COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE ON FINANCE - - - Room 400, City Hall4 Philadelphia, Pennsylvania Wednesday, December 8, 2010, 1:55 p.m.5 - - - BILL 100557 - To add the Philadelphia Police and Fire Pipes and Drums Band to the list of7 entities for which payroll deductions may be authorized by City employees.8 BILL 100751 - Authorizing the Director of9 Finance to enter into a lease agreement to lease vehicles and equipment from the10 Philadelphia Municipal Authority. 11 BILL 100781 - Allow the Commonwealth to add City and School District taxes to the12 Commonwealth's online system for the electronic filing and payment of taxes.13 BILL 100794 - Add Police and Firemen's Ins.14 Assoc. to list of entities for which payroll deductions may be authorized by City employees.15 (Full text of all bills attached hereto.)16 17 COMMITTEE MEMBERS PRESENT: Marian B. Tasco, Chair18 Jannie L. Blackwell, Vice Chair Blondell Reynolds Brown19 Frank DiCicco W. Wilson Goode, Jr.20 William K. Greenlee 21 - - -22 23 24 25 2 12.8.10 - FINANCE - BILL 1005571
Good2 afternoon. The Committee on Finance will3 come to order. There is a quorum in the4 presence of Councilman DiCicco,5 Councilman Greenlee, Councilwoman6 Blackwell, Councilwoman Blondell7 Reynolds-Brown, and yours truly.8 We'd like to have the clerk9 read the bill, please.10
Bill No. 100557, an11 ordinance amending Chapter 19-200 of the12 Philadelphia Code, entitled "City Funds -13 Deposits, Investments, Disbursements," by14 amending Section 19-203, entitled15 "Payroll Deductions," to add the16 Philadelphia Police and Fire Pipes and17 Drums Band to the list of entities for18 which payroll deductions may be19 authorized by City employees, under20 certain terms and conditions.21 Bill No. 100751, an ordinance22 authorizing the Director of Finance, on23 behalf of the City of Philadelphia (the24 "City"), to enter into a lease agreement25 3 12.8.10 - FINANCE - BILL 1005571 to lease vehicles and equipment from the2 Philadelphia Municipal Authority, for the3 purposes of financing vehicles and4 equipment and to enter into an escrow5 agreement pursuant to the terms of the6 lease agreement, under certain terms and7 conditions.8 Bill No. 100781, an ordinance9 authorizing the City to enter into an10 intra-agency agreement with the11 Commonwealth of Pennsylvania for a period12 of years for the Commonwealth to add City13 and School District taxes to the14 Commonwealth's online system for the15 electronic filing and payment of taxes16 under certain terms and conditions.17 Bill No. 100794, an ordinance18 amending Chapter 19-200 of the19 Philadelphia Code, entitled "City Funds -20 Deposits, Investments, Disbursements," by21 amending Section 19-203, entitled22 "Payroll Deductions," to add the Police23 and Firemen's Insurance Association to24 the list of entities for which payroll25 4 12.8.10 - FINANCE - BILL 1005571 deductions may be authorized by City2 employees, under certain terms and3 conditions.4
Thank you5 very much.6 The Chair calls on the first7 panel for Bill 100557: Catherine Paster,8 Frederick Donnelley, and Sean Gallagher.9 (Witnesses come forward.)10
Hi, good11 afternoon. Would you please state your12 name for the record and begin your13 testimony.14
Hi. Good15 afternoon, Chairwoman Tasco and members16 of the Finance Committee. My name is17 Catherine Paster, First Deputy Director18 of Finance for the City.19 I'm here today to testify in20 support of Bill No. 100557, which would21 amend Section 19-203 of the Philadelphia22 Code pertaining to payroll deductions.23 Section 19-203 of the Code24 authorizes the Director of Finance to25 5 12.8.10 - FINANCE - BILL 1005571 deduct from salaries such sums as2 employees may request. Any authorization3 for these payroll deductions is made4 voluntarily by the employee and may be5 revoked at any time.6 The Code lists specifically7 entities for which payroll deductions may8 be made, and bill 100557 would permit9 City employees to authorize payroll10 deductions to be paid to the Philadelphia11 Police and Fire Pipes and Drums Band.12 This concludes my testimony,13 and I would be happy to answer any14 questions you may have.15
Yes. Good18 afternoon, Finance Committee Chair Tasco,19 Vice Chair Blackwell, and members of the20 committee. My name is the Frederick W.21 Donnelley. I'm a battalion chief of22 Battalion 13, Platoon D, Philadelphia23 Fire Department.24 Today, myself and Firefighter25 6 12.8.10 - FINANCE - BILL 1005571 Sean Gallagher come before you as2 representatives of the Philadelphia3 Police and Fire Pipes and Drums to ask4 you to support Bill No. 100557.5 This would make available to6 our rank-and-file in the police and fire7 departments the option of a payroll8 deduction in order to support the funding9 of our band. Our band is, and has been,10 a charitable, nonprofit organization,11 with a 501(c)(3) status, and all12 contributions made by City employees are13 tax-deductible.14 There is one minor change in15 the bill. The exact name for the record16 is: "The Philadelphia Police and Fire17 Pipes and Drums."18 I understand that, at the19 request of Councilman Rizzo, who20 introduced the bill on behalf of our21 authorization, the Law Department has22 prepared an amendment to reflect the23 band's official name. I would like to24 hand up the amendment for consideration25 7 12.8.10 - FINANCE - BILL 1005571 by the committee.2 Thank you for your3 consideration in this matter.4
Thank you5 very much.6 Mr. Gallagher, you going to7 testify?8
Okay.10 Thank you very much.11 We'll now hear testimony the12 regarding testimony regarding Bill13 100794. The panel will consist of14 Ms. Paster, Mr. Timothy McShea, and15 Michael Tesigni.16 (Witnesses come forward.)17
Good18 afternoon. Would you please identify19 yourself for the record and proceed with20 your testimony.21
This is Cathy22 Paster again. I'm here to testify in23 support of Bill No. 100794, which would24 amend Section 19-203 of the Philadelphia25 8 12.8.10 - FINANCE - BILL 1007941 Code on payroll deductions.2 Section 19-203 authorizes the3 Director of Finance to deduct from4 salaries such sums as employees may5 request, and these authorizations are6 made voluntarily by the employees and may7 be revoked at any time.8 The Code lists specifically9 those entities for which the deductions10 may be made, and Bill No. 100794 would11 permit City employees to authorize12 payroll deductions to be paid to the13 Police and Firemen's Insurance14 Association.15 This concludes my testimony,16 and I'd be happy to answer any questions.17
Thank you18 very much.19 Next?20 MR. McSHEA: My name is Timothy21 McShea, and I'm a firefighter with the22 City of Philadelphia and also an account23 representative with the Police and Fire24 Insurance Association.25 9 12.8.10 - FINANCE - BILL 1007941 Beside me is Mike Tesigni.2 He's the regional manager of the Police3 and Fire Insurance Association.4 Philadelphia has been an5 established section of the Police and6 Fire Insurance Association since the7 1980s. At this time, there are over 2008 insured members and families of the9 Philadelphia police and fire departments10 holding over 1200 policies, and many more11 members would take advantage of the12 benefits if there were a payroll13 deduction.14 Currently, the money is15 withdrawn from the member's checking or16 savings account on the third Thursday of17 each month. The Police and Firemen's18 Insurance Association has also donated a19 thousand dollars to the family of every20 line-of-duty death, whether they were a21 member or not.22 A number of other insurance23 groups have come into the City, promising24 good benefits and were gone in a year or25 10 12.8.10 - FINANCE - BILL 1007941 two. The PFIA has been in Philadelphia2 over 20 years, and will continue to3 provide their benefits well into the4 future.5 I humbly request that the City6 approve the bill so that those who would7 like to join the PFIA may do so with a8 less invasive manner. I thank you for9 your time and consideration on this10 matter.11
Basically -- oh,15 my name is Mike Tesigni, and I think that16 Tim covered just about every point that17 was necessary. We just wanted to let you18 know that we have been here, in19 Philadelphia, since the 1980s, and we are20 providing scholarships and many fraternal21 benefits, okay, for the police officers22 and firefighters in the City.23 Thank you for your time.24
Thank you25 11 12.8.10 - FINANCE - BILL 1007941 very much.2 Are there any questions or3 comments from members of the committee?4 Councilman Rizzo. I'm sorry.5 Did you raise your hand before? I'm6 sorry.7
No. No8 problem. I did not.9 I just wanted to take this10 opportunity, since I introduced both of11 these bills, that -- I want to thank the12 Finance Committee for their13 consideration.14 Thank you.15
Thank you.16 Thank you very much.17 Our next panel will be our18 Budget Director, Miss Rebecca Rhynhart,19 and David Wilson relative to Bill 100751.20 (Witnesses come forward.)21
Fine,2 thank you.3 Would you state your name for4 the record and begin your testimony,5 please.6
Sure. Good7 afternoon, Councilwoman Tasco and members8 of the Committee on Finance. I am9 Rebecca Rhynhart, Budget Director for the10 City of Philadelphia. I am here to11 testify on behalf of Bill No. 100751.12 Bill No. 100751 will authorize13 the City to enter into a lease agreement14 to lease-purchase vehicles and equipment15 through the Philadelphia Municipal16 Authority. These vehicles and equipment17 are essential to City operations and have18 a long, useful life, averaging over19 eleven years. This type of financing is20 done by municipalities across the country21 and is considered fiscally prudent.22 The current plan of finance is23 to enter into a fixed-rate, tax-exempt24 lease financing in an amount not to25 13 12.8.10 - FINANCE - BILL 1007511 exceed $30 million and not to exceed a2 10-year term. The fixed rate for this3 financing shall not exceed 6 percent.4 This was discussed during the5 fiscal 2011 budget process, and a payment6 for the lease is included in Fleet7 Management's approved fiscal 20118 operating budget. Annual lease payments9 will not exceed $4.5 million.10 Certain documents will be11 executed as part of the lease-sublease12 agreement structure, including a lease-13 purchase agreement between PMA and the14 selected financial institutions, a15 sublease purchase agreement between the16 City and PMA, and an escrow agreement17 between the City PMA, and the selected18 financial institutions. A competitive19 bid process will be conducted which will20 provide the City with the lowest cost of21 capital.22 I would like to request a23 suspension of the rules to allow for24 first reading at Council's next session.25 14 12.8.10 - FINANCE - BILL 1007511 This concludes my testimony and2 I'm happy to answer any questions you may3 have.4
Let me8 recognize that Councilman Goode is here.9 Any questions about this?10 (No questions.)11
Good afternoon,12 Councilwoman Tasco and members of the13 Committee on Finance. I am Dave Wilson,14 the First Deputy Managing Director for15 the City of Philadelphia. Thank you for16 the opportunity to present this testimony17 in support of Bill No. 100751,18 authorizing the City of Philadelphia to19 enter into an agreement to lease vehicles20 and equipment from the Philadelphia21 Municipal Authority.22 Many of these vehicles have far23 reached their useful life, and if not24 replaced, will need to be retired,25 15 12.8.10 - FINANCE - BILL 1007511 leaving the City in a vulnerable2 position. Some of the vehicles and3 service that this financing support are:4 Street compactors, which5 approximately half of the compactors6 utilized by the Streets Department are7 nearing the end of their useful life, and8 the cost of those repairs increases9 substantially each year.10 Fire-ladder trucks and pumpers.11 Nearly 40 percent of the Fire12 Department's pumpers and ladders have13 exceeded their useful life, leading to14 longer periods of time for their repairs15 and are inoperable equipment to the16 department.17 Bucket trucks. The Streets18 Department and Fairmount Park utilize the19 equipment currently, and currently20 two-thirds of these trucks have exceeded21 their useful life.22 As a Pennsylvania state23 requirement, this equipment must be24 independently certified, and quantities25 16 12.8.10 - FINANCE - BILL 1007511 of repairs have forced the equipment to2 be out of service for considerable3 periods of time.4 Also, the new vehicles being5 leased are equipped with many6 technological improvements, including7 onboard diagnostics, cleaner emissions,8 and better fuel efficiency. And this is9 coupled with a full warranty, reducing10 our maintenance cost.11 This financing is important in12 order to address these issues and to13 ensure that our departments have the14 vehicles necessary to complete their15 missions.16 I thank the members for the17 opportunity to explain this initiative18 and am happy to answer any of your19 questions.20
Thank you21 very much.22 What happens to the old23 equipment that you're currently using?24
Okay. And6 in terms of the upkeep, maintenance of7 the new equipment, who does that?8
Well, sometimes9 it's the company that we've purchased10 this because it's under full warranty.11
So it's usually13 not until the after warranty has elapsed14 that the actual technicians from Fleet15 will do the repair.16
What's the17 turnaround time if they should -- if the18 leasing company has to do the repairs?19
The24 turnaround time is repairs is fairly25 18 12.8.10 - FINANCE - BILL 1007511 quickly?2
Currently, from3 where we have those arrangements, they4 are.5
I don't have a7 specific time. I can -- the Fleet8 Manager's here; he can give you any type9 of details on that.10
Oh, okay.11 The Philadelphia Municipal12 Authority, you're using that vehicle to13 lease the equipment?14
That's right.15 We're going through the Philadelphia16 Municipal Authority, and that allows for17 a lease term longer than four years, but18 the City will retain title to the19 equipment.20
So it will be22 just like we're purchasing the equipment.23
So who24 puts out the RFP, the Municipal25 19 12.8.10 - FINANCE - BILL 1007511 Authority?2
The City will,3 in conjunction with the Municipal4 Authority, so it will be run out of the5 Treasurer's Office.6
Do you10 usually select one company, or are there11 several companies?12
One bank or16 leasing. You're talking about for the17 money, the loan, for the lease financing?18
Right. Well,21 the process will be that we prequalify22 banks and leasing companies that agree to23 our documents that have been attached and24 given to Council.25 20 12.8.10 - FINANCE - BILL 1007511 And then we do an RFP and ask2 the banks and leasing companies for the3 lowest rate. And then -- so that then4 the City awards it based on the lowest5 rate.6 But we'll send that out to a7 variety of different banks and leasing8 companies; I think about 25 we have a9 list of right now.10
Our next17 panel will be Bill 100781,18 Mr. Richardson.19 (Witness comes forward.)20
Good21 afternoon, everybody. Good afternoon,22 Councilwoman Tasco and members of the23 City Council Committee on Finance. I'm24 Revenue Commissioner Keith J. Richardson.25 21 12.8.10 - FINANCE - BILL 1007811 I am pleased to be with you today to2 discuss Bill No. 100781, a bill3 authorizing the City to enter into a4 multi-year intra-agency agreement with5 the Commonwealth of Pennsylvania to add6 City and School District taxes to an7 online system for electronic filing and8 payments of taxes.9 This bill supports the10 mandatory electronic filing of tax11 returns and electronic transfer of tax12 payments due to the City and School13 District of Philadelphia that were14 approved by Bill 100224 on June 30th of15 2010.16 The City is seeking to have its17 taxes added to the Commonwealth of18 Pennsylvania's Department of Revenue's19 online e-paying e-file tax system called20 e-TIDES. The City of Philadelphia is21 hoping to sign a multi-year intra-agency22 agreement with the Department of Revenue23 for them to bill the Philadelphia taxes24 into the e-TIDES system.25 22 12.8.10 - FINANCE - BILL 1007811 The partnership with the2 Commonwealth and the use of the e-TIDES3 system will allow taxpayers the ease of4 filing on the same platform that they're5 already familiar with when filing6 Commonwealth taxes.7 The DOR will bill City and8 School District taxes into the e-TIDES9 system in two phases over a two-year10 period of $750,000. The City will then11 only pay maintenance fees, starting at12 $16,287 per year, subject to an annual13 increase of up to 3 percent each year.14 All payments made will be made directly15 to the Commonwealth.16 A multi-year agreement is17 desirable because of the ability to lock18 into the low maintenance fees, as was19 presented by the Department of Revenue in20 the long-term use of the Commonwealth's21 e-TIDES system. The agreement will allow22 for the City to exit the contract after23 four years without penalty.24 The Revenue Department is25 23 12.8.10 - FINANCE - BILL 1007811 seeking a transfer in appropriations of2 $488,197 through Bill 100775 for payments3 in Fiscal Year 2011 and to the4 Commonwealth for interagency agreement.5 Bill No. 100775 was voted out of6 committee with a rules suspension on7 December 1, 2010. The remaining $261,8038 to be paid to the Commonwealth will be9 requested in the Revenue's fiscal year10 2012 budget.11 The use of the robust online12 tax payment and processing site will13 allow the City to collect tax dollars14 more quickly, will allow for fewer errors15 when processing payments and returns, and16 increase compliance. In addition, by17 eliminating the need to print coupons,18 this effort will support the Mayor's19 Greenworks Philadelphia Initiative.20 The efficiencies created21 through the use of the State's e-TIDES22 systems will allow the City to focus our23 resources on increasing collections24 effort, outreach, education, and25 24 12.8.10 - FINANCE - BILL 1007811 compliance initiatives. It has been2 determined that to develop a system3 in-house or to contract out of the system4 would cost more than the cost proposal5 the Commonwealth presented and could take6 even longer to bill.7 The great benefit of using the8 Commonwealth e-TIDES system has been in9 place for several years, and taxpayers10 are required to file their sales and11 employer taxes through this vehicle now.12 The City would be offering its taxpayers13 a major convenience while creating14 massive efficiencies in the15 administrating of the City of16 Philadelphia taxes.17 The department hopes that18 Council seeks the tremendous benefit of19 using the Commonwealth e-TIDES system to20 offer electronic-payment filing to the21 City taxpayers.22 Thank you, and I'm happy to23 answer any questions that you may have.24 And we also ask for a25 25 12.8.10 - FINANCE - BILL 1007811 suspension of the rules on this.2
Okay.3 Now, what tax will people be paying on4 this system?5
Well, the6 first phase, the businesses in the City7 of Philadelphia or outside the City will8 be paying the wage tax, the liquor tax.9 And also the parking tax will be some10 taxes in the first phase that will11 happen.12
So these13 are basically business taxes that will be14 paid through the system.15
Yeah. This16 system is not designed for individuals to17 pay their real-estate taxes through this;18 it's designed for businesses.19
So the20 businesses which pay state tax are used21 to this system.22
Okay. Any25 26 12.8.1 - FINANCE - PUBLIC MEETING1 questions?2 (No questions.)3
Thank you10 very much.11 On these other bills, would you12 like a suspension of the rules?13
All right.15 We will now go out of our public hearing16 and go into our public meeting.17 The Chair calls on Councilwoman18 Blackwell to call up Bill 100557 and...19 first, would you please move the20 amendment, please.21
Thank22 you. I move that the amendment to Bill23 100557 be adopted.24 (Motion duly seconded.)25 27 12.8.1 - FINANCE - PUBLIC MEETING1
It has2 been moved and seconded that Bill3 100557 -- that the amendment to Bill4 100557 be adopted.5 All in favor will say aye.6 Any opposition?7 There being none, the motion is8 carried.9 Now I call on Councilwoman10 Blackwell to pass -- to vote out of11 committee Bill 100557, as amended.12
Thank13 you, Madam Chairwoman.14 I move that Bill 100557, as15 amended, be reported out of committee16 with a favorable recommendation, and also17 that the rules of Council be suspended so18 as to permit first reading at our next19 session.20 (Motion duly seconded.)21
It has22 been moved and seconded that Bill 100557,23 as amended, be reported out of committee,24 with a suspension of rules, so that this25 28 12.8.1 - FINANCE - PUBLIC MEETING1 bill can be heard at Council's next2 session.3 All in favor will say aye.4 Is there any opposition?5 There being none, the motion is6 carried.7 The Chair recognizes Councilman8 Greenlee for Bill 100794.9
Thank10 you, Madam Chair.11 I move that Bill 100794 be12 reported out of this committee with a13 favorable recommendation and that the14 rules of Council be suspended to allow15 first reading at our next session of16 Council.17 (Motion duly seconded.)18
It has19 been moved and seconded that Bill 10079420 be reported out of committee with a21 favorable recommendation and a request22 for the suspension of the rules so that23 this bill can be heard at Council's next24 session.25 29 12.8.1 - FINANCE - PUBLIC MEETING1 All in favor will say aye.2 Any opposition?3 There being none, the motion is4 carried.5 The Chair recognizes Blondell6 Reynolds-Brown for Bill 100751.7
Madam8 Chair Lady, I move that Bill No. 1007519 be reported out of committee with a10 favorable recommendation and further move11 that the rules of Council be suspended so12 as to permit first reading.13 (Motion duly seconded.)14
It has15 been moved and seconded that Bill 10075116 be reported out of committee with a17 favorable recommendation and a18 recommendation for a request for a19 suspension of the rules so that this bill20 can be heard at Council's next session.21 All in favor will say aye.22 Is there any opposition?23 There being none, the motion is24 carried.25 30 12.8.1 - FINANCE - PUBLIC MEETING1 The Chair recognizes Councilman2 DiCicco for Bill 100781.3 COUNCILMAN DiCICCO: Thank you,4 Madam Chair.5 I move that Bill No. 100781 be6 reported out of this committee with a7 favorable recommendation and that the8 rules of Council be suspended so as to9 permit first reading at our next session10 City Council.11 (Motion duly seconded.)12
It has13 been moved and seconded that Bill 10078114 be reported out of committee with a15 favorable recommendation and a request16 for the suspension of the rules so that17 this bill can be heard at Council's next18 session.19 All in favor will aye.20 Is there any opposition?21 There being none, the motion is22 carried.23 This meeting is adjourned.24 Thank you.25 31 12.8.1 - FINANCE - PUBLIC MEETING1 (Proceedings end at 2:30 p.m.)2 * * *3 4 5 6 32 C E R T I F I C A T E2 I HEREBY CERTIFY that the4 proceedings of the City of Philadelphia5 Council Committee on Finance are contained6 fully and accurately in the stenographic notes7 taken by me on Wednesday, December 8, 2010,8 and that this is a true and correct statement9 of same.10 __________________________________ JOSEPHINE CARDILLO Registered Professional Reporter15 (The foregoing certification of21 this transcript does not apply to any22 reproduction of the same by any means, unless23 under the direct control and/or supervision of24 the certifying reporter.)25