Committee Hearing, February 26, 2008

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. Welcome.

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.

Why isn't the money restored in the out years?

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.

What subsidy would there be and in what amount?

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.

I'm sorry. I didn't hear.

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?

You asked would there be contracting out?

Yes.

I'm not sure.

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.

All right. Thank you. Thank you, Madam President.

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.)

Good morning, Council President.

It's the last paragraph on that page. 21 2/26/08 - WHOLE - RES. 080173

I'm Wendell Pritchett, Director of the Office of --

I'm sorry. We can't hear you.

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.

We would hope so.

In both the creation of the land bank and its management.

Very well. Thank you. But you will keep us apprised of how this is going to be operating?

Absolutely.

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.

When do you plan to do that?

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.

I'm 24 2/26/08 - WHOLE - RES. 080173 sorry.

Of Philadelphia gear, items --

Oh, 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.

Thank you.

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.

Thank you. COMMISSIONER GIORLA: You're welcome.

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.

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?

Here. COMMISSIONER GIORLA: Ninety-two hundred.

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.

Okay. Thank you. Thank you, Madam President.

Madam President?

Yes.

I do have a follow-up question.

Okay.

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.

Okay.

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.

Very well. Good morning, Doctor.

Good morning.

Good morning.

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.

I see.

But that is not directly linked to the prisons.

So there's a dot that could possibly be connected --

It certainly could.

-- to service those families?

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.

Thank you, Madam President. Good morning.

Good morning.

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?

Two hundred million dollars.

And what assumption is that based upon?

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?

I'm sorry, Councilman Goode. I didn't --

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.

Thank you.

You're welcome. 51 2/26/08 - WHOLE - RES. 080173

Thank you, Madam President.

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

Point of 14 information. 15

The 16 Chair recognizes Councilman Goode. 17

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

Thank you.

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.

I am.

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.

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.

If we haven't yet heard, I'm sure we will.

Okay. Very good. Thank you. Thank you, Madam President.

Point of information, Madam President.

Yes. You have a point of information?

Yes, ma'am.

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.

The equalization?

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.

Thank you, Madam President. Good morning.

Good morning.

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.

That's correct.

You state in your testimony that an additional $3 million will go to improving City health centers, and the more appropriate time to discuss this in great detail will be when the operational departments come before us, but there's clear evidence that there's an underutilization of CHIP. Have you decided yet how those dollars 67 2/26/08 - WHOLE - RES. 080173 will be allocated, that 3.8 million? Is that to hire more benefits counselors or what? What is that? That's $3 million annually to the City health centers.

Councilmember, it is both for staff to rebuild the infrastructure and to augment the infracture. That staff is being discussed internally as to exactly where that would go. The doctor is here.

Got it.

Thank you for the question on CHIP. We currently have benefits counselors in each of the health centers, as mentioned. They have information on CHIP. The question is beyond CHIP. So what will we do beyond CHIP to notify. The $3 million builds infrastructure in the health centers particularly around delivery of services. So if we can get more people in, particularly children, the hope is that they will have access to the benefits 68 2/26/08 - WHOLE - RES. 080173 counselors. The other thing that we'll do, although not specifically with the $3 million, is work with the benefits counselors at the other pediatric facilities in town so that we actually have a network of counselors for the first time that are looking for children who will be eligible for CHIP. Obviously all of that is contingent on the federal budget and what happens ultimately with the CHIP dollars.

Okay. I have a subsequent question on that, but I'll save it for operations hearings. Office of Arts and Culture, can you speak to the status of it and/or whether or not you've had an opportunity to really think through strategically what its role is going to be?

The current status is that we have been actively seeking someone to lead that operation. We have not as of yet settled on a 69 2/26/08 - WHOLE - RES. 080173 candidate. With respect to the strategic thinking about it, obviously the strategic thinking about it will be more informed to the extent that we have somebody who is actually here to help us think about it. I think we've been close a couple of times and we have not been able to get people signed up, but I think we are still actively seeking to have someone in that capacity, at which time we will sit down and think strategically about how we want to utilize arts and culture as a significant economic development engine here in the City. (Bell rung.)

Okay. I have to wait until my next round. Thank you.

Thank you. I would just like to ask a few questions at this time. Under Public Safety, you mention in the Plan that the 70 2/26/08 - WHOLE - RES. 080173 Police Department will have an additional 400 officers on the street through additional funding and redeployment. The Plan only includes 200 additional officers in 2009 and no new officers for the balance of the five years. Is that correct, and can you tell us how the additional funding from the state is being handled and are those officers included in the figure of 6,824 that we presently have?

Yes, Councilwoman. If you'll recall, when the Police Commissioner revealed his Crime Plan, he indicated that by May 1 that he would get through redeployment primarily 200 additional officers. That would include a new class, I think, that was coming online sometime in April of about 100, maybe about 100 officers or so. So 200 of the 400 officers that we identify in the Plan relate to the Commissioner's Crime Plan, and we hope to have those on the street by May 1. 71 2/26/08 - WHOLE - RES. 080173 The additional 200 officers that are referred to in the Plan and for which funding is provided is the $78 million that we've put in the Plan, and we hope -- and it is our expectation that we will be able to bring in additional classes and other new officers the additional 200 from that $78 million that's identified in the Plan, and we hope to have those in place by the end of Fiscal Year 2009.

But is that from the state funding?

The state funding will help support some of those officers, that's correct.

All right. In the information provided, you state that the Fire Department will receive additional funding of $3.8 million for emergency medical services. I'm having a difficult time understanding this because in Appendix 2, , it shows that you have cut the Fire 72 2/26/08 - WHOLE - RES. 080173 Department by $1.2 million in Class 100 in FY08. Can you explain why you are cutting their current budget? Is the calculation of $3.8 million from their adopted FY08 budget or from the target budget?

I'll answer the first part of your question first and then the second part second. The reason the spending for this year is lower than -- that we project the spending to be lower is based on just how much had been spent through the first half of the year but before we got here and our ability to then staff up during the second half of the year, and we do base the increase off the estimated obligations for '08.

Why couldn't you spend the money in '08?

Well, we are. We're spending more in the second half than we're spending in the first half, but we're just basing it off where we 73 2/26/08 - WHOLE - RES. 080173 were and hiring schedules. That's really how we're getting to the '08 number.

Wait a minute. Weren't we promised more employees for EMS?

Yes, and we're bringing them on. I mean --

And when will they come on? Is there an existing list that they will be taken from? (Witness approached witness table.)

Good morning, Commissioner. Please identify yourself for the record. COMMISSIONER AYERS: Fire Commissioner Lloyd Ayers. Good morning, Council President.

Good morning. COMMISSIONER AYERS: We just started a class this morning -- excuse 74 2/26/08 - WHOLE - RES. 080173 me; on Monday morning, 90 new firefighters.

I'm sorry. How many? COMMISSIONER AYERS: Ninety firefighter/EMTs, as well mid-March we'll be graduating seven paramedics. Also, we just got our new updated list. We will be putting in another class of paramedics probably May. So we are currently increasing the spending and bringing our complement of personnel up to the allotted budget.

And you hope to have a full complement by the end of this fiscal year? COMMISSIONER AYERS: Minus -- that's right. That's correct.

Thank you. I think, Mr. Dubow, the answer to that question should have been, the prior Administration would not allow us to spend the money that was given to the 75 2/26/08 - WHOLE - RES. 080173 department.

I was trying to be polite.

And now it's a new day. Thank you. (Laughter.)

Okay. The Chair recognizes Councilman Clarke.

Thank you, Madam President. Good morning.

Good morning.

The question that was asked earlier about the Housing Trust Fund, and I think you indicated that there is still a commitment of a million dollars per year?

That's correct.

And I was hoping that the fact that it wasn't on your testimony, that you were entertaining increasing that amount. Is 76 2/26/08 - WHOLE - RES. 080173 that a possibility?

I think as we all acknowledge, this is a deliberative process and many things that we propose might change during the course of this process.

All right. Let me tell you -- and we actually had this conversation to a lesser degree at the briefing with Councilmembers and the Mayor. We appreciate that early-on engagement. The current housing market in the City of Philadelphia is stagnant, at best, and we've actually seen over the last, I guess, the last three or four meetings that we've had with the Housing Trust Fund a decline in the revenue that's being generated as a result of the recording fees per the state law that allows a portion of that to go to the Housing Trust Fund. My concern is that the million dollars that's committed will probably fill that gap in terms of the 77 2/26/08 - WHOLE - RES. 080173 reduction in the current revenue that were being generated, but beyond that, it will not be beneficial to creating affordable housing. It's my understanding based on the federal government's budget that, there again, the Bush Administration is requesting a significant reduction in Block Grant dollars to the cities and the counties across the country. Understanding that, beyond -- and I do want to follow up and ask you about the inclusionary housing proposal that's on the table. Beyond that, is there any discussion about the possibility of creating affordable housing and at least continuing the pace that we've had over the last several years and possibly increasing that?

Councilman, you correctly noted the many challenges and strains on the nation's kind of housing economy right now, and we're all being stretched, as you can imagine. 78 2/26/08 - WHOLE - RES. 080173 We've had the value of housing tax credits falling and then developers are coming back asking for additional resources, and the problem is that it's kind of a vicious cycle that we can't quite seem to get out of and the question really is one of limited resources. I think, as we stated earlier, this is a deliberative process. We made proposals. Those proposals ultimately have to be approved by you. And we can have a discussion, but I think everyone has to recognize that that discussion will have to take place in the context of shrinking resources, and if we give more to housing, that means it's going to be less for something else, and that's a discussion that we certainly can have.

Okay. I just wanted to first acknowledge that I understand that there are limited resources, but there are also priorities in terms of what direction you spend those limited resources in, and 79 2/26/08 - WHOLE - RES. 080173 understanding the significant need for affordable housing, I would like you all -- and you all have committed to take a serious look at possibly creating some opportunities. With respect to the inclusionary housing proposal -- and I don't know if you can answer this question now -- is that, at a minimum, conceptually something that this Administration is supportive of?

Councilman, I'm really not in a position to answer that question at this point, but we'll certainly get back to you on that issue.

We're in the process of the second phase, and one of the reasons why I needed to know that as we move ourselves through this process is that there are going to be in probably the next month a number of initiatives that will be put on the table to provide the cost off-sets associated with the developers' concerns about the cost of 80 2/26/08 - WHOLE - RES. 080173 them doing the affordable units, and probably two of those, maybe three initiatives will in fact be tax-related legislation. So the need to have that in place before the next fiscal year and the end of this budget cycle is upon us is very important. So I would like to be in a position to, at a minimum, engage in --

We'll be prepared to address it in a timely manner.

Because Councilman DiCicco and I met with the heads of the Building Industry Association maybe two weeks ago, and they are prepared to give us a set of recommendations, I think, in mid-March on their cost off-sets as a result of an analysis done by Econsult, and the assumption is that there is going to be probably some costs to the City to entertain those initiatives. So it will be very helpful if you can kind of tee up and be a part of this process before we 81 2/26/08 - WHOLE - RES. 080173 come before you. One other thing real quick before my five minutes run out. I hear that clock ticking over there. The surveillance camera program -- (Bell rung.)

Councilwoman Tasco, did you push that button? (Laughter.)

All right. I'll tee back up. I'll come back. Thank you.

Councilwoman Miller.

I just want to piggyback off of Councilman Clarke's concern regarding neighborhood economic development, housing development. We started a lot of activity. We did lots of building. We did lots of demolition, and now I feel like we are 82 2/26/08 - WHOLE - RES. 080173 broke and I can't do anything else. So it's really serious, and we still want to continue to rebuild neighborhoods. The waterfront is fine and whatever you guys are doing down here in Center City, that's fine, but we got to continue to rebuild neighborhoods. So I want to have that discussion also.

I think we share the same goal, and as I indicated earlier, one of the exciting things about the Administration is the addition of Andy Altman who, as an avowed planner, isn't concerned about just downtown planning or riverfront planning. He's really concerned about the entire City. So we're very confident and hopeful that with his arrival and the coordinated effort of all of our planning, economic development and housing opportunities, that you'll see a very much coordinated effort that won't be limited to one sector of our economic development and planning activity, that 83 2/26/08 - WHOLE - RES. 080173 it will be a holistic approach. And we're very anxious for his arrival. So we're hopeful that you'll see that.

Well, I do know that he has reached out to Councilmembers to schedule appointments, but when I read, I just feel like something is missing here in this Plan for neighborhood housing development. I heard Council President ask earlier what is the Office of Sustainability, and I keep trying to figure that out, too, as it relates to what do we do now to sustain our neighborhoods. Certainly there is information here about the Commercial Corridor Program, and that's good, but we have all these blocks in the City and in five years we're going to turn around and we're going to be right back where we started from unless we are able to continue to rebuild these neighborhoods.

Agreed. Yes.

Thank 84 2/26/08 - WHOLE - RES. 080173 you.

You're welcome.

Thank you.

Thank you. The Chair recognizes Councilman Kenney. No questions? Thank you. Councilman Green.

Thank you, Madam Chairman. Thanks for coming today. I just have -- I'll try to get as many of my questions I have in the five minutes allotted to me at this time. I have a few. The fund balance, I think the last time we publicly met with Rob and Steve and in several private briefings I had with Rob over the summer, there was discussion that a municipality should have, I think, between eight and 13 percent saved and a fund balance for a 85 2/26/08 - WHOLE - RES. 080173 rainy day, and I note that the Five-Year Plan basically spends our entire fund balance down to $30 million, and given what I read in the Wall Street Journal and New York Times and Philadelphia Inquirer about perhaps a recession coming or much slower growth than we expect, is it prudent to spend down our rainy day fund to less than the amount recommended by PICA previously and in our previous discussions?

I think the points you raise are good and it creates a risk, and in constructing the Plan, we have to look at the trade-offs between making what we think are essential investments and the level of our cushion, but I don't disagree with you that this creates a risk.

I mean, are there harder choices you can make to have -- have we made enough hard choices in this budget?

We believe we have, 86 2/26/08 - WHOLE - RES. 080173 yes.

Okay. It does sort of have the appearance of most department spending as staying the same or going up as running a recession. So let's talk about some of the revenue assumptions. What's behind the wage tax assumptions? And I recognize you're going to give me percentages, but I'm wondering what's behind that. New jobs, new population or just overall increase in wages?

Councilmember, what we've assumed in growth is approximately three and a half percent for Fiscal Year '09, assuming that the national economy continues to grow. There are signs --

Excuse me. Would you please identify yourself for the record.

I'm sorry. Steve Agostini, Budget Director. 87 2/26/08 - WHOLE - RES. 080173 There are signs nationally that there are the beginnings of a recessionary environment. You see job contraction. You see -- the last growth domestic product number that came out for the fourth quarter of the past year was below one percent. So what we have done is assume that on a nominal basis we're going to have some growth of about three and a half percent. That includes what we anticipate about two and a half to three percent inflation for the local economy. Moving forward what we're assuming is about four percent. Again, assuming that what happens nationally based on the Congressional Budget Office assumptions does materialize in terms of nominal growth in the three to four -- three and a half to four and a half percent. If those assumptions change because national trends are changing, then we will -- and we've identified this in the plans -- then we'll have some 88 2/26/08 - WHOLE - RES. 080173 risks to our forecast, but the underlying basis was approximately three and a half percent growth in the wage base and then four percent in subsequent years, even after including what we anticipated would occur after changes to the rates, as you've seen and heard other discussion about.

So it's three and a half percent growth in the wage base. Does that three and a half percent take into account the continuing, although slowing, wage tax decreases?

Yes, it does, Councilmember, but it doesn't include any potential growth that would occur from firms that might relocate here from expansion in jobs. We didn't exactly know how to incorporate that, but that's an upside that is possible here that we haven't taken into account.

And typically has the Philadelphia economy tracked the nominal growth at the federal 89 2/26/08 - WHOLE - RES. 080173 level?

Typically based on the look of the last 30 years, we pretty much grow -- the local economy, that's the boundary of the county, seems to grow by inflation, and we -- inflation plus a half percent, one percent. So, yes, we track. We don't seem to have real bad dips compared to the national economy, but this is a new economy and the last big recession that the United States faced was in 1982. The 2000 and 1991 recessions were relatively mild in terms of historical perspective. So we don't know what we might expect. (Bell rung.)

Okay. Just to try to close a loop on this, you mention the national economy, that we grow at the rate of inflation of the national economy. The rate of inflation is expected to be two and a half percent, I thought you said, but you've assumed a three and a half percent growth. 90 2/26/08 - WHOLE - RES. 080173

I'm sorry. It's inflation plus a little nominal -- I should say a small amount of real growth. It's not much. The three and a half would assume about two and a half percent -- the three and a half percent growth that we have assumed for '09 fiscal year assumes about three and a half percent growth. Of that, about two and a half percent is inflationary. About one percent of that is real growth. The real growth assumptions for the federal government are about the same.

Okay. That's all my time for now. I have questions about real estate, business privilege, property taxes and the assumptions along those, as well as some other things. I'll get back to you. Thank you very much.

Councilman Kelly.

Thank you, Madam Chair. 91 2/26/08 - WHOLE - RES. 080173 Good morning.

Good morning.

I just want to follow up on Councilwoman Brown's questioning about the reopening of the Office of Arts and Culture. Could you tell me how that's going to be budgeted or whose office is going to be responsible for that and how many employees, if you know, are going to be responsible for running that office?

Much like the Office of Sustainability, we're going to look to rely on significant resources that are currently within the government. We have allotted or allocated, I think, one new position, but the plan would be to try to, again, husband existing resources that are in and around the City to comprise the office, and we would expect that with a more coordinated concentrated effort, to really be able to bring about the kind of policy results that we'd like to have in that office. 92 2/26/08 - WHOLE - RES. 080173 So I think the plan is that we have one budgeted new position, but the greater plan is to make sure that we find the existing resources within the government and bring those into a coordinated fashion.

Well, do you have the resources now?

We're going to have to go out and make sure that we identify where they are. We think that there are currently either positions or functions, at least people doing part-time or some people in other instances doing full-time some of the work that we can bring together, and we're going to help, with the Director, identify what those resources are.

Okay. Well, this isn't the time, I guess, to get into the responsibilities of people running that office. We'll do that during the budget, I guess, but could you tell me a little bit about the Office of 93 2/26/08 - WHOLE - RES. 080173 Sustainability, what they're responsible for?

The Office of Sustainability will help us reach one of our goals, which is to have a greener and livable city, to make sure that the government is focused on long-term, sustainable, renewable energy sources and making sure that the government operates in a way that is green. We also want to make sure that it's involved in helping us take advantage of what is emerging as the green economy, in which there are jobs being created in that economy that are not jobs that will necessarily leave the region, that will be retained here. So it's going to have a very wide platform and area of responsibility.

I see. Since you're creating an Office of Sustainability, you have an Office of Transportation, you have an Office of Business Services, as well as reopening 94 2/26/08 - WHOLE - RES. 080173 the Office of Arts and Culture. The people who are going to be responsible for these offices, are they current employees now, just being reassigned into those different departments, or are you going to be looking for new people to take over those departments?

It depends on the office. In some of the offices that you've identified; for example, in Transportation, I think it's probably fair to say they're existing resources within the government that we would -- because there used to be a Transportation Office here before it was disbanded that we would recreate. There were no 18 additional budgeted resources for creating that office. We were just going to reform that office, in effect. As I mentioned earlier, we do have one position in for the Office of Sustainability and I think one position in for the Office of Arts and Culture. And it's possible that the individual 95 2/26/08 - WHOLE - RES. 080173 that can fulfill that office might be in the government, but it's also possible that we might go outside.

You might go outside?

Yes, sir.

And who is really going to be responsible for it? Is it the Managing Director's Office? Are all of these offices going to come under the Managing Director's Office?

No. The Office of Transportation -- and I was just advised by the Budget Director I misspoke on one response with respect to Transportation. There is $500,000 in the budget for the Office of Transportation.

How much was that?

Five hundred thousand dollars that's included. So I misspoke on that.

That's included in this budget? 96 2/26/08 - WHOLE - RES. 080173

Yes, sir. And your question again? I'm sorry. I lost my train of thought.

I just wanted to know whose offices --

Oh, the reporting requirements, right. The various reporting responsibilities will be either between the Mayor's Office or some other respective Deputy Mayor. So, for example, the Office of Sustainability is likely to be found in the Commerce Department. The Office of Transportation will be under the auspices of the Deputy Mayor for Utilities, Rina Cutler, and the Office of Arts and Culture will probably be in the Commerce Department. (Bell rung.)

Okay. Thank you, Madam President.

You're welcome. The Chair recognizes Councilman DiCicco. 97 2/26/08 - WHOLE - RES. 080173 COUNCILMAN DiCICCO: Thank you, Madam Chair. And good morning.

Good morning. COUNCILMAN DiCICCO: Councilwoman Miller mentioned something earlier about development along the waterfront. Just for the record, there are probably a dozen projects that we've worked on that have been approved, but there is no development happening on the waterfront as well. There are two potential developments that would like to occur there, and if you'd like one, again, I offer it, either one of them, for your consideration and be glad to have a meeting with you. Speaking of casinos, in your Five-Year Plan -- I think I had asked this before. I thought the answer was that you did not have any gaming revenues built into the Five-Year Plan.

We have revenue beginning in 2010. So we assume that 98 2/26/08 - WHOLE - RES. 080173 revenue will start coming in in January 2010. We moved it back a year from where it was in last year's Plan. So there's no money in the '09 budget, but there is money in the Plan. COUNCILMAN DiCICCO: So if it's for '10 --

Two years from now. COUNCILMAN DiCICCO: Which is about a two-year buildout. So what happens if the casino construction does not begin according to your timeline? Because the way I see it, it almost means that you would almost have to be under construction now, because it's about roughly a two-year buildout for casinos.

Right. We don't have the full amount. We assume some ramp-up. There's only, I think, about --

It's less than half a year. I think it's approximately 9.6 million.

So eventually you get up into the high 20's. We have about 99 2/26/08 - WHOLE - RES. 080173 $9 million. So we're really assuming about a third of that year. But to get to your question, if it's delayed, then that amount of revenue will go down. It will keep getting pushed back. COUNCILMAN DiCICCO: That's my point. I mean, I think I asked the question of the Foxwoods folks yesterday how long -- they will not have a temporary facility. They're going to have a full-blown slots parlor, when and if they get to build. I think their answer was to months. So it's two 15 months shy. If they start today, they 16 would be two months shy of your 2010 17 projections. 18

If they start 19 today, they'd be a couple of months 20 before, because we're talking -- if we 21 have a third of the year, we're talking 22 starting April 1st. But I understand your point. COUNCILMAN DiCICCO: Isn't it somewhat presumptuous to have those 100 2/26/08 - WHOLE - RES. 080173 numbers in your Plan when they have not even gotten approvals to start construction? And I'm not being critical. I'm just -- I expect that we'll have casinos in Philadelphia. I mean, I've said that publicly and I'll continue to say it. I just don't know when.

Right. Well, obviously we don't know when either and we were taking our best estimate. But you're right, it could be later than that. COUNCILMAN DiCICCO: I mean, I can't imagine anything happening in terms of construction, at best, at the very least, six months out from today, and that may be an ambitious schedule.

So that would wind up -- and then we'd have to reduce the revenue. COUNCILMAN DiCICCO: You'd be in 2011.

Right. Then we'd 101 2/26/08 - WHOLE - RES. 080173 have to move some of those revenues out of the Plan. COUNCILMAN DiCICCO: I thought you knew something I didn't know. I'm just trying to get to that. Councilman Greenlee mentioned something about the parking tax. At that briefing we did a couple of weeks ago, I mentioned that there are a number of parking lots that are managed by companies that do not take credit cards, they only deal in cash. I just want to remind you that I think we need to look at that, because I suspect that a lot of those revenues from parking we haven't been receiving, and we'll continue not to receive it unless we look into that. And also as a reminder -- and I'm not sure if it's still happening in the stadium district. It was a major problem a few years ago, which I brought to the Street Administration's attention, where private companies were using their parking lots for overflow parking for 102 2/26/08 - WHOLE - RES. 080173 stadium events, sports events, and at that time, we were getting zero from those establishments. Some sort of enforcement measures were taking place at that time. I just want to, again, bring it to your attention. I think it's worth looking at again. I mean, we're talking significant numbers.

You're right, Councilman DiCicco. I do recall that conversation, and certainly we will have the Deputy Mayor for Transportation and Utilities, Rina Cutler, look into those very issues. COUNCILMAN DiCICCO: I think that was all. Thank you, Madam President. I don't have any more questions. Thank you.

Thank you. The Chair recognizes Councilwoman Brown. 103 2/26/08 - WHOLE - RES. 080173

Thank you, Madam President. Mention was made of the Administration's intent to follow through on the recommendations of the DHS report. Where does the Administration stand with the Blue Ribbon Commission report, which for a year professionals of all stripes met and representing all levels and continuum of service? Where are you all with a look-see at that report and a roll-out or execution of any of those recommendations? (Witness approaching witness table.)

Good morning.

Good morning.

If you could just update us or let us know where the Administration stands with regards to the recommendations that were cited in the Blue Ribbon Commission report, that would be helpful. 104 2/26/08 - WHOLE - RES. 080173

Dr. Arthur C. Evans, Director for the Department of Behavioral Health and Mental Retardation Services and also Acting Commissioner for the Department of Human Services. Councilwoman, as you probably know, several things happened after the issuance of the Blue Ribbon Commission report on children's behavioral health. The first was the establishment of something called the Leadership Council, which is co-chaired by myself and Administrative Judge Kevin Dougherty. That group continues to meet. In fact, we have a meeting coming up in the next couple of weeks. That is a group of people in government who are charged with ensuring that the recommendations move forward. In addition to that, there is a group of community advocates, providers, a broad cross-section of people that continue to meet on a monthly basis. Again, a meeting is coming up in the next 105 2/26/08 - WHOLE - RES. 080173 several weeks, and that group is charged with having the community oversight over the process. In terms of specific things that have been accomplished, the number one priority of the group after the report was issued was the building of community supports for children. In particular, there was a great concern amongst all of us that this City relies too heavily on residential care for children. Many of those children are outside of Philadelphia. They're outside of the state. And so there are a couple of projects that we've started. Just to give you a couple of examples, one of them is that we are -- we have a joint project that was funded by the Robert Wood Johnson Foundation to transition kids who are aging out of the child welfare system and who are in residential care, to bring those children back to the community. We've identified -- we're working with 23 children currently to 106 2/26/08 - WHOLE - RES. 080173 wrap services around them, bring them back to the community. But the long-term goal is to institutionalize those services that we wrap around those children.

How long is the Robert Wood Johnson grant?

That work -- well, it wasn't a grant per se. What it was was technical assistance. We were one of four jurisdictions around the country that received technical assistance from the Robert Wood Johnson to do this work. We also just submitted a System of Care grant to the federal government working with the State of Pennsylvania to do similar work. So there are a number of things that we're doing. We have increased the use of evidence-based practices, such as functional family therapy, which is a practice that we can use to keep children in their own home and treat them in the community. 107 2/26/08 - WHOLE - RES. 080173 So that's an example of the kinds of things that we're continuing to do.

So one can presume from that that there is a commitment to continue to make happen the recommendations that have been cited?

I think there's a strong commitment. Dr. Donald Schwarz, who is the Deputy Mayor for Health and Opportunity, is a pediatrician and has a very strong commitment to seeing that the recommendations go forward.

Okay. Thank you for your testimony. Could someone speak to -- there was some discussion about a review of the workforce development agencies. Briefly talk about what that is, what that means, and do you intend to report back to Council and let us know what your recommendations are?

Yes. I think I may have mentioned that earlier. The 108 2/26/08 - WHOLE - RES. 080173 Administration is about to begin a serious review of all of our workforce development activities to try to better streamline them and coordinate them and make sure that we get a better bang for our buck, so to speak. We will be reporting back to the Council. We're not sure where the recommendations may lead us. Some may require some Council approval, but we will report back to you on that activity.

Okay. You reference the Brookings report and you say how Philadelphians pay more in taxes as opposed to Camden or Boston. So can you cite where does Philly stack up with regards to those other cities?

We can certainly get that information for you.

Could you provide that for us?

We can tell you also that every year Washington, DC does a comparative of the largest city in each 109 2/26/08 - WHOLE - RES. 080173 state and looks at their tax burden, and Philadelphia consistently comes in in the top two or three, depending on the income level you look at.

Okay. (Bell rung.)

Thank you, Madam President.

You're welcome. The Chair recognizes Councilwoman Sanchez.

I'm going to attempt to use my time wisely since some of the questions were asked already, but I wanted to go on record as it relates to the Cohen tax. My understanding from this tax cut, that it is targeted more at working families who live on the margin, and with an acknowledged rate of percent of our 23 citizens in poverty, I am not satisfied 24 that we're presenting a budget where we 25 are more aggressive in our business tax 110 2/26/08 - WHOLE - RES. 080173 cuts and then at the same time eliminating this. So that I'm not satisfied with. With relation to the Housing Trust Fund, going back to Councilman Clarke mentioned this, we're going to be experiencing some massive CDBG cuts in our budget, in our federal budget, and that's going to continue to decrease as we continue to spend $10 billion in this war a month. A million dollars is not enough. So just that said. It's just not going to be adequate. When we've spent so many millions of dollars, in the case of the 7th Councilmanic where we spent $14 million, most of it in demolition, we have nothing to work in terms of how do we rebuild the 20,000 vacant properties and lots that we have in the 7th. As it relates to the healthcare piece -- I don't know if you want to respond to that before I keep going. I'll try to use my five minutes wisely 111 2/26/08 - WHOLE - RES. 080173 and get on the record here. As it relates to the healthcare increase, I think it's important, and we haven't done the best job possible, in coordinating with some of our private non-profits who do a lot of preventive health services. So I would encourage the Administration and Dr. Schwarz to meet with some of these folks as we look at where we're going to make our healthcare center investments so that it's complementary to some of the things that are already going on in the area. I don't know if this question was answered. The Office of Arts and Culture, where is it going to fall? Is it going to be in the Mayor's Office? Is it going to be in Commerce?

We've kind of gone back and forth. It will probably reside in the Mayor's Office, but it will have a very strong connection to the Commerce Department, because we view it as principally an economic development 112 2/26/08 - WHOLE - RES. 080173 opportunity for us. But it will organizationally reside in the Mayor's Office.

Will it have the power to oversee how we spend our current money as it relates to marketing the City, the money that we can give to Greater Marketing Tourism, or are we just creating a position and not giving this person the authority to look at where we're putting our money with these private non-profits and other stakeholders?

Clearly, we're not in the business of creating positions just to create positions. We think that once created, the office will have the requisite authority it needs to fulfill its mission. With respect to marketing, if you mean broad marketing of the City, I believe that that function is primarily rested in the Office of the City Representative, and particularly you will 113 2/26/08 - WHOLE - RES. 080173 have a Charter change provision before you to consider that. Obviously the City Representative, the Office of Arts and Culture and other offices around the City that work in marketing the City will all coordinate. One of the things that we are very committed to in this Administration is the coordination of efforts. People may have defined responsibilities as to job titles, but everybody is responsible ultimately for marketing the City, and we want to make sure that those agencies that have a piece of that are all working together, working on the same page, and the City Representative in her current capacity is working to a great extent to make sure that that happens. And we would think that when the Office of Arts and Culture is in fact created and staffed, that they will work with the City Representative and get that done.

My interest is to making sure that we're 114 2/26/08 - WHOLE - RES. 080173 maximizing how we market our neighborhoods and some of the attributes, that we have some of the ethnic attributes in our neighborhood. So I don't want it to get lost --

I understand.

-- in the shuffle. In your projections, you look at a percent revenue increase in real 12 estate growth. What are you basing this 13 on? Reassessments? For the budget, your 14 Plan. 15

You mean 23 percent 16 over the five years? 17

Yes. 18

Yes. We base that 19 on growth in market value. 20

So it 21 makes no assumption of full value? 22

No. It assumes 23 that if full value is put in place, it will be revenue neutral.

Okay. 115 2/26/08 - WHOLE - RES. 080173 In light of the Safe and Sound situation, when you talk about a $5 million increase, is that $5 million that we're getting from our needs assessment from the state or is the City making a $5 million commitment out of our general operating?

You're talking about the --

The youth prevention, the violence.

That's out of City funding.

So that's not state pass-through? We're not saying we're looking to get --

No. We're increasing City funding.

And then that's going to be coordinated as it relates to some of those activities. Because we just cut parent truancy officers and some of these other elements that are part of our youth violence 116 2/26/08 - WHOLE - RES. 080173 prevention strategy. Does that mean we're going to reentertain how we use and how we do some of those prevention services?

I think the final determination as to whether or not any of those activities are, as you refer to it, reinstituted will be a function of how people evaluate their effectiveness, and we would leave those determinations to the policymakers to look at the effectiveness and make sure that those investments are appropriately made where programs are in fact effective. (Bell rung.)

I have one more question.

No, you don't. (Laughter.)

The Chair recognizes Councilwoman Miller.

Thank you. Thank you, Madam Chair. 117 2/26/08 - WHOLE - RES. 080173 I actually just want to continue the discussion about the YVRP funding. Thank you for the $5 million. I actually think that that's really a good program. But two questions. In light of the fact that there are nine police districts that are, I'll call them, at the priority level because of increasing crime, will any of those -- I don't know whether the 24th or the 25th is one of the nine. I'm just thinking about the three police districts that are in my district that are not on this list to be included for YVRP, and I'm sure -- I don't have the breakdown of the ages of the people that are committing the crime, but I'm sure many of them are between the ages of 15 and 24. Are we thinking about providing services, additional services, as needed and maybe YVRP services that are needed in the 14th, 39th and 35th Police Districts?

Point of 118 2/26/08 - WHOLE - RES. 080173 information, Madam President. Madam President, point of information.

The Chair recognizes Councilwoman Brown for a point of information.

Yes. To your question, Councilwoman Donna Reed Miller, that's why I put on the record the value and use of the Children's Report Card, because it's data driven. It's current data driven, and it speaks to either the police districts or the councilmanic districts, and some of that information might be found in there.

Okay.

Thank you, Madam President.

Thank you.

Right. Councilwoman Miller, the program, as you know, currently operates in the 12th, 9th, 24th and 25th Police Districts. 119 2/26/08 - WHOLE - RES. 080173 Certainly -- and it's considered to be a highly effective program, and I think it's fair to say that those who will be evaluating where to target the investment of this additional resources will certainly look at the other districts around the City to make sure that we can get the highest return for the investment. So I would assume that the districts that you mentioned, I guess the three in your councilmanic district, will certainly be considered, but I can't assure you at this point that they would in fact be included in that program, but they would certainly be considered in the expansion.

Point of information.

I bring those districts up because --

Excuse me. The Chair recognizes Councilman 120 2/26/08 - WHOLE - RES. 080173 Goode for a point of information.

Excuse me, Councilwoman. Just real quickly, I was going to raise this a couple other times that the YVRP issue came up. Under the last Administration under a series of questioning in a number of different hearings, the Director of Social Services eventually had to admit that while the program is highly effective, it was not necessarily targeting the most at risk, and their judgment of what was most at risk really was a matter of layering social services to the same clients. In other words, a lot of what they decided to do was client driven, which from their standpoint made a lot of sense, but it was not necessarily data driven. And so my question in following up is, regardless of whether we're talking about police districts or whether we're talking about targeting areas of the City, at the end of the day if the 121 2/26/08 - WHOLE - RES. 080173 end purpose of the program is to deal with the most at risk, are we going to use a data-driven approach to make sure we're actually finding those that are most at risk as opposed to just trying to layer services to those who are already in the system? I'm assuming that the most at risk are in the system, but that doesn't mean that the program is actually targeting them.

May I respond to that, Councilwoman?

Please.

I think it's fair to say that certainly under this Administration we're going to be data driven. Under the direction of the Managing Director, who has already started our PhillyStat meetings, the Administration is working very hard to try to identify the data that drives our policies, that drive the results that we are trying to achieve, and I think it 122 2/26/08 - WHOLE - RES. 080173 would be fair to say that the investments that we intend to make with the resources that you all will provide to us will be made in the most effective manner based on the data that we have. Everybody may not agree on the data, but the results and the decisions will be made with respect to data at some point.

Well, the reason that I asked about expansion is because those three police districts that I name are three of the nine police districts that have escalated in crime, and as I said, I'm sure some of those folks that are committing those crimes are young people. And given the fact that the Beacon centers are no longer operating in the evenings and that's where a lot of -- that's the time that the Beacon centers -- and I want to say that, and I don't know whether it's across the board, but all the calls that I've received, it pretty much sounds like the evening programs have been 123 2/26/08 - WHOLE - RES. 080173 eliminated. Is that not true?

That is incorrect. The Beacon programs that included after-school programs have been retained. The Beacon programs that went beyond after school, those activities beyond the after-school in ten of the Beacon sites have been curtailed, as far as I understand.

Say that again, please. I know the after-school has been maintained.

The Beacon programs where there are after-school programs, where there are after-school programs, the after-school programs have been retained, as far as I understand. The programs that went beyond the after-school activities in ten of the programs, as I understand it, were in fact eliminated, but I can certainly confirm that with the --

Because you're saying that ten of the Beacons 124 2/26/08 - WHOLE - RES. 080173 will no longer have evening activities? Is that what you're saying? Because I got a call on Friday from a person that has four Beacons that will no longer have evening activities, which will actually put hundreds of young people back on the streets of Philadelphia. (Witness approached witness table.)

Don Schwartz. Councilwoman, as you know, this has been a confusing issue.

Right.

We met with providers yesterday and are discussing with Safe and Sound the best way to deal with what are called the family preservation, which were the evening and weekend programs. There will likely be some reduction in funding. The question as to whether the ten centers that were identified will take all of that reduction is not yet entirely clear, but we expect to have an answer for you by 125 2/26/08 - WHOLE - RES. 080173 tomorrow. Part of the issue has to do with what information is available to us from Safe and Sound.

Okay. That's good. Because, I mean, I know that originally you gave us a list of ten, but then these folks that called me on Friday are outside of that ten. But I would appreciate the information tomorrow when you get it. (Bell rung.)

I'll make sure that you have it.

Give it to Council President Verna.

And I'll distribute it to the rest of Council as well.

Council President, some of my time was taken up by Councilwoman Brown and Councilman Goode.

No. 25 We did add -- 126 2/26/08 - WHOLE - RES. 080173

They wanted these points of information. So I really only got --

We added three minutes.

I really only got a chance to ask one question.

We did add three minutes.

All right.

If I may, I would just like to ask a question here. On , you mention that the state has $94.7 million in its 2009 budget for wage tax reductions in Philadelphia, and that is not reflected in the Plan. If we do receive these funds from the state, how will the wage tax be reduced?

If we receive that funding, the wage tax would actually -- the resident wage tax rate would actually go below 3.9 percent in '09 and it would 127 2/26/08 - WHOLE - RES. 080173 reach 3.5391 by 2013, and for the non-resident rate, it would go to 3.48 percent in '09 and down to 3.11 percent in 2013.

Will Council have to pass an ordinance, and if so, what would be the timing of this?

Council would have to pass an ordinance. We will find out the final numbers in April. So we would get an ordinance to you then.

And we would have to pass it before we recess?

Yes. Yes.

Thank you. The Chair recognizes Councilman Goode.

Thank you, Madam President.

You're welcome.

Getting back 128 2/26/08 - WHOLE - RES. 080173 to the issue of economic development, within the Five-Year Plan on , one of the goals is to improve the performance of the Commercial Corridors Program. Can you explain what that means?

What we'd like to do is to take the Commercial Corridors Program that has been in existence heretofore to ensure that the funding that we're going to provide to it actually results in enhanced activity on those commercial corridors. Under the Commerce Department, when we have the person who is going to be in charge of the business services, we hope to make sure that this is one of the focuses of that activity and to make sure that those services are brought to the commercial corridors in a way that they haven't been before.

As part of that, when the Commercial Corridor Bond was presented and floated, included in it 129 2/26/08 - WHOLE - RES. 080173 was the Philadelphia Small Business Loan Guarantee Program. The authorization for that program came from the Commercial Corridor Bond, and in previous Five-Year Plans when the Commercial Corridor Program was discussed, that Small Business Loan Guarantee Program, which is a pet project of mine, was included. I don't care whether it's included as part of the Commercial Corridor Bond Program or included elsewhere, but what is the status of the Small Business Loan Guarantee Program?

Hi. I'm Terry Gillen. I'm Senior Advisor to the Mayor. Councilman, are you referring to the program that's in PCDC?

No. 20

Then I'm not familiar with the --

There was a Small Business Loan Guarantee Program, and Council had a series of hearings around small business lending. There was 130 2/26/08 - WHOLE - RES. 080173 a task force developed by the Greater Philadelphia Urban Affairs Coalition and had a series of recommendations. One was for a Small Business Loan Guarantee Program. That concept was included within the Commercial Corridor Bond Program and there was supposed to be a line of credit for $5 million established, and through past testimony hearings, there was supposed to be an RFP put out for oversight of that program through the Neighborhood Transformation Office.

Oh, I'm sorry. Yeah. Yes, I'm familiar with that, and we are -- as part of the rethinking of the Commercial Corridor Program that Clay referred to, we're trying to decide whether to park that, frankly, in the Commerce Department or to pull in some of the commercial corridor programs that NTI has been running and that PCDC has been running and whether to combine them all in the Commerce Department. So we 131 2/26/08 - WHOLE - RES. 080173 haven't moved ahead with it for that reason, but I'm familiar with what you're talking about now.

As I said, I'm not really concerned where it's placed, whether it's in Commerce or whether it's under NTI or where it's at. I'm just more concerned with the status of the program.

Yeah.

Because the program was actually about seven years in the making.

Right.

And we thought we had some movement last year, and what we were told last fall, that an actual RFP was being put out, but, of course, in the transition of the Administration, I want to make sure that the Small Business Loan Guarantee Fund is a priority.

Yes. We understand that it is a priority and 132 2/26/08 - WHOLE - RES. 080173 we'll be moving on it, and the reason you haven't heard of anything, it's just because we're rethinking the whole commercial corridor piece.

But part of the concern, too, was that it was dropped from the Five-Year Plan. It was in previous Five-Year Plans.

Was there a particular amount that was supposed to be put in?

A $5 million line of credit.

Oh, the $5 million for a line of credit? Over what period of time?

Per year.

Five million a year?

But essentially the $5 million, if the loans go right, is never used. So it's --

Right. So it revolves. Exactly. Yeah. Okay. We'll 133 2/26/08 - WHOLE - RES. 080173 look into it. I don't know why it was dropped.

Thank you.

Sure.

Thank you. The Chair recognizes Councilman Jones.

Thank you, Madam Chairman. In reference to the Mann Music Center and the Dell, how much revenue does the Mann Music Center generate annually versus the Dell? COMMISSIONER CARAPUCCI: Bill 17 Carapucci, the Recreation Department. I can't answer what the Mann generated, but last year for the eight shows, the cost was approximately 650,000 and the revenue was around 200,000.

Do we subcontract out the operations of the Mann and the Dell? COMMISSIONER CARAPUCCI: Again, 134 2/26/08 - WHOLE - RES. 080173 I can't answer for the Mann, but I know with the Recreation Department we handle 99 percent of it, the Recreation Department. We handle the maintenance, we handle all the skilled trades operations there, and we do all the bookings, most of the bookings and things like that.

I am very concerned about that operation. When I look at the Mann and when I look at the Dell, the Mann Music Center, which is a fine recreational activity -- I love Bach, I love Brahms, little Beethoven, Chopin every now and then, but I also like the Delfonics, the Temptations and the Stylistics. You can throw a little Jill Scott in there, if you'd like. My point is, the vast majority of people who go to the Mann Music Center come from outside of the City of Philadelphia to enjoy Philadelphia, spend money, and that's a worthwhile activity. The vast majority of people that attend 135 2/26/08 - WHOLE - RES. 080173 the Mann Music Center are Philadelphians, and for them, that's their big night out during the summer. I don't want to lose that in the process. And even though it looks like it's in the 5th District, it is actually in the 4th Councilmanic District in the park. So I would be concerned about any plans to privatize it. I would be concerned about how revenue will be generated, whether there will be opportunities for local promoters, local acts, local talent in the City of Philadelphia to participate in it, and I want to be kept abreast of how we proceed on the study of how -- and I want to know, have we met with the Friends of the Dell? COMMISSIONER CARAPUCCI: Yes, I did, January 21st.

And what is their position on this? COMMISSIONER CARAPUCCI: They are very concerned about, over the past number of years, how the ticket sales 136 2/26/08 - WHOLE - RES. 080173 have dropped tremendously, and most of the family of the Dell, they themselves were ticket holders for years and they would like to see something changed to where we could bring this back to where it was.

I like change, and it's a new day, but all progress ain't forward for everybody, so I want to monitor how we move with that, please. My next question is on the previous concern about the commercial corridors in the City of Philadelphia. That's a long walk up there, before my five minutes is up. (Witness approached witness table.)

I got it. Got it.

And I know we're anxiously anticipating the arrival of the new Commerce Director, but some things and food for thought. The relationship between the Philadelphia 137 2/26/08 - WHOLE - RES. 080173 Commercial Development Corporation, the Philadelphia Industrial Development Corporation and the Minority Business Enterprise needs to be examined. I believe there is an opportunity for synergy. And similar to what the 8(a) programs do for federal-assisted DBE, minority and female companies, I think we have a unique opportunity, the resources of those three agencies, to replicate that in some small way for the City of Philadelphia. It is my understanding that we do an annual contracting out of services such as grass cutting in the City of Philadelphia, and that currently goes to a firm up in King of Prussia. We have a 17-day rotation for grass cutting. Is that right, Commissioner, roughly? COMMISSIONER CARAPUCCI: The Recreation Department is 14 days.

Okay, 14 days. Well, that's a 14-day 138 2/26/08 - WHOLE - RES. 080173 opportunity for a homegrown company if we choose to use that as a development opportunity within Fairmount Park and other places. I'd also like to see, having the unique experience of having run MBEC and having run PCDC, a synergy between contracting opportunities and actual capital resources to small businesses in a graduated manner that a company in PCDC's portfolio might graduate to PIDC. So a small tabloid that started a newspaper might actually become a daily newspaper. Thank you very much. (Bell rung.)

Sure.