COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE OF THE WHOLE - BUDGET - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, February 26, 2008 10:25 a.m. - - - PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DiCICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN BILL GREEN COUNCILMAN WILLIAM GREENLEE COUNCILMAN CURTIS JONES, JR. COUNCILMAN JACK KELLY COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILWOMAN MARIA QUINONES-SANCHEZ COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILWOMAN MARIAN B. TASCO BILL 080154 - An ordinance to adopt a Capital Program for the six Fiscal Years 2009-2014... BILL 080155 - An ordinance to adopt a Fiscal 2009 Capital Budget BILL 080156 - An ordinance adopting the Operating Budget for Fiscal Year 2009 RESOLUTION 080173 - Resolution providing for the approval by the Council of the City of Philadelphia of a Revised Five Year Financial Plan... V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2
Good morning, everyone. This is the public hearing of the Committee of the Whole regarding Bill Nos. 080154, 080155, 080156 and 080173. I would ask Mr. McPherson to please read the title of the bills. MR. McPHERSON: Bill No. 10 080154, an ordinance to adopt a Capital Program for the six Fiscal Years 2009 through 2014 inclusive. Bill No. 080155, an ordinance 14 to adopt a Fiscal 2009 Capital Budget. Bill No. 080156, an ordinance 16 adopting the Operating Budget for Fiscal Year 2009. Resolution 080173, providing for the approval of the Council of the City of Philadelphia of a Revised Five Year Plan for the City of Philadelphia covering Fiscal Year 2009 through 2013. And testimony today will be limited to Resolution 080173.
Thank 3 2/26/08 - WHOLE - RES. 080173 you. We will now hear from the Administration. (Witnesses approached witness table.)
Good morning, Council President Verna. How are you this morning?
Fine. Thank you. Please identify yourself for the record and proceed with your testimony.
Good morning, Council President Verna and members of City Council. I am Clarence D. Armbrister, Chief of Staff for the Mayor, Michael A. Nutter. I'm joined at the table this morning by the Finance Director, Rob Dubow, and the Budget Director, Steve Agostini. Thank you for this opportunity 4 2/26/08 - WHOLE - RES. 080173 to present testimony in support of the Administration's proposed Fiscal Year 2009 Strategic Plan and Fiscal Year 2009 to 2013 Five-Year Financial Plan. I know that you have all received copies of the Plan, so my testimony today will merely summarize the most important points covered in the Plan. These documents lay out a bold vision for the government of the City of Philadelphia. The mission of the Nutter Administration and this Plan will be to create a high-performing government that produces results that matter most to the citizens of this City. This Five-Year Plan is different from those in the past, because our budget priorities are based on achieving results in six key areas: Public safety, education, jobs and economic development, healthy and sustainable communities, ethics, and customer service. The Plan is a financial and strategic plan for the 5 2/26/08 - WHOLE - RES. 080173 City. 5 million to the Streets Department to fund weekly, single-stream recycling to every City resident. Our long-term fiscal 6 2/26/08 - WHOLE - RES. 4 percent, and by Fiscal Year 2013, the rate will be dropped to six percent; increasing the parking tax from 13 percent to 20 percent to promote 14 sustainable activities, including street 15 improvements, enhancements to Fairmount Park and new trees; funding the Philadelphia Employee Pension System to 95 percent of its estimated liabilities to secure the financial future of the City's retirees by ensuring the stability of the Pension System. The Nutter Administration is proposing a Five-Year Plan for Fiscal Year 2009 to Fiscal Year 2013 Plan that anticipates a modest fund balance of 7 2/26/08 - WHOLE - RES. 97 million in Fiscal 2013, while implementing significant reductions in taxes and funding critical enhancements in City services, overdue investments in critical infrastructure and important initiatives to ensure the long-term stability of the City's finances. Many of the City's budget priorities reflect not only public demand, but also a continuous effort to address basic structural challenges unparalleled among other cities or counties in Pennsylvania and across the nation. As mentioned in the demographics sections of the Five-Year Plan, the City not only provides basic local government services, but also a significant array of social services that are typically the responsibility of state or county government elsewhere in the nation. 4 percent of General Fund 8 2/26/08 - WHOLE - RES. 080173 obligations in Fiscal Year '07. Urban taxpayers often fund services particular to dense and lower-income populations, higher policing costs, for example. County taxpayers typically finance services shared among their municipalities and unincorporated areas, such as courts and prisons. But Philadelphia taxpayers bear the cost of both types of services and often without significant support from the Commonwealth of Pennsylvania. A study by the Brookings Institution underscores this. Philadelphia had the widest range of service mandates by state government and the lowest general revenue-sharing support among its peer cities. As a result, when compared with similarly sized cities across the United States, Philadelphians pay more taxes. Throughout the rest of Pennsylvania, the burden of financing county-level services is spread widely across areas of high and 9 2/26/08 - WHOLE - RES. 080173 low social need and varying fiscal capacity. Only in Philadelphia are the burdens of financing county-level services concentrated entirely on the urban population. This Plan upholds our responsibility of fiscal stewardship while providing for the needs of our citizens.
In producing this Plan, the City strives to make the tough choices necessary to meet the needs of our citizens and to make smart investments to secure the future of the City and our families. Philadelphia is showing progress on several fronts, despite continued fiscal challenges that arise from the demographic and economic changes that have occurred over the last half century. Significant challenges remain. While fewer people live and work here than in previous decades, social needs continue to grow just as the cost of providing services are rising 10 2/26/08 - WHOLE - RES. 080173 considerably. The City's tax base is increasingly under pressure as personal income levels remain relatively low in comparison to the region, state and nation, and poverty in the region has become increasingly concentrated in the City. These factors create the ongoing challenge to fund those public services required by a growing segment of our population with a revenue base that is unduly burdensome on the City and the regional economy. Each investment is tempered by our need to put this City on a fiscally sound footing to meet the challenge posed by rising pension and health benefit costs, a prison census increasing at an alarming rate, and increasing reliance on an unsustainable tax structure. The Nutter Administration plans to increase the rate on the parking tax to 20 percent, consistent with the recommendations of the Tax Reform 11 2/26/08 - WHOLE - RES. 080173 Commission, which will increase revenue by $16 million in Fiscal '09. The rate increase will not only raise much-needed revenue and encourage residents to use public transit, but fund badly needed improvements to Philadelphia's streets and green spaces. Another efficiency in revenue-generation technique is the pension obligation issue. In order to address the City's massive unfunded pension liability and prevent it from undermining the City's long-term fiscal health, the Nutter Administration is proposing a pension obligation bond that would fund 95 percent of the Pension Fund's obligations. The borrowing would, in essence, eliminate the City's unfunded pension liability, ensuring that current and future employees would receive their retirement payments. This Strategic Plan and Five-Year Financial Plan is an overarching framework and a set of goals 12 2/26/08 - WHOLE - RES. 080173 focused on achieving results for our City. Some of the goals are far-reaching and will require significant time to attain. Our core service areas reflect a set of critical priorities, however. An ethical and responsive government must anchor all public safety, education, jobs, economic development, and provide healthy and vibrant neighborhoods. This Strategic Plan and Five-Year Financial Plan make clear that respect for the citizens of Philadelphia, service delivery that is efficient, and continuously improving and publicly accountable government decisions will be the core values for City employees in the Nutter Administration. I'd be happy to answer any questions.
Thank you very much. In the educational section of the Plan, you mention that the Recreation Department will receive additional 13 2/26/08 - WHOLE - RES. 080173 funding for pre-school academics. Can you explain why you are reducing their Class 200 budget by almost $350,000 in FY09? The Recreation Department is only increasing $24,187 over its targeted 2008 budget. I just don't see how they are receiving an additional $2.5 million, as indicated on , over the life of the Plan. Can you please explain?
Yes. The Finance Director, Rob Dubow, can answer that question.
Rob Dubow, Director of Finance. There are a couple of reasons for that. One is, as you know, at the beginning of the Administration, we asked departments to present us with efficiencies. The Recreation Department did. A couple of the things that they did to help reduce their costs were streamlining supply purchases, and we returned trash removal responsibility to 14 2/26/08 - WHOLE - RES. 080173 Fairmount Park. The largest thing that we're doing here, though, is, we plan to do major renovations to Robin Hood Dell and to begin doing those as soon as we can, which will mean that we'll lose this season as we do those repairs. Our concern is that some of the structural issues there make it unsafe to use, so we want to get to this as quickly as we can.
Well, we are hoping that we will have a business model there that will work better than the model we had before and that there will not be as big a subsidy there.
The subsidy relates to the deficit they incurred, and I think last year it was $700,000. Almost $900,000. 15 2/26/08 - WHOLE - RES. 080173
What support would the City be giving them in the out years? Do we know?
Our anticipation is that the Dell would break even going forward and that it wouldn't need the subsidy it got in the past.
With an improved management model. The hope is that we would not have to subsidize the Dell and that it would break even, would not require future subsidies from the General Fund.
Will this be the same model as we use at the Mann?
I don't know, Councilwoman Verna. We'd have to check. We're not sure what the new model is going to be. The hope is that whatever 16 2/26/08 - WHOLE - RES. 080173 model we produce, we'll make sure that it will break even, it wouldn't require any additional subsidies.
I'm sure that there are other questions from Councilmembers on this issue. So you would be contracting out?
Yeah, there would be, and, I mean, I think that the management of that had pretty much been handled through contract already.
I think Councilman Clarke has a point of information.
Thank you, Madam President. Real briefly, and I don't know if this is your mind-set on this, but I'm assuming that you would essentially 17 2/26/08 - WHOLE - RES. 080173 privatize the operations of the Dell, get the City out of it. You would then have no subsidy associated with the operation, meaning there would no longer be any free tickets or tickets that are of a reduced cost, because right now you can go to the Dell for $5, $6, $7. The shows that they have at the Dell that make money essentially when you have -- and I say this one because this is the one that's always a seller. When Teena Marie comes to the Dell, they sell out. Those tickets are $25, $30, right? In order for us to realistically operate the Dell without significant subsidies, the ticket prices would increase dramatically, which I'm not necessarily adverse to, although I represent a population that's used to getting those tickets from our office, and, frankly speaking, it might be a good thing if you all no longer give us free tickets, because we don't ever get enough. You know what I mean? So if you can't give us enough, don't give us any. 18 2/26/08 - WHOLE - RES. 080173 Is that my understanding, the understanding that you're just going to privatize it? Obviously we have increased costs, and I'm assuming there would be some level of sponsorship from a private entity, because even shows at the Wachovia and other venues have to have some sponsorship to make a profit, because it's unrealistic to think that you can operate that without some outside sponsorship. You may actually end up calling it the Wachovia Dell East or something like that. I mean, I don't know. But in real terms --
You may have information we don't have, Councilman. But I think that essentially is probably correct, what you just described.
Thank you. Under Job and Economic 19 2/26/08 - WHOLE - RES. 080173 Development, Section 73-77, can someone explain what the Office of Sustainability does, where it is funded and what is its budget?
The Office of Sustainability is likely to be contained in the Office of the Commerce -- I think the Commerce Department is where we're going to end up keeping it. What we're thinking about right now, Council President, is to utilize existing resources that we have within the Department. We now have various disparate employees and resources around the City government that we hope to bring together and create an Office of Sustainability and hopefully not to increase significantly the resources that we need to fund that office, that we would use existing resources that we have.
Is it reflected in the budget? Because we don't see it. 20 2/26/08 - WHOLE - RES. 080173
I think we have one position that we have identified that we would create that is currently in the Mayor's Office. I think it's about $70,000. And then the idea would be then to husband the resources that we have around the City with this person if we find a suitable candidate to lead that operation, but beyond the one position, we don't think that it will require any additional resources.
Thank you. On , you mention that the Nutter Administration wants to create a single land bank. Are there now multiple land banks? Can you tell us how you propose to do this? . (Witness approached witness table.)
It's the last paragraph on that page. 21 2/26/08 - WHOLE - RES. 080173
I am Wendell Pritchett, the Director of the Office of Policy, Research and Planning. Right now several City and private entities own property. So the Redevelopment Authority owns property. The City of Philadelphia owns property through the Department of Public Property. The Philadelphia Housing Authority owns property and I think even the Philadelphia Housing Development Corporation owns some property. Our plan, our hope, is to consolidate the ownership of the property, as much of that property into one entity. The prior Administration was looking into this, and we are reviewing their proposal that was made last year. It's at the Law Department right now. So we don't have an answer yet about what 22 2/26/08 - WHOLE - RES. 080173 exact entity would own and manage the vacant property, but our hope is to consolidate it.
Well, what role do you see City Council having in this process?
I would think that the City Council would have a very robust role.
Very well. Thank you. But you will keep us apprised of how this is going to be operating?
Thank you. One of the recent Charter changes was the creation of a Youth Commission. Can you tell me whether or 23 2/26/08 - WHOLE - RES. 080173 not any funding has been included in the Budget and the Five-Year Plan for this?
There is not. We'll have to add that, particularly given its membership.
We'll identify where that would come from at some point during this process. So before you vote on it, we'll let you know.
Okay. Under the Mayor's Operating Budget Summary, on of the revenue estimates, you are projecting to receive $3 million from the strategic marketing fees. What are strategic marketing fees? Can you explain to us where you are in the process, and when do you expect to be coming to City Council for approval?
That is -- it's naming rights and pouring rights, plus the sale of Philadelphia gear.
There was an RFP out. I think the prior Administration had gotten to the point where they were close to picking a vendor, but I think we will start that RFP process again to pick vendors to do this. So we are going to do that sometime within the next month.
On , you are projecting three new revenue generators for the Philadelphia Prisons. Can you explain what they are and how these funds are generated?
Councilwoman, I'd like to have the Prisons Commissioner come up since it was his idea.
This was an idea when the Nutter Administration came 25 2/26/08 - WHOLE - RES. 080173 into the transition, we asked each of the operating departments to come forth with initiatives that would either save costs or raise revenue, and the Prison Commission did a great job in providing us some examples.
Thank you. COMMISSIONER GIORLA: Good morning, Madam President.
Good morning. COMMISSIONER GIORLA: There are three initiatives that we proposed --
I'm sorry. Please identify yourself for the record. COMMISSIONER GIORLA: I'm sorry. I'm Louis Giorla, Acting Commissioner of the Philadelphia Prison. We proposed three initiatives earlier this year, the first of which is to convert our inmate telephone system from a combination free and collect 2/26/08 - WHOLE - RES. 080173 system to a total collect system so that all calls emanating from the facilities by inmates would be collect calls. There were a couple reasons behind this. Not only generate some revenue for the department, but it's becoming extremely difficult for us to acquire a vendor who will supply free services. Most of the vendors, the inmate phone vendors now, supply only collect services, because their profit margin is cut severely and they can't operate at a profitable level by providing free phones. The second proposal we made was an increase in work release room and board. All inmates who are working and are in our Work Release Program pay 16 percent of their gross to defray the costs of the program. It's one of the lowest not only in the area but nationally, and we're looking at an upgrade to percent of the gross 24 salary. 25 The third and final proposal we 27 2/26/08 - WHOLE - RES. 080173 made was to impose transaction fees to defray the costs of some of our clerical operations for inmate transactions. There are two types we have in mind. The first is commissary transactions, where inmates purchase toiletries, cosmetics and food items from a vendor who operates more or less a catalogue-ordering service for the inmates. The second is a transaction fee for what we call D forms or inmates checks, where inmates disburse funds from their inmate accounts to various community -- to the courts, probation and parole for fines and costs, home to pay bills and child support and other personal costs like that.
I'm sorry. Just a moment, please. Councilman Jones has a point of information. 28 2/26/08 - WHOLE - RES. 080173
Under your savings for vending to inmates, what is the current population racially of your inmates? COMMISSIONER GIORLA: I'm sorry, sir. Do you mean the total census?
Yes. COMMISSIONER GIORLA: As of midnight last night, 9,147.
What is the demographics of the inmates in incarceration? COMMISSIONER GIORLA: I believe racially the breakdown is 71 percent African-American, approximately 18 percent Hispanic and the remainder are white, and I believe there are three percent, approximately three percent, Asian Pacific Islanders. The gender breakdown, we're about 15 percent to 18 percent female and we also have a small -- and I don't know what the percentage is -- a small juvenile 29 2/26/08 - WHOLE - RES. 080173 population, about 125 males and about anywhere from four to six female juvenile inmates.
Do you have a diversity plan for vending to those inmates? COMMISSIONER GIORLA: We follow the City's guidelines on minority participation in all our contracts.
And how successful have you been in providing that diversity through vending opportunities to that population? COMMISSIONER GIORLA: Both our commissary vendor and our food service vendor meet the City's requirements.
And who are they? COMMISSIONER GIORLA: Aramark provides food services throughout all of our facilities. Keefe Commissary is the vendor for commissary services.
And what is the DBE/MBE/WBE participation within that 30 2/26/08 - WHOLE - RES. 080173 vending opportunity to the incarcerated persons? COMMISSIONER GIORLA: I don't know those percentages right here and I don't have that information in front of me, sir.
Councilman, the Administration has been put on notice that that is information that the Council will be requiring, and certainly during the course of our -- the testimony of our operating departments, all of the operating departments have been instructed to provide such information or to have it available, at the request of Councilwoman Blondell Reynolds Brown and others who are interested in that topic. So we will be having that information. We just got the letter, and we are working feverishly on trying to get that information for you.
Thank you. 31 2/26/08 - WHOLE - RES. 080173 Councilman Kenney also has a point of information.
Madam President, I have a question relative to the prison, actually a request for some information, and if you do know today, you can please tell us, but if not, you can provide the information later. I'd like to know what the overall cost of healthcare in the Philadelphia Prison System is, which would include a breakdown of healthcare plus pharmacy. I'd also like to know how many sick calls on average per year that an average inmate gets or makes, and who manages the medical program now. Is there some type of HMO or managed care? Are we looking at the possibility of that, and are issuance of prescriptions and other medical care out of line with what industry numbers are in the general public. I'm sorry. Do we have someone taking these questions down for our sake? 32 2/26/08 - WHOLE - RES. 080173
I believe so. I think Sharon is taking the questions in her office.
I'm sure there's a number of questions you're not going to be able to answer. You may not be able to answer right now, but I'm really just trying to get an idea on what our healthcare costs overall are. I mean, obviously as it relates to our own public employees, as it relates to people in the general private workforce, as it relates to everything we do in the country these days, the cost of healthcare, the cost of pharmacy are major issues, and I want to know whether or not or how these numbers line up with general industry standards and statistics. COMMISSIONER GIORLA: Let me answer as many of your questions as I can, Councilman. We have two health services vendors. One is a nationally prominent 33 2/26/08 - WHOLE - RES. 080173 firm, Prison Health Services, which supplies healthcare to about 300,000 inmates nationwide.
How many do we have here total? How many inmates here total? COMMISSIONER GIORLA: Here?
Thank you. COMMISSIONER GIORLA: I believe the annual costs as of this fiscal year was probably about $31 million for healthcare.
That includes the pharmacy number? COMMISSIONER GIORLA: That includes physical health, mental health, pharmacy and related services.
Okay. COMMISSIONER GIORLA: We recently looked at our pharmacy operations. We were dispensing 30 days' 34 2/26/08 - WHOLE - RES. 080173 medication to inmates, routine and blister packs, to try and lower the dispensing costs. Most of the items are non-narcotic, they're not psychotropic, and they're dispensed that way to save on nursing costs. We're also looking at reducing that 30-day supply to a 14-day supply, because about 44 percent of our population doesn't spend any more than 12 days with us and they can acquire 13 additional prescriptions in the 14 community.
And the other questions relative to frequency, you could answer at some point in time? What I'm interested on average, the average -- and I understand the issue of a 14-day stay on average and all that, but on average in a year, how many times does an inmate go to the dispensary or to the infirmary or gets a prescription? COMMISSIONER GIORLA: I don't know how many visits an average inmate 35 2/26/08 - WHOLE - RES. 080173 makes or the number of prescriptions. I can tell you that they number in the thousands.
You can't tell me now or you can't -- COMMISSIONER GIORLA: No. I can get that information for you, yes, sir.
Okay. What I'm interested in is the average number per inmate per visit and how many of those visits result in a prescription being written. COMMISSIONER GIORLA: Okay.
And the other one issue is, are we doing any generic replacements on brand name pharmaceuticals? COMMISSIONER GIORLA: Both our physical health and mental health medication formularies are reviewed annually to see if we can substitute generics for brands.
And who 36 2/26/08 - WHOLE - RES. 080173 reviews them? COMMISSIONER GIORLA: Excuse me?
Who reviews that information? COMMISSIONER GIORLA: Not only our vendor, but our contract services unit, which is now headed by a doctor with experience both in economics and healthcare administration, to make sure that we're keeping the cost as low as we can.
Have we considered either contracting or asking for help from a large healthcare provider, like, say, Independence Blue Cross or one of the other, to kind of review what it is our people are reviewing and to make some suggestions themselves as to what we could do to cut costs? COMMISSIONER GIORLA: We recently acquired the services of a third-party administrator, Aetna 37 2/26/08 - WHOLE - RES. 080173 Healthcare, to review our utilization costs, hospital stays and other costs. I don't believe that they're involved in pharmacy costs at this point.
Is that contract bid or was it a professional services contract? COMMISSIONER GIORLA: I don't know.
Could you find that out -- COMMISSIONER GIORLA: That was prior to my tenure.
Could you also find that out, what the length of that contract is and when it expires? COMMISSIONER GIORLA: Yes, sir.
And also whether or not they can be looking at the utilization numbers on pharmacy, because that's, as you know, an exploding cost for healthcare. COMMISSIONER GIORLA: Yes, sir.
Thank you. 38 2/26/08 - WHOLE - RES. 080173 Thank you, Madam President.
You're welcome. While the Commissioner is at the table, does anyone else have any questions on this issue? Councilwoman Miller. Commissioner, please remain.
Just real quick. Do inmates pay for medical care? COMMISSIONER GIORLA: There's no co-pay or associated cost with healthcare at this point for the inmates.
Some correctional facilities they do pay; is that correct? I keep hearing that, or that seems to be a question that people have or a fear that they have. COMMISSIONER GIORLA: There are a number of state and county facilities that charge a minimum co-pay for sick call services. Most don't charge for care after the sick call, the initial visit, specialty care, et cetera. Not 39 2/26/08 - WHOLE - RES. 080173 only to defray their costs, but they feel that that minimum charge defrays the number of frivolous complaints.
Thank you. Thank you, Madam President. Good morning. COMMISSIONER GIORLA: Good morning.
What provisions are made to ensure that the children of the prisoners are utilizing CHIP? Where does that duty sit? Who is responsible for making sure children of prisoners are covered? COMMISSIONER GIORLA: We 40 2/26/08 - WHOLE - RES. 080173 don't -- as part of our inmate services that we provide to the inmates, we don't provide sign-ups for CHIP or medical care for the children of inmates.
So that's not in the lap of the social workers to make sure that -- social workers who work for the prisons have some duty in trying to do what they can for those families. So that's not included in that delivery of service package? COMMISSIONER GIORLA: Our social workers make regular contact with community resources, especially where the children of prisoners are placed with a childcare agency, either DHS or some other custody agency.
And so who is responsible for ensuring that the dots are connected? COMMISSIONER GIORLA: I don't know.
Madam 41 2/26/08 - WHOLE - RES. 080173 President, Councilwoman Blondell Reynolds Brown, we have Dr. Don Schwarz, the Deputy Mayor for Health and Opportunities, who might be able to address that question.
Good morning. While we have no specific program that is linked to the prisons, in the eight health centers for the City we have benefits counselors who help children and families both identify potential sources for healthcare funding, health insurance and link them. So they have the enrollment forms, and we can do essentially deemed eligibility, which means for medical assistance in particular, we can enroll people directly in the program on the temporary basis, 42 2/26/08 - WHOLE - RES. 080173 and then ultimately the state approves them finally.
We could certainly give them information so that they could know where the health centers are and could go there and have children become enrolled. There's also a fairly extensive outreach program that the state runs for CHIP, and we could provide information to the prisons on that.
Okay. Thank you, Madam President. I'll wait my turn, because I have additional questions for the Health 43 2/26/08 - WHOLE - RES. 080173 Commissioner, but I'll wait my turn.
Thank you. While the Commissioner is still up at the table, I'd like to address the issue about detainers. Are they MA eligible and do we get reimbursed for their medical expenses? COMMISSIONER GIORLA: I'm sorry, Madam President.
The detainers -- detentioners. I'm sorry. COMMISSIONER GIORLA: Detentioners within the City?
Yes. COMMISSIONER GIORLA: We don't get reimbursed for their medical costs.
I'm sorry. COMMISSIONER GIORLA: We do not get reimbursed for their medical costs.
Are they MA eligible? COMMISSIONER GIORLA: No. Once 44 2/26/08 - WHOLE - RES. 080173 they're incarcerated, they're no longer MA eligible. With sentenced inmates, when we draft discharge plans or prepare them for release, in preparation for them to become MA eligible, we provide some counseling and some assistance in signing up for MA upon release, but while they're incarcerated, no. 10
Very well. Thank you. Thank you, Commissioner. I don't want to dominate the hearings by asking the questions. However, we will set guidelines. Each Councilman will be recognized. We will have more than one go-around. The first go-around will be for five minutes. The first one to be recognized will be Councilman Goode.
Let me first 45 2/26/08 - WHOLE - RES. 080173 start with jobs and economic development. During the mayoral campaign, within the Five-Year Plan, there's a concept of an Economic Opportunity Cabinet reference. Can you tell me the status of the Economic Opportunity Cabinet and what exactly it is?
I can't give you the specifics, Councilman Goode, but suffice to say that we have been anxiously awaiting the arrival of the new Commerce Director, who will be heading that effort up. He will start with us full time next week, and that is Andy Altman, and upon his arrival, there will be the development of that, Councilman.
Thank you. Turning to business tax reform, the proposed Five-Year Plan cuts the gross receipts portion of BPT to 0.08 percent, but both the Administration and Council bills cut it to 0.75 percent by the end of the Plan. Which is it? Is it 0.08 percent or 0.75 percent? 46 2/26/08 - WHOLE - RES. 080173
It's 0.75. I think that's just a rounding of -- 0.75 rounds up to 8, but it's 0.75.
Okay. And the Administration bill does not exactly eliminate the gross receipts portion. Will it be amended to go beyond the five-year schedule?
Yes, it will. I think we were planning to introduce that amendment before tomorrow -- or have that amendment available before tomorrow's hearing.
What is the cost of the BPT reform in the Five-Year Plan?
It's based on four percent growth on the gross receipts side, two percent on the net income in '09 and then four percent a year after 47 2/26/08 - WHOLE - RES. 080173 that.
Okay. In terms of economic development, I see a reference to business services, and a number of Administrations come in and talk about how they're going to better business services. In the '80s there was a Client Services Division. In the '90s was the Mayor's Business Action Team. What is the plan for business services now?
The current plan is that we are going to have a business service officer who will be responsible for making sure that businesses who want to do business with the City can come in and coordinate their efforts. Again, when the new Deputy Mayor for Planning and Economic Development arrives, that office will get off the ground, but the plan is to make sure that we have someone who is in the Commerce Department who is responsible for that particular effort. 48 2/26/08 - WHOLE - RES. 080173
And will it be separate from 3-1-1 or will it be joined?
Well, everything -- I think in terms of our overall philosophy, there is hardly any separation from anything from 3-1-1, but this particular position will reside in the Commerce Department, but the goal and the plan ultimately is to have everything linked ultimately with 3-1-1.
In terms of the Advisory Commission that was created of construction industry diversity, what is the status of that Commission?
In terms of the Advisory Commission for construction industry diversity, what is the status of that Commission?
The Administration is currently in the planning stages. We are meeting, I 49 2/26/08 - WHOLE - RES. 080173 think, this week to talk about the creation of that Advisory Committee.
And while you're still developing the Economic Opportunity Cabinet, will there be any link between that Advisory Commission and the Economic Opportunity Cabinet?
I certainly can see a linkage there. Again, everything we want to do is going to be coordinated, so it would seem to make a lot of sense to have some linkage there as well.
Lastly, in terms of the additional funding for Community College, for years we've discussed the issue of job training and how many different jurisdictions utilize their community colleges for job training. How might there be better partnerships between the job training agencies and Community College? How might additional workforce development dollars go to Community College and so 50 2/26/08 - WHOLE - RES. 080173 forth? Is there going to be a better utilization of Community College for workforce development in addition to the additional dollars to Community College?
Councilman Goode, we in fact just had a meeting last night about workforce development. Our goal is to take a good, hard look and reevaluate the current structure of our workforce development programs, and, clearly, the Mayor's insistence that we increase the Community College budget to the $4 million recognizes the importance of that entity as part of that workforce development process. I think it's fair to say that when we complete the review of the workforce development agencies, that it will certainly include a significant piece for the Community College workforce training as well.
You're welcome. The Chair recognizes Councilman Jones.
Thank you, Madam President. I see in here that there is the proposed elimination of the low-income tax credit, affectionately known as the Cohen bill, and the rationale I understand is because there is the EITC tax from the federal government that's going to supplant that. How does that help low-income people? It seems to me by eliminating that tax we are increasing taxes for them. I don't understand the rationale.
Well, the rationale for looking at the potential elimination of that tax, which was already included, I think, in the Five-Year Plan from previous 52 2/26/08 - WHOLE - RES. 080173 Administrations, is that there are several opportunities for the reduction of taxes for all residents; i.e., the stated reductions in the wage tax that will go below four percent for the first time in 30 years, in addition to which the gaming revenues that come from the rest of the state will also benefit Philadelphia by reducing the wage taxes. And as in any compilation of a budget, you have to make choices and you make priorities, and the overall net in fact of the reduction in wage taxes versus the opportunity to decrease the business taxes that had not been as well addressed was an opportunity that we thought we should take. Obviously to help low-income individuals, the best way to help them is to help them get a job, and in order to help them, we think that enhancing the business climate was certainly on balance in this particular instance, something that we thought we could do, particularly 53 2/26/08 - WHOLE - RES. 080173 in light of the fact that wage tax reductions have been decreasing over time.
Okay. I would only urge that we check in with advocacy groups that are particularly interested in providing some relief and maintaining some ability for the 10 percent of people under the poverty 11 guidelines to move along with this 12 direction of prosperity for the City. 13
Excuse me, 18 Councilman Jones. 19 Very quickly, I won't be 20 supporting the repeal of the Cohen tax 21 credit. I possibly could support the 22 repeal if it was going to be replaced 23 with something else, but having nothing 24 there I'm not sure is acceptable to me. So the one question I was 54 2/26/08 - WHOLE - RES. 080173 asking as a follow-up question simply is, is there a level of poverty or income at which people should not pay a local wage tax, and if it should be adjusted, will the Administration be considering adjusting it to that level?
Councilman Goode, I think that that's a policy question that, along with the Administration and this body, is one that we'll have to wrestle with. I can't answer that question at this point, but fair to say, it's the Administration's position at least in development and proposal of this particular budget that on balance the opportunity to enhance job opportunities is a significant opportunity. To say that there's some level below which no one should have to pay the wage tax is a policy decision that you, your colleagues and the Administration will have to wrestle with and come to a conclusion about during this process. 55 2/26/08 - WHOLE - RES. 080173
I was also looking in the budget and I see the Housing Trust Fund. Are we going to make a commitment to that?
In the Five-Year Plan, we've committed to maintain the funding at a million dollars a year through the Five-Year Plan for the Housing Trust Fund, that's correct.
The 4th Councilmanic District is one of the few districts that -- and I'm glad you are from the 4th Councilmanic District.
You may have noticed we don't have a health center. And I understand there is a commitment from this Administration to increase the proficiency of these centers, but in order for folk in my district to get a vaccination when they fall under the guideline, they have to either go to Councilwoman Blackwell's district or 56 2/26/08 - WHOLE - RES. 080173 Councilwoman Miller's district, and I was wondering how we are going to deal with that.
Certainly the budget -- we've increased the amount of resources for health centers. Unfortunately, it does not include resources for the additional construction of new health centers. I think the best way that we can expand the service opportunity is to increase the efficiency of our existing health centers and make sure that we can get those residents and citizens who are seeking health services in and out and, therefore, enhance the efficiency of the existing health centers. Unfortunately, the budget does not include any money for new health centers, but we do have $3 billion in the budget to increase the efficiency and enhance the quality of the care that our residents who do seek out healthcare from those centers can get provided to them. 57 2/26/08 - WHOLE - RES. 080173
I'd like to also consider the possibility of multi-purpose centers in the 4th Councilmanic District that can be utilized to provide those services. I don't necessarily need a new health center bill, but I need a facility by which people can access it readily, and I want to work with you and this Administration and the new Health Commissioner to look at those possibilities.
Yeah, we will, Councilman Jones. I know during the delivery of the report on DHS, one of the recommendations is to look at the placement of what you refer to as kind of universal centers where you can get services. That is certainly going to be something that the Administration will continue to look at, so that you can place services where people need them, whether they be health centers, whether they be behavioral health, whether they 58 2/26/08 - WHOLE - RES. 080173 be child services. So that is something we're going to be looking at as we go through the implementation of the recommendations in the report that was issued with respect to DHS.
Thank you. The Chair recognizes Councilman Greenlee.
Thank you, Madam President. Councilman Jones addressed my one issue -- one of the issue I was going to raise, the low-income tax credit, and I certainly agree with him and Councilman Goode that you're going to have to convince me that there is not a way that we can still do that, but I know we're going to have a lot of discussion on that. And I just hope it doesn't, before I go off on another thing, I hope we don't get down into a thing where it's either business tax cuts or that. I 59 2/26/08 - WHOLE - RES. 080173 don't think we need to necessarily have that discussion. And while I agree that it's important to get people jobs, a lot of these people, yeah, they have jobs, they have jobs already, but they're not making a lot of money, and that is why it was thought that that was a good program to have. And I just add for the record -- and I think you know this -- that one of the people that pushed to have it pushed back three more years to have the City ready for it was then Councilman Nutter. So I just put that in there for the record. On property taxes, how, if any, is full valuation figured in here? Are there any assumption that we're going to full valuation? Because I know Councilwoman Blackwell and myself and others have questions about that issue.
The assumption here is that if we go to full value, it will be revenue neutral, so that there won't 60 2/26/08 - WHOLE - RES. 080173 be any net impact on our revenues. But we don't know when the BRT will have it fully in place. We've had some conversations, but we're not sure when they'll move.
And I know the last time the BRT was in here last year, they said that basically they were going to wait to hear from Council on what adjustments could be made on the millage, that kind of thing, before they moved on that. And certainly obviously we hope that if it ever happens, that it will be revenue neutral. There's some question about that. Just one last question then, if I could. On the parking tax, and I'm not saying that this is a bad idea to raise it to 20 percent, but obviously last time it raised some concerns. Has there been any discussion with the garage parking lot owners about this, kind of preparing them for this? Any feedback from them? Any discussion at all yet? 61 2/26/08 - WHOLE - RES. 080173
Councilman, I can say that I have not personally received any. I can't say whether the Mayor has received any specific communication from that particular constituency.
My prediction is, they'll be in here to let us know.
Okay. Very good. Thank you. Thank you, Madam President.
Yes. The Chair recognizes Councilwoman Blackwell.
My 62 2/26/08 - WHOLE - RES. 080173 colleague just mentioned this issue of taxes and the revenue neutral issue.
Yes. And part of that debate, as you may know, is that it's got to be -- you have to deal with what is before you come up with something new to tax people. That's always been my issue. You can't say it's revenue neutral if you don't straighten out where it is so that it's fair at the bottom line before you talk about other taxes. That's been our concern on that issue. Thank you. Thank you, Madam President. It really was a point of information.
Okay. On that same vein, when equalization does occur, is this Administration committed to working with City Council to provide homeowners a safety net so that they will not be forced out of their homes in the 63 2/26/08 - WHOLE - RES. 080173 event there are significant increases in property assessments?
I think it's fair to say, Councilwoman Verna, that the Administration has no interest in seeing homeowners lose their homes as a result of the equalization process and that the Administration would stand ready to work with the Council and other parties to try to make sure that that does not happen as much as we could, but we certainly don't want to see homeowners lose their homes as a result of that process.
I'm glad to hear that, because we certainly don't either. The Chair recognizes Councilwoman Brown.
On of your testimony, you talk about $5 64 2/26/08 - WHOLE - RES. 080173 million annually to expand the Youth Violence Reduction Partnership. So what does that mean? Is that expansion tied to those areas of the City where you see an uptick in juvenile crime?
I think the simple answer is yes, that the $5 million that we have identified here for the Youth Violence Reduction Partnership would be allocable to those areas that most need them.
And who or what would inform the decision to where those dollars go?
We would certainly be working with the appropriate deputy commissioners, be it either in Health and Opportunities or in Public Safety, to determine where those dollars might be best spent.
I might mention to remember the value and the use of the Children's Report Card, which looks at a broad, diverse mix of youth 65 2/26/08 - WHOLE - RES. 080173 at-risk factors, and that helps drive both policy and funding, because it covers all of the risk factors that any child or young person could be associated with and actually grades what those risk factors are, and is a great tool for ultimately deciding how you spend dollars around kids. You state here that $6.5 million will go to the Streets Department to fund weekly, single-stream recycling. So what does that number buy citizens? How does that move the needle?
Well, as you know, Councilwoman, I think only a small portion of the City currently has the opportunity to provide the recycling and single-stream. Some have it every other week. Some of us in the City still have to separate. What we hope this will do is provide the opportunity for every citizen to enjoy the prospect of being able to put their recyclables out either on the same day of their trash pick-up or 66 2/26/08 - WHOLE - RES. 080173 at least once a week and they don't have to remember if it's this week or the next week. I know personally I have to figure out -- my son and I have to figure out every other week which week it is to put our recyclables out, and if we get single-stream, weekly pick-up, that will enhance significantly around the City the opportunity to increase our recycling.
Sure. And I actually overlooked the phrase that it does say every City resident. So that indeed takes us citywide.