2858 COUNCIL OF THE CITY OF PHILADELPHIA Capital Program & BUDGET HEARINGS BEFORE THE COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, March 10, 1999 9:27 a.m. - - - Bill 990021 - Adopting Capital Program for the six fiscal years 2000 to 2005, inclusive. Bill 990022 - FY 2000 Capital Budget Adoption. Bill 990023 - FY 2000 Operating Budget Adoption. Bill 990024 - Re Business Privilege Taxes. Bill 990025 - Re Wage and Net Profits Tax. Bill 990026 - Re School Tax Authorization. Bill 990027 - Re School Tax Authorization. Bill 990028 - Re School Tax Authorization. (Full text of all bills attached hereto.) PRESENT: COUNCIL PRESIDENT ANNA C. VERNA, Chair COUNCILWOMAN AUGUSTA A. CLARK COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DAVID COHEN COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN JAMES F. KENNEY COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN MARIAN B. TASCO COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK DICICCO COUNCILMAN BRIAN J. O'NEILL COUNCILMAN RICHARD T. MARIANO COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN FRANK RIZZO CHARLES MCPHERSON, Chief Financial Officer - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2859 3/10/99 WHOLE - 990021 Through 28, Inclusive I N D E X Dean Kaplan, Budget Director. . . . . . . . . 2325 City of Philadelphia Nancy Kammerdeiner, Commissioner. . . . . . . 2332 Department of Revenue 2860 3/10/99 WHOLE - 990021 Through 28, Inclusive P R O C E E D I N G S
Good morning. This is the Committee of the Whole. And I would ask the clerk to please read Bill No.'s 990024 and 990025.
Bill No. 990024, an ordinance amending Chapter 19-2600 of The Philadelphia Code entitled "Business Privilege Taxes" by decreasing the rates of the tax based upon gross receipts. Bill No. 990025, an ordinance amending Chapter 19-1500 of The Philadelphia Code entitled "Wage and Net Profits Tax" by decreasing the rates of the tax.
Good morning, Mr. Kaplan. Please identify yourself for the record and proceed with your testimony.
Thank you, Madam Chair. My name is Dean Kaplan, and I'm the City's Budget Director. And I'm here this morning to offer brief testimony on Bill No. 990025 and very brief testimony also on Bills 990024 and through 28. 24 Let me speak briefly on 990025, as you 25 requested. The Administration is requesting an 2861 3/10/99 WHOLE - 990021 Through 28, Inclusive amendment to Bill 990025. The bill authorizes, as the clerk has noted, reductions in the rate of tax for both the wage tax and the net profits tax.
Sure. As indicated in the bill, the rate reductions are to be effective on July 1, 1999. And this effective date is appropriate for the wage tax, but it poses a problem for the net profits tax. Unlike the wage tax, the net profits tax is filed n an annual basis, and the tax year for this tax is generally the calendar year rather than the fiscal year. Therefore, we're proposing that the rate changes for the net profits tax only be effective for the 1999 tax year, which began on January 1st of this year, 1999. And a January 1st effective date is consistent with the reductions in this tax that this Council has enacted in the last three years -- 1996, 1997, and 1998. This is one of the least complicated of the City's business taxes, the net profits tax. And without this amendment, it would become significantly more complicated. Taxpayers would 2862 3/10/99 WHOLE - 990021 Through 28, Inclusive have an additional record-keeping burden since they would have to determine their --
I'm having great you're going much too fast for me; I'm not too sure what it is you're saying. If you could go a little more slowly and speak into the microphone.
Sure. The net profits tax is a tax which is generally calculated by corporations, by taxpayers on a calendar year basis. When the bill was drafted, it was mistakenly put in for a fiscal year start date -- July 1st rather than January 1st. And the result is that if we enact it this way, we will cause a record-keeping burden for the people who we're trying to give a tax cut to. So what we're suggesting is that we change the start date for the net profits reduction -- change it from July 1st to January 1st to make it administratively easier for the taxpayers. That is also the way that we had calculated the numbers in the budget, and it also makes the tax much less complicated for the people 2863 3/10/99 WHOLE - 990021 Through 28, Inclusive who pay it. And that's also, finally, the way we've done it the last three years, as a January 1st start date. So essentially, what we're proposing is to correct an error, and the bill is drafted.
It would, of course, reduce the rate, as we had proposed earlier, which is change the effective date of that reduction to the same day and the year that we've done it the last three years.
Why don't you tell us how much the rate is being reduced by.
The rate was 4.6869 percent, and under the bill, we're proposing to reduce it to 4.615 percent.
And for the next six months -- the first six months of the new fiscal year, it would remain the same as currently. Is that -- 2864 3/10/99 WHOLE - 990021 Through 28, Inclusive
It would be for the calendar year -- for this particular tax, it would be calendar year 1999 rather than Fiscal Year 2000. And the reason is that this is a calendar-year tax, and to do it another way would actually increase the burden on the taxpayers.
I'm just trying to find out, are you reducing the amount of the tax retroactively to January the 1st, or are you saying that the next reduction begins next January the 1st?
No, we would be reducing it retroactively to January 1st of this year.
Mr. Kaplan, do you have copies of the amendments?
I have a set of copies and think there should be at least one for each member.
You were just 2865 3/10/99 WHOLE - 990021 Through 28, Inclusive talking about an amendment?
Mr. Kaplan, for the record, can you tell us if this amendment adversely affects the Five-Year Plan or the budget?
No, it does not. The Five-Year Plan figures were calculated assuming a January 1st start date, so then this bill would actually match the legislation to the budget figures.
And obviously, therefore, I respectfully request your favorable consideration of this amendment to Bill 990025. And as I mentioned at the beginning of my remarks, we are also requesting the committee's favorable 2866 3/10/99 WHOLE - 990021 Through 28, Inclusive consideration of 990024, 990026, 990027, and 990028, and we're requesting a suspension of the rules.
You covered the bill 6 024? Did you say something about that previously?
Bill No. 990024 would reduce the gross receipts portion of the business privilege tax in FY 2000 from 2.775 percent to 2.65 percent. And we have commented in our hearings on the Five-Year Plan on February 8th and on the finance-related agencies on February 16th, and that is -- that amount is consistent with the Five-Year Plan and with the recent original --
The amendment is not involved in that; although, obviously, we're requesting passage of the bill.
And that's calculated on a calendar-year basis, that bill?
This is probably a good point for the Revenue Commissioner to answer, but. . . 2867 3/10/99 WHOLE - 990021 Through 28, Inclusive (Revenue Commissioner Nancy Kammerdeiner comes forward.)
Good morning. My name is Nancy Kammerdeiner, Revenue Commissioner for the City of Philadelphia. Bill No. 990024 regarding the business privilege tax is effective with the tax year for 1999, and the filing for that is April 15, 2000. So it is consistent with what we're doing with the net profits tax. It will cover that tax year.
Does that mean it's on a calendar-year basis? COMMISSIONER KAMMERDEINER: The tax year's on a calender-year basis, but way the bill 16 is worded, it says "for returns filed after a certain date," and therefore, it is effective appropriately. It does not need an amendment in order to be effective for the proper time period.
I think I understand but I'm not sure I do. You can't give it -- under these circumstances, it's impossible to give a "yes" or "no"; is that what you're saying? COMMISSIONER KAMMERDEINER: I'm saying that the tax year is a calendar year, but there is 2868 3/10/99 WHOLE - 990021 Through 28, Inclusive a situation for some businesses where they may file on their fiscal year. There are some adjustments or some changes in filing periods for a number of businesses for the business privilege tax. The way the bill is worded, the effective date for the change is July 1, '99 for returns filed after that date based on the appropriate tax filing period for the particular business. In most instances, that means it will be for their return filed on April 15, 2000.
But for those that file April 15th, is there a reduction in that tax effective retroactively to January the 1st? COMMISSIONER KAMMERDEINER: That's on the net profits tax that it's retroactive to January 1, 1999. On the business privilege tax -- the business privilege tax is really a tax that you pay for the current year; it is not a tax paid for the prior year.
All right. COMMISSIONER KAMMERDEINER: And so you base your rate on the time period when the return is filed as opposed to the business tax year. 2869 3/10/99 WHOLE - 990021 Through 28, Inclusive
Are there any other questions on the two bills that we just heard testimony on? (No further questions.)
Seeing none, I would ask the clerk to please read the title of Bill No. 990021.
Bill No. 990021, an ordinance to adopt a Capital Program for the six fiscal years 2000 to 2005, inclusive.
Thank you. Again, good morning, members of Council. I'm Dean Kaplan, the Budget Director. Bills 990021 and 990022 propose to establish the City's FY 2000 to 2005 Capital Program and the FY 2000 Capital Budget. Today we're proposing to amend the bills which were introduced in January to add additional appropriations necessary to carry forward all unobligated funding from 1999 appropriations and to include additional appropriations where there 2870 3/10/99 WHOLE - 990021 Through 28, Inclusive were sources that were unanticipated when the bills were prepared and introduced in January. This is the process we go through each year in making sure that the unspent appropriations at this point are available next year. In the proposed amendment, all of the unobligated capital appropriations have been carried forward from Fiscal 1999 and from prior years where applicable, with very few exceptions. There are fewer than a dozen of these exceptions that fall basically into --
Mr. Kaplan, could we have copies of the amendment?
Yes, a copy has been available in the clerk's office for about a week. I have a copy with me of both the budget amendment and the program amendment. And we can make them available to individual members as necessary. Essentially, there are really two categories where there are exceptions: one is where there are unspent PICA or general obligations where projects have been completed under budget, and --
Would you please 2871 3/10/99 WHOLE - 990021 Through 28, Inclusive speak into the microphone. All I can hear is echo.
There are two categories of exceptions to the general rule that all appropriations are carried forward. One is a small number of cases where there are unspent PICA or generally obligations dollars where projects have been completed under budget.
PICA, yes. And the second category is when there are federal, state, or private appropriations where we had anticipated grants or contributions and they haven't materialized. In those cases where general obligation funds haven't been carried forward, the projects have been completed within budget. So normally, the balance is very small, usually a few thousand dollars. The key issue traditionally for members of Council and the Administration is that there are a large number of projects in the Capital Budget, as members are aware, that have been included at the direct request of individual 2872 3/10/99 WHOLE - 990021 Through 28, Inclusive members of Council. And again this year, as in the last several years, I can assure members that all remaining funding for these projects have been included in the carry-forward amendment proposed today. This recommendation doesn't include the lapsing of any unencumbered funding for projects that --
Yes. The amendment that we're suggesting does not lapse any unencumbered funding for projects included in the budget at the request of members of Council whether or not those projects have been completed. And that's something that you've asked us each year to state clearly and unequivocally, which we're happy to do again.
Councilman Cohen, what is being said is that any projects that the District Council people have in their Capital Budget, if they have not been completed for some reasons, those monies will simply be carried over until next year's budget. 2873 3/10/99 WHOLE - 990021 Through 28, Inclusive Is that correct?
So there will be no disruption of any of the projects.
Other than the addition of the carry-forward appropriations, there are some further proposed modifications to the two bills as introduced. Those are summarized in the testimony we had submitted prior -- mostly in the Commerce, Park, Fire, Prisons, Property, and Recreation Departments.
For the record, would you say what they are, please.
Sure. In the Capital Program for Commerce, there's an increase of $1.5 million in Line 45 for the Auto Mall streetscape improvements recommended for 2001. And in addition, we're recommending a change in the title for the "Food Distribution Center" to "Food Distribution Center and Other Relocation Activities" to recognize the intent to use funding there to allow for expansion of activities at the Food Distribution Center. There's an additional $100,000 for 2874 3/10/99 WHOLE - 990021 Through 28, Inclusive State appropriation for Fairmount Park for the Fairmount Park Water Works to allow us to finance a State grant that was received after the budget was submitted. In the Fire Department, we're recommending a line change for their new emergency facilities and warehouse to be changed to expansion and reconstruction of facilities to recognize the fact that we are undertaking a review of the Fire Department's space needs. And that may conclude that -- although we think they will need more space, we're not sure that it will necessarily be in the emergency services or warehousing areas. In the proposed Prisons budget, we have asked for a title change for "House of Correction" replacement to "Women's Correction Facility" for lines 99-A and B, and this reflects the latest plans to construct the women's facility on the northeast campus that we have discussed previously, and it allows us to match other funding available for that project. In Public Property, we're recommending a -- 2875 3/10/99 WHOLE - 990021 Through 28, Inclusive
Yes. In Public Property, we are recommending an additional appropriations of $6 million for the 800 megahertz project, which recognizes the amount of 911 revenue that we expect to receive next year for the 800 megahertz construction. And, finally, in Recreation, we've included an additional State-funded appropriation of a million dollars in Line 120 which is a result of a State grant that we were not aware of at the time the budget was developed. Those are the specific projects that we're requesting modifications for. And, obviously, I'd be happy to answer questions about them or the rest of the budget.
Thank you, Madam Chair. Is it the Chair's intention today to conduct a public meeting on these bills?
Yes. 2876 3/10/99 WHOLE - 990021 Through 28, Inclusive
I have to leave the chamber for Council business. And if I do not return by the time of the Council committee meeting, I'd like to be recorded as voting aye on 990021, 22, 23, 24, and 25, and also approving the rules suspension.
And also aye on the amendments -- actually, the amendment to Bill 14 990025.
Thank you, Madam Chair. Mr. Kaplan, there were a number of items discussed on the first day of the Capital Budget, and then some were subsequently discussed 2877 3/10/99 WHOLE - 990021 Through 28, Inclusive during the appropriate days of the Operating Budget regarding the few projects with which I have great interest and concern. Can you state for the record today what the status is of a couple projects for me. You and Mr. Mifflin from Fairmount Park were at the table not too long to talk about capital funding for Belmont Mansion. Can you briefly state where we are with that.
Yes. The Administration is prepared to initiate a project to determine the scope of the remaining additional improvements that are needed to Belmont Mansion during the remainder of this fiscal year and FY 2000 and to then move forward to make those improvements. Our guess is that that will probably take place sometime toward the end of next year -- more likely in FY '01.
I'm sorry, I didn't get the tail-end of what you said.
Our assumption is that the funding for the investigation and design of additional improvements will probably take somewhere in the range of 6 to 9 months and then 2878 3/10/99 WHOLE - 990021 Through 28, Inclusive be followed by the actual construction of those improvements.
All right, so you fully anticipate that you're going to fund the engineering and design work that will determine how much work actually needs to be done at Belmont Mansion. And then when that determination is made -- both the scope of the work and the cost of the work -- the Administration today is committed to then funding that work.
All right, thank you. The 21st Ward Ice Rink Project and the Wynnefield Recreation Center.
In both of these cases, we have engaged in some discussions with the Recreation Department -- and in certain cases, with other parties. For the ice rink, the Administration is prepared to initiate an analysis of both the 2879 3/10/99 WHOLE - 990021 Through 28, Inclusive demand and need for the rink, the size of a facility were it to go in the site which has been proposed, and the feasibility of constructing on that site, as well as an analysis of what it would cost. We have also been investigating the question of whether there is sufficient rink capacity in the area and believe that there may be some ability to leverage additional resources for this. And, finally, it's our understanding that there is some possibility of gaining at least some modicum of State funding for this project. So we think that there's a, you know, a reasonable amount of progress has been made, and that there's a potential for putting together a funding package for this -- although, as I stated before, to build something of the size that has been discussed, we will need, you know, some substantial assistance in addition to any City funds that might be appropriated. I think the potential commitment of State funds would be very encouraging. In terms of the --
Well, you're aware that there were some recent discussions with 2880 3/10/99 WHOLE - 990021 Through 28, Inclusive various State legislators about the real prospect of State funding to go to this particular project. Let me, though, try to make sure that we are clear and talking on the same page. Your statement is essentially that unless it can be proved that there is virtually no 8 or extremely limited usage potential for an ice rink in the 21st Ward area, the Administration at least supports the concept and is working on a funding plan. Is that an accurate statement?
I don't know if I'd say that there's virtually -- no, I think that it's our -- our preliminary discussions indicate that there is substantial demand for a rink in that area, that there may not be the potential for a continuing (unintelligible) with the private rink in the area. And that assuming that that is in fact the case once we're able to spend more time 2881 3/10/99 WHOLE - 990021 Through 28, Inclusive working on it and that State funding does in fact become available, that we would supportive of the general concept and would want to move forward on it.
For Wynnefield Recreation Center, our discussions with the Recreation Department indicate that they do believe the area is in need of some additional services. We began talking to them about what the nature of those might be. Some of their analysis of the potential ideas for the site seem to be reasonably expensive compared to the similar recreation centers we've built in other areas, but we have committed to them to try to complete those discussions in the near future and decide what would be appropriate for the site work with your office to do that as well and then try to put together a funding package that would work for that site.
All right. So the only issue with regard to the Wynnefield Recreation Center revolves more around cost 2882 3/10/99 WHOLE - 990021 Through 28, Inclusive because of the challenges of the particular site versus demand issues. You don't have any question that there is a need, you don't question that the area is under-served from a recreation standpoint. And the only real issue here is: a site has been identified, it is a challenging site, and the economic feasibility of putting a rec center at that site is really the only primary issue.
The only caveat I would have is that I have not actually seen the demand information that Recreation has put together; I'm taking that on reasonable faith based on their historical performance on that, but I'm assuming that that's correct, yes.
Well, it's a large community that does not have a B or a C size recreation center let alone an A; it has a D size recreation facility in a community that has, you know, probably over 10,000 households. So I mean, that's the demand issue.
All right. You may 2883 3/10/99 WHOLE - 990021 Through 28, Inclusive not necessarily have an answer to this today but I'm going to ask you as Budget Director, Miss Paster, and I see Miss Bittenbender in the audience. There is an outstanding issue with regard to the Japanese House and unconcluded discussions and negotiations around moving that project forward. Dollars have been allocated for this project, the group is in a fund-raising mode, and as best I can figure out, they are literally caught in the kind of governmental community chicken-and-egg situation where if we put our dollars forward, they're able to raise their money, and people are always looking to try to figure out what the City's is doing before oftentimes they step to the plate. I'd like to get a resolution to the Japanese House situation.
I think that, as you will recall, the Japanese House issue was held up for some time as a result of the need for time to fashion the actual pieces of the roof, the specialized wood in Japan.
In the interim, the 2884 3/10/99 WHOLE - 990021 Through 28, Inclusive appropriations for the Japanese House roof were required for another project, which I think you're also aware of. And in the FY 2000 budget, as I recall, we reappropriated the funding for that. I'm looking --
Right, but where are they? I'm aware of those particulars. But, I mean, you have kind of two or three dynamics going on: One, you have a currently leaking roof; two, the bark that is going to be used for this is currently being harvested in Japan for this particular project. Three, the group has various outstanding pledges committed to this project, but as often happens in these cases, they're also trying to figure out where the City's commitment is, and often we have to be the first in. So you've got some funding in place, outstanding pledges, and a contractor coming from the other side of the world to do a project that we have to put our money up on the table to get it concluded. And I don't mean in any way, shape, or form to make it seem as simple as just outlined, but we have a treasured facility out in the park, the roof is leaking -- this is not just, you know, 2885 3/10/99 WHOLE - 990021 Through 28, Inclusive where you call a roofer somewhere and put another roof on; it's a very complicated project. But I can't have the building further deteriorate as a result of, you know, what it is that we're doing in-house.
My name is Cathy Paster, I'm Deputy Budget Director. Councilman, we recently had a meeting with your staff and the Park to discuss that issue in particular, and one of the issues -- you're correct that the City does have $250,000 in place, and we're prepared to obviously fund that project; that's what that money's there for.
But there was an issue in terms of the private fund-raising, and we were concerned that they hadn't come very far along in terms of their actual dollars received and pledges.
I'm not even sure at this point that they have sufficient pledges to complete the project, the total scope of the project. 2886 3/10/99 WHOLE - 990021 Through 28, Inclusive We did meet, like I said, with your staff and the Park, and we discussed the issue, and we had asked for additional information from the Japanese House representative in terms of, you know, what their financing situation was. We do have that information; I guess it was received a week or so ago, and I think Julia on your staff has it and I have it. And we're committed to reviewing that information and trying to work out some kind of plan with them so that we can move the project forward.
I understand, but I mean, my final statement on that will be, notwithstanding what another group is doing in their best efforts in trying to raise money, we own the building.
It is owned by the City of Philadelphia. The roof is leaking, and we need to move the project forward. Notwithstanding what anybody else is doing, we own the building, and I think that has to be the driving message here about getting this project completed. 2887 3/10/99 WHOLE - 990021 Through 28, Inclusive I believe that if we go in and do what it is that we can do and put our dollars on the table, it will tremendously help the other side as they are totally committed to raising their dollars and getting their pledges in, but somebody's got to take a step here, and I believe that we ultimately have the obligation and the responsibility to make that step and push this thing along.
I have to admit that I'm not specifically familiar with this; I haven't been briefed on this specific problem. And I'm not quite sure exactly what, other than appropriating our share of the funds and committing to spend it, exactly what step you want us to take.
There's a contract issue, and I believe that the Friends of the Japanese House have essentially been told that the City will not put its money in the project because they have not raised the portion of the funds that they are supposed to raise. Some of our money is, in fact, being used for the purchase of the items. But before you can get to the purchase of 2888 3/10/99 WHOLE - 990021 Through 28, Inclusive the items, the craftsmen and workmen literally have to come from Japan, get on the ground here, be housed wherever they're going to be housed, and so there's also an issue of how our early money is being used and whether it's for labor or whether it's for goods. I mean, that's the -- I mean, it's a part of the conundrum of this particular project. I mean, as we dot every i and cross every t -- and everyone is doing their job, but if we continue along that path, the only thing that's going to happen is more water is going to go into the Japanese House as we make sure that we're, you know, covering all of our respective bases. That's the problem. And we don't need to -- I mean, we'll have more discussion about it. Let's just -- it's on the record, let's finish it. Street trees and flashing lights. Last year, Mr. Kaplan, through some inadvertent situation, there was no money in the budget for street tree removal and replacement. We are not going to be faced with that again this year; is that correct? 2889 3/10/99 WHOLE - 990021 Through 28, Inclusive
I believe there's $300,000 in capital, but I'm going to have to find the right page here.
And does the Park currently have capital funding for street trees?
Has all the money that's been appropriated to them actually been given to them, or is any being held?
I believe that all of the funding that we have promised them is available.
All right. The reason I ask the question is because I had a request just the other day, and the response that came back to me was that the money has essentially come to them, in somewhat inarticulate terms, "in descriptions and drabs." There's 100,000 here, you spend that, you get another 100,000. I mean, it's kind of like, you know, if you have pencils, 2890 3/10/99 WHOLE - 990021 Through 28, Inclusive you can't get another one until you bring back the one with no eraser left on it. I mean, you know, I can't deal with them on a tree-by-tree basis. I have to know that the money is there and the requests come in, 'cause I don't control, you know, how we get requests. I could get ten requests in a day, then I might not get another one for another couple of weeks.
I think that the issue has been in terms of cash availability. We wanted them to pick up the pencil before we gave them a second pencil, and that's historically been the issue with the Park. The amount for FY 2000 in the future years for capital park and street trees is 300,000 throughout the plan.
All right. Is it my understanding that this upcoming fiscal year, we will have money in the budget for the school flashing light program?
I believe the Mayor has 2891 3/10/99 WHOLE - 990021 Through 28, Inclusive made a commitment to spend up to $750,000 in FY 2000 for flashing lights at schools.
All right. And has the Streets Department been notified about that, and can they begin to crank up their operation even at this point, in March, anticipating that July 1, they will have those dollars and be able to fulfill a number of yearlong -- over-a-year outstanding requests, and that they might actually be able to get some of those lights in place for the September 1999 school year?
I believe that they're aware of the commitment. I don't think we've had time to discuss it with them in detail, but I do know that they are the holders of the list of outstanding requests, which are approximately 39.
And our assumption is that those would be the first ones that they would work on. I don't have a very good sense of the timing for each -- it depends on how big the intersections are.
But, obviously, our goal 2892 3/10/99 WHOLE - 990021 Through 28, Inclusive would be to have them operational by the fall.
Well, there is some preliminary work that they have to do. My experience, though, with them -- and this may come from direction from the top, but the departments often are reluctant to even begin their preliminary work, not in expenditure of any money, but they don't generally like to do anything until they've gotten the secret nod, wink, handshake, and a letter signed in triplicate telling them that they can go forward on things. This is the kind of project that does have some lead time that is built into it. There are many things that they can do that virtually require no expenditure of money so that on July 1, I mean, they can now start telling their contractors, We're going to be in the ground in July and August, anticipating the September school opening. And if you could communicate that message to them, I'd greatly appreciate that.
We can certainly do that, and we can ask them to begin immediately working on the -- certainly the outstanding 39 requests.
Okay. Last two 2893 3/10/99 WHOLE - 990021 Through 28, Inclusive issues, they're both tied together. I have two outstanding projects, money allocated for them. They are somewhere in a pipeline that is clearly somewhat clogged. Many a bike path has ISETEA grant money that is old and is apparently nowhere near being spent or on its way to completion -- that is over in Fairmount Park now. And the Manayunk bank stabilization project has FY '99 money, which you and I had a half dozen, at times, blow-out conversations about this, and that project is nowhere near any water moving anywhere up there. And I would ask somewhere between you, Mr. Kaplan, Cathy Paster, and Emily Bittenbender over at CPO that a serious fire -- if not dynamite -- needs to be placed strategically to get these projects moving. I mean, it is unacceptable where things are now with these projects, given the age of money, inability to apparently spend ISETEA money, which -- I mean, you know, we're into almost a third round now of ISTEA. I mean, you know, we're two acronyms gone on ISTEA, and nothing has gone on with these projects.
I'm not familiar with the 2894 3/10/99 WHOLE - 990021 Through 28, Inclusive bike path timing, but I'll be happy to look into that and get back to you as soon as possible on that.
On the Manayunk bank stabilization, my understanding is that that project is supposed to be bid next month, so I'll investigate it and find out if that is, in fact, the case, but that's the most recent word I heard.
All right. And will someone get back to me with timetables on both of these? And who is actually going to be responsible for these projects?
Is it Fairmount Park, is it CPO? 'Cause, I mean, I'll need to know where to place the next call.
You can call me, but we'll try to call you before that happens and give you that information.
That would be nice, all right. Thank you. Thank you, Madam Chair.
Thank you. 2895 3/10/99 WHOLE - 990021 Through 28, Inclusive The Chair recognizes Councilman Cohen.
Mr. Kaplan, the Capital Program, isn't it really basically a combination of a wish list and a plan for the future? It is not on operational ordinance like the Capital Budget, right? When we appropriate money, it's got to be in the Capital Budget when we move ahead; isn't that true?
Yes. The Capital Budget is a specific budget appropriation for the next fiscal year. The plan -- program, I'm sorry, is a six-year Capital Plan, which is required by the Charter and is developed by the City Planning Commission. It is not specifically a wish list but is an attempt to put together a rational, thoughtful program for the scheduling of upcoming replacement of City assets and construction of new assets.
But until an item gets into the Capital Budget, it is not subject to having an appropriation bill passed relying on it; isn't that correct?
I think that's correct. However, over the past several years, we have made 2896 3/10/99 WHOLE - 990021 Through 28, Inclusive a fairly strong attempt to make sure that the things that are in the program are, first of all, things that there's some consensus that are needed and then try to make sure that the program is not, as you suggested, a wish list, but rather, that most of those projects, in fact, when the funding is available and assuming the timing works out, actually are funded in subsequent capital budgets.
Now, the amendments that you introduced with respect to the Capital Program, are they for years other than Capital Budget Year 2000?
I believe the only one that's for a year other than 2000 is the streetscape project for the Auto Mall, and the reason that that is a 2001 appropriation was that in the time between when it was originally proposed and now, some additional review work has been done by the Streets Department, and they've identified what they think the actual project scheduling will be, and have suggested that there would be additional funding needed in FY '01. So other than that, I believe all the changes are to FY 2000. 2897 3/10/99 WHOLE - 990021 Through 28, Inclusive
So that these amendments are also going to be made in the Capital Budget Ordinance for Fiscal 2000?
Right. In fact, most of the changes are really to the budget. And inherently, obviously, the budget year is always included in the program.
Right, there are two separate -- we have to amend both documents, but the -- (Interruption by PA sound equipment malfunction.)
So the amendments are going to be duplicated, the amendments to the bill 021 are going to also go into capital -- into the 2000 Capital Budget, with the exception of the one you referred to.
All right, thank you. 2898 3/10/99 WHOLE - 990021 Through 28, Inclusive
Thank you. The Chair recognizes Councilwoman Tasco.
Thank you very much. I had a list here of projects that were sponsored by me from '95, '96, '97, and '98. How do I know that, if the money wasn't expended, it's carried over? Would you be able to tell me that?
Obviously, not off the top of my head but, yes, if you could give us a copy of the list, we'd be happy to do that. And members will frequently ask us that question and we're happy to provide you with an update whenever you would like it.
Okay. Because it's confusing the way it's presented, so you never really know whether your projects are carried over or not.
As a general rule, all of the Council-sponsored projects are always carried over; I can't think of a time in the last few years when there wasn't one, one that was not carried over -- unless, you know, obviously, when 2899 3/10/99 WHOLE - 990021 Through 28, Inclusive that's completed, it is not carried over. But if you would like to, you know, sit down with me and my staff, we'd be happy to go through that. I believe we presented a list recently. Sometimes the budget presentation is a little different. But if you'd like to go back, we can actually provide you a list of everything that we believe is currently outstanding from all prior years and the current year and go through that with you and make sure that we're in agreement.
You know, I don't see any reason why we shouldn't be getting quarterly reports on the status of our projects. I think that that would be extremely helpful to all of us.
They were doing that -- at least the Recreation Department was doing it.
The Recreation Department was doing that; I don't know if they're still doing that. You know, we ask for 2900 3/10/99 WHOLE - 990021 Through 28, Inclusive something, and maybe for the first three months or six months, we do get the information we're seeking, and then everybody forgets about it. But I think that's very important because we're also getting calls from our constituents wanting to know the status of a particular project.
That would be helpful, and I'd like to get a report by project and not by year.
Because if I know that I'm doing -- improvement work's being done on a specific recreation center, for me, it's easier to know that. And then it could be by category, by project, and then the year the money was appropriated. Then you have the total amount of money that was appropriated through the years for that project. That is what -- 'cause, see, I have to look and see, in 1995, there was $100,000 for a project. Well, was that done, was all the money spent, is there a carry-over? I see here I put in -- there's some money for paving of the street. 2901 3/10/99 WHOLE - 990021 Through 28, Inclusive Well, I shouldn't be paving the streets out of my capital appropriations; that should be something out of the Streets Department, unless there was some unusual circumstance which we'll go back and look at. So if I could get the report by project, then I'm better able to track what's going on in my district.
I believe that District Councilmembers should have each received within the last week or so a copy of the report detailing the progress through the first half of FY '99 on projects in their district. If you don't have a copy of that, please let me know, and I'll be happy to make sure that you have it. And I would be the first to say that, obviously, the Capital Project system is built to be an accounting system, and even for budget people, it's not always completely clear. But if you look at the lines in that, the carry-forward lines from each year, there usually is a pretty clear indication that there's prior-year funding involved and what year it comes from and what the total available is. 2902 3/10/99 WHOLE - 990021 Through 28, Inclusive And when we sit down to go over your projects, I'll be happy to go through that with you to make sure that it makes sense.
Thank you. Are there any other questions or comments? (No further questions or comments at this time.)
Is there anyone else to testify on the bills that have just been hears? (No response.)
Seeing none, this will conclude our -- before we conclude our public hearing, I would just like to announce that on last Wednesday, we had hearings on the School District, and we were extremely concerned about children being in the audience saying that they did not have books. So we asked the School District to give us a report on how the $21 million appropriated for this year to purchase 2903 3/10/99 WHOLE - 990021 Through 28, Inclusive books were spent. They are working on that report. Therefore, I am recessing Bill No.'s 990026, 990027, and 990028 until March the 17th, 1999, at 1 p.m. The Chair recognizes Councilwoman Blackwell.
Madam President, I will leave my vote. That day, I know already that I can't be here that day, or I'll be here but that I may not be here for that meeting. I have two important engagements. But I wanted to say also, do not forget that they were also supposed to give us a form on health emergencies to be distributed to each school that we've been asking from them for two years, and they're supposed to have that form ready.
It's for health emergencies, whether it be a shooting, or whether it be a disease like meningitis where we had a child die. They were supposed to give us this form, and we've been asking for it years, and 2904 3/10/99 WHOLE - Public Meeting I still find it unconscionable that the School District does not have one uniform policy for health emergencies in public schools today. So they agreed to do that as well.
Fine, we will notify them to be prepared with that information, also.
We will now go into our public meeting. At this time, the Chair recognizes Councilwoman Clark.
No, no, excuse me, Councilwoman. Can we do them individually because --
All right, I move that we suspend the rules so as to permit -- 2905 3/10/99 WHOLE - Public Meeting
Councilwoman, I'm sorry, can we move for the adoption of the amendment first, please.
The amendments as read by Mr. Kaplan be adopted.
You really should pay attention here, shouldn't you? I move that the amendments as adopted by Mr. Kaplan be adopted. (Duly seconded.)
All those in favor will signify by saying aye. Those opposed? The ayes have it, the motion is carried. The Chair recognizes Councilwoman Clark.
Madam Chair, I move that Bill No. 990021, as amended, be reported 2906 3/10/99 WHOLE - Public Meeting out, and that the rules of Council be suspended so as to permit consideration at our next stated meeting. (Duly seconded.)
It has been properly moved and seconded that Bill No. 990021 be reported out of committee with a favorable recommendation, as amended, and that the rules of Council be suspended so as to permit first reading at our next session of Council. All in favor will signify by saying aye. Those opposed? The ayes have it, the motion is carried. The Chair recognizes Councilwoman Clark.
No, no, Councilwoman, sorry. The amendment has to be adopted first.
Okay, I move that the amendment be adopted to Bill No. 990022. 2907 3/10/99 WHOLE - Public Meeting (Duly seconded.)
It's been properly moved and seconded that the amendment to Bill No. 990022, as read by Mr. Kaplan, be adopted. All in favor will signify by saying aye. Those opposed? The ayes have it, the motion is carried. The Chair recognizes Councilwoman Clark.
Madam Chair, I move that the amendment to Bill No. 990023 be adopted. (Duly seconded.)
No, Councilwoman, we're still on Bill No. 990022; we have to report the bill out with a favorable recommendation as amended.
Oh, I really need to pay attention, don't I? Okay, then this time, I'll -- (Laughter.) 2908 3/10/99 WHOLE - Public Meeting
Madam Chair, I move that Bill No. 990022, as amended, be reported out with a favorable recommendation and that the rules of Council be suspended so as to permit first consideration at our next stated meeting.
It's been properly moved and seconded that Bill No. 990022 be reported out of committee with a favorable recommendation, as amended, and that the rules of Council be suspended so as to permit first reading at our next session of Council. All in favor will signify by saying aye. Those opposed? The ayes have it, the motion is carried. The Chair recognizes Councilwoman Clark regarding Bill No. 990023.
There are no 2909 3/10/99 WHOLE - Public Meeting amendments to it.
There are no 4 amendments to it, wouldn't you know it.
I'm sorry, I'm sorry, I see. I'm sorry, go ahead.
24 -- oh, 23, I'm sorry. Now I'm getting confused. (Laughter.)
-- be reported out with a favorable recommendation, and that the rules of Council be suspended so as to permit first reading.
It's been properly moved and second that Bill No. 990023 be reported -- I think Councilman Nutter has his light on too? Councilman Nutter?
You did get it right, Councilwoman Clark. Madam Chair, my only question on Bill 2910 3/10/99 WHOLE - Public Meeting No. 990023 is the matter of the $15 million for the School District and whether or not those dollars are presently accounted for in the FY 2000 budget; or is the plan to come back and do a transfer ordinance subsequently?
It is our plan to do a transfer ordinance. The $15 million is not included in this bill for the School District. Maybe Mr. Kaplan would like to add to that.
No, I believe the Council President has accurately characterized the situation.
Councilman Cohen, do you still want to be recognized?
Yes. As a matter of procedure, prior to the time that the presidency was assumed by President Street, the procedure before operating -- before enacting a budget, the Operating Budget, there was always a Democratic caucus and a Republican caucus, and then if 2911 3/10/99 WHOLE - Public Meeting necessary, a caucus of all the parties so that there could be informal discussion going over the budget. I think that such a procedure would be very helpful so that all of us are very clear and if we have any questions, instead of engaging in debates at the time of the adoption of the budget, we could discuss these things as party caucuses do. I don't -- except for our procedure the last number of years, I know of no other legislative body that doesn't have a caucus of the parties to see whether or not the budget ought to be altered, you know, whether any recommendations come out of the those caucuses. So I would like to urge that before we act on 990023, that we have such party caucuses. We have time, there is absolutely no requirement for the budget to be adopted prior to the end of May, and we're only at the beginning period of March. Sometimes when there are proposals, the Administration agrees or agrees to talk about it, and then we arrive at an agreement. Sometimes the Administration opposes it. 2912 3/10/99 WHOLE - Public Meeting And it seems to me that Council, as an independent legislative body, ought to take its position first, seek agreement with the Mayor, but be prepared to act if there is no agreement on any matters we deem important. Therefore, I would like to suggest that we not act on 990023 today until after the caucuses. There's absolutely no time urgency with respect to the adoption of that bill.
Thank you, Madam Chair. Madam Chair, may I propose a question to Councilman Cohen, or will Councilman Cohen accept a question?
Councilman, I fully understand what you just laid out. Could you share with us, I guess, from a timing standpoint what your sense of the proposal is to have a caucus of Democrats and a caucus of Republicans. 2913 3/10/99 WHOLE - Public Meeting And then, I guess, the caucuses would come back in the same forum and setting, back in the Committee of the Whole. I mean, are this still outstanding questions about the budget which you would rather pose in a caucus forum? And, I mean, is this a matter of days, weeks, months?
No, just a matter of maybe week or two, but to give everybody a chance to go through everything carefully in their mind and decide whether they want to suggest -- for example, take the amount of money for the School District, should it be million? 15 As far as I know, this Council has never actually made such a decision. We were told at one point several years ago that it had been decided by the Mayor and the then-Council President that there would be an additional 15 million.
But, Councilman, the $15 million is not in this budget bill; it would be in a transfer bill.
Yeah, well, I'm just referring to that, that it would give us -- 2914 3/10/99 WHOLE - Public Meeting
And I would just like to add that I have personally spoken to several of the Councilmembers, and I thought I would speak to each one individually. Because of the time constraints, you made a suggestion that you wanted to meet, and I told you that immediately after today's hearing, I would meet with you and any other Councilmember that felt that they wanted to discuss the budget.
I don't know why we can't report this out, and if we have to hold it on a second reading, we will do so.
Well, it just, as a matter of fact, when it comes up on second reading, there is always the additional argument that, Well, we can't pass the bill if we amend it and, therefore --
Why can't we pass the bill and amend it? 2915 3/10/99 WHOLE - Public Meeting
Well, you can't -- you mean, pass it out of committee. I'm just saying that it just seems to me best to have these caucuses so we can informally discuss a budget, and I would like to see that. It's not only the School; there may be other things that other members may want to raise. I may want to raise public access, I may want to raise additional facilities for the Health Department. I'm extremely concerned as to what plans the City has as a result of the welfare legislation coming up. What arrangements do we have in the budget to deal with emergencies. There are all sorts of things that I think ought to be discussed at a caucus so that we can have an exchange of opinions informally before we go through the process and act.
Madam Chair, I would say that Mr. Cohen is correct, that members need to have an opportunity to discuss what's in the budget, but that does not in any way conflict with putting it on first reading, because that 2916 3/10/99 WHOLE - Public Meeting period between first reading and final passage is an adequate opportunity for us to put our stamp on the budget and to make whatever changes as would be necessary; that's what our amendatory process permits us. If this were second and final passage, I could see the urgency for his comment; I don't see it and, therefore, would respectfully ask him to permit us to pass this bill out, make whatever changes are appropriate and necessary between now and second and final passage.
I should ask if Mr. Cohen would permit himself to be interrogated.
I'm always ready to be interrogated. (Laughter.) 2917 3/10/99 WHOLE - Public Meeting
David, what prevents us from making the changes that you recommend or that you might see as a result of an in-depth search of it between now and second and final?
Well, there's sort of an automatic process. Once it gets reported out --
Well, it is with the body. Once it's passed, everybody feels it's gone out of committee, we ought to just enact it. And I don't see why we go through -- you know, I don't understand why we don't have these discussions. They were very helpful, we always arrived at agreement in the caucuses, every member felt he fully participated. I'm just suggesting that --
But there's nothing magic about having them before first reading, so this is between first reading and 2918 3/10/99 WHOLE - Public Meeting second and final passage. Nothing is to prohibit whatever changes would be necessary to adjust this budget so that the final one that's passed out represents your best interests. I would think you need to have it before us in order to get a true attention of people who might otherwise be opposed to your thoughts.
Well, I don't have any strong feeling that there has to be a caucus prior to committee action; I just think it would be appropriate to do it before committee action. But if we're going to have these caucuses between first and second reading, I would say that's fine, too.
But I think that's what the President is saying in her comments.
I'm just looking for a way in which Councilmembers can get together and discuss these issues other than in a formal procedure or a one on one with the Council President. I welcome what Council President Verna said about her willingness to meet, but I don't think it's a substitute for a caucus meeting; I 2919 3/10/99 WHOLE - Public Meeting think it's a very fine addition to a caucus meeting.
Well, one of the things that arose with respect to the caucus is the Sunshine Law, and so we got ourselves into a situation where we were meeting in groups of less than nine in order that we would not be automatically subject to the Sunshine Law.
No, Councilwoman, I have to disagree with you on that. I think -- I just think it is unconstitutional to say that a political party -- that the membership of a political party within a legislative body has to be open; it is not true anywhere else in the United States. And that was an interpretation that I think is a faulty legal interpretation. We use ruses to avoid it. We go down and we have briefings in the mayor's office because technically, you know, it's a meeting by the mayor, but I think we ought to openly have party caucuses. It would be unconstitutional for us not to be able to meet unless we agreed to turn over some seats to the Republicans so that we only have 2920 3/10/99 WHOLE - Public Meeting eight Democrats. Under that ruling that, you know, we say existed -- and there never was such a ruling, there's never been a ruling that we don't have the power to meet as a party caucus; we've done that sometimes. You know, when we felt it really urgent, we did it, and nobody brought suit; and if they did, I'm confident that we'd win. We've got to have the ability as a party to meet, and that's what I'm trying to reestablish.
And, again, Councilman, I am saying that any interested Councilmember can meet in my office immediately after this hearing.
All right. I'm just pointing out, Madam President, that that's different from --
And to be very honest with you, I don't remember in recent years every being called to a caucus --
Only since President Street has been -- 2921 3/10/99 WHOLE - Public Meeting
Only since President Street became president. Till he became president, we regularly had caucus meeting on the budget.
I am willing, as I said, to meet with any and all Councilmembers who are interested in coming to the meeting immediately after this hearing.
I think from the conversations that we've had and from what you stated and what Councilwoman Clark stated is that we're going to have the intervening period, and during this intervening period, we can meet as a caucus, we can meet and discuss the budget and whatever amendments we might decide to bring up before second and final reading. Is that right? 2922 3/10/99 WHOLE - Public Meeting
That's what we're talking about, right? So that we can set up through you those meetings so that we can begin discussing before final passage, because final passage does not have to follow --
Well, why can't we start today? I mean, at least we would know what each other is thinking.
Dave, I think, you know, we have a new era in Council of participation and cooperation. And I think this process can take place, you know, during the intervening period, okay? I think it can take place during the intervening period. So I see no problem in moving the legislation out of committee and then going forward with that, okay?
I think the process is the same process, but if somebody wants to call it new, that's fine. 2923 3/10/99 WHOLE - Public Meeting
It has been properly moved and second that Bill No. 990023 be reported out of committee with a favorable recommendation; also a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. All in favor will signify by saying aye. Those opposed? The ayes have it, the motion is carried. The Chair recognizes Councilwoman Clark regarding Bill No. 990024.
Madam Chair, I move that Bill No. 990024 be reported out of committee with a favorable recommendation, and that the rules of Council be suspended so as to permit first reading at the next stated session of Council. (Duly seconded.)
It's been 2924 3/10/99 WHOLE - Public Meeting properly moved and seconded that Bill No. 990024 be reported out of committee with a favorable recommendation, and that the rules of Council be suspended so as to permit first reading at our next session of Council. All those in favor will signify by saying aye. Any opposed? The ayes have it, the motion is carried. The Chair recognizes Councilwoman Clark regarding Bill No. 990025.
Councilwoman, I'm sorry, there's an amendment that has to be approved first.
Madam Chair, I move that the amendment to Bill No. 990025 be approved. (Duly seconded.)
It has been properly moved and seconded that the amendment to Bill No. 990025, as proposed by Mr. Kaplan, be 2925 3/10/99 WHOLE - Public Meeting approved. All in favor will signify by saying aye. Those opposed? The ayes have it, the amendment has been adopted. The Chair recognizes Councilwoman Clark.
Madam Chair, I move that Bill No. 990025, as amended, be reported out of this committee with a favorable recommendation. And do we need a rules suspension?
And that the rules of Council be suspended so as to permit first reading at our next stated session of Council. (Duly seconded.)
It has been properly moved and seconded that Bill No. 990025 be reported out of committee with a favorable recommendation as amended, and that the rules of Council be suspended so as to permit first reading at our next session of Council. 2926 3/10/99 WHOLE - Public Meeting All in favor will signify by saying aye. Those opposed? The ayes have it, the motion is carried. Again, I would like to repeat, we are recessing the public hearings on Bill No. 990026, the 990027, and 990028 until St. Patty's Day, March the 17th, at 1 p.m. I just want to thank all of my colleagues for their patience and for all of their interests in the budget hearings this year. I think that they went very smoothly and you were all great in being here and asking some very, very pointed questions. And I'd also like to thank Mr. Kaplan for being available to answer the many questions that we had. Thank you. This concludes it all. (Adjourned at 11:46 a.m.) - - - 2927 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, March 10, 1999, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE OF THE WHOLE BUDGET HEARINGS BILL NO. 990021, 22, 23, 24, 25, 26, 27, 28 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter