COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE THE COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, March 21, 2002 9:05 a.m. - - - FY '03 SCHOOL BUDGET TESTIMONY - - - Bill 020031 - Ordinance amending Section 19-1301... Bill 020032 - Ordinance amending Chapter 19-1800... Bill 020033 - Ordinance amending Chapter 19-1801... Bill 020034 - Ordinance amending Chapter 19-1800... Bill 020040 - Ordinance authorizing transfers... PRESENT: COUNCIL PRESIDENT ANNA C. VERNA, Chair COUNCILWOMAN JANNIE BLACKWELL, Vice Chair COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN DAVID COHEN 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 COUNCILMAN MICHAEL A. NUTTER COUNCILMAN BRIAN J. O'NEILL COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, PA 19103 (215) 561-2220 629 3/21/02 - Continuing FY '03 School Budget Testimony
This is a continued public hearing of the Committee of the Whole regarding Bill Nos. 020031, 020032, 020033, 020034, and 020040. Do we have any questions from members of the committee of any of the witnesses that are here? The Chair recognizes Councilman Nutter.
I was about to ask a question and there was no one there. I think the gentleman from the school district, the CFO, Mr. Doosey, and any other --
Can we request that he come up in case there are issues relative to City finances, City budget?
We will also 630 3/21/02 - Continuing FY '03 School Budget Testimony communicate with him and try calling him.
Thank you, Madam Chair. Mr. Doosey, I need to go back over some items that we discussed yesterday with regard to we had a fairly extensive discussion about timetables with regard to the deficits in the fiscal year '02 going into fiscal year '03. My recollection is that you said yesterday, or it may have even been the day before, that going toward the end of FY '02 you faced a $70 million cash flow problem. Is that correct?
That is correct. The cash flow situation again is the School District cash flow is currently scheduled to expire May 15. Should the City provide the one-time grant for fiscal year '02, that extends to June 10, and there is a $70 million gap between June 10 and June 30.
I couldn't hear on 631 3/21/02 - Continuing FY '03 School Budget Testimony this side of the room.
I understand. We had the same problem yesterday. Why don't you try to pull that mike a little closer, Mr. Doosey?
The current cash situation for the School District is -- assuming no additional funds from any source are received, the School District will run out of cash May 15. Assuming that the City provides the $45 million proposed one-time grant for fiscal year '02, that date extends to June 10, and there is a $70 million gap between June 10 and June 30.
Wait a minute, Mr. Doosey. Either yesterday or the day before when we had the discussion about the $70 million, I thought you said that the $45 million one-time payment would take you to June 10 and then you had a $25 million gap from June 10 to June 30?
The difference is that the -- it's -- I'm sorry. The $25 million is correct if you -- I guess -- I'm sorry I am throwing out a different number today. The difference between the and the $70 million number is we have 25 an opportunity to advance one payroll from next 632 3/21/02 - Continuing FY '03 School Budget Testimony fiscal year to the current fiscal year to save money on the Pewzer's contribution. If we stay with the current payroll schedule, it is $25 million.
Right. Don't change the numbers on me from day to day now. I only have one set of notes.
Which number was the number you were just referring to on the million? 13
There is a $70 16 million cash flow problem from May 15 to the end of 17 the fiscal year. What Mr. Doosey is anticipating is 18 getting the $45 million one-time payment almost 19 immediately. That would allow him to continue to 20 operate the district until June 10. From June 10 to 21 June 30 there is a $25 million gap and so the 45 22 plus the 25 makes up the entire $70 million issue. 23 He also raised the prospect of moving 24 around a payroll payment, which I think it is 25 accurate to say then created a little bit of 633 3/21/02 - Continuing FY '03 School Budget Testimony confusion. Why don't we leave that out of the discussion for the moment and stick to the 70, split up by the 45 one time and then you still have a deficit until the end of the fiscal year of $25 million. Mr. Doosey, I just want to go over these facts again. We also had some discussion about the deficit financing and a timetable issue with regard to our present discussion and the need for cash, which is -- again, I don't think there is any dispute about the need for cash but also the understanding of when that need might be, when did you have to go to the bond market, and we talked about basically a 35-day period backwards from when you actually needed the money. In the scenario of getting the $45 million on a fairly quick basis that took you to June 10, we then engaged in some math and calendar exercise that took us back 35 days to around about May 5, 4th, even back to the 1st. You said you might need a few other days. I think last night we basically agreed that a deadline, if you will, would be April 27 or so. Is that correct?
No, that is not correct. 634 3/21/02 - Continuing FY '03 School Budget Testimony The actual date when -- I was in error in not anticipating that there needs to be a window where underwriters will not allow us to go up to the last day. They will insist on a grace period where funds would be in hand prior to the last day that funds would be disbursed by the School District and also I miscalculated the time frame necessary in that the -- all the legislation permitting the issuance of the bonds needs to be in place before the underwriters go to market, not when it closes. The impact of this is that the drop-dead date for approval of all legislation is April 11 and I have a letter from bond counsel I would like to put in the record documenting that fact.
So you are now correcting -- I want to try to make this as easy and respectful to you as possible. You are saying on the record that you are changing the date that we talked about last night, which was around or about April 27 to --
You indicated April 11. Is it April 11 because that happens to be a Thursday and a council day, or it could actually be 635 3/21/02 - Continuing FY '03 School Budget Testimony about April 15, but obviously we are not in session at that time? The last session before --
What is driving the April date is I need to mail the preliminary statement 6 by April 15. 7
Okay. So why don't 8 we put all of those dates on the record. Your real 9 drop-dead date -- I don't want to call it a 10 drop-dead date. Your real deadline is April 15. We 11 have a council session where we could vote on a piece of legislation on April 11. Therefore, you need action no later than April 11 in order to meet your April deadline? 15
And under that scenario you could, under our legislative process and procedure, have a first reading of a bill on April 4 and second reading and final passage on April 11, which would meet the types of deadlines that we have talked about and that your bond counsel is advising you. Is that correct?
Yes, sir, that's correct. 636 3/21/02 - Continuing FY '03 School Budget Testimony
Let's talk about another issue from yesterday. You made mention, and it was handed out during yesterday's session while we were in session. There has been a great amount of discussion with regard to legislation that is pending in Harrisburg that seeks to accomplish at least two objectives. One is relief for the City from the provisions -- the maintenance of AFRA provisions in Act 46 related to both the one-time FY '02 $45 million payment as well as the millage transfer that would happen for FY '03. Is that correct?
And the second component of that legislation seeks to amend the debt act so as to allow for a deficit financing in excess of the present limitation of ten years to go to 30 years; is that correct?
Now, I need you to tell me a little bit about that piece of legislation. First, what is the bill number?
I apologize. I don't have the bill number available with me. 637 3/21/02 - Continuing FY '03 School Budget Testimony
I take it that this is a fairly significant and important piece of legislation to you?
It is my understanding the bill will be introduced next Tuesday.
I thought our discussion yesterday or the day before was that the bill was going to be passed on Tuesday, March 26. That's my recollection from your testimony yesterday.
That's not my understanding. My understanding is it would be introduced Tuesday in the Senate.
Do you recall yesterday your testimony that the bill was going to be passed on Tuesday? I believe I asked that question three times yesterday. 638 3/21/02 - Continuing FY '03 School Budget Testimony
Your recollection is that you testified that it would be introduced on Tuesday?
Deborah Kahn, secretary of education for the City. If I can clarify, I believe at least I testified to, and I did not hear all of Mr. Doosey's remarks, but that we have asked for action on that legislation and that the Governor's office has, in fact, been meeting with legislative leaders, as have our representatives. I don't think we can tell you definitively what day or what bill number or anything like that, but there have certainly been many, many discussions about this issue. 639 3/21/02 - Continuing FY '03 School Budget Testimony
In addition to the bill number and when it is being introduced, if Councilman Nutter will allow me to add a request if we ask who exactly is going to introduce it.
No problem, councilman. Miss Kahn, maybe I attach too much significance to your description or your response -- and, again, I think the record will point out that the language was maybe what you just said, that you expected action on the bill on Tuesday. Now, maybe I was mistaken in legislative parlance. Generally in our body if somebody says an action is being taken on a bill, that usually means that a vote is being taken. Did you mean to convey that, or are you now saying that your definition of action is that a bill is being introduced on Tuesday?
What I said was that we have requested action on the bill next week. 640 3/21/02 - Continuing FY '03 School Budget Testimony
It could mean -- depending upon their procedures, it could mean introduction and passage.
Well, again, that was not my recollection of our discussion, so I need to ask you a few more questions. I believe the record will reflect that the testimony about this particular matter was that we needed to take all or some of the actions on legislation in front of us now because you were anticipating or expecting action by the legislature on Tuesday. Is that your recollection?
What I said was that if this council takes action to move these bills forward we believe that in anticipation of action by the general assembly next week that this would put us in a very strong position for the City to be able to say that we are taking the steps forward to implement the City's portion of the financial agreement. 641 3/21/02 - Continuing FY '03 School Budget Testimony
Okay. So now let me ask this question: Who is introducing this bill?
I don't know yet. That is not my decision. That is a decision to be made by members of the general assembly.
We have been working through the Governor's office and our representatives have also been having conversations with the leadership of the general assembly.
I can't tell you that definitively. What we have asked for is that the legislation -- that there is action taken. If that can mean introduction and passage, great. If it only means introduction, I don't know yet, but those discussions are serious. They are ongoing.
How does their 642 3/21/02 - Continuing FY '03 School Budget Testimony process work up there? How do you get a bill passed in Harrisburg?
I don't think I'm in a position to give you the exact primer in the step-by-step process of passing legislation in the general assembly, but I'm sure there are others that can do that. Nevertheless, I think the basic --
Who might be able to do that? I mean, I'm assuming that you are going to -- this is also an important piece of legislation --
And I'm assuming you are going to want to monitor or watch this bill 20 through its process, right?
How do you do that if you don't know what their process is?
Well, it will be done most directly through our government legislation 643 3/21/02 - Continuing FY '03 School Budget Testimony representatives in Harrisburg.
And as the legislative representatives for the City, what are they telling you as to the process and the expectation about this bill?
Just what I have told you, that the discussions are ongoing, they are serious, that legislative leaders and the Governor's office -- number one, that the Governor's office supports the effort and that the legislative leaders have been made well aware of the need and the timetable.
I understand that. What's the position of the legislative leaders?
I believe -- I don't know whether there are any firm commitments yet. I do not know. I can take time to confer and see exactly 644 3/21/02 - Continuing FY '03 School Budget Testimony what the status is, but I believe that it is under consideration.
And your legislative -- I'm sorry. What did you call it, legislative?
Wasn't there a recommendation made yesterday, Councilman Nutter, that this council meet with the leadership in Harrisburg before we take any action on this to ascertain where the leadership in Harrisburg is at?
There was a recommendation that we meet with the leadership in Harrisburg to ascertain this. Since obviously we cannot get any answers from Miss Kahn or Mr. Doosey as to conversations and where those conversations are in Harrisburg, shouldn't we be as a body, legislative body, meeting with that leadership to ascertain where those talks are and process whether they are real or not or whether there is really a 645 3/21/02 - Continuing FY '03 School Budget Testimony possibility of them passing this type of legislation on the $75 million? Because we are not going to get any answers from -- we are not going to get any answers through this process.
Councilman, I know there were discussions about that, and while I don't necessarily know whether they were conclusive finally, I know that a number of members of council did express in some of those conversations an interest in having that discussion, and I suggest it would be a good discussion for us to have. Let me try to do this: Miss Kahn, your legislative representatives, they are talking to the Governor's office and the respective leaders of the House and the Senate on both the Republican and Democratic sides of the aisle?
Let me ask this question: Has the Mayor had a conversation with either Senator Jubalier, Senator Brightbill?
The Mayor has certainly spoken to them. Whether he has spoken to them --
No, specifically about this legislation. 646 3/21/02 - Continuing FY '03 School Budget Testimony
Specifically about this, I don't know. Certainly he spoke to them about the need for this, and "this" being the larger plan. Whether he has had a specific conversation recently about the timetable I can't speak to.
As the secretary of education you wouldn't know whether the Mayor had a conversation with legislative leaders about a significantly important bill in Harrisburg?
I understand that. I didn't think you were babysitting him --
-- but I understand you might have a conversation from time to time.
Councilman, just a minute. You have a lot of competition in the room and then we have the sirens outside. Those having discussions side bar, please do so in the corridor. Please proceed. I'm sorry, councilman.
Thank you, Madam President. 647 3/21/02 - Continuing FY '03 School Budget Testimony Do you know if there have been any discussions directly either with Speaker Ryan, majority leader Purcell, minority leader Dewies, or Senate minority leader Mellow about this bill?
I believe that there have been, but I don't know the nature, no. Discussions are happening with both staff members as well as the members themselves and I can't be absolutely up to the minute on every conversation.
I understand you might not have real-time information, but when did the bill go up?
I believe that it has been in discussion for about the past week, ten days, two weeks, something like that it has been in discussion.
Could you give me a sense of what you know up to three days ago?
I know that we have had serious indications that there will be -- can be some action taken. I can't sit here and commit to you --
Who are the serious indications from? 648 3/21/02 - Continuing FY '03 School Budget Testimony
-- that any other legislative body will take an action, the same way I would never commit to members of the general assembly that the City Council will definitively take a certain action. I don't believe that it is appropriate or in the best interest of this process to do that.
I did not ask you to lock anybody into anything or indicate what someone was actually going to do. My questions have been strictly along the path of who has been talked to and what did they say. You said that the legislative leaders in Harrisburg have been engaged in those discussions. I'm asking you about specific individuals who based on general public information are the leaders in those respective bodies.
The general indications that I have and the reports -- and I do not have every detail -- are that the idea has been explained, it has been understood, and that it seems to have been received favorably. I cannot speak to how that reaction will be specifically interpreted into action.
I understand that. Received favorably by whom? 649 3/21/02 - Continuing FY '03 School Budget Testimony
So it is your testimony that Senator Jubalier, Senator Brightbill, Speaker Ryan, and majority leader Purcell have indicated to you that they are favorably disposed to this bill?
I cannot say whether each one of those has. I'm just simply not up on every single current conversation.
Well, I understand that, but in those bodies there are no people higher than those individuals, correct?
In those particular bodies there are no individuals of higher authority than those four people; is that correct?
So that's who you would want to engage in that discussion with?
Those are the people that our representatives would want to speak with, correct.
But your testimony is at the moment you cannot say if those four 650 3/21/02 - Continuing FY '03 School Budget Testimony individuals or representative Dewies or Senator Mellow or Representative Varley or Representative Evans or Senator Fumo or whoever the -- I don't know who the -- I actually don't know who the senate majority chair is on appropriations.
You cannot say that those it looks like eight individuals have been spoken to and what their position is as it relates to this particular bill?
I can't tell where it stands with every one of them. Everybody has a different role to play in this process and it is really up to the Governor's office and it is the Governor's legislative secretary who has also taken the lead to help us determine this strategy and lead that strategy.
Thank you, Madam President. Point of information for Councilman 651 3/21/02 - Continuing FY '03 School Budget Testimony Nutter, in addition to the eight people that he has talked about in the course of this questioning, it is important to remember that they also have constituents. It is not simply that they are leaders in their own right, but they are elected leaders of their caucuses. So in addition to the views of those very prominent legislators both in the House and Senate, it is important to be able to gauge the views of their constituents who represent the rank and file of both the House and Senate who put them in those leadership roles. So their positions often are reflective or should be reflective of the views of those constituent members. So simply an individual in leadership indicating a desire to be helpful does not necessarily translate into the ability to convince their rank and file that this is good for them in their districts. And may I highlight the fact that this is an election year for the House. So with some of my experience with those two legislative bodies in my past life from here, it is not simply the leadership saying, yes, we will help you. It is the leadership having to convince the majority of 652 3/21/02 - Continuing FY '03 School Budget Testimony the members of their caucuses, their own constituents, that this is a good thing. So it is much more complicated than just the leadership saying, "We will do our best." Thank you.
Thank you, councilman. One last question in this area. From your perspective whose legislation is this? Is this a City request legislation or is this Governor Schweiker's request for legislation?
The legislation was drafted as a combination of actually Council for the School Reform Commission as well as the City Solicitor's Office. What we did together was submit it to the Governor's office. The City of Philadelphia cannot directly submit legislation to the general assembly and therefore it was going to the Governor's office and it has the backing of the Governor's office.
The Governor doesn't get to vote on legislation, right?
I understand that, but that is at the end of the process. The Governor 653 3/21/02 - Continuing FY '03 School Budget Testimony does not introduce legislation, right?
I guess from a process standpoint I'm somewhat intrigued. With every respect to the Governor, why would you start with the Governor on a legislative matter that is solely decided by legislators?
The same way when we submit legislation to this body there is an administration-backed legislation or not, and it was important as part of this entire arrangement --
Well, obviously, for introduction because the Mayor, the same way, cannot introduce legislation. A member of this body has to introduce legislation. But in this process it is important to have it also be backed and to be assisted by and to work in partnership with the Governor's office in his legislative operation.
It's your choice. Mr. Doosey, let me lastly go back over some outstanding requests for information. I wanted to make sure that our lists are in sync. We had 654 3/21/02 - Continuing FY '03 School Budget Testimony some discussion yesterday about variations on the present proposal, which is to put forward a bond offering for upwards of $300 million for 30 years with a fairly flat debt service schedule of $25 million a year, total cost barring $75 million, correct?
And I had also asked you some questions about variations on that in a variety of either staggered payment schedules or terms such that the present limit naturally is ten years, but I believe I also asked you to try to put together debt schedules showing years, years 15 as well as naturally the 30 year. Presently we 16 don't have a debt service schedule from you; is that 17 correct? 18
We also have 20 outstanding as a request actually a five-year plan for the School District; is that correct?
Can you talk to us a little bit about in the -- I think in the legislation or maybe it is in the existing debt act, 655 3/21/02 - Continuing FY '03 School Budget Testimony tell us about any call provisions that you would expect to have as a part of this proposed bond offering.
I would anticipate the bond offering having a three- and five-year call. Those call provisions are required under deficit financing, counsel advises me, simply to ensure that should the district run surpluses during those early periods of time that the bonds in fact will have the ability to be called earlier.
Well, we should all be so fortunate. Could you provide us with a schedule that shows in the most optimistic situation what would happen in a three-year call as well as a five-year call which would also indicate what the total cost of the borrowing would be as a result of even though we are planning to go out 30 years and we know that's going to cost $750 million, I believe it is correct that if you call the bonds early in a three-year or five-year call, you would actually probably significantly reduce the cost of the total borrowing; is that correct?
That is correct, and those schedules are in the process of being prepared and 656 3/21/02 - Continuing FY '03 School Budget Testimony will be delivered to the council president.
The flat 25-year debt service schedule that is being proposed today, I asked you a question yesterday with regard to a staggered or graduated debt service schedule over that 30-year period or any other period that may be determined. What I mean by that is given the financial situation not only of the School District, which it is proposed here that this will help, we also have the financing of the City to take into consideration, and I asked you whether or not you could prepare or whether you have the opportunity or the legal authority to develop a graduated debt service schedule with lower payments in the earlier years and increased payments in the latter years, although the total amount of the payments would actually be the same, but the theory naturally being in the later years of this offering all parties would have more money notwithstanding the fact that there could be a three- or five-year call. Do you have the ability legally to do that?
I would have to defer to counsel on that. I do know with the last general 657 3/21/02 - Continuing FY '03 School Budget Testimony obligation bond that was recently closed on February 1, that is exactly the structure where it is a sliding scale structure with lower principal payments in the earlier years.
Let me ask this question: If you are able to put that schedule in place, the legislation before us though has a set rate which calls for the estimated $25 million shift in millage. If you have a debt service schedule that has lower payments in the early years but you are receiving still the $25 million, what do you do with the extra money?
It would be used for 18 general School District purposes. I'm making no 19 assumptions that there are any restrictions on it. 20 From a budget standpoint, I'm not making any 21 assumptions on restrictions as to whatever the stub 22 amount of that $25 million would be. 23
But you are going to 24 put in your OS or your POS that there is a dedicated 25 revenue stream from the millage transfer to pay the 658 3/21/02 - Continuing FY '03 School Budget Testimony debt service on these bonds. How do you stay in compliance if, for instance -- if the earlier debt service payments are $15 million but you received $25 million from the millage shift and you technically have $10 million I will call it, quote/unquote, extra, you are saying that you are going to put the $10 million in the general School District operations. How do you ensure in the latter years when your debt service payments may go as high as 30 or $40 million, one, that you are going to be able to meet the debt service schedule, but, two, is there not the potential of misrepresentation to the bond holders that you didn't set aside that $25 million that is dedicated from the millage transfership only for debt service payments?
With all due respect, I will ask bond counsel to respond to your question.
If the members of council please, my name is Robert Tuteur, T-U-T-E-U-R. I'm a partner in the law firm of Blank Rome Comisky & McCauley, and we serve as bond counsel to the School 659 3/21/02 - Continuing FY '03 School Budget Testimony District. Councilman Nutter, in response to your questions, the Local Government Unit Debt Act does limit the manner in which debt service can be paid, and debt service with respect to overall indebtedness of a local government unit, of which the School District is one, has to be substantially equal over time. That can be done in one of two ways, either by structuring the debt service on a particular bond issue as being substantially level or by structuring all of the debt service of a local government unit that exists to be substantially level over time. That's why Mr. Doosey said that in the last bond issue which the School District did that the debt service was structured in a certain fashion. It was structured that way, but when you look at the overall debt service of the School District, it is in fact level. That will limit to some degree whether you can front-end or backload, which is really I think what you are suggesting --
-- the debt service on this 660 3/21/02 - Continuing FY '03 School Budget Testimony particular bond issue. Moreover, council should keep in mind that the objective, of course, will be to attempt to get bond insurance, as the School District has been able to do with I think almost every one, if not all, of its issues because that will help lower the interest costs.
Bond insurers in my experience will not take favorably to an issue which is backloaded. Moreover, to the extent that you postpone principal payments into later years, you increase the coupon on the bonds because as a matter of investors, the longer they hold the paper, the higher the rate of interest that they want. So essentially whether you do this over ten years, years or 30 years or any other period 18 for that matter, I think you will be looking 19 essentially at level debt service. 20
Thank you. Mr. Tuteur, let me ask you this question: Is it my understanding that a letter is being sent to the Chair of the SRC with regard to the proposed bond offering related to whether or not any POS or other documents will be sent prior to a written 661 3/21/02 - Continuing FY '03 School Budget Testimony explanation that given the uncertainty at the moment of the legislative matter that is soon to be going to Harrisburg or is in Harrisburg or is floating around the Governor's office, no action will be taken on this particular bond issue until the relief that is sought in this particular bill has been attained?
Councilman, without legislation there can't be a bond issue. The Local Government Unit Debt Act in its present form would not permit the deficit funding bonds which the School District -- would not authorize the deficit School District bonds which the School District presently would like to issue. We must have legislation in order to issue these bonds.
I understand that, but there are two components to the legislation. What will you do if the legislation is bifurcated such that the legislature gives you the ability to float a 30-year bond but does not provide Act 46 relief?
I think that's a question that I would ask Mr. Doosey to answer because I think what you are asking is a financial question, 662 3/21/02 - Continuing FY '03 School Budget Testimony which I don't feel comfortable in answering.
In all discussions with primary bond counsel, Joan Stern, and with the SRC, it was not contemplated that the bonds would be issued without both a change to the local public debt act by the state legislature and Act 46 relief. It is for that reason that the formatted bill that was presented yesterday and is attached to the letter that I will place into the record specifically states that those two components are part of one and the same bill.
I understand that, but, Mr. Doosey, and I know you are relatively new to government service, but, one, you know there are two things you never want to watch being made, sausage and legislation; two, just because you send the bill up in a particular fashion doesn't mean it is going to come back to you anywhere near the fashion that it started. My recollection, I think, is that we probably didn't anticipate that the Parking Authority was going to be taken over, and the vehicle that was used, I think, was a bill to provide -- had something to do with nurses and I 663 3/21/02 - Continuing FY '03 School Budget Testimony think debt relief for school loans or licenses or something. I can't think of two things that are further apart from each other, so I'm compelled to still ask the question. If you get relief on the Local Government Unit Debt Act and not on Act 46, will you in fact have a bond offer?
I didn't ask you what your intent was. I asked you what you are going to do. I intend to pay my bills on time. Sometimes it doesn't work out.
If I can jump in here, and I can't speak for the SRC, and I think the commission would have to reconsider that, but certainly that scenario would then have an impact on the original $45 million appropriation and we would then have to revisit what our position has been in our long-standing position that we need that exemption. I think what Mr. Doosey has testified to in terms of his cash flow is they are counting on the $45 million from the City and if they don't receive it, it would put their timetable even for the bond issue in some jeopardy.
Let's talk about the 664 3/21/02 - Continuing FY '03 School Budget Testimony $45 million in the last two questions. On Bill 3 020040 there was a request yesterday that we receive essentially an updated version of the letter that the Mayor sent as a part of his veto message from the bills that we passed last year for that $45 million. The Mayor gave his reasons. We understand the reasons. They had to do with lack of relief from Act 46, the same position we find ourselves in literally a year later. I think Secretary Burrell testified that he couldn't see any reason why such a letter wouldn't be available. Can you give us updated information on that?
I have asked the Mayor and certainly we are prepared to send you a letter to that effect.
Lastly, there is a provision in Bill 020033 that makes mention specifically of June 28, 2002 with regard to a certification required by the city solicitor in the context of the bill that is in Harrisburg in the Governor's office and the relief from Act 46. There was some concern that that date, when you look at the calendar and the chain of events that need to 665 3/21/02 - Continuing FY '03 School Budget Testimony happen, that that date to some extent does not make much sense because it is fairly clear that if a number of other things happen you are going to have a bond offering prior to June 28, at which point that dates becomes somewhat meaningless. There was discussion with Mr. Doosey and with Miss Stern about the prospect of a discussion with the city solicitor's office in making that provision more realistic and to comport with the realities that we're faced with here today about who is going to do what when. Can you seek to get some resolution on that particular issue?
Yes. I thought Mr. Fader has testified on that point, and if he needed to go back and clarify that, I'm sure he will do so.
Okay. All I can ask at this point I think is -- and I cannot say this more strongly -- this is a very serious matter that people are trying to figure out what to do. With regard to specifically the millage shift bills, my request is that the information that has been requested either by myself and many other council members may have information requests of their own, that we receive this information in a timely fashion 666 3/21/02 - Continuing FY '03 School Budget Testimony and that there not be a request to vote on these matters prior to the receipt of these documents. I am not left with the impression that the compiling of these documents or this information will take any enormous amount of time and certainly will not in any way, shape or form affect the schedule that we talked about earlier which is unique passage of these bills by April 11. Certainly we could do that, and, again, with timely receipt of information through the Chair, get a first reading on the 4th and have final passage on the 11th, but I cannot overemphasize the discomfort level of not having that information in a timely fashion prior to being asked to vote on such a not only important but complex piece of legislation.
Councilman, I would like to clarify and reaffirm what our request is, and I'm not sure what you meant by this, but that we are still asking for these bills -- for this committee to vote these bills to report them out today. If what your request is is in addition to that, that's fine, but if you are suggesting that the committee not move to report the bills out, I agree with you. We can provide that information and can have first 667 3/21/02 - Continuing FY '03 School Budget Testimony reading on the 4th and hopefully final passage on the 11th, but we still would need the bills reported out today, and pending that, then we could provide the information prior to when you would need certainly final action.
Miss Kahn, based on the schedule, I don't know why you need any particular action today. This body can again move those bills out either on the 3rd, certainly the morning of the 4th, exactly similar to our situation here today and still maintain your schedule. I understand your need to be on a schedule in order to be able to do a bond offering. I am very clear on that and I understand that. At the same time I think it is crossing the line of relationship to ask members to vote on such a complex matter with virtually no information in front of them that this record is replete with instances of information requests, not that there has been any acrimony about this, not that anyone has said they will not provide information, but we literally have had now two and a half days of hearings. I think you know from many of the 668 3/21/02 - Continuing FY '03 School Budget Testimony members that they were not satisfied at the lack of information that was provided at the start, the middle and now virtually the end of these hearings, and I think at the moment it is unreasonable to ask members to take action on bills that clearly do not have the necessary requisite documents to go with them to in any way, shape or form justify a vote at this point in time when it is also crystal clear and you know our rules -- I'm not sure what they do or how they do it in Harrisburg, but our rules are absolutely crystal clear that we could have a vote on this bill. By your own testimony you don't need a vote on this until April 11th and we have more than enough time to get it done even under that timetable.
Our point is that by taking the action today and having the committee report the bills out, it gives us the ability to have an indication that the bills are moving ahead on a timetable that would in fact take us to final passage on the 11th and at the same time it really doesn't bind this council into taking any final action. It is simply a step that we are requesting so we can deliver that message to Harrisburg that we 669 3/21/02 - Continuing FY '03 School Budget Testimony are on that track, and, again, it doesn't presuppose any final action, although obviously we are continuing to request that final action.
I understand that, but action, no action, you can certainly amend -- I mean, look, we have had a hearing. We have had two plus days of hearings. It is obvious to anyone with their eyes or ears open that this process is moving, that these bills have attracted a tremendous amount of attention and that they are moving down a particular track. There is no question about that. It is not like there wasn't a hearing. It is not like people have not been engaged. We are all grown-ups here. You can very clearly either directly or through your legislative representatives express to people that there is movement on this, and to now virtually treat us like children, that you need to take an action so I can show somebody else that something is going on, leads me to think that you don't trust us or that there is such lack of faith in relationship that if it is crystal clear that people are trying to move, trying to be helpful, but there are easily a half dozen to ten serious outstanding information requests and that 670 3/21/02 - Continuing FY '03 School Budget Testimony short of that and that demonstration of good faith and conversation back and forth, you can't meet those requests, none of which are onerous, none of which are burdensome, and demonstrate to the body that there is a partnership and relationship here that will lead you to the place where you know it is going to go anyway.
We have over the course of the past, as you say, two and a half days attempted to provide you with all the information you have requested.
Miss Kahn, you talked about providing. You have provided virtually no information. We had to ask for this bill, which is not the bill. It is a draft of the bill. No one knows the bill number. You don't know who is introducing it or who is running the matter. Yes, there has been a lot of discussion and there have been a lot of indications that you wish to cooperate and wish to provide information, but the information itself is not here. The intention to provide information is not the same as providing information. You know that as well as I do.
I also know that we don't 671 3/21/02 - Continuing FY '03 School Budget Testimony control all parts of the process. We are doing the best in providing you with all the best information that we can possibly do right now and it is a matter of -- not a matter of trust as you suggested. It is a matter of taking affirmative steps.
Miss Kahn, there is nothing that has been requested of this body over the past two days that could not have been a part of a package of information. You know as well as I do that when people want you to have information we get binders. We get boxes of information. There is not one request that has been discussed here this morning that could not have been a part of a package of information. Nothing. There is not one document that I requested that either Mr. Doosey or Mr. Tuteur or Miss Stern or anyone else who has been at that table has said, "No, I cannot produce that. That is impossible to produce that. My machine doesn't count that high. My computer won't work that way." Everyone has said, we can produce that information in a very timely fashion, and if it could be produced in a couple days, it could have been produced a couple days ago. You know that as well as I do. 672 3/21/02 - Continuing FY '03 School Budget Testimony