COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COUNCIL COMMITTEE ON APPROPRIATIONS - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, December 9, 1999 9:00 a.m. - - - BILL 990805 - Withdrawn. BILL 990806 - Authorizing transfers in appropriations for Fiscal Year 2000 within the Aviation Fund. BILL 990807 - Authorizing transfers in appropriations for Fiscal Year 1999 within the Aviation Fund. BILL 990808 - Authorizing transfers in appropriations for Fiscal Year 1999 within the General Fund. BILL 990836 - Authorizing transfers in appropriations for Fiscal Year 2000 from the General Fund, the Director of Finance - Contribution to School District/Tax Cuts and the City Representative and the Director of Commerce - Economic Stimulus and from the Grants Revenue Fund, the Director of Finance - Provision for Other Grants to the General Fund, the First Judicial District of Pennsylvania. (Full text of all bills contained herein.) PRESENT: COUNCILWOMAN JOAN L. KRAJEWSKI, Chair COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN DONNA REED MILLER COUNCILMAN DARRYL L. CLARKE COUNCILMAN FRANK DICICCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 12/9/99 APPROPRIATIONS I N D E X Michael Nadol, City Finance Director . . . . . Robert Dubow, City Budget Director . . . . . . 4 3 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 P R O C E E D I N G S
Good morning. The Committee on Appropriations is now in session. Will the clerk please read the title of the bills.
Bill No. 990806, an ordinance authorizing transfers in appropriations for Fiscal Year 2000 within the Aviation Fund from certain or all City offices, departments, boards, and commissions to certain or all City offices, boards, departments, and commissions. Bill No. 990807, an ordinance 14 authorizing transfers in appropriations for Fiscal Year 1999 within the Aviation Fund from certain or all City offices, departments, boards and commissions to certain or all City offices, departments, boards, and commissions. Bill No. 990808, an ordinance 20 authorizing transfers in appropriations Fiscal Year 1999 within the General Fund from certain or all City offices, departments, boards and commissions to certain or all City offices, departments, boards, and commissions. Bill No. 990836, an ordinance 4 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 authorizing transfers in appropriations for Fiscal Year 2000 from the General Fund, the Director of Finance - Contribution to School District/Tax Cuts and the City Representative and the Director of Commerce - Economic Stimulus and from the Grants Revenue Fund, the Director of Finance - Provision for Other Grants to the General Fund, the First Judicial District of Pennsylvania.
I believe that Bill No. 990805 has been withdrawn. Thank you. Who's here from the administration? (City witnesses come forward.)
I'm Bob Dubow, City's Budget Director. We're here before you today to offer testimony on Bills 990807, 990808, which make FY 5 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 '99 budget appropriation transfers between and among classes and departments in the City's General Fund and Aviation Fund. In addition, we're going to offer testimony on Bills 990836 and 990806, which make FY 2000 appropriation transfers between and among classes and departments in the City's General Fund, the Grants Fund, and the Aviation Fund. 's 990807 and 990808 are required for the 1999 year-end closing of financial records in the City. As you know, year-end transfer ordinances are introduced in City Council every year. Once each Fiscal Year ends, the Accounting Bureau and the Office of the Director of Finance close the books on that year's financial transactions and begins to compile the annual financial report of the City covering that Fiscal Year. In the course of preparing the City's financial report, the Accounting Bureau and the Budget Office identify reconciliations which need to take place between the total (unintelligible) and the financial report and the appropriations for each department included in the City's 6 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 operating budget. Once the annual financial report is completed, it's audited by the City Controller, who serves as the City's independent auditor. For the Controller to give a favorable opinion regarding the annual financial report, (unintelligible) appropriations for each department and each fund must be consistent with the annual report. Enactment of the 1999 year-end transfer ordinances will make possible direct reconciliation that's required in order to permit the controller to issue a favorable opinion. The transfers in Bill No. 99808 are needed to close the books on the FY '99 General Budget. As shown in Exhibit A attached, there are 33 transfers in the bill. Now I'll summarize the reason for the major transfers included in it. There are a total of transfers that 20 involve a change in total appropriations for a particular department or cost center, 7 of which are increases. 4 million. 4 million net increase in the Police 7 12/9/99 APPROP. 8 transferred to Class 100, largely to cover increased costs associated with the August 1998 arbitration award, as well as some increased overtime costs related to an increased number of arrests. Another $176,596 would be transferred to the Department's Class 800 appropriation to fund the Department's FY 8 payment to the City's Productivity Bank for the initial MDT pilot program. The MDT pilot led to the installation of mobile data terminals in all police district patrol cars. These increased costs are offset by small surpluses totaling $519,892 in the Class 200 and Class 3/400 appropriations for the Police Department. An increase of $14,083,860 is requested in the Director of Finance-Contribution to the School District appropriation. This increase is requested to support the continued improved operations of the Philadelphia public school system. Specifically, the City's annual supplementary appropriations to the School District have enabled the School District to provide additional staff and equipment, including metal detectors, to create a safer learning 8 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 environment for the City's students, provide additional textbooks, computers, and other educational materials, and to continue full-day kindergarten for every five-year-old in the City. The $14 million proposed transfer represents the second such transfer to the School District out of the FY '99 budget and continues our efforts to provide additional aid to the School District on an interim basis until the Commonwealth meets its constitutional obligation to properly fund the schools. With this second supplementary contribution from FY '99's budget, the Administration does not currently anticipate a contribution in FY 2000.
4 million is requested in the Licenses and Inspections demolition appropriation due to additional requirements for the demolition of imminently dangerous buildings. In total, L&I demolished 1,059 buildings in FY '99, which is an increase of 31 percent from FY '98, even while the City provided the highest level of demolition funding, a total of $15 million, in the city's history. That's 'cause the average cost of demolition has 9 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 risen substantially as a result of enhanced monitoring to prevent the onsite bearing of nontoxic debris at demolition sites, more expensive asbestos remediations, and reduced opportunities to perform string demolitions, an approach used by L&I to demolish adjoining buildings together to achieve cost efficiencies. 3 is requested in the Department of Records appropriation to repay a Productivity Bank loan. 85 million loan for an automated document recording system which was to have been implemented by the fall of 1996. Unfortunately, under the system's design and implementation process, the Department encountered a number of delays before the effort collapsed altogether, with the vendor terminating its contract and fully reimbursing City for all the funds that the City had paid. Subsequently, in March of 1998, the Administration initiated a comprehensive effort to re-engineer the document-recording process first before settling on an automation system. During the last 18 months, the Department has implemented 10 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 a redesigned manual recording process that has increased its daily recording capacity from an average of 760 documents to 917 documents with the same level of resources. Additionally, the Department has established a customer service desk and a pilot program to provide remote computer access to the Recorder's Index for some of its largest-volume clients. With the re-engineering process completed, the Department recently received, with Council approval, to second Productivity Bank loan to fund a new automated recording system that will, as a result of the, re-engineering effort, support a new, efficient recording process. And now the Productivity Bank will be fully repaid with principal and interest for its original loan. These increases in appropriations are made possible through reductions in 13 different appropriations. 1 million from the Director of Finance-Fringe Benefits. This reduction's made possible because of lower-than-projected costs for employee health and 11 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 medical benefits in FY '99. 6 in FY '98. 7 million is requested in the appropriations for the Department of Revenue-Sinking Fund Commission. This reduction is possible due to savings resulting from a bond refunding and lower-than-budgeted costs for new general obligation bonds and for short-term borrowing. 4 million from the Department of Public Health. 2 million of the savings is a result of unanticipated vacancies in authorized positions, with the rest largely the result of lower-than-anticipated revenue pass-through's to the contract operator of the Philadelphia Nursing Home. The nursing home's operations are funded largely through revenue from medical assistance and Medicare. These revenues are received directly by the Department of Public Health, which then passes it on to the contractor. The FY '99 budget assumed an amount of passed-through revenue 12 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 based on an arrange daily census at the nursing home of 475, which is 95 percent of capacity. The actual average census during FY '99, however, reached only 433 because of delays in opening a new 50-bed unit. Revenues received from the nursing home and the corresponding pass-through expenditures, therefore, were lower than budgeted.
7 million is available in the General Fund appropriation for the Streets Department, a savings that resulted largely from higher-than-expected level of vacancies in authorized positions, a mild winter that reduced overtime costs for snow removal from what had been budgeted, and a reduction in the electric power costs for street lights, alley lighting, and traffic signals. The energy savings was largely the result of a combination of lower-than-budgeted rates for electricity and the Department's light-Emitting Diode, or LED program, which involves the replacement of 26,000 red traffic signals with long-life, energy-efficient LED signals. Intensive testing shows that LED signals are brighter, less likely to burn out than traditional traffic lights, and consume 83 percent 13 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 less energy than incandescent bulbs. These devices, moreover, have a useful life in excess of six years, compared to useful life of one year for conventional bulbs. 5 million is available in the appropriation for the Streets Department's Sanitation Division as a result of higher-than-expected level of vacancies in authorized positions, reduced overtime as result of disposal efficiencies, and lower-than-projected landfill costs, resulting from lower-than-expected overall tonnage collected. 6 million is requested in the appropriation for the Department of Human Services. This reduction is made possible because of a higher-than-projected level of vacancies in authorized positions and a lower-than-projected cost for placement of children in the Children Youth Division as a result of slower growth in the CYD caseload than had originally been projected. million decrease in the Public 14 12/9/99 APPROP. reduction in the Director of Finance appropriation because of a lower number of filled positions than originally planned, decreased overtime expenses, and lower costs for contract services and for equipment purchases than originally expected; an $861,887 decrease in the Public Property-Space Rentals appropriations made possible through lease savings and lower-than- projected cost related to relinquishing the City's lease at 1600 Arch Street; a $464,125 increase in the Licenses and Inspections appropriation for core services due to a higher-than-projected vacancy rate in Class 100, partly resulting from a higher number of retirements than was expected, and a $439,826 decrease in the Public Property Telecommunications appropriations due to reimbursements from the Philadelphia Housing Authority for telecommunications services provided by the Department that had not been included in the original FY '99 budget. The other transfers in this bill are 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 between classes and in departments and thus result in no net change in FY '99 department appropriations. 8 million shift between classes in the First Judicial District budget. As in the last several years, the First Judicial District realized the Class 100 surplus. This ordinance would transfer the surplus to Class 200 to provide additional monies to the Administrative Office of the Pennsylvania Courts for training and equipment for City court personnel as well as for renovations of First Judicial District-occupied space in City Hall, consistent with the ongoing agreement of understanding between the City and the AOCP. The next largest internal transfer is a $519,892 shift between classes in the Police Department budget. The Police Department achieved a slight surplus in Class 200 and Class 3/400 that will be used to help cover increases in Class 100 costs, as well as a $176,596 scheduled repayment to the Productivity Bank for the mobile data terminal project, as described earlier in the testimony. 16 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 The transfers in Bill No. 990807 are needed to close the books --
These are just transfers from class to Class; is that what we're saying?
All right. Well, I believe that we could have your testimony read into the --
Okay, all right. And do you want to do that for the remaining bills too? They have the --
-- Aviation in the FY 2000 midyear and the Aviation midyear for FY 2000. We'll just read those into the record?
Okay, thank you. (Remainder of Mr. Dubow's testimony submitted in written form and is attached hereto.) 17 12/9/99 APPROP. - BILLS 990806, 807, 808, 836
Are there any questions from members of the committee? Yes, Councilwoman Miller?
I have a question as it relates to the School District contribution.
And in your last sentence, it says that the Administration does not currently anticipate a contribution in Fiscal Year 2000.
Yeah. Essentially what we're doing with this transfer is asking you to approve a second FY '99 transfer, so we'd be giving the District roughly 30 million in '99 instead of 15 million in each year.
Okay. Well, I know that everybody has been anticipating getting money from the State and since I've been here, we have not, and I want to advocate on the School 18 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 District's behalf that if they need the additional million next year, then we should be able to 4 give it to them. 5
Just to clarify what we're 6 proposing to do. We're proposing to take 7 advantage of certain one-time revenue gains that 8 the City experienced in the Fiscal Year just 9 passed that left us in a stronger position than 10 might otherwise, you know, have been the case to 11 accelerate the FY 2000 payment and to do it within 12 the City's Fiscal 1999 budget. 13 So we're not proposing or anticipating 14 that we're shortchanging the District in the next 15 year; we're actually paying next year's contribution a little bit early out of Fiscal Year '99's budget in order to take advantage again of some of the one-time revenue gains that we experienced in our last Fiscal Year.
I understand you're giving them in advance, but I would like them to have consideration next year based on need and one-time gains, and I'm sure we'll have some. 19 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 Okay thank you.
Thank you. Are there any other questions from members of the committee? (No questions.)
With that, I'm going to call on Councilman DiCicco for the purpose of Bill No. 990806.
Oh, I'm sorry, 836. The Chair recognizes Councilman DiCicco.
Thank you, Madam Chair. I offer an amendment to Bill No. 18 990836, and the amendment is on , under the title "From Grants Revenue Fund 8.20, Director of Finance-Provision for Other Grants." Advances and other miscellaneous payments. Strike $30,040,235 and insert $30,540,235. Total, strike $30,040,235 and insert $30,540,235. Total quote from Grants Revenue Fund, strike $30,040,235 and insert $30,540,235. 20 12/9/99 APPROP. - BILLS 990806, 807, 808, 836 Total from section, strike $54,485,629 and insert $54,985,629. Going further down on , General Fund, under Section 2.68, First Judicial District of Pennsylvania. Under "Personal Services," strike $41,883,398 -- sorry, let me repeat that. Strike $41,883,398 and insert $42,383,398. On under "Total," strike $54,485,629 and insert $54,985,629. Next line "Total," two section, strike $54,485,629 and insert $54,985,629.
I would move for the adoption of the amendment. (Duly seconded.)
All in favor in favor? Opposed? So the amendment is. . . All right, that ends our public hearing. We will now go into our public meeting. - - - 21 12/9/99 APPROPRIATIONS - PUBLIC MEETING
Thank you, Madam Chair. I move for the adoption of the amendment that was just read into the record on Bill No. 7 990836. (Duly seconded.)
All in favor? Opposed? All right, Bill No. 990836 will be reported out of this committee, as amended, so as to permit first reading at the next session of Council.
I move that Bill No. 990836, as amended, be reported out of this committee with a favorable recommendation and that the rules of Council be suspended so as to permit first reading at our Council session today. (Duly seconded.)
All in favor, aye? Opposed? The bill will be reported out of this committee with a favorable recommendation and with 22 12/9/99 APPROPRIATIONS - PUBLIC MEETING a suspension of rules so as to permit first reading at the next session of Council. Councilman Clarke, Bill No. 990806.
Thank you, Madam Chair. I move that Bill 990806 be moved out of committee with a favorable recommendation and a suspension of the rules. (Duly seconded.)
All those in favor? Opposed? Therefore, Bill No. 990806 will be reported out of this committee with a favorable recommendation and with a suspension of rules so as to permit first reading at the next session of Council. The Chair recognizes Councilwoman Miller for Bill 990807.
Thank you, Madam Chair. I move that Bill No. 990807 be moved out of this committee with a favorable recommendation and that the rules of Council be suspended so as to permit first reading. (Duly seconded.) 23 12/9/99 APPROPRIATIONS - PUBLIC MEETING
All those in favor? Opposed? Therefore, Bill No. 990807 will be reported out of this committee with a suspension of the rules so as to permit first reading at the next session of Council. The Chair recognizes Councilwoman Verna for Bill No. 990808.
Madam Chair, I move that Bill No. 990808 be reported out of committee with a favorable recommendation and also a recommendation that the rules of Council be suspended so as to permit first reading at our next meeting. (Duly seconded.)
All those in favor? Opposed? Therefore, Bill No. 990808 will be reported out of this committee with a favorable recommendation and with a suspension of rules so as to permit first reading at the next session of Council. 24 12/9/99 APPROPRIATIONS - PUBLIC MEETING Thank you all very much. That ends the hearing on Appropriations.
Thank you, well done. (Adjourned at 9:17 a.m.) - - - 25 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Thursday, December 9, 1999, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE ON APPROPRIATIONS BILL NO.'S 990806, 807, 808, 836 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter