing that things were being brought back together. Was that in June?
Yeah. I will apologize for not -- I didn't bring a chronology, so I'm not exact -- I'd have to check the dates. But, yes, I believe it was June that we announced the cost related to the site scenario that had been recommended, which is 12th and Vine and the T warehouse combination. And after that public announcement, there were further discussions with the teams. My best recollection is it kind of ran for several more weeks, but I'd have to sort of just check my calendar. And then, in effect, further discussion ceased -- again, my best recollection is kind of mind-July, but I might be off --
And why was that again? 49 9/20/00 WHOLE COMMITTTEE - BILL 000535
I think both -- we continued to -- well, obviously, we had not brought the negotiations to closure, we wanted to bring them to closure between the parties. And a decision was made that we should stop at that point and -- and we did.
I think there was a feeling, as had been mentioned earlier, that the Administration wanted to move on to some other issues and wanted to hold off on further discussions about stadiums. That's as probably as responsive as I can be.
I mean, were your activities or meetings in some way, shape, or form distracting to whatever else was going on in the government or in the City? Were you drawing away resources or bodies or people? I mean --
It's the judgment of the Administration -- the negotiation of the PFT contract is of paramount importance, and it's the 50 9/20/00 WHOLE COMMITTTEE - BILL 000535 judgment of the Administration that that dialogue can't happen, that you can't focus the negotiations if you also have the stadium issue actively moving. It becomes a question of kids versus stadiums, and you don't end up getting the kind of focussed movement that need on either issue in that kind of situation. We have -- we have fundamental reforms we're seeking to accomplish in the PFT negotiations.
I understand that, but the stadium activities, I'm assuming, were being conducted -- I mean, I don't know where they ever met. I mean, I know where the PFT and the Administration are meeting about the schools. I think they're right over at the Franklin Plaza. I mean, they may have been meeting at Bill's house, for all I know. I mean --
What I can report to you is that the assessment was made that we could not successfully move forward in the PFT negotiations if the environment was so clouded with conversations about the stadiums that the financial issues involving the schools become more difficult when the public perception is that 51 9/20/00 WHOLE COMMITTTEE - BILL 000535 you're devoting major City resources to fund the stadiums. It's virtually impossible to keep those issues distinct in a way that people understand, although they are fundamentally different. And it's for those reasons that the decision was made to focus on trying to secure the PFT contract in order to keep the schools open so that the kids can get their education. It was a judgment call that was made by the Administration in balancing two competing concerns.
And as you follow that through, I mean the next nature question is, there would be no restart on negotiations --
Settled, or whatever kind of conclusion. As you know, you know, there are alternative scenarios that might come up.
Councilman, 52 9/20/00 WHOLE COMMITTTEE - BILL 000535 if I may.
I would just like the record to be very clear. Can you tell us what happens if we don't meet that November 30th deadline?
The November -- if we don't meet the November 30th deadline, I believe that the City is obligated to undertake, you know, the repairs, the ten years worth of repairs at the Vet. And, you know, there are other -- you know, the practice facility consequences are attached.
I didn't mean to interrupt you, but I just think that the record has to be clear.
Mr. Hankowsky, is -- based on your knowledge and information, is 12th and Vine no longer viable as a site?
You waited a long time to get to that one. 53 9/20/00 WHOLE COMMITTTEE - BILL 000535
I don't think -- I think there's a series of responses to that question,'Cause it has various aspects of is it viable. It is absolutely technically viable. I mean, we have absolutely determined that there -- it is feasible to assemble a site, deal with the various utility issues -- I mean, some issues, as you know, have been a source of prior discussion -- utility issues, traffic issues, et cetera. We believe it is a site that could viable be developed and a baseball stadium construct and that that can technically work. It can work physically and technically. We believe we have a fairly good handle on the costs associated with doing that, including, as you recall, when the Mayor made those public, we included a fairly decent contingency so that to the degree -- with the data we had, we hadn't thought of everything that we would be covered. And so I think we've thought that through, again, with as much knowledge as you can get before you actually get on the site. 54 9/20/00 WHOLE COMMITTTEE - BILL 000535 And I think that the real fundamental question is whether there is a business transaction that could be negotiated between the public and the teams that is economically reasonable for the various parties at that site. And to date, we have, as I -- as I've said earlier, we have been unable to reach that closure. I would like -- those are the facts. Now, how you --
How you want to characterize that is -- I mean, will we be able to do it when we recommence negotiations? We will have to see.
To the best of your knowledge, has any determination been made by the negotiating team, both the private and public components of the negotiating team, as to the likelihood of the viability of a business transaction taking place that will result in a baseball ball park at 12th and Vine?
There have been scenarios developed that would allow that to 55 9/20/00 WHOLE COMMITTTEE - BILL 000535 occur, allow a stadium to be developed there, that in different instances, either one side or the other felt were not acceptable. And so I guess you can say we thought we had a solution that the teams didn't find acceptable, or solutions, different scenarios. And it's a business negotiation. I think you can't quite -- I mean, you're making a judgment about the other parties' capacity to move, I guess, you know.
So I don't -- I wouldn't -- I'm -- I'm here this morning on behalf of that committee, I would not want to characterize that they've reached some, you know, ultimate conclusion, other than we have been unable to do it to date. They may have reached individual conclusions, I don't -- but I just won't -- you know, in a kind of a formal sense, it's not like they made a formal conclusion that this is done. We stopped.
I understand. Madam President, you've been 56 9/20/00 WHOLE COMMITTTEE - BILL 000535 tremendously generous, and I will -- some of our colleagues might have a few questions.
And we can have a second go-around. Thank you. The Chair recognizes Councilwoman Krajewski.
Thank you. According to , some items have been excluded from this report, including tenant improvements and the trash management and disposal system. Can you explain to me what is "tenant improvements," what is meant by that?
I'd like to have Rick Tustin come back and respond to that. (Mr. Tustin returns to witness table.)
I believe the -- that items refers to the comments from the teams themselves as a result of their review of the reports. Once they review the report that we've given them, the draft report, I'm sure they're going to come back to us with tenant improvements, 57 9/20/00 WHOLE COMMITTTEE - BILL 000535 or things that they as tenants would like to see over and above maybe what we've outlined in the draft report we have. So I think that's what's referred to as "tenant improvements."
Well, in light of the recent Daily News articles regarding the state of the Vets trash and concession stands, who is responsible? If it is the vendor, what course of action does the City take if these violations aren't corrected?
I'll ask Greg Grillone to come up. He's responsible for the actual maintenance of the Vet, and that is, to some extent, a maintenance issue. (Greg Grillone comes forward.)
I'm sorry. You have to identify yourself for the record.
I'm sorry. Greg Grillone, I'm the Stadium Director for the City of Philadelphia. 58 9/20/00 WHOLE COMMITTTEE - BILL 000535 The overwhelming majority of the items that were listed in the article in the Daily News were items that are the responsibility of the food and beverage concessionaire in terms of cleanliness, in terms of complying with health code violations and things of that matter. As far as the actual removal of the trash from the building, that's the City's responsibility. And we do that.
Just a minute. Are the Phillies and Eagles responsible for any maintenance, costs, or capital improvements?
The -- in the leases, there are areas defined as exclusive use areas that come under the control of the two teams. And within those limited areas, they are responsible to keep those areas in good working order and have the responsibility, I guess, and the right to make improvements and to fit and finish those spaces as they see fit. In terms of capital improvement, as we normally define them or think of them, in terms of 59 9/20/00 WHOLE COMMITTTEE - BILL 000535 to the structure itself, those are the City's responsibilities.
Excuse me. Can you give us an example as to what the teams are responsible for?
Yes. If Bill Giles wants to redecorate his office and wants to put paneling in there or he wants to put drapes or if he wants to put new rugs or if he wants to put in an intercom system or Muzak, that would be his responsibility.
Well, my question is, what are they doing about the violations? Who is responsible? What voice does the City take?
The specific violations, the food and beverage concessionaire has laid out an action plan where they have -- continuously, they've already responded to lots of the violations, and some of the things that were 60 9/20/00 WHOLE COMMITTTEE - BILL 000535 mentioned are going to take a little more time because of --
And that was only because of the Daily News bringing out these articles.
Some of the articles -- some of the violations that they referred to dated back to July, and they had done things separate and apart from anything that was in the Daily News. I think that they've been -- it's been my experience that they have been fairly responsive as a company. When things are cited or when there are problems, they've responded.
Well, again, I ask the same question again: What responsibility does the vendor have if they don't correct the violations?
I think if the vendor doesn't comply, I think the Health Department has, you know, remedies. I guess they would take them to court. I'm not -- you know, I'm not an expert in that, but I don't believe that there are any things that were cited that they are consciously just going to ignore. I mean, they've shown, at 61 9/20/00 WHOLE COMMITTTEE - BILL 000535 least in my opinion, a good-faith effort to comply and to correct whatever deficiencies were cited.
Thank you. Mr. Grillone, I would appreciate your providing us with a list of what the teams are responsible for. You know, are they responsible for the upkeep of the locker rooms? If you could give us just a list, if we're going to be getting a list from the Administration, as to what improvements we're responsible for, I would like to know what the teams are responsible for.
We will provide that list. I'll have the Law Department do that when we submit, you know -- I mean, it will be fleshed out when we make the, you know, the November submission that has to identify specific items that we're responsible for, but I'll have the Law Department draft something that summarizes it.
Thank you. Is Councilman Clarke in the room? He's next to be recognized. (Councilman Clarke not present at this time.) 62 9/20/00 WHOLE COMMITTTEE - BILL 000535
Well, since he's not here, the Chair recognizes Councilman Rizzo.
Thank you, Madam President. I'd like to go back just for clarification purposes. You had talked, Miss Wilkerson, about the preventive maintenance program for the Vet in the event that we spend $82 million for repairs. You said -- and I'm not going to attempt to quote you. You said that we don't want to get back into the situation that we presently are. Are you suggesting that part of the problem, the $82 million of maintenance-related items, are partial -- is the responsibility for this condition lack of maintenance? Did we not do some things along the way that should have been done and that's why we're in the situation we're in?
I mean -- well, a lot of the repairs that we have to make right now are simply because we have old systems. It's a 30-year-old building and a lot of the systems that 63 9/20/00 WHOLE COMMITTTEE - BILL 000535 are in the building are original to the building. This is -- you know, in any event, we would be making repairs to the building simply because the systems that are in there are at the end of their life span. I think when you read through the report and read about things like leaking roofs, you know, there's some things that might have been preventable had the maintenance regiment been different. Had we given more money in the operating budget to the maintenance of the facility, we might have been able to forestall this. I know that in talking to people about this specific property, we also talked about a little bit about City Hall. And if we had done maintenance work on City Hall four or five years earlier, the kind of costs that we incur now would have been substantially less, tens of millions of dollars less if we had just done some maintenance. You know, there is some maintenance we probably could have done on the Vet to avoid some of the kinds of costs we're going to incur now.
So then what I'm 64 9/20/00 WHOLE COMMITTTEE - BILL 000535 hearing is that the maintenance strategy that we used during the life of the Vet, if it had been more aggressive, if there had been more attention and more money put into that facility, that the facility may not have gotten the review that it had received in this report.
You're welcome. The Chair recognizes Councilman Clarke.
Thank you, Madam Chair. First of all, I want to have a follow-up request from yesterday's briefing, a question on the turf. It's my understanding that there are several systems being reviewed, and I'd like to get more detail on that, if somebody could provide me with some information on the various systems.
I don't know what -- I didn't hear what systems you're referring to. 65 9/20/00 WHOLE COMMITTTEE - BILL 000535 Oh, the turf systems, okay.
Yeah, I'd like to get more details 'cause it's my understanding that the costs associated with the various scenarios may be substantially different, and in your document, you only have $3 million, and I'm not clear what that reflects.
Okay. The other issue, going across the discussion on the stadium construction, the new stadium scenario, there was a very relatively aggressive strategy associated with the participation of MBE/WBE. I understand that -- I think the State was actually going to participate to some degree in some training dollars. I think this was spearheaded by the laborers unions -- I don't know if you all recall that part of the discussion. My understanding is -- and I'm not 66 9/20/00 WHOLE COMMITTTEE - BILL 000535 really clear on, if we do not do stadiums, it's not clear to me if any sort of participation program would still be in place upwards and beyond what we normally do. And although I understand that we were talking about a potential billion-dollar scenario, this is potentially $100 million, and I think that's a substantial amount of public investment. And I don't know -- is that a part of the process if we have this doomsday scenario where we have to actually going in and renovate the Vet?
I have not heard discussions about that. I will follow up on that. It is an issue that certainly when we come back, if we end up seeking funding for, you know, the long-term renovation of the Vet, the renovation for the 10-year scenario, I'll make sure that we come back responding to that and --
Is there anyone that could speak to the new construction scenario participation?
What exactly was 67 9/20/00 WHOLE COMMITTTEE - BILL 000535 being proposed? (Ms. Wilkerson confers off-mic. with colleagues.)
During the initial stadium discussion on the two new stadiums, there was a proposal put forth, I believe, by the laborers union and worked out with the building trades that it was going to be a very aggressive participation strategy that would allow apprenticeships for all of the various trades and the State would actually put some money on the table to participate in that program. And my question is, if we do not do new stadiums, will there be any level of that type of participation program in the renovation of the Vets Stadium?
I'm not sure I can answer the second half of that question, which is what will we do if we're fixing the Vet?
I mean, we'll be doing that, I guess, as the City, and, you know, we'll need to follow, you know, whatever the public bidding and the MBEC and that process. 68 9/20/00 WHOLE COMMITTTEE - BILL 000535 I think when we're talking about new stadiums, at least the model that has been pursued was a model, in effect, where the teams would become the developers, and where they could have -- we could look at a kind of comprehensive program because you'd kind of know that all of this work was happening, you know, over a period of time, and we had some discussion about that. But, again, because we never reached closure, we never reached closure on a detailed plan, but the intent was, in fact, to have a detailed plan on how that would happen with --
With the new stadiums? Are you saying that there was no 16 closure on that -- on that particular --
The closure in the sense of a detailed final plan on how that would happen. I mean, the parties were clearly prepared to do that; we just never -- kind of never wrote out the full plan because we never reached -- we never proceeded. That's all I'm saying. It wasn't that people didn't want to do it -- we just. . .
Is somebody working 69 9/20/00 WHOLE COMMITTTEE - BILL 000535 on that? I mean, in the event that we somehow do get two new stadiums?
I think it's fair to say that all activity related to stadiums at the moment is on hold.
(Inaudible.) If we're going to spend $100 million, is this an opportunity to pursue the same kind of aggressive program that was anticipated with the new stadiums where we had special relationships struck with the building trades? And we'll respond to that.
That's why she's the Chief of Staff. I mean, this is an opportunity, although it's not the billion-dollar scenario, we're talking about $100 million, and I'd like to see an opportunity to get people involved in this process. Thank you. Thank you, Madam Chair.
You're welcome. 70 9/20/00 WHOLE COMMITTTEE - BILL 000535 The Chair recognizes Councilman Ortiz.
Thank you, Madam Chair. I have very few questions. I would like a definition of what a "reasonable business transaction" between the public and the teams means, in very clear language and so that the people understand. So that when they read that phrase in the Daily News and in the Inquirer, they're not confused by what it means. Does it mean how much money the taxpayers are going to put forward in terms of stadiums and how much money the teams are willing to put forward in terms of stadiums? I'd just like a definition of that phrase.
I'll try, Councilman, again to be as responsive as I can in the context of -- as was indicated earlier when we --
Well, because the underlying issue in this hearing, all through it, is not really $80 million or the maintenance; it's really about whether we are really going to at one point or another begin building stadiums. And 71 9/20/00 WHOLE COMMITTTEE - BILL 000535 when you make a statement like that, I think the people have a right to know as to what it means and if it means that they will have to put forward a certain amount of money from their pockets, to build it.
Yeah, I think I'm -- I think I -- well, all I want to do -- I will try to be as responsive, but obviously, without a transaction done, I can't be detailed, so let me try to do both halves of the coin, as you asked. I guess from a team perspective, the teams are looking at this from the standpoint of -- and obviously, we're urging -- that we are interested in them maximizing the dollars that they would commit, that they would borrow, that they would be responsible for, that that they would spend to build these facilities. The teams' ability to do that is obviously dependent on their finances. I mean, how much money could they make on a new stadium and as a club and, therefore, pay, you know, bank loans so that they could borrow money and put it in the building. And you've got very different dynamics between the two leagues that, you know, we all -- 72 9/20/00 WHOLE COMMITTTEE - BILL 000535 we've heard-- you know, we know there's a salary cap in football, we know there's not one in baseball, so you have a lot of just different kind of dynamics that impact, quote/unquote, what the teams can do. And on the public side, we're basically dealing with trying to look at a transaction where you could see an investment by the public, that the public would believe it -- I'll use the term "could get paid back on." In other words, where there would be revenues coming back to us, whether tax revenues or rent revenues -- I'll use rent just as a -- revenues coming back to us that would save ourselves -- okay, we've made this -- we've borrowed this money and we have a high expectation, a reasonable expectation that we will get paid back. I think those are the -- so that both parties are looking to cover -- get paid back out of the transaction the respective investments they make.
And when is a reasonable time period for the public to get this information so that they can tell us, as a 73 9/20/00 WHOLE COMMITTTEE - BILL 000535 legislative body, whether the public and the people really are for this or not? Because ultimately, it comes down and will come down as to what it is that the public gets back from any investment that we make. And I think before we make a decision, we have to know very clearly what it is that we get back and what we don't get back and what is the -- because we don't want to be able to build another white elephant in which we create richness for one side but the public gets zero and gets even locked out of the stadiums. So when do we begin to get that information as to what is the payback? Because I know that right now, we entered into a deal that very early on, without all of the information, that we may have to buy off, and I think a lot of people here were talking -- I know Frank DiCicco said if we pass the practice field facility and we pass this, we lose some leverage in terms of negotiations. And now we're faced with a situation that I don't see how we're going to meet a November 30th deadline, I don't see how we're 74 9/20/00 WHOLE COMMITTTEE - BILL 000535 going to meet a September deadline in terms of stadiums, so we're going to be stuck with a deal that everybody knew was a bad deal from the beginning. And before we keep on making investments, I think this body and this city and the citizens need to know all the financial connotations that we're talking about. Thank you.
Thank you. The Chair recognizes Councilwoman Tasco.
How close -- and this question may have been asked -- are we to limit of our capital borrowing?
Well, right now, we have $342 million of capacity available, as we speak.
To the Chief of 75 9/20/00 WHOLE COMMITTTEE - BILL 000535 Staff, on the blight program, will that take us over? What impact does this have on the possibility of floating the bonds for the blight program?
We are still in the process of putting together that program, and we're exploring various alternatives. In terms of respective financing vehicles, we are not necessarily sure that we're going to finance these bonds through GO, so I'm not -- I'm not -- I can't answer that question in terms of the vehicle we're going to use, as we're still exploring those options right now.
There's some of the things that we want to be able to do under the blight program that might require that we issue private activity bonds. That does not go against, you know, the City's debt. And at this point, we have not refined a budget for that, so we don't have the specific information.
And any or all of that activity would require Council approval?
That's right, because it's going to involve at some point the City 76 9/20/00 WHOLE COMMITTTEE - BILL 000535 committing to, you know, some kind of lease arrangement or service arrangement that obligates the City to pay the debt service over time. So we'll have to bring that back to City Council before financing that.
If we are to -- this capital requirement of $82 million, 40 this year and 40-plus next year for a 10-year period, plus the construction of the practice facility if we do not do a stadium today, is there any sense to continue with the discussion of the stadium in view of the request for the expenditure of this type of (inaudible)?
Well, I guess the question is, if you're asking us, if we're making a 10-year commitment to -- it's (inaudible) somewhat to what Councilman's question. Here we are being asked to approve the bond deal for 40 million this year and 40 million the following year, that's for a 10-year capital improvement, and the payment for the practice facility, that's a lot of money being expended in public funds. 77 9/20/00 WHOLE COMMITTTEE - BILL 000535 Would it be prudent to even continue the discussion of the possibility of constructing stadiums in light of this?
It's an either/or scenario. If we're able to conclude successfully negotiations over the new stadiums, we probably will have to spend some money on in order to -- maintenance at the Vet, but we wouldn't anticipate spending anything close to the $80 million, probably, you know, not close to half that, you know, because we would only be talking about remaining in the Vets Stadium for, you know, for a two-, three-, four-year period on the outside. But the $82 million is money that would have to be expended if in fact we're not going to build new stadiums and we have, you know, an obligation to make the facility available to the teams through the end of the lease term, which, I guess, is in 2011. And so it's an either/or scenario. It's not -- you know, to some extent, it's not trying to do both. But, you know, as the report details, there are things that we have to do now. We have 78 9/20/00 WHOLE COMMITTTEE - BILL 000535 some leaking problems that have to be corrected, we have, you know, issues in the stands that have to be addressed. Those things have to be addressed even if we're going to only be in the building for two or three more years.
So the maintenance for five years, that's the cost out of what you would target for a five-year period maybe?
That was actually at the beginning of an exercise to try to figure out if we're only going to be -- you know, if, in fact, there are going to be new stadiums, there are some kind of costs that we know we're going to incur over the short term and what might those be. That requires a lot of refinement before we would actually be in a position to mount some kind of capital program. Yesterday at the briefing, you know, people made the observation that it doesn't make any sense to undertake some of the more extensive repairs that might be fairly, you know, you know -- repairs that need to be made now if, in fact, you can't get the construction completed until 2003 and you're looking at abandoning the building 79 9/20/00 WHOLE COMMITTTEE - BILL 000535 in 2004, you know. And so if, in fact, there are going to be new stadiums and we're only going to be in occupancy of the building for a short period of time, we would have to develop alternative scenarios for, you know, for addressing those items of need. It may not be full-blown, you know, capital projects, you know, that we normally think about, where, you know, you strip off a whole roof and complete a new system. It may be something short of that, but that -- we have not begun yet to work that out in any detail. And what was passed out yesterday, I think, is a kind of planning, working document that helps us think through some of those kinds of issues and make decisions about, you know, how it is that we proceed at this point.
Okay. I had another question; I lost my train of thought. Oh, I know, I know. What -- how much have we spent annually on the maintenance of the Vets Stadium? Was it just minimum, maximum or based on need or (inaudible) before we decided what we would do? 80 9/20/00 WHOLE COMMITTTEE - BILL 000535
Councilwoman, Linda Berkowitz, City Budget Director. We have been spending approximately a million dollars on maintenance at the Vet annually. This report indicates that we need to be spending approximately $1.5 million over and above that. If going through and understanding all of Ewing Cole's assumptions that underlie its maintenance cost estimates, if we agree, then I think that it speaks for itself that we have not been spending sufficient funds on the operating side for preventive maintenance at the stadium.
But there also have been capital expenditures made on the property over the course of the years. I don't have the total amount but there have been items that we've funded out of the capital budget on an ongoing basis, and we can provide you with that list of expenditures that have been made over the last decade, if that would be --
(Inaudible, off-mic.) 81 9/20/00 WHOLE COMMITTTEE - BILL 000535
I thought we were spending approximately $6 million a year.
My recollection is, I think the first or second fiscal year of the Rendell administration, I thought there was a number of like $31 million out of PICA funding in either '92 or '93. When the City had no capital budget, we used PICA money.
And I seem to remember there was one year where it was like $30 million.
In the spring hearings, we got into a lot of those issues.
It would be very interesting to know what that (inaudible).
You're welcome. The Chair recognizes Councilman DiCicco.
Thank you, Madam President. The more I listen to what's going on in this room this morning, the more -- I don't want to say confused I am becoming, but I'm really beginning to wonder, and my questions are probably in line with where Councilman Kenney and Councilman Ortiz were going. We know from the report from the engineers and architects that immediate repairs are necessary to maintain the safety and the integrity of the Vet. And at minimum, should we build new stadiums, I guess that really is the biggest question here. If we're going to do it, we probably don't need to have all of these conversations, but we're not sure what we're doing, so we'll waste a lot of time, I guess, going through something that by November 30th, we'll wonder why we were here today to begin with. But my point is, if -- I want to 83 9/20/00 WHOLE COMMITTTEE - BILL 000535 fast-forward a minute. Councilman Ortiz said that we have a responsibility, and we all know we have a responsibility to the taxpayers of the City as to what investment we should make at the Vet. If we don't build two new stadiums, and based on the report that the architects and engineers have given us, we're talking $82-plus million to maintain the integrity of the Vet. What happens to the Vet, or the integrity of Vet, after ten years? Are we just putting somewhere in the vicinity of $100 million, less the annual capital maintenance that goes into it, which bring us probably to $116, $120 million over 10 years, only to have to do a new stadium, or stadiums, 10 years out? Don't we have a responsibility now for the citizens, not only today, but going forward? And I may not be here, some of us may be here, some of us may not. Don't we lay the groundwork today for what that investment should be going forward? I mean, you can take an old building and do repairs to it, the Band-Aid approach, or even extensive repairs. But at some point, that building will have to be taken down. I don't know 84 9/20/00 WHOLE COMMITTTEE - BILL 000535 enough maybe about stadiums to understand what their real life expectancy is, even with the best maintenance care. And at the end of years, is 5 somebody going to be back here -- someone will be 6 back here saying, We can't even fix it, it's 7 beyond maintenance, it's beyond another two 8 years. We have to build new stadiums. And at 9 that point, based on the way inflation is and 10 everything else that occurs, it will be even more expensive for the taxpayers to have to build two new stadiums. So I wonder if we really should just be saying, Let's hold off on this discussion until we know if we're going to do two new stadiums and then make the decision, do we do -- how much we need to keep the building up and running for the next two or three years. And if we're not, then we got to figure something else out.
The Administration -- you know, the Administration's position is that it supports the development of two new stadiums. We want to do stadiums if we can negotiate a deal that makes sense for the City. We, however, have an obligation to 85 9/20/00 WHOLE COMMITTTEE - BILL 000535 provide maintenance at the Vet. And what we're trying to do is put something in place in the event we don't -- we are not able to conclude two new stadium deals and have to spend money to renovate the Vet. You know, our goal is to have two new stadiums. I think the Administration's analysis is, you know, similar to the one you've just been through. We have a building that's, you know, marginally, you know, acceptable under today's standards, there are certain benefits the City could get from having a new facility; why spend $80 million now only to have something, you know, that is, you know, barely acceptable? And at the ends of 10 years, you know, what are we going to do? You know, we want new stadiums, but it may be that we can't reach an agreement with the teams and have an obligation to provide maintenance at the Vet, and it's that funding facility that we're trying to put in place now.
I guess my frustration is that after all of this discussion, we're still that far away that we don't know if we 86 9/20/00 WHOLE COMMITTTEE - BILL 000535 have a deal or at least close to a deal?
You're welcome. The Chair recognizes Councilman Kenney.
Thank you, Madam Chair. I would argue that you'll never get a deal if you're not talking. And I don't see how hurdling towards November 30th and the self-imposed deadlines that put on ourselves at the request of the Mayor and still have no 17 conversation going on at all about new stadia either at 12th and Vine or some other scenario, is never going to get us to that point. I would have never voted for the deal, for the practice facility deal, putting a November 30th deadline on ourselves if I had any inclination that the Mayor would unilaterally stop discussions based on what apparently are legitimate reasons -- in his mind legitimate 87 9/20/00 WHOLE COMMITTTEE - BILL 000535 reasons, but -- and not have any discussions between now and November 30th. Now we're hurdling towards this other scenario that Councilman DiCicco has just alluded to, and I think it's really insane. I mean, when I first -- my first car was a '67 Buick, and it had cancer on the floor boards and cancer in the trunk. And every time I rode in the rain, the car would fill up with water. Well, the last thing I was going to do with that car was put in a new transmission, a new radiator, new brakes, and, you know, a new muffler in there. I was going to get rid of the car. And the problem that we face with the Vet is, we've got to admit that it may be, most likely will be, a bad public investment to invest this amount of money into a building that's going to, at some point in the relative near future, be obsolete and unusable. I think that's probably a worse public policy investment than getting a stadia deal done now, whether it's 12th and Vine or someplace else. I mean, that's the frustration level, that we're going to wind up throwing good money 88 9/20/00 WHOLE COMMITTTEE - BILL 000535 after bad because we've self-imposed a deadline on ourselves of November 30th, and the Administration has self-imposed a moratorium on not talking to the teams to make a deal. I mean, we're at a self-fulfilling prophesy of defeat, and that's the frustration, and that's why, I guess, everybody's aggravated about being here and voting on this issue. I have a 12th and Vine question. When the Mayor announced the 12th and Vine site as his choice, it's been estimated -- and Mr. Hankowsky can tell me if I'm wrong -- to be approximately a $350 million premium on the cost of doing it, for example, at the north lot and the T warehouse. Is that really out of bounds, that number, as far as a premium number on what it would cost to do, for example, north lot, T warehouse? Will we be spending approximately $350 million more?
I'm going to do this a little bit off the top of my head. I would actually have to come back and sort of do the math. I don't think the number is quite that large. 89 9/20/00 WHOLE COMMITTTEE - BILL 000535
There's a differential, there's clearly a delta. But let me just -- and the reason I say it's not quite that large is because there would be some costs you'd incur in a, quote, north lot scenario, so you'd sort of subtract that, 'cause the number you're citing is sort of the studies number to do 12th and Vine. And it assumes, you know, you, quote, would save it all by abandoning that site; you wouldn't quite save it all. But it would be, you know, probably in a kind of the 250 to 350 range. That's without doing the math.
It's according to how you look at 250 million as substantial or not, but it's substantially more expensive.
I'll provide the facts; I won't characterize them, all right. 90 9/20/00 WHOLE COMMITTTEE - BILL 000535
The 12th and Vine site was also linked with the T warehouse site for football.
And the T warehouse for acquisition, as I understand it -- and this has been numbers that have been coming from either the State Senate or from PIDC -- is a 40 to $50 million number? Is that --
-- out of bounds? To acquire the T warehouse for football at 12th and Vine Street?
Yeah. You know, Councilman, my normal approach would be as responsive as I could be. But I'd be hesitant to put a number out here because there is a single property where we would have to have a single discussion with the property owner where we might end up in an adverse --
Tens of millions of 91 9/20/00 WHOLE COMMITTTEE - BILL 000535 dollars.
Is there any possibility -- and I would like a commitment today, if possible, either from the Chief of Staff or from PIDC -- that a 12th and Vine scenario, if it could be accomplished, would not include the possibility at all of a football facility being on the north lot in an effort to save the tens of millions of dollars necessary to acquire the T warehouse site? Because one of the things -- I mean, we've had different discussions in South Philadelphia, in Council President Verna's office and in DiCicco's office and the neighbors down there that are willing to perhaps look at the possibility of a football facility further away from their homes, south of Pattison Avenue, on a T warehouse site. What I need is some commitment from you, or at least some assurance, that there will not be the economic pressure on the north lot to save the money in acquiring the T warehouse in 92 9/20/00 WHOLE COMMITTTEE - BILL 000535 order to do 12th and Vine for baseball. Do you understand the question?
I thought that commitment was made in the spring. However, I would like that to. . .
I don't think we have any -- we're not exploring that, we have no 9 interest in doing that. I think we're just talking -- I mean, let us make sure we can say it with a categorical, just to be safe, but you're right. I mean, we -- I think we were clear even in the scenarios --
Even before we picked sites, if you recall, the committee, the site selection committee, when it made its recommendation to the Mayor, under kind of any scenario, quote/unquote, said the Eagles should be at T warehouse. So we'll just affirm that. I just --
Okay, I just wanted to make sure the record was clear that there would be no backslide to the economic pressures at 12th 93 9/20/00 WHOLE COMMITTTEE - BILL 000535 and Vine to allow, require the citizens who live adjacent to the north lot to put up with football, because it's a different scenario than a potential baseball facility there, if that could be worked out at all.
If 12th and Vine doesn't work, can't be done, it's not feasible, can't do a deal, is there a Plan B? Is there a Plan B scenario for the construction of a baseball facility and a football facility, whether it's north lot or somewhere else? Or are we just in an all or nothing 12th and Vine scenario?
I guess, again, to be responsive, the only scenario that has been working on has been the 12th and Vine scenario, and that's where we stopped, and I -- we have not -- there is not a Plan B in somebody's pocket, if that's the question.
I mean, if there's no Plan B, then I guess there is no Plan B, but I 94 9/20/00 WHOLE COMMITTTEE - BILL 000535 think, if you, self-impose this November 30th deadline, which we've done, and we only have 12th and Vine to discuss, which is Herculean at best -- and everybody admits that, even the people who support it admit that it's Herculean -- what happens November 30th? I mean, do we fix up my '67 Buick and go forward?
The only thing way I know to respond to that is that we anticipate that the PFT contracts, you know, that those issues will be resolved within the next -- within a very short time period, and that we'll be in a position to, you know, address the issues that you've raised.
The issues of doing the due diligence for 12th and Vine, but we are not aware of any other fall-back position.
And, you know, if there are other scenarios, you know, those will be developed at that point.
Has there been any discussion as to if we acquire the Eagles Novacare -- is it still Novacare?
The Eagles Novacare facility because of the November 30th deadline being missed, and the Eagles, over a period of a year or two or three, figure out another scenario in which to move their practice in and executive operations into another county or state, what we would, in fact, would do with that $30 million state-of-the-art sports complex? I'm sure Southern High School wouldn't mind it being there, but as a practical use --
No, there's not been a development of an alternative scenario. I mean, as we're all aware, it was left in the spring that should that occur, should we become the owners of it, that we would sit down with the Eagles and see if we could enter into a transaction that would then be subject to the consent of this body, that would provide for their long-term occupancy. That would be clearly the first choice, and so we have not developed it.
Okay, so the Eagles 96 9/20/00 WHOLE COMMITTTEE - BILL 000535 don't desire to enter into a long-term occupancy in an effort to protect their interest in potential recouping of wage tax dollars. And what is that number that -- the estimate number on the loss of wage tax on Eagles due to loss of duty days and the executive office moving into, for example, Delaware County?
If you could give me a second, I have it in my briefcase, so I don't know if you want to ask --
Councilman, I think in that vein, I think that is why City Council was attempting to require the Eagles to remain at the practice facility until the end of their contract with the stadium, but we're not there. And I would just like to remind the Administration, we heard today receiving about receiving a list in November, and November seems to be the magic date. And it may sound very far off, however, in looking at our stated meetings, I think there are only about six Council sessions left until the 97 9/20/00 WHOLE COMMITTTEE - BILL 000535 end of November, so I am urging the Administration to please get any and all information to Councilmembers in a very timely fashion so that we have the opportunity to review what is given to us. Councilman, while you're waiting, perhaps we could recognize --
I was, but I just saw Mr. Grillone sitting there, and I wanted to say one thing. I had the opportunity in the winter of this year to go to Busch Stadium in St. Louis. Busch Stadium is almost an exact replica of the Vet -- it's -- I think it's three or four years older than the Vet. And during the course of the life of Busch Stadium, the Busch family, which privately owned it, put in scores of millions of dollars in maintenance upkeep and upgrades. I think that if Greg and his staff had been given the resources that were appropriate 98 9/20/00 WHOLE COMMITTTEE - BILL 000535 over the past few administrations, this building would not be anywhere near the condition that it's in, and I don't want the condition of this building to be reflective at all of the effort and energy and desire that they have and their staff have to keep that place as nice as possible. They just haven't been given the resources, and I just wanted to make that publicly stated.
I think any of us would agree with you. While we're wait for Mr. Hankowsky to get the information, I would like to recognize Councilman Rizzo.
Thank you, Madam President. I think I need Mr. Hankowsky but I'll ask a question and maybe the Chief of Staff can answer it. I think we're all pretty much familiar with the funding scenarios with the State, City, and the teams. I'm curious in reference to a Plan B. Have either of the teams, especially the Phillies, since the 12th and Vine Street site appears to have a premium associated with it, have either of the teams come forward to say that 99 9/20/00 WHOLE COMMITTTEE - BILL 000535 they're willing to do more to make new stadiums work? I would hope that the teams would have a B Plan in the event that we can't come up with funding to provide these two new facilities. So I'd like to know from Mr. Hankowsky what the teams are doing or what they may be prepared to do in the event that there is a funding problem. And I hope he heard that question.
Mr. Hankowsky, did you hear the question, and are you prepared to respond?
Are the teams willing to come up with more money to make this deal work?
Well, I mean that's why we were meeting. That is to say, the discussions that were held were discussions where the parties were talking about what did each -- you know, what 100 9/20/00 WHOLE COMMITTTEE - BILL 000535 did people think was a reasonable investment by the teams in the prospective facilities. I wouldn't want to when -- I mean, you say more money more money than, I guess, what. But the teams -- and given we don't have concluded negotiations, all I can say is that both teams were clearly willing to make substantial investments in new facilities that would be their obligations. The teams -- neither team was looking for -- I should be clear about this. Neither team is looking for the public to 100 percent pay for the cost of the facility. They were both looking to provide a significant portion of those costs through their own resources.
But it appears to me that there's a crisis developing to get this done, and I would hope that the teams would be willing to do more -- and I don't know how much more -- to meet the timelines and the financing required to build two new stadiums. I look around this room today. This is a very important, I think, hearing for the teams. And I look around here, and I think I know most of 101 9/20/00 WHOLE COMMITTTEE - BILL 000535 the people involved in the issue, and I don't see anyone here from the Eagles -- well, McLaughlin is here from -- it's obvious. But I wish I would -- I wish I could -- I wish we would know more about the ability of the teams to make this deal work. 'Cause most of the people that I talk to resent the fact that government's going to pay for a new stadium for the Phillies and a new stadium for the Eagles, and, like you said, they are willing to make a substantial contribution, but is that contribution sufficient?
Well, that will only be known at the point where we can conclude the negotiations. I mean, you know, we are where we are.
Well, let's talk about, then, something we know. We know that there's a premium on the 12th and Vine Street location. Have the Phillies agreed to contribute more to make that site work?
Again, Councilman, I'm not trying to be evasive, 'cause that's not my -- you know that's not my style.
I know that's not 102 9/20/00 WHOLE COMMITTTEE - BILL 000535 your style.
But we're in the middle of negotiations. It would be -- it would probably be unfair to everybody involved to get particularly specific. Let me just say, though, that -- that the Phillies have been willing to do more than they -- than had been discussed in the past and to the degree that it in part covers the cost of the site, I mean, there has been movement by the Phillies forward. That's all -- I mean, that's the best that I can tell you, in terms of what they're prepared to do. Could I, just for the record answer -- though I'm not sure where Councilman Kenney went. The answer to the question of what would you lose if the Eagles ended their practice facility function in the City of Philadelphia, the one number that I was able to immediately get, you should lose immediately $1.5 million in wage taxes based on the duty day computation. There would be additional taxes you would lose because also in that function is their corporate offices, and so there's a certain computation that deals with the 103 9/20/00 WHOLE COMMITTTEE - BILL 000535 BPT and how that's calculated when you move, quote, your business offices out of, and they would have the right to do that. And there are also -- what I was dealing with was duty days based on players' salaries, which you actually can know because of the salary cap, at least that's a public number. There's also wage taxes related to management, employees, and others. I think our last calculation was, you'd be somewhere around a $2.5 million gross impact immediately -- in other words, kind of the calendar 2000, and that number would escalate every year as the salaries increase, the loss. I'm sorry, Councilman, I just wanted to. . .
You're welcome. The Chair recognizes Councilman Goode.
Thank you, Madam President. I'm finding this discussion kind of interesting this morning in the fact that we are 104 9/20/00 WHOLE COMMITTTEE - BILL 000535 isolating the issues ourselves in discussing only $40 million of the $162 million capital budget, and the fact that in that discussion, we would discuss the issue of rehab versus new construction. We take on issues in terms of development related to rehab versus new construction all the time, but we discuss the rehab, spending millions of dollars on rehab on houses for low- and moderate-income individuals. We don't discuss doing only new construction, rather than doing rehab. We make a conscious financial decision because of financial considerations to rehab houses for low- and moderate-income people. But here we're making an argument, just new construction. Here we're making an argument over $42 million of $162 million capital budget authorization, when, in fact, I believe we're going to report this bill out of committee with a favorable recommendation. So while we're here spending time trying to determine the Mayor's agenda, I'd like to make a request to the Administration that we not necessarily engage in stadium discussions 105 9/20/00 WHOLE COMMITTTEE - BILL 000535 right after the teachers' contract, but that we move on to blight removal first and look out for interests of low- and moderate-income individuals and look at what we're going to do in terms of new construction versus rehabbing for those people. Thank you very much.
You're welcome. The Chair recognizes Councilman Nutter. Is he in the room?
Thank you, Madam Chair. I'd like to talk a little bit during this time actually about the report and the documents that we received both Monday, the day before, and then Tuesday, the shorter sheet with the different breakdowns of --
Councilman Nutter, I'm sorry to interrupt you, but apparently, we haven't worked out the kinks on this sound equipment. Could you talk directly into the mic. so that we could all hear you. I think the stenographer is even having a hard time hearing you. 106 9/20/00 WHOLE COMMITTTEE - BILL 000535
Let the record reflect the President made a funny. Thank you, Madam President, I'll try to do this. Now I know how Richard Nixon's secretary felt. I'd like to talk about the report in the big binder as well as the stapled smaller report with the five-year and ten-year components to it. I think in yesterday's briefing, Councilman Clarke had raised an issue about this item A 14, which was -- which is the replace field turf, (inaudible) tracks, and a host of other things, which are probably more detailed in the report. The 10-year column says $6 million, the 5-year column says $3 million. I'm assuming that we're not getting less turf covering. So what is the difference? And can you tell me why we only got five years out of the turf that we presently have? And think the turf that 107 9/20/00 WHOLE COMMITTTEE - BILL 000535 it replaced had been on the field longer.
My understanding from both the management and Greg Grillone from the stadium and also from our consultants is that the turf has a useful life of only about seven years, six to seven years of useful life. So what you're really looking at is replacing that turf every six years or seven years. The difference is, in the 5-year plan, it's due to be replaced. That $3 million represents replacement of it. Once -- if we're there over five years or ten years, that would be two replacements. So that's why it's $6 million in the 10-year column.
And you have it on here twice because you're anticipating doing it at least twice during --
Right, for that term. 108 9/20/00 WHOLE COMMITTTEE - BILL 000535
Okay. With all of the numbers that are in these various reports, is there -- how do you -- when we have a five-year plan here, although there's been some discussion about only wanting to be in the Vet as long as it takes to get the stadium deals done, which could have at least potentially one of the parties who doesn't have a site dispute problem out of the Vet in potentially an even shorter period of time, it could be three years, are all of these items viewed as capital eligible because of the -- if there's a capital rule about it's got to be at least a five-year life span?
We're reviewing that now, trying to get clarification on which of the items can be funded out of the capital budget and which can't and how that rule applies in this particular case.
The work that we've been doing, and I may have misspoke earlier on the eight-year investment that we talked about back in the spring in terms of capital dollars into Veterans Stadium. I think when Councilwoman Tasco was discussing that issue, I may have said upwards 109 9/20/00 WHOLE COMMITTTEE - BILL 000535 of $80 million. I now think my recollection now is it may have been 64. For some reason, that number seems to be in my mind. But in any event, what kind of warranty do we get with any of this work? I mean, has anyone made any determination, I guess -- if we had been making the kind of capital investment that we've been making in Veterans Stadium over the past eight years, as -- whether it's been sufficient or not, you know, could be debated for the ages, but with the fairly sizeable dollars over a relatively short period of time, why is the place in the condition that it is in?
The best way I can answer that is I believe that the major capital investments that had been put into Vets Stadium over the past, say, five to seven years, I think part of that work had to do with the sprinklering of the facility, which initially did not have a sprinkler system and did have to have that added as a result of the high-rise sprinkler code in the Meridian fire years ago. So that was -- that was a whole system put into the building that was never there initially, and that was a major 110 9/20/00 WHOLE COMMITTTEE - BILL 000535 capital investment. The work outlined in the report, as Linda Berkowitz said earlier, covers a lot of systems that had been there since the building was originally built and are at the end of their useful life. I mean, your major HVAC system may have a 20- to 25-year useful life, and we've gotten to that point in time. If the discussion goes forward on the new stadiums site and we're told that it looks like that's the direction we're going to go, naturally, we're going to go look at even the five-year plan to see what can be pared down off of that to get us through to the point time that the new stadium will be up and operational. I look at the column listed as "Immediate Requirements," that $31 million column, as something that is -- that we should concentrate on and even possibly be able to pare that down somewhat if, in fact, the stadium goes forward and we're not there five years from now. So as both the Chief of Staff and the Budget Director said earlier, this is really a working document by which we need to use as a 111 9/20/00 WHOLE COMMITTTEE - BILL 000535 starting point and revise it based on the direction we go in with the new stadium.
Let's go back to the financial side of this transaction for a second. What's the total amount of outstanding debt on Veterans Stadium?
What's the total amount of the 30-year cost? I'm assuming most of our GO obligations are 30 years?
Let's say this transaction goes forward, we borrow the money, you put the 40 million in, three to four years from now, Veterans Stadium is demolished. A couple questions. One, what is the debt service on the $40 million?
I haven't done that actual calculation since it's basically the sizing of the debt, the entire bond financing. When we do the sizing, I'll get that information to you. 112 9/20/00 WHOLE COMMITTTEE - BILL 000535
Okay. And along with that, could you tell me what the total costs of the $40 million in borrowed funds will be over that 30-year period?
My concern, naturally, is that -- and we will always run this risk. Again, the question is, how much we actually put in the Vet. We will borrow money now; we will make an investment; three or four years from now, hopefully, we will demolish the Vet and continue to have to pay for Vet repairs 15 years later. 16
So you want to know 17 exactly what the true value of the cost of the 18 bond $40 million is over the next 30 years to the 19 City? 20
Let's talk about 23 the question. Presently, the question is, as you 24 have laid out, which is an attachment to your 25 testimony on . Am I correct, though, in 113 9/20/00 WHOLE COMMITTTEE - BILL 000535 reading the bill, that there is no question in this bill?
Come on up and join the party. Everybody else is having a good time. (Laughter.) (Witness comes forward.)
Good morning. I'm Paul Rucci, from the City Solicitor's Office. The ballot question is not usually a part of the loan authorization ordinance. Actually, under the Election Code, the formation of question is the duty of the City Commissioners, but the Council prepares the question, in fact.
Council, as in City Council? Or counsel as in you, counsel?
Yes, City Council. After the enactment of the ordinance, the Clerk of council sends the question to the City 114 9/20/00 WHOLE COMMITTTEE - BILL 000535 Commissioners.
And the in response to a question that I asked in the first go-round, I asked the Treasurer about the wording of the question and the very general nature of the categories, and I am certainly familiar with these questions from the past, and they usually do have fairly broad categories, and the voters, I think, generally support these questions in the 70-plus or so percent range, and it's kind of the in the realm of who could be against rec centers, libraries and a wide variety of municipal facilities. Was there any feeling expressed or concern that in this particular case, given the nature of one of the items in this question, which I think, as we all know, if that item wasn't in this particular loan authorization, this hearing would have probably been over about two hours and ten minutes ago. Did anyone think that maybe there should be some specific mention of an item of such great concern to the populace that the notion that this question, and given the complex and controversial nature of one of the items, do 115 9/20/00 WHOLE COMMITTTEE - BILL 000535 you think that there is legitimacy in saying that we are asking the voters to approve something of which they have virtually no knowledge?
Well, Councilman, how to characterize the project is a judgment call initially of the Finance Department when it submits the loan authorization ordinance. Section 9 2 contains the various allocations. About five or six years ago, an effort was made to streamline the categories of projects that would be detailed in these loan authorization ordinances. It is entirely within Council's prerogative, as the legislative body, to formulate Section 2 of the ordinance and to determine a particular identification of categories. What was introduced in Bill 000535 does not seem to me to be a departure from common practice of the past. I cannot tell you whether anyone in the Finance Department considered that Veterans Stadium improvements should be somehow highlighted.
Actually, in one of its components, it is certainly significant and somewhat extraordinary. I think I asked the 116 9/20/00 WHOLE COMMITTTEE - BILL 000535 question earlier, is there any recollection in recent times of such a sizeable project -- one project taking percent of the authorization 5 solely? I mean, maybe the Convention Center? 6
Well, I -- I don't want to 7 stray too far, but in the distant past, we used -- 8
I don't want to stray too 11 far from the present. But in the distant past, 12 when all we had was general obligation bonds, we 13 would have included high-priced airport or water 14 or gas projects in this type of questioning. 15 But in the last 25 years, we've had 16 revenue bonds, and as you know, we often come to 17 City Council with ordinances asking for hundreds 18 of millions of dollars for those enterprise funds 19 capital projects. So that we've kind of taken the 20 big stuff out of the general obligation category. 21
But if I understood 22 your earlier statement, one, there's nothing to 23 prevent some mention or separate detail that 24 Veterans Stadium is a component of this; or for 25 that matter, based on, I think what I understood 117 9/20/00 WHOLE COMMITTTEE - BILL 000535 you to say in terms of the formulation of the question, there would be nothing to prevent an entirely separate question on that particular issue. Is that correct?
Yes. At yesterday's briefing, I did tell you that my understanding of the law is that depending upon the type of ordinance that Council enacts, its statement of the amounts to be borrowed and the purposes on which it is to be spent, it would it quite possible to cause two separate ballot questions to go on the ballot, because each of them would be a separate loan authorization by the Council. That's a matter of the structure of the legislative act.
So based on what you're saying, you could have one question that said, Should the city borrow $122,135,000 for all of those five categories? and you could have a second question that says, Should the City borrow $40 million specifically for Veterans Stadium renovations to be used by professional sport teams?
I think the plain answer to 118 9/20/00 WHOLE COMMITTTEE - BILL 000535 your question is yes, but a full answer requires me to remind you that the Finance Department has an ongoing responsibility for the City's overall accounting, that the classifications of projects is initially determined by the Finance Department, and I'm not talking about just for Bill 000535; I'm talking about as an ongoing basis. I don't know whether you may recall back ten or fifteen years ago, an ordinance such as this would have had ten or twelve allocations of money. And I can recall one where Veterans Stadium was a specific line item. But somewhere back in the last administration, in the early days of the last administration, the Finance Department did make an effort to streamline those various classifications of projects and has been using that streamlined reduced number. We have now five instead of what might have been twelve ten years ago. It's not because of Veterans Stadium. And today, it's the practice --
I understand that. I mean, that sounds like an internal policy and management issue. I mean, that not a legal issue, 119 9/20/00 WHOLE COMMITTTEE - BILL 000535 is it?
No. I think that the Charter makes the Finance Director the person who is initially responsible or primarily responsible to keep orderly management of the City.
I understand that, but in all of what you just said, I mean, does that matter in the context of one question or two?
The number of questions on the ballot is determined by the number of loan authorizations that Council enacted.
Right, okay. Is there a particular reason under these extraordinary circumstances that you wouldn't do it, so that it would crystal-clear as to what the voters are being asked to make a decision about, that they have a clear understanding that this set of dollars is kind of for the general, regular, routine things that we do every year, every other year, and that we also 120 9/20/00 WHOLE COMMITTTEE - BILL 000535 have this unusual or slightly different situation that we subject to the voters' judgment and education, that they make a decision about that. Is there some reason why you wouldn't do that?
Well, I see my role as a technical one. I think what you're describing is a political/policy decision.
So your real answer is, you are now exiting from the discussion and go back on the other side of the -- (Laughter.)
Now you go back to the other side of the rail 'cause have nothing else to say about this particular issue. Very good very good. Ken, he gets the rest of the day off. (Laughter.)
I thought you would. 121 9/20/00 WHOLE COMMITTTEE - BILL 000535
Because I think that one of the -- you indicated that because of the very special nature of this, you know, this kind of decision that we're about to make, we have already committed to fund maintenance repairs at the Vet when we undertook, you know, to develop the Vet and enter into the leases. If we don't fund the repairs this way, the -- notwithstanding, you know, the decision not to fund this way, we have an obligation to fund and would end up funding it out of the operating budget of the General Fund. You know, and in that respect it's not --
Excuse me? That's right, or through a PAID option, that's right. But, you know, what --
Well, I guess the flip side of this is, you mention it, you don't mention it, people figure it out. Or you do mention it, it's in there. I mean, is there any concern on the other side of this coin that if for some extraordinary reason the voters, and a 122 9/20/00 WHOLE COMMITTTEE - BILL 000535 significant number of them, felt so strongly and passionately about not wanting to put dollars in Veterans Stadium, that, similar to a previous Charter effort, where, you know, people may have felt strongly about two items in a commission report that had 64 components to it, and the only way to negate the item you didn't like was to vote the entire question. So is there any concern on the flip side of this that if people felt so strongly about not wanting to put money into Veterans Stadium, that they actually voted the question down?
I mean, that's always a risk. I don't think that that is -- I don't think that that's a greater risk.
So tell me what the argument is against two questions.
I think that -- I think that it implies that it's a decision to fund the repairs of the Vet or not fund it, when, in fact, we have an obligation to fund the repairs of the Vet, and we'll be paying for that out of the operating budget or a PAID issue. If it's turned down, it's not as though we're presenting the 123 9/20/00 WHOLE COMMITTTEE - BILL 000535 public with, you know, a fund/no fund kind of decision. We're going to have to fund repairs to the Vet because, you know, years ago, we decided that we were going to take on that obligation.
And, you know, to imply somehow that there's this critical decision that's being made, I think, in fact, is misleading. We're going to be repairing to the Vet and it's a much more discrete kind of question that we're putting before the public -- do you fund it out of, you know, a PAID issue, do you fund it out of the, you know, capital budget, do you fund it out of the -- you know, I mean, it's a much more discrete question and subtle question that people are being asked to make.
But also much more likely if it's all bundled with everything's else to go forward, right?
I think it will -- I don't know. I mean, that would be my guess, yes.
Thank you. The Chair recognizes Councilman 124 9/20/00 WHOLE COMMITTTEE - BILL 000535 Mariano.
Thank you, Madam President. Along the line of what Councilman Nutter was just speaking about, in fact, Councilman Nutter asked every question that I was going to ask. That's why I like going behind him because --
Councilman, when you were out of the room I took your notes.
He took my cheat sheet? Thank you. But he just asked -- he asks them a lot more. He went to the Prep and he gets the words out better. The obligation that the City has to the Veterans Stadium, now, the taxpayers pay for that. And I'm a taxpayer and you're a taxpayer and everyone in this room and everyone in this city is a taxpayer. So if we separate this bond question, without beating around, that's what we're talking about and if it's shot down because everybody's got a problem with the City funding professional athletes --
Councilman, 125 9/20/00 WHOLE COMMITTTEE - BILL 000535 I'm sorry.
The stenographer cannot hear you, we still have not worked out most of the kinks on this new system. So if you could speak directly into the mic. rather than look at the witness, we would appreciate it. Thank you.
What I was getting at was, we as taxpayers have to pay this. Now, is there a difference if we float the bond -- bear with me here -- and it passes, and it passes along with everything else, of if it comes back? I mean, I know there's a difference between it. Could someone explain that. If it comes back to a PAID bond or it's taken out of the General Fund, Joe, the taxpayer, is still paying. And, actually, we're losing money, or correct me if I'm wrong. Are we losing money if it comes out of the General Fund because we can save money by doing it as a bond issue?
Well, when you float bonds, typically, which is for 30, you're years 126 9/20/00 WHOLE COMMITTTEE - BILL 000535 paying for it over time, versus taking money, the 40 million in total out of the General Fund and paying for it upfront. So it impacts the General Fund greater if you pull $40 million out from there, versus paying for it over time.
So it would impact the Administration greatly if we were unable to either do it with the PAID financing or do it with the loan authorization.
Excuse me. Since we passed the operating budget for '01. Wouldn't we have to take the money out of the '01 budget and, therefore, we would have to make cuts in order to realize the $40 million that would be spent?
I think that -- Linda Berkowitz, Budget Director. I think that would have to be a discussion between the Administration and City 127 9/20/00 WHOLE COMMITTTEE - BILL 000535 Council. But because it is almost October, the value of the 40 million is greater because we would have to make those cuts over months rather 5 than over 12 months. 6 The other thing, if I can just remind 7 Councilmembers respectfully, is that this proposed 8 ordinance is to support the capital budget of $162 million that was passed by City Council. City Council did not approve two separate capital budgets; it approved a single capital budget for $162 million. And that is the question we are asking to be put before the voters. Will the voters approve borrowing of $162 million to support the capital budget proposed by the Administration and approved by City Council?
Councilman Mariano, I'm sorry. I didn't mean to interrupt you, but I just wanted to get that clear in my own mind.
But along that 128 9/20/00 WHOLE COMMITTTEE - BILL 000535 line of what Councilman Nutter and Councilwoman Verna was talking about, the money -- it's actually better for the taxpayers if we float this bond?
I'm correct in assuming that? Now, I think the problem we're getting at here, and the closest, I think was Councilman DiCicco, who had to leave. He compared it to buying a house that needs to be fixed up, but we know we need to get rid of this house. I mean, it's obvious that Veterans Stadium, we probably shouldn't in there, and it's in a state of disrepair, whose ever fault it is. It's probably something this administration inherited from the previous administrations inherited, whoever was around before, whoever, you could point fingers all day, but that's not going to make anything. But what I personal would like to see, let's put what we got and put it in there and let's get out of here. I mean, in Council, we sometimes tend to make -- like the 60 days is a long time. November 30th is our drop-dead date. 129 9/20/00 WHOLE COMMITTTEE - BILL 000535 That's 60 days, we can do a lot of things in 60 days. If this was the 28th of November, I wouldn't be saying this, but I think we just have to -- like DiCicco said, if we're going to put this money into this place, we got to make sure that we put the one shot into it and that's it. I mean, I went over them reports last night and yesterday morning, and some of stuff that I spoke about yesterday was, you know, electrical systems that I know a little bit about. There's some dangerous things going there. But I always have to think about when I was young and I went to a couple rock concerts at the old municipal stadium, that was JFK Stadium. How did that place ever last for so long? I mean, maybe they were different in them days, but that electrical system was in disrepair. And I'm not saying that we should jeopardize the health or the safety of any of our citizens, but sprinkler stuff had to be done, and that stuff they didn't count on in 1965 and 1970, when this thing was being built. A lot of these things didn't happen. And that electrical system that was put on in the late '60s wasn't set up for Fanovision and it wasn't 130 9/20/00 WHOLE COMMITTTEE - BILL 000535 set up for all the things that were going to happen. If this was my house, if this was a house that I owned, I'd be looking to get rid of it real fast, but we do have some kind of obligation, the lawyers tell us, to these two teams. And we see the teams and we see their consultants running around here and they're figuring out things. I mean, they're here, or if they're not here, they're listening outside. Again, and I've said this before on the floor, the Eagles have been good corporate citizens. I heard some encouraging stuff the other day by Mr. Hankowsky saying (inaudible) because you work for the Mayor, I think he doesn't want to tell us stuff because maybe he doesn't feel we could be trusted with that information, and that might make a lot of my colleagues upset, but I think it's gotten to that by the relationships that some of us have had with this administration. If this was the 28th of November, I'd be a lot more concerned, like I said. But Mr. Hankowsky said that the Phillies are talking about 131 9/20/00 WHOLE COMMITTTEE - BILL 000535 it, as you answered Councilman Rizzo, that this site, if this they do this 12th and Vine site, it's going -- there's a big expense, and the Phillies are talking. And you had said what, they're saying they're not expected to do that? That's positive. I mean, I think we have to try to be very to try to be positive in this thing and try to wait these 60 days a little bit and try not to second-guess everyone. And I admire you three or four for coming here (inaudible) trying to tell us what you're trying to tell us without telling us anything. (Laughter.)
(Inaudible.) I pretty much think that's where it is, and the scary part is, I'm starting to understand why you're (inaudible), so maybe I've been sitting here too long now. But, you know, we could talk about sites as long as we want to. If we have private discussions with different Councilpeople. Everything I hear -- and I'm not the Councilperson in South Philadelphia, thank God, but I don't think that's acceptable, that north lot site to 132 9/20/00 WHOLE COMMITTTEE - BILL 000535 the constituents of that Councilperson, so I don't know how that goes on, but I could put myself in that Councilperson's place and realize it would be real hard for me to introduce legislation in a district where it's a problem. So we better start really listening to what the teams and the Administration is coming down for and what they're coming down with in these next 60 days. Thank you, Madam President paragraph.
Thank you. The Chair recognizes Councilman Ortiz.
Thank you, Madam President. It's 40 days -- it's 48 days before November 7th, and both Councilpeople and the Administration have talked about this presented to the voters. And as I look around, there's only Administration people over here, so we don't -- we will not be hearing from voters as to the overall discussions that we're putting forward, and we're asking them to vote on it. And I wonder whether we may not have -- I think Michael Nutter was alluding to this, so 133 9/20/00 WHOLE COMMITTTEE - BILL 000535 that we don't have a misunderstanding as to what the ballot question says, and I agree with Joyce in terms of misunderstandings that may be given in terms of the ballot question, that it might be a stadium question or it might be construed such as that. And I think that given the need for the other expenditures that are involved in this ballot in terms of recreation centers and other facilities, I think we have to be very, very careful that what happened, as Michael said before, does not happen once again. So I think it behooves us to listen and maybe have another hearing in terms of being able to invite the public, because the public is not here, the public is not testifying. And I think we should hear from the people because, as the Revenue and Budget Director just said, the voters will be asked to decide this, not City Council, not the 17 members of this body, the voters. And I think it behooves us to make a hearing available to the voters to hear their opinion as to the ballot question that is going to be going forward.
The Chair recognizes Councilwoman Brown. 134 9/20/00 WHOLE COMMITTTEE - BILL 000535
Thank you, Madam Chair. Mrs. Berkowitz, you stipulated in your answer that City Council approved, quote, a single capital budget, correct? City Council approved a single capital budget. As a point of reference, has City Council ever approved a multiple capital budget?
So to do this would be in, in some ways, unprecedented?
Well, I think there are two -- there are really two separate questions. The issue of a single ballot question really simply addresses the fact that City Council did approve one capital budget for Fiscal Year 2001, and this ballot question simply is to allow the City to move forward with that 2001 capital program.
So that being the case, then has City Council ever been in a circumstance where we were to consider multiple ballot questions around capital budgets?
I don't know that. 135 9/20/00 WHOLE COMMITTTEE - BILL 000535
I can try and get that information for you, but I don't know that. I know that it did not happen in '97.
It did not -- there was a single ballot question in 1997, which was the last loan authorization that -- which was the last time we asked the voters to vote on a loan authorization.
Okay. And for my information only, do you recall what the circumstances were for that?
It was basically to fund the capital program for the City. Like I said earlier, approximately every 18 months or 2 years, the City issues bonds from its capital programs. And in 1997, when we came to Council to seek approval to have a loan authorization, it was for the Fiscal Year '98 and capital budget, and it was for the entire matter. It wasn't bifurcated or wasn't in a series, it was for the entire capital budget. 136 9/20/00 WHOLE COMMITTTEE - BILL 000535
That's what I'm trying to get a handle on. Thank you very much, ladies.
Are there any other questions or comments from members of the committee? The Chair recognizes Councilman Nutter.
Thank you, Madam Chair. This will probably be it for me today. Earlier the timetable that was laid out was, the question goes forward, the $162 million, you go to the bond market in January and you expect, hopefully, to have dollars in hand in March. Can you talk to us a little bit about what happens at that point in the context of the requirements, as laid out by at least Bill 82 and the other bill that was passed back in the spring in terms of if we, unfortunately, find ourselves in a renovation of Veterans Stadium scenario, what is actually coming back to us at that point? And can you just kind of generally, with a little specifics, lay out what our role in this is and what the process is from that point in time in 137 9/20/00 WHOLE COMMITTTEE - BILL 000535 terms of potential repairs and who does what?
My understanding is that in Bill 82, Council reserves unto itself the ability to approve by resolution the repair agreements that are worked out between the City and the two teams.
So at some point in time, again, if we unfortunately find ourselves in that situation, maybe sometime in the spring, a list would come over with the --
It would probably be substantially before that when we would be coming back to City Council, saying, you know, this is what we've negotiated, these are the repairs, you know, the City will be funding with the, you know, the bond proceeds and --
Let me take a step back. We would have to come back to you probably at the same time we are requesting -- we are floating the bonds because we need to get the list to size the bonds projects.
We have to make sure that the project are of a capital nature, get the 138 9/20/00 WHOLE COMMITTTEE - BILL 000535 dollar amount. And it's from that that the transactions is sizes. So it wouldn't happen after the bond financing; it would happen coterminus with the bond financing.
In the November, December time period, you'd have a list of items, you would bring it here, end up in the same, I guess, hearing situation and go through the various items. At that point, some engineering person or someone would have to come in and explain what those are, go through the list. Maybe the list is what it is, maybe it can change one way or the other. That gets approved, then you go take care of your transaction.
And these are all items that, in essence, would need to be done, stadium or no stadium -- new stadium, no new stadium scenario, some set of repairs must be made and need to be made -- and I'm very clear about that -- to Veterans Stadium no matter what we do 139 9/20/00 WHOLE COMMITTTEE - BILL 000535 for the Eagles and the Phillies in the new stadium scenario.
Because they will be playing in that facility for a three- to five-year period of time no matter what.
Again, I'd like to make certain that the record is very clear. I thought that Miss Wilkerson indicated earlier in her testimony that we would be getting a list of the repairs to be made --
-- in November. Now -- and as I said, I'm having trouble hearing. I thought you had asked the Councilman about the list, and I think, Joyce, I heard you say something about in December.
So each 140 9/20/00 WHOLE COMMITTTEE - BILL 000535 time. I know we're having trouble with the mics. today, which will be corrected, but I think the record has to be very clear as to when Council can expect to receive the list for the necessary repairs.
When I generate the timetable, I'm talking about -- I'm referring back to Bill 82 that was adopted by City Council and signed off on. I believe it anticipates a November schedule that we will be negotiating with the teams on specific repairs that need to be made in the event that, you know, there are no 14 transactions for new stadiums. It turns on our ability to sit down with the teams and negotiate. I mean, there are a host of things that could -- you know, litigation could happen, there are a lot of things that could happen that we can't account for right now. But it's our intention to negotiate with the teams, come up with repairs and, you know, and follow what is provided for in Bill 82. And my reading of it is that it anticipates a November schedule.
And then I think that 141 9/20/00 WHOLE COMMITTTEE - BILL 000535 what --
Talk about the financing of the bonds. Once that's done in November, we have to go through a process of certifying that these are capital -- for purposes of issuing the bonds, and then we can size the transaction and float the debt. And that's why I come up with the December date.
Right, exactly, it doesn't. I was referring to -- answering Councilman Nutter's time schedule with respect to the financing of the bonds.
Very well, thank you. As I said, we are having some difficulty with the mics. Are there any other questions or comments from members of the committee? (No further questions or comments.)
Do we have anyone else to testify on this bill? (No response.)
Seeing no 142 9/20/00 WHOLE COMM. - Public Meeting one, the Chair recognizes Councilwoman Blackwell. Just a moment, let's give the other members an opportunity to be present. Councilman Mariano, we're about ready to vote, if you don't mind. This will conclude the public hearing on Bill No. 000535. We will now go into our public meeting, and the Chair recognizes Councilwoman Blackwell.
Thank you, Madam President. The Committee of the Whole reports out Bill 000535 with a favorable recommendation and also requests a suspension of the rules so as to permit first consideration at our next session of Council.
It has been moved and properly seconded that Bill No. 000535 be reported out of committee with a favorable recommendation and also a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. 143 9/20/00 WHOLE COMM. - Public Meeting All those in favor will signify by saying aye. Those opposed? The ayes have it, the motion is carried. And I thank you all for your patience and attention.
Madam President, I'd like to remind my colleagues that we have a meeting at 2:30 with the Managing Director on skateboarding. Please, all who are interested, please come, we'll be across the hall in the caucus room. 2:30, the caucus room on skateboarding. Thank you. (Adjourned at 12:55 p.m.) - - - 144 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Wednesday, September 20, 2000, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE OF THE WHOLE BILL NO. 000535 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter