Committee Hearing, March 21, 2012

DiscoveryWorks Global 888.557.8650 www.dw-global.com COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON APPROPRIATIONS Room 400, City Hall Philadelphia, Pennsylvania Wednesday, March 21, 2012 1:05 p.m. PRESENT: COUNCILMAN W. WILSON GOODE, JR., CHAIR COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN BILL GREEN COUNCILMAN BOBBY HENON COUNCILMAN CURTIS JONES, JR. BILLS 120169, 120170, 120171 and 120172 - - - DiscoveryWorks Global 888.557.8650 www.dw-global.com

Good afternoon. This hearing is called to order. This is a public hearing of the Appropriations Committee on Bills No. 6 120169, 120170, 120171 and 120172. My name is W. Wilson Goode, Jr., Chair of this Committee. I note that a quorum is present. To my immediate right is Majority Leader and Vice Chair of the Committee, Curtis Jones. To his right is Councilwoman Jannie Blackwell, and to my left is Councilman Bill Green. The title of Bill No. 120169, authorizing transfers in appropriations for Fiscal Year 2012 from the General Fund, certain or all City offices, departments, boards and commissions and from the Grants Revenue Fund, the Director of Finance - Provision for Other Grants to the General Fund, certain or all City offices, departments, boards and commissions. The title of Bill No. 120170, DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. authorizing transfers in appropriations for Fiscal Year 2012 within the Grants Revenue Fund from the Director of Finance - Provision for Other Grants to the Managing Director - Office of Innovation and Technology. The title of Bill No. 120171, authorizing transfers in appropriations for Fiscal Year 2012 from the Grants Revenue Fund, the Director of Finance - Provision for Other Grants to the Hotel Room Rental Tax Fund, the Director of Commerce. The title of Bill No. 120172, authorizing transfers in appropriations for Fiscal Year 2012 within the Aviation Fund from the Department of Revenue - Sinking Fund Commission to the Director of Finance - Fringe Benefits. Our first witness is Rebecca Rhynhart, Budget Director for the City of Philadelphia. (Witness approached witness table.) DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

Good afternoon.

Good afternoon.

Good afternoon, Councilman Goode and members of the Appropriation Committee. My name is Rebecca Rhynhart and I'm the Budget Director for the City of Philadelphia. I appear before you today to offer testimony on Bill No. 120169, 120170, 120171 and 120172. Bill No. 6 million coming from the General Fund and the remainder transferred from the Grants Revenue Fund. 9 million to appropriate 9-1-1 surcharge receipts for use on 9-1-1 eligible projects. com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. revenues collected per agreements with the FJD. 8 million to fund a shortfall in FICA. The Fire Department requests 4 million for minimum staffing level related overtime caused by no new firefighter class and an increase in firefighters injured on duty and on heart and lung. 96 million to offset increased fuel costs. 9 million to fund professional services needed to address the increased number of appeals related to the common level ratio to be established by the State Tax Equalization Board, or STEB. com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. five million is needed for indemnities to cover a projected shortfall due to a large number of high dollar settlements. One million is requested for the Sheriff to fund wage increases awarded during interest arbitration. Of the smaller transfers, OHCD wishes to appropriate acquisition recycling receipts for several fiscal years, '8, '9 and '10, in the amount of 154,000. The Office of the Director of Finance requests 148,000 for initial funding needed to establish the Office of Property Data. The Managing Director requests 84,000 to fund a contract with Town Watch. The Department of Parks and Recreation needs 80,000, which would allow them to support winter season programs they operate at School District facilities. com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. transfers with no net change in appropriation levels, including -- and I'll just list them out instead of reading the whole thing -- the Managing Director, the Fire Department, City Planning and the Office of Inspector General, as well as the Auditing Department. Bill No. 3 million. This is needed to allow payment of accumulated 9-1-1 surcharge receipts to the General Fund for use on 9-1-1 eligible expenses. Bill No. 5 million to the Director of Commerce in the Hotel Room Rental Tax Fund. The purpose of this bill is to appropriate receipts from the Hospitality Promotion Tax that are coming in higher than originally projected. com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. agencies to promote the use of the Pennsylvania Convention Center and the area served by the tourist promotion agencies. Bill No. 120172 transfers 1 million within the Aviation Fund to the Director of Finance for employee benefits to fully fund health and medical payments for the balance of the fiscal year. I respectfully request that you report these bills out of Committee with a favorable recommendation, and I further request that the rules of Council be suspended so as to permit first reading at the next session of Council. I appreciate the opportunity to testify before you today, and I'd be happy to answer any questions you may have.

Thank you, Ms. Rhynhart, for your testimony. If you would please stay at the table as we call each department individually.

Sure. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

The first department to be heard is the First Judicial District. (Witnesses approached witness table.)

Good afternoon.

Good afternoon.

David Wasson, District Court Administrator, First Judicial District.

Kevin Cross, Deputy Court Administrator, First Judicial District.

Thank you. Please proceed with your testimony.

To the Chair and the Committee, we respectfully request City Council approval of our FY12 mid-year transfer ordinance in the amount of 6.15 million for the following uses: Filing fee revenue, 4 million; Title 4E funds, 1,075,000; filing fee revenue for DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Zone Court, 575,000; bench warrant initiative, 500,000. The majority of this is used for staffing, Class 100, for probation officers, courtroom staff, and this is required to keep these workers on payroll for the rest of this year.

Thank you. Are there questions from members of the Committee? Councilman Jones.

Thank you, Mr. Chairman. And thank you for your testimony. A couple of quick questions while we have you. I'd be interested in knowing the future of the Mortgage Foreclosure Diversion Program. There's been an uptick based on some articles by way of foreclosures in the City of Philadelphia, and I wanted to know if that has a smooth landing in this fiscal year and are you projecting to continue that program into the next fiscal year?

Yes, Councilman. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Unfortunately, I'm unable to comment on that at this time. I was not prepared for that, but I could get that information to your Chambers tomorrow and I'll have discussion with Administrative Judge Herron, who heads that program.

Okay. I guess -- well, if you're unprepared to do that -- that would be important to me.

Absolutely.

I know that -- I don't know -- I guess you won't know their success ratios, but this Council two consecutive times shut down Sheriff sales, to the degree that we could. We were able to bring all parties to the table and talk about this important issue. And even though the economy seems to be improving in some sectors, not in the homeownership end, and I hear we had a spike in filings recently. Can you speak to that?

I will definitely get that information for you. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

Thank you, Mr. Chairman.

Thank you, Councilman. Any other questions from members of the Committee?

Yes. I'm sorry, Mr. Chair. You testified about Class 100 filing fees and they're in the tune of 4 million, I believe, and I wanted to know do you keep all of the filing fees that you receive?

Councilman, we have a revenue-sharing agreement with the City of Philadelphia. For certain level of filing fees, we get a one-third share that gets applied to our budget, and we don't know what those filing fee amounts are going to be. So they're not included in our budget at the beginning of the fiscal year, so as the fiscal year goes on, we reconcile that amount with the Administration. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

Year to date do you have any figures on what those fees have been, the amounts?

We're looking at probably around $14 million and a projected amount of around $20 million.

Is that up or down from last year?

Last year was a little higher year to date, but they may come in around -- last year it was around $21 million. This year we're projecting around $20 million. So it's down a little bit.

So it's a one-third/two-third split with the City?

That's correct.

It goes into our General Fund.

And, Councilman, if I can just add to that. When we -- there's several revenue-sharing agreements with different types of fees with the courts, and so in the mid-year DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. transfer ordinance, what we're doing now is when the courts makes a request of the City, we look to see what the actual revenue collected to date is for each revenue source to make sure that we feel very comfortable that they're on track to hit the number that they're requesting at that point.

Another court that I'm interested in -- and I'm assuming you're not prepared to talk about it is -- you discontinued Community Courts.

Yes.

And I wanted to know what the future of Community Courts was.

Well, we'll definitely include that in our main testimony, but I will say it's basically a funding issue and we have, in a sense, expanded the concept of Community Courts through our AMP program, Accelerated Misdemeanor Court program. So we have DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. more locations that are doing basically the Community Court philosophy and work. Community Court was shut down because of funding, money connected to certain funding, but we were able to expand the programs through other funding under a different name. And we'll speak more of that in our budget --

I'm going to need a detailed understanding of what shared other responsibilities and how, since it's no longer open, those services are provided. There was a $13.5 million grant from the Justice Assistance Grant. Is that the funding shortfall you speak of?

Mr. Cross.

I don't know what you're referring to out of $13.5 million grant from the Justice -- the BJA. We had --

The Recovery Act, the First Judicial District received 13.5 million from the Byron Justice DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Assistance Grant.

We had 7.5 million of that for recovery positions for Fiscal Year 2010 and 2011. Funding was replenished for the probation officers but not for the Community Court. We had a one-year grant for Community Court, which kept us through this fiscal year.

Okay. You will provide more detail --

I can get more detail on that.

-- as we enter into the budget hearings.

Yes, sir.

Thank you, Mr. Chair.

Thank you, Councilman. Let me acknowledge for the record that Councilman Bobby Henon, member of the Committee, is also present. Councilman Green.

Thank you, DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Mr. Chairman. My question relates -- net-net, the General Fund provides money to the courts regardless of all fees collected?

Correct.

So why do we have complicated revenue-sharing agreements at all? I mean, ultimately it's a net payment from the City to the courts. You present a budget; we approve the budget. What is the purpose of a revenue share considering that overall we provide the entire budget whether or not we share the fees?

I think to answer that question, there's a base budget that makes up the bulk of the money we give to the courts, and then the revenue sharing is on top of that base budget. And the idea of that came about, I think, many years ago. It's called the Zero Growth Agreement, and the idea behind it is that the City wasn't going to fund the courts -- give the courts DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. additional money or wouldn't be required to give the courts additional money unless they raised more revenue. So the idea was that, okay, that there's baseline for various different revenue sources that the courts collect. There's a baseline, and then anything above that, if they collect above that, they get -- most of the time it's one-third to the courts and two-thirds to the City. So it's in addition to the base budget. Does that answer your question?

Yeah, but if you can't plan on that, I mean, why is that a sound budgeting method?

Right.

How many lawsuits are filed and the County of Philadelphia is not controlled at all by the court system or the City, and it seems like a lot of time and energy wasted trying to keep a count of something that is meaningless in the context of us providing net money to the DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. courts anyway.

Well, but we wouldn't -- the revenue sharing money we wouldn't provide to them if they didn't hit the baseline. So --

But they don't control whether or not they hit the baseline.

Well, I think they do to some extent. There are certain --

Not with filing fees they don't. People file or don't file.

I mean, you can speak to some of the initiatives that the courts has done to raise some of the revenues. But we budget for -- starting in Fiscal '13 and in the Five Year Plan, we put in an adjustment in the fund balance number to account for the revenue sharing, the average of the revenue sharing over the past few years. So it DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. is in the budget. But in terms of we just shouldn't do it altogether, is that what you're saying?

It seems like I don't know why we're keeping track of it since we're net providers of money to them. And if there were many less filings, the court system wouldn't cost less to operate. We would be doing transfer appropriations from the Grants Revenue Fund. If the money comes in way in excess, they're essentially getting money that they didn't request and don't need in theory, so the following -- we're then encouraging them to go ahead and spend before the year is over. It doesn't sound like a sound budgeting practice. That's my only point. I don't want to belabor the Committee with that right now, but we can talk about it during the budget hearings.

Sure. We'll talk about it.

Councilman DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Jones.

One other follow-up question. Thank you, Mr. Chairman. Gun Court, is that planned to be continued?

Again, that was another funding issue. The state gave us a special grant for Gun Court for a number of years and the state cancelled that funding. So those probation officers that were on that grant, about to 20, 18 probation officers, a couple 15 more staff, were moved onto the General 16 Fund, and the function of one court 17 handling all the gun cases were then 18 transferred throughout the various zones in the court structure. Since Zone Court came on board about a year or so ago, it almost took out the need to have a special Gun Court.

Why do you say that?

Because of the way DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Zone Court is set up, it --

There's geographic prosecution; is that what you're talking about?

Geographic prosecution, and the thought there is that is a better -- from the people that put that together, which include the courts, that's a better way to handle caseloads than to have various groups of specialized courts.

This will be a question asked again during the regular budget process, and I want you to quantify why that's better this way versus that way as opposed to today just stating that. Because as you can see, we're having a slight problem with proliferation of firearms in the City of Philadelphia. So any move one way or the other, it's important that we quantify why we're doing it. And I understand that cost is always a factor. That's the reality of budgeting, but the unintended DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. consequences that come with a budget cut or a shift in resources, we need to monitor closely.

Absolutely.

If you'll be prepared to talk about --

We'll have a year under our belt, so we'll be able to compare the year under Zone Court and the prior years under Gun Court. We'll definitely do that for you.

I appreciate that. Thank you, Mr. Chairman.

Any questions of the courts? (No response.)

Thank you very much.

Thank you, Councilman.

Thank you. Have a good afternoon.

The Office DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. of the Sheriff is next. The Office of the Sheriff is next. (Witness approached witness table.)

Good afternoon, Sheriff. SHERIFF WILLIAMS: Good afternoon, Councilman.

Please state your name for the record and proceed with your testimony. SHERIFF WILLIAMS: Good afternoon, Councilman Goode and members of City Council. I am Jewell Williams, the Sheriff of the City of Philadelphia. Again, good afternoon. The Sheriff's Office is seeking additional funding for its Class 100 budget allocations to provide for an arbitration award of June 21st, 2011. In that award, the sworn officers was granted a 2.5 percent wage increase retroactive to July 1, 2010 and DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. an additional wage increase of 2.5 percent effective July 1, 2011. This combined wage increase of approximately 5 percent was not budgeted in our Fiscal Year 2012 in our class appropriations that was approved by Council. Due to the lateness of the arbitration award; i.e., June 21, 2011, the entire fiscal impact of this award fell upon our fiscal budget of year 2012. Without this transfer, the Office of the Sheriff's office will be without a budget authority to meet its payroll responsibilities June 2012. Thank you for allowing me to speak, and I look forward to answering any questions.

Are there questions for the Sheriff? (No response.)

Thank you, sir. SHERIFF WILLIAMS: Thank you. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

Office of City Controller is next. (Witness approached witness table.)

Good afternoon, Councilman Goode and members of the Appropriations Committee. I am Harvey Rice, First Deputy City Controller, and with me is Andrea Rose, our Administrative Services Director. I am here today representing City Controller Alan Butkovitz to present testimony on the Auditing Department's Fiscal Year 2012 budget. The ordinance before you contains a mid-year budget transfer of 170,000 for the auditing department. The need for this transfer is to fund unanticipated expenditures for the forensic audit of the Office of the Sheriff. So I thank you for your cooperation. It's always appreciated. I'd be glad to answer any questions that DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. you may have.

Councilman Green.

Thank you. This money has already been spent? This was spent with outside auditors?

It was spent from our existing budget, yes.

So how come you didn't seek approval prior to expenditure? In other words, you've spent money that has not been appropriated. That's a question for the Controller's Office.

We did seek approval with the Finance Department. They agreed to fund out of the General Fund $45,000 and then we were going to pay the additional 45,000 out of our existing budget, and that's what we did under the Class 200 funds. And, therefore --

Mr. Rice, DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. are you aware that the City Council is the only body of this government that can appropriate funds to the City Controller's Office?

Let me just try to clarify this a bit. I think that this audit was at first expected to be done last year, in Fiscal '11, and the funds were appropriated and not fully spent in that year. And so this was a matter of needing appropriations in Class 200, and they had extra -- they have extra money in Class 100 that they're moving over to fund other things in Class 200 that they would normally spend out of Class 200. So the expectation was that this contract was going to get funded last year, actually, just to clarify.

Mr. Rice, how much was spent on the internal investigation that was recently in the City Paper on private investigator fees and --

All I can tell you, DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. because I was not involved in that, the allocation or the commitment of how much it -- I can only tell you what the Controller has reported was 8,500.

Would you please provide the specific details of all expenditures related to that investigation to the Chair of this Committee. Thank you.

Yes.

Other questions for this witness? (No response.)

Thank you. City Solicitor. (Witness approached witness table.) SOLICITOR SMITH: Good afternoon, Councilman Goode and members of the Appropriations Committee. I am City Solicitor Shelley R. Smith. With me today are Donna Mouzayck, First Deputy City Solicitor, and Suki Kazahaya, DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Administrative Services Director. We are here today to offer testimony relating to Bill No. 120169, which will transfer General Fund appropriations of $1.85 million to the Law Department's Class 200 and 1.5 million to the General Fund Indemnities appropriation. The factors causing the Law Department to request the appropriation transfers are as follows: First, the Law Department, as Budget Director Rhynhart said, requires a number of contracts to secure property appraisals for use in unusually large tax assessment appeals pending with the Board of Revision of Taxes or the Court of Common Pleas. The total cost of the contracts to hire appraisers in appropriate cases is estimated to exceed $1.85 million. The Law Department Class 200 budget is without sufficient funds for these contracts. Second, two extraordinary cases have significantly impacted the budget DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. for indemnities. Specifically, the Woods case settled for $1,600,000 and the Isaac case settled at $1,825,000, for a total of $3,425,000. In the Woods case, the plaintiffs sued the City for breach of contract for educational services that they provided for DHS-placed special needs children at Woods. In the Isaac case, the plaintiffs' decedent was fatally wounded when a police officer discharged his firearm into the house where he was celebrating New Year's with his family. The costs of these two significant cases will leave the Indemnities Fund with a shortfall and thereby reduce the funds available for the payment of other more routine settlements which occur throughout the year for which appropriated funds were budgeted. Because timely payments are required by the courts, the Law Department requests additional funding DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. for Fiscal Year '12 Indemnities Fund. Thank you for the opportunity to testify today, and we are happy to answer any questions that you have at this time.

Good afternoon, Solicitor. Thank you for your testimony. Similar to the questions that were asked of the previous office, the $1.85 million for the hiring of appraisers, is that money that has already been spent or money to be spent?

That is money to be spent. It's being transferred from -- the request is to transfer the money from the Office of Property Assessment over to Law so that the Law Department can hire appraisers for these cross appeals that they need to do.

And how will the selection process occur? SOLICITOR SMITH: We will put -- I believe we put out RFPs to hire DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. appraisers. Essentially what they are is the equivalent --

I'm asking specifically for this $1.85 million. Has it been spent? The answer is no. It's going to be spent. How will the selection of the appraisers be done? Will it be done through RFP? SOLICITOR SMITH: They've already been selected and they've been selected through an RFP process.

So the money has been spent? SOLICITOR SMITH: The money hasn't been spent, but the firms have been selected, and should the ordinance 18 be --

So once again, how did you know the appropriation was going to be approved?

If the appropriations aren't approved, the Law Department won't fund the contracts. I mean, I don't think -- I think that the DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. request makes sense, but your power is such that you provide the appropriation power to be able to fund the contracts.

So can you please explain to me the RFP process?

Sure. Just explain the RFP process.

And can you tell me who was selected? SOLICITOR SMITH: The firms that were selected -- you asked me who the firms were, right, and how they were selected? Okay. So the firms that have been selected are the American Evaluations Group, Bearoff and Company, Griffin Consulting Services, Ludwig Corporation, PJL Realty Advisors and RCDH of Pennsylvania, doing business as AR Hughes and Company. And Dan Cantu-Hertzler, our Corporate Chair, can tell you what the RFP process was.

I don't recall the RFP process. I don't know DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. whether this was posted. I don't know for sure whether this was posted or not. It was publicized. They tried to get people on board very quickly. It's taken a lot longer than --

How do you publicize something without posting it?

I'm not sure how to answer that. SOLICITOR SMITH: I think the best thing for us to do, Councilman, is to get back to you with the details of how the process -- of what the process was for selecting these appraisers rather than try to piece it together from our best understanding of what the process was. I think we should get back to you with the details.

Are the contracts for the appraisers equal among the people you listed who were awarded of the awarded contracts? SOLICITOR SMITH: Yes, except for one. The RCDH looks like it was DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. contemplated to be a larger one. The others are equal.

Do you know what portion of the money being spent or hope to be spent, the 1.85 million, is going to Philadelphia-based firms? SOLICITOR SMITH: I do not, but we can get that information for you.

Do you know what portion is to be spent with disadvantaged firms? SOLICITOR SMITH: I do not, but we can get that information for you.

Councilman Green.

You've asked my questions, Mr. Chairman.

In the future -- I'm just going to say this for the record now, say this to the Budget Director -- the process we're going to have is that these bills will not be introduced until we know what the requests are, and we will quite possibly DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. separate the bills. In this case when I saw the requests, this was one of the bills that I would have separated from the package. Do you understand that?

You mean in the future you could possibly separate the requests?

When I see a red flag, which this is, and I saw the flag, but I got the memo the day before the bills were introduced. Had I gotten the memo a week before, I would have separated this bill out.

I'm happy to work with you on that. If there's a better process for you, I'm happy to do that.

Thank you. Any more questions for this witness? Councilman Jones.

Thank you, Mr. Chairman. Solicitor Smith, could you DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. provide for this Committee a breakdown of all awards over the last three years and the categories, so if it's a slip and fall, and the amounts? Do you have that kind of data? SOLICITOR SMITH: You mean from --

Arbitrations or court cases. SOLICITOR SMITH: You want settlements and all the payments that we've made in cases for the past three years?

Correct. SOLICITOR SMITH: Sure. We can provide that to you.

By whatever the categories. SOLICITOR SMITH: By category, yeah, we can provide that to you.

I appreciate it. Thank you, Mr. Chairman.

Councilman DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Henon.

I have a few questions. You're asking for additional monies for the RFP you put out. Are they pending appeals or are they anticipated appeals? SOLICITOR SMITH: They're pending appeals.

Pending appeals from 2012, from citizens from last year's budget? SOLICITOR SMITH: From the tax assessments from last year.

Do you have an idea of how many cases? SOLICITOR SMITH: Two thousand, is my understanding.

So they haven't been heard yet, right? SOLICITOR SMITH: I'm sorry?

So they haven't been heard yet? SOLICITOR SMITH: I think they've begun to be heard. I think the DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. BRT has started to work through them.

And will you be coming back to this body for additional monies for future anticipated cases? SOLICITOR SMITH: We don't anticipate doing that. We anticipate that what we're seeking today should cover -- the amount that we've requested is, I believe, the estimate that our office, working with OPA, has determined should cover the cost of independent appraisers for all of the appeals that we are currently aware of.

And anticipating in FY13? SOLICITOR SMITH: Well, these are the current -- I mean, there's 2,000 of them now, so this is for the current appeals.

But you would imagine that there's going to be a significant amount of appeals anticipated in the next coming year? DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

We'll have to look at -- I mean, obviously that's a moving process and, I mean, we'll have to continue to look at that in terms of Law's budget and if they could handle it within their budget. But the expectation for '13 and beyond is that Law is expected to handle it within their own budget.

Okay.

I hear what you're saying, though.

Councilman Green.

Thank you. I think that raises a good question. This is a thousand dollars roughly per appeal based on Allegheny County, elsewhere. I'm just wondering why -- is there a reason that we are doing this in the Law Department as opposed to OPA? SOLICITOR SMITH: Yes. And the reason is that the -- we actually talked DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. about this and came to the conclusion that it didn't seem appropriate for OPA to hire -- it's basically, if you're familiar with injury litigation, it's basically the equivalent of an IME, an independent examination of what OPA has done. So it didn't seem reasonable for OPA itself to pay for the cost of an appraiser to evaluate its own work. So that's the reason that OPA isn't doing it -- wouldn't be hiring the appraisers itself.

But, I mean, why doesn't the work of the professional appraisers at OPA stand on its own? Why do we need to hire outside experts to prove that OPA is right? And is this expected to be standard practice or are we confident that OPA's appraisals can stand on their own if we go to full value or AVI?

I think we're definitely confident in OPA's ability to appraise. I think that this specific DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. situation arose -- it started as a result of the STEB decision. I think you're familiar with this. And the number of -- a number of appeals we received because of that, the rate being set much lower than the 32 percent originally. So there was a decision made to cross appeal, and this was a decision made that was in the best -- expected to be in the best interest of the City. This was a one-time decision for the 1.85 million. I think going forward, there isn't an expectation that this is a new standard policy that Law would get funded for this going forward. This is related to the STEB ruling.

Right, but --

I see what you're saying in terms of if there are appeals in the future, what are we going to -- how are we going to handle those appeals.

No. Even DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. with respect to this, I mean, we're talking about what is the fair market value -- what is the actual value of these properties, which really is not at all related to the common level ratio. What the value of these properties are is what the value of these properties are, and so OPA has determined what the value of these properties are, and I'm wondering why that is not sufficient for us to move forward within the process. And if OPA is not capable of determining the actual value of these properties, we've got 570,000 more lined up behind this.

No. I think OPA is capable, but Shelley or Dan can speak to the process -- the strategy of cross appealing in this specific case.

Cross appealing has nothing to do -- legal strategy has nothing to do with what the properties are worth. OPA has determined a value, an actual value, fair market DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. value, for these properties. SOLICITOR SMITH: What's at issue here, though, in these appeals is the old valuations, and because of that, because of the STEB issue and because in relation to the STEB issue at some point it was determined that cross appeals would be taken in some instances, collectively we determined that the best way to approach litigating those issues was to have an independent appraiser attest to or contest, depending on what the situation was, the appraisal that had been done. So this is a situation that's sort of unique to these particular circumstances, as Rebecca said, and not a policy going forward.

So the City may take a position that OPA was wrong and that the actual value of the properties is far higher; is that correct? SOLICITOR SMITH: The Law DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Department may, but in relation to old appraisals and not --

Not the new appraisals. SOLICITOR SMITH: Not the new ones.

There's no 9 such thing as old or new. On the City's books, on tax bills that we send out, there's an actual value that is not related to the 33 percent or 32 percent of that for which is the assessed value, and the actual value is either accurate or not. SOLICITOR SMITH: Also remember at some point there was a moratorium, so a fresh appraisal wasn't done. I mean, there's all these complications that drove the decision relating to this particular set of circumstances.

So the moratorium is partially responsible for the fact that these commercial properties are not at actual value and that this $2 DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. million expenditure is required?

I would say that once the Office of Property Assessment goes through and reassesses all of the properties, that we will be in a very different situation. I wouldn't say this has to do with the moratorium. It has to do with the fact that, as you know, we don't have assessments that are correct for the entire City. That's why we're going through the process of full valuation, and once that happens, it will be a very different situation. I think we all know that.

Well, it seems to me if we have an actual value for properties, they ought to be on the OPA's system and there should be no such thing as new or old.

Councilman, with all due respect, we know that the system as it has stood for years and years has been relatively broken, and that's the goal, is to fix that system. So moving DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. forward, it will be a different situation.

State law requires that we have an actual value that's correct in the system every year.

And that's why we're working towards the correct system.

Doesn't that make a moratorium illegal?

I'm not commenting on that.

Thank you.

For those of us who are non-lawyers, not ready to argue these matters in court, if you were to simplify it for my own edification, that we have a broken system, you are now charged with defending that broken system, to the degree that you can. SOLICITOR SMITH: Correct.

And what is at risk is tens of millions of dollars of revenue that if we are ruled against from the 25 to 33 or 17 range, we could be DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. exposed. SOLICITOR SMITH: Right.

So you have a piecemeal approach at this point because that's what you've inherited, that this may not repeat itself if we actually do what we are looking to do, which is create a fair and equitable system that is less challengeable in court. SOLICITOR SMITH: That's correct.

For the non-legal mind. SOLICITOR SMITH: That's correct, yes. If the system is fixed, we won't have to --

If it's fixed, we won't have to go through this again. SOLICITOR SMITH: Correct.

You said it better than me. Thank you.

Is that DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. close? Thank you, Mr. Chair.

Thank you. Any more questions for these particular witnesses? (No response.)

Thank you very much. SOLICITOR SMITH: Thanks.

Ms. Rhynhart, are you presenting testimony from the Finance Department?

I can. And I think someone is here from the Office of Property Data. Saskia, do you want to come up. (Witness approached witness table.)

So I'll start with my testimony. The Office of the Director of Finance is requesting an increase to its operating budget in the amount of $148,284 to cover the costs associated DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. with the start-up of a new division called the Office of Property Data. The Office of Property Data has been created to lead and manage a cohesive program for the efficient collection, maintenance and distribution of current and accurate property information. Once fully operational, the division of the Office of the Director of Finance will put in place a cross-departmental mechanism that will reduce the redundancy, cost and inconsistency of City-held property information and ensure that all business processes related to the development and maintenance of property information are efficient, effective and customer-service focused. Specifically, we are requesting $117,300 in personal services to cover salaries for the four-member Office of Property Data team and $30,984 for the purchase of materials, supplies and equipment associated with establishing this new division. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Thank you for the opportunity to testify today.

Councilman Green.

Thank you. I don't understand the purpose of this office.

Hello. I'm Saskia Thompson. I'm the Executive Director of the Office of Property Data. The purpose of this office is to handle all of those cross-departmental handoffs that we know exist and are not necessarily as efficient and we would like them to be for all property-related information.

What does that mean?

For example, Property Assessment generates addresses and has tax accounts associated with those addresses. Those addresses don't necessarily link up to addresses in other data systems across the City; for DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. example, at Licenses and Inspections, which is also performing inspections on those same properties. The way the data is structured, you can't necessarily tell that one tax account is on the same property that L&I is inspecting. Some of those are data issues built into the systems that are old and out of date and some of them are just the way that we are inputting information, and it's a cross-departmental issue. It's more on business process that we're hoping to fix.

Right. So why are we creating a special office for this? There's a bill before City Council today that would require that every single City department that deals with one taxpayer, one property, whatever, use the same identifier to identify that property so that there's real data. It requires that if there's a field on a form, that every field that's on a paper form must be in the database rather than DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. just selecting fields that we put into our databases, et cetera. I just don't understand the need for this office in the Department of Finance and what personnel are doing. Are you taking data from each department and inputting it yourselves?

We're trying to answer that question right now. So our staff is very small. It's some people on the business analyst side and then two people that have GIS backgrounds, and we're trying to figure out exactly how to do that, how to create a unique identifier, how to make sure that we're all talking about the same thing. Because each department is responsible for generating its own data, they don't necessarily -- they're not necessarily in the position of making sure or knowing how even to make sure their data attaches to someone else's.

Isn't that just -- when we -- it's really just a DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. question of the City setting specific criteria for each department of what data they have to put in, how they have to put it in, where it goes into a database, right? And you don't need to create a separate office for that. That's just created in the standards that we send down from on high to every department and build in a system such that it communicates with each other. I don't understand why we're using manpower to do something that we should be doing. And what I really don't understand, since it's related to property, is why we're doing it in the Department of Finance when we created the OPA, the Office of Property Assessment, that deals with property data. We created a separate office that was not under Finance or Revenue, that was its own office to deal with property data so it could be independent. And this seems to me to be moving things back over into the Finance/Revenue side of the house DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. with respect to property data.

I think the Office, if I can just add something, of Property Data is addressing a really big issue that's existed for 20, 30, 50, 60 years in the City, which is that departments have created their own systems and are inputting their own data -- just let me finish. And there's a lot of inefficiency, a lot of inefficiency in that, because there's incorrect addresses. Like when one department fixes an address, it doesn't fix it across the whole City.

The problem is clearly identified. We all agree on the problem. How are four people in the Department of Finance going to solve the problem?

I think that's what Saskia was trying to explain, but all I was saying was that the problem is quite large. So that's why I was saying that -- if you could just let me finish DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. for a second. The problem is actually quite large, which is why it's not just about telling the departments, Oh, put this data in this way, because of all the different systems, and Saskia can speak to what her staff are doing.

But what she said was that they didn't know how they were going to do that.

We're answering that question right now. So you said somebody has to set the standards. We're trying to figure out what those standards are.

Let me ask the first question, which is when was the office created?

Staff just came on -- I was hired a year ago last February.

When was the office created?

I think Saskia was brought on by the Finance Director DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. about a year ago, right?

Right, February of last year.

To tackle this problem.

So it was not budgeted for this fiscal year?

It was brought on as part of in Finance's budget, but the request is being made to add money to Finance, yes, right now.

There was thought in the last budget process of creating an Office of Property Data and the thought of hiring four new people?

No. It came -- it was after the budget. Maybe it was about a year ago maybe. I think that the process has been --

A year ago would not be after the budget process.

When the budget was proposed. I mean, I could get you more specific details from Rob Dubow, the DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Finance Director, about it. I think that --

The question is just simply, when was it created? Are these new personnel that were hired for this purpose? Will it be in the proposed budget for next year?

Yes, it is.

How is it reflected in that budget? And what is the purpose for spending that money in this way during this fiscal year if it wasn't anticipated during the last budget process?

It will be -- to answer the question about being included in the proposed budget for '13, it is definitely included in the budget request. So it can be part -- will be part of Finance's budget.

How is it identified within the budget?

I would have to look to make sure that in the budget DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. detail -- I think it's specifically split out so that you can see it. I'll make sure that it is.

And the question is, what's actually going to be accomplished this year that it can't wait for next year's budget?

I think the --

I'm sorry. I didn't hear the question.

The question is, what's actually going to be accomplished this year that it can't wait for next year's budget?

I think what we are trying to accomplish this year, figuring out what the standards are that all departments should meet so that we can then go through the process of making sure all the data systems can link.

And these are four new hires for things we have not determined what we're going to do yet? These are four new hires of people, and DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. what they're going to do has not fully been determined yet?

That's what they're going through the process of doing right now.

I'm sorry. They're going through the process right now?

Yes.

So the four people are hired?

That's including myself.

The testimony was just that you were the only employee in this office.

I don't know if that's what we said in the testimony. We asked for --

No. I understand. Just now in response to Chairman Goode's question --

Chairman Goode asked when the office was established, DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. and so in order to answer that question, we thought of when Saskia was hired, because she's leading that effort.

I see.

I'll just wrap up and go back to Councilman Green. Since the last budget process, the Administration decided to create an office and hire four people for specific reasons yet to be determined?

No. I think the specific reason is clearly set out, that there's a big problem within the City that's existed for years and that we're trying to create much more efficiency, which will be a really big improvement.

So the specific reasons, I meant specific reasons in terms of short-term reasons. I understand the long-term reasons for doing it, but we're in the process of going through reassessments right now, going through an Actual Value Initiative right now. These are funds that are DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. being invested this year for some purpose I'm not quite sure of.

I think in terms of -- maybe we're not doing a good job explaining to you what the Office of Property Data will do, and so maybe it would be helpful to you if we provided you something in writing or provided you more information about what Saskia's group is doing so that we can better communicate to you what the effort is and the benefits to it. So maybe that would be -- if that would be helpful, we'd be happy to do that.

Okay. Councilman Green.

Thank you. I still don't understand -- so 148,000 covers a shortfall in the Office of Director of Finance this year, when you've already had four people working for six, nine months, a year for the Director. My question is, what will the cost be next year? This is three months' DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. worth of expenditure, this is six months' worth of expenditure? What? And while she's getting that information, I don't understand why we need an office of four people in the Department of Finance to figure out how to share data among departments. We used to own -- I don't know if we still do -- software called Mindshare, which allows us to go into every different database and collect the data. I understand that people have to figure out how that is. We have to undertake business process flows in every department in order to make sure that the same data is going in every way, that we're eliminating unnecessary work in each department, et cetera. That's not going to be done by the four people in the Department of Finance in the Office of Property Data. So why is there this expenditure in the Department of Finance with respect to only property data when we are trying to accomplish what you are DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. describing for the entire City? In other words, if --

I think it's spearheaded by Saskia out of Finance, but it is to fix the problem through the whole City. It's not just to fix the problem in Finance.

But this is the Office of Property Data.

Right.

We've got lots of data that has to be combined associated with particular accounts that has nothing to do with property data.

Actually, the way we're defining "property data" is all of the attributes of a piece of -- so that's the address, the parcel, the history, the occupant.

That's property --

And they all live in different data sets across the City all in multiple departments, and DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. until this office was created, there wasn't a single source that had its responsibility was to look at all of those departments and all of those data sets across the City and figure out how to make them link. Each department is responsible for managing its own data to deliver its own specific service and hasn't had the charge of trying to figure out how to make it link to other places. That's specifically what we're doing. It is citywide, it's cross departmental. We're the coordinating effort, but certainly there will be work going on in every other department to implement the fix once it's determined.

But you don't know what the fix is; you don't know what data you want to combine?

We know that we need unique identifiers, which you've already identified. We know that we need to make sure that we can track history on DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. the property. We know that we need to make sure you can have a one-to-one and a one-to-many relationship, you can have multiple addresses on one parcel, multiple addresses on a building. We know the answers to those questions. What we have to figure out now is what the standard is by which we're going to make all those different links.

So why is this in the Department of Finance as opposed to the relevant department, which seems to me -- does it include a business that's a renter --

That's --

-- in the Office of Property Data? They don't own the property. Would it include them?

We would include anyone --

We would include any relevant data that's attached to that particular property.

So how would DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. you know who is renting a property?

You would know who is renting the property only if there's another City service attached to this renter. For example, if that renter has a water account or --

So if somebody has a BPL, that will then be attached to the property that they're in?

Right. And right now that information -- the City has that information; it's just not living in any place where you can pull it into one central source.

And we need a staff and a specific office to combine the data or do we need a staff and a specific office -- because once the processes are set in place and it's done and the departments either through the implementation of the new technology plan or through cobbling together the data sets through Mindshare or some other software program, once we have all this DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. data, what will this office do?

Well, I think somebody still has to be responsible for making sure that the standards are identified, met, kept, maintained over time.

Four full-time employees? We're talking about electronic data.

Well, somebody has to input that electronic data and somebody has to make sure that that data is accurate.

So why do people have to input data if the data comes from the departments? Why do people in the Department of Finance input data?

I don't know that we would be inputting the data, but somebody has to make sure that whatever data is entered is entered accurately and in the standards that we have set.

So we're DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. creating an office that is a custodian of data in a database of four people?

Councilman, if I can just interject here, I think the office is being created to fix a big problem and I think that it's at the beginning stages. I think Saskia is at the beginning stages of identifying the solutions to these problems, and I think what might make sense is if we sit down with you and walk you through what the ideas are and then we can talk about what your ideas are as well. But I think that it's the beginning of fixing a significant problem.

I'd be much more comfortable funding a task force than an office, because offices never go away. Once the data is gathered and it's all collected, there will be a new mission that they send themselves on, because that's what happens, and offices expand.

Well, why don't DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. we discuss that, because I think that -- I mean, I understand your question there, and I think that Saskia is at the beginning process of fixing a problem. And I see -- I understand what you're saying, so I think, though, that it might be better if you would agree if we could continue the conversation offline.

I'd be happy to, but I want to agree with the Chairman that all of these should be separate items, because I would not approve this today.

Councilman Jones.

Yes. Could you ask Mr. Abernathy and Mr. Ilia to come up to the --

They're next.

Oh, they are? Well, my question is, is this an evolution of a study that was being DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. conducted by the Redevelopment Authority and I believe you, Mr. Abernathy, to try to figure out how we track properties? I remember that a couple of years ago. Is this some way an evolution of that?

Councilman -- I'm sorry. Brian Abernathy, Managing Director's Office. My understanding the study you're referring to is the vacant property study that Econsult did with the RDA. The work is certainly related, but I don't believe it's an outgrowth of. And so certainly I think my personal goal of what the work that Saskia and her office would be doing is to give us a better ability to track vacant property as well as provide some indicators of where vacant property might be without doing a physical survey. So I think that data actually leads directly into a number of other services that we don't currently have in order to identify properties. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

And I don't mean to jump out of line, but your study that you and the RDA and others conducted by way of property acquisition, trying to make sense of the whole system, where did it wind up?

I'm not sure -- the study itself made an argument for us to deal with vacant property and to make an economic argument so we understood the impact of vacant property on both our budget as well as our services. That has been extremely helpful as we have looked at a land management policy citywide and --

I guess my question then is, how does that land management policy impact your new office? Is there a connect?

There is a connection, yes, sir. And I don't know if you want to...

I would say DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. those things are all related. I think that anyone who worked on the vacant property study could tell you that one of the issues they had in conducting that study was even identifying where the vacant properties are, how to figure out what those indicators are, which department holds the pieces of information that might give you an indication of where data is without actually having to physically go, send staff out to identify a property as vacant. So I would say the vacant initiative is a symptom of one of the problems that our department is trying to fix.

Okay. So out of the study came a recommendation for this type of service?

I don't believe the study -- the study isn't directly correlated to, but I believe, as Saskia said, this is the vacant -- many of the DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. problems we saw with vacant property are a symptom of our larger office or our property data issues as a whole. Property data affects almost everything we touch, and our property data is struggling.

I think Councilman Green might be right. I'm trying to logically follow this, and that doesn't -- that's on me as opposed to you, but I want to see the correlation to what this value added amount does to make sense of this. If we're adding another piece of an already complicated puzzle, I don't get it, but if somehow by us going to one source we're able to gain information, that makes sense to me, because it expedites the ability to do land assembly to do development.

Yes.

So Mr. Chairman.

Councilman Henon. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

Yes. I think -- I just want to expand a little bit on my colleagues. How are you doing, Mr. Abernathy? You know, from my short time here so far this year, I've seen within the RDA and I understand about the land assembly. It's absolutely necessary, but it seems like each department is doing the same thing. I mean, it just seems there's a lot of duplicity, whether it's in OIT -- I'm sure there's a supplement OIT allocation just for these systems to communicate and to manage itself, whether somebody is inputting it or continuing to add data. You had mentioned something earlier about when you first were testifying about adding taxes to it. Is one of that the reasons why you're in the Department of Finance or is that another function, added function?

I don't think --

You had DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. mentioned -- you have, I think, if I'm correct, you had mentioned that to see if there's any taxes assessed to the properties --

Oh.

-- that you're inputting. So I was just curious, is this an added functionality of the new office that's being created or an extension of the Department of Revenue? In the global sense, is it just property or are we trying to segue into trying to recoup some of our taxes that are out there that are owed to the City?

I think that if we can better collect all types of data about accounts that we bill across the City, it could definitely improve collections. I think that could be a result of it.

Because I've been requesting data for some time now, including back taxes. The process of departments in recouping a lot of the DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. taxes and identifying properties whether they're vacant or occupied and the land management policies and the disposition policies for many of the departments, and it's very complicated. So having something permanent is concerning when I'm not sure what we have now and what the process is and what we're trying to manage now.

Well, I think, again, what might be best, given the level of questioning on this, is for us to provide you supplemental information and probably have a conversation with Council on this.

Councilman Green.

Thank you. The one question that wasn't answered was what is the budget for this office next year?

Oh, I just looked. It's about $500,000.

Five hundred DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. thousand dollars? Four full-time employees to, once the data is gathered, be custodians of an electronic database?

No. I think that -- I mean, if Saskia -- I'm not sure if we're ready to answer that question, but we're talking about would be about 9 500,000. But I think we should talk with 10 you about what the overall goals and 11 objectives over time are. I think we can 12 flesh it out in a more comprehensive way 13 for you.

Thank you.

Thank you. Mr. Abernathy, stay at the table. You have testimony, separate testimony?

Sure. Good afternoon. My name is Brian Abernathy, Chief of Staff to the Managing Director. The Managing Director's Office is seeking an additional $84,000 in Class 200 funds to maintain current service DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. levels and increase the neighborhoods served by Town Watch Integrated Services. In addition, we're asking for an internal transfer of funds of approximately $112,000 for Animal Control services.

Any questions for this witness? (No response.)

Thank you very much.

Thank you.

Is someone here from the Fire Department? (Witness approached witness table.)

Good afternoon. Please identify yourself. DEPUTY COMMISSIONER BEATRICE: I am David Beatrice, Deputy Fire Commissioner, Administrative Services. I am here representing Fire Commissioner Lloyd Ayers. Good afternoon, Councilman Goode and members of the Appropriations DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Committee. In this mid-year General Fund transfer ordinance, the Fire Department is requesting an increase of $4 million in Class 100. This funding is needed to cover the cost of staffing apparatus at the minimum staffing levels required in the labor contract to the end of the fiscal year. The Department is also requesting an internal transfer of $350,000 from Class 300 to Class 200 to properly reflect the cost of retrofitting bunker gear pants as part of the Rope Rescue Escape System project. This completes my testimony, and on behalf of the men and women of the Philadelphia Fire Department, I would like to thank Council for your continued support.

Thank you for your testimony. Any questions for this witness? (No response.)

Seeing none, DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. thank you very much. DEPUTY COMMISSIONER BEATRICE: Thank you.

Recreation Commissioner. (Witnesses approached witness table.)

Good afternoon, Commissioner. COMMISSIONER SLAWSON: Good afternoon, Councilman Goode and members of the Appropriation Committee. My name is Susan Slawson, First Deputy Commissioner of Recreation and Programs. I am joined by Leo Dignam, Deputy Commissioner for Programs. It's a pleasure to be here with you today. I appear before you to present testimony in support of Bill No. 120169, specifically as it relates to transfers in appropriations for Fiscal Year 2012 of $80,458 pertaining to the Department of Parks and Recreation. This transfer represents a portion of committed DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. resources which will be provided to the Philadelphia School District in order to continue providing high-quality winter programming at School District facilities and gyms. As has been previously communicated, due to the Philadelphia School District's current financial challenges, to help reduce operating expenses for the School District, the Department consolidated programming groups into larger school gyms to reduce the number of school gyms that were open. In addition, with leadership from Mayor Nutter and City Council, we will also provide financial support to the Philadelphia School District that kept programming running through March the 17th of 2012 at 48 School District facilities and gyms. This helped to preserve a wide variety of programming for over 12,000 children and families. Thank you for the opportunity to discuss this important issue with you DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. today, and I look forward to any questions you may have.

Thank you, Commissioner. Are there questions for this witness? (No response.)

Thank you very much. Office of Inspector General. (Witness approached witness table.)

Good afternoon, Councilman Goode and members of the Appropriation Committee. I am Amy Kurland. I'm the Inspector General. Thank you for the opportunity to present testimony regarding the Office of the Inspector General's Fiscal Year 2012 mid-year transfer request. In the proposed mid-year ordinance, we are requesting $5,371 to be transferred from Class 200. This would be allocated in the amount of $2,421 for DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Class 100 personal services to cover a shortfall caused by a large payout to a long-time City employee. Additionally, we request $2,950 for Class 300 materials, supplies and Class 400 equipment needed to carry out our functions in an efficient manner. I welcome any questions.

Thank you. Questions for this witness? (No response.)

Thank you very much.

Thank you.

Chief Innovation Officer. (Witness approached witness table.)

Chairman, Councilmembers, I am Adel Edeid, CIO, and to my left is my CFO, Chris Donato. Happy to be here. We are requesting the transfer of FY12 appropriations all relate to DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. services, materials, supplies and equipment associated with the management and support of the citywide 9-1-1 system relative to the functions that are provided by OIT, the Fire Department and the Police Department. The breakdown by major class is as follows: 200, 4.6 million; combination of Class 300 and 400, total of 3.2 million; for a total of 7.9 million. Happy to answer any questions to the extent that I can. I have, of course, Chris with me who can probably add in.

Councilman Green.

Thank you, Mr. Chairman. Does this expenditure include any expenditure related to the citywide WiFi network we purchased indirectly from EarthLink?

To the best of my DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. knowledge, it does not.

And so when you say the 800 megahertz upgrade project, what are you referring to?

We are referring to the combination of two projects that the City undertook several years ago, combination of re-banding where Sprint Nextel is involved, as well as an upgrade of the City's radio backbone, all running on the spectrum of 800.

Are you familiar with the proposal that was generally widely accepted in the City that was an expenditure of $15 million of E911 funds to create a private City WiFi/WiMax network to allow for Police Department Mobile Command Centers, other things where realtime data could be available in the street to our first responders and that would also prove to be a digital backup for voice should our regular radio go down? It would also allow intergovernmental communications on DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. via WiMax within the City limits with state, federal authorities, et cetera, when we're all responding to the same event?

I've heard some of that, and three weeks ago I started to dig into a little more, try to understand the history, whether it's Wireless Philly, Digital Philadelphia.

No. This is a specific proposal of what to do with those assets.

I understand. So I have started to look into those and try to understand the history, the motives and the current status of that.

Has the City heard any discussion from the State of Pennsylvania that if we do not spend our E911 funds, we will lose them, they will be taken away and spent by other -- given to other counties or jurisdictions?

Chris and Rebecca could chime in, but I'm not aware of a DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. situation where we are under-spending those dollars.

We have $30 million.

To that point, Councilman, this is actually -- there has in the past been balances that have somewhat accumulated. This is actually a positive development, that we're requesting the 7.9 million. Basically what this means is that we are now spending faster than planned and we are spending down that money on projects of importance to the City of Philadelphia. So by asking for this additional appropriation, what we're doing is asking for the money to be transferred from the Grants Fund over to the General Fund and for the money to be spent at a much faster rate than originally planned. So this is addressing what you're bringing up right now.

"Than originally planned," I don't know what DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. that means.

That means --

Because we haven't really spent any E911 money for the first four years of the --

That's not true. I mean, we are spending money and we have spent money. And when I said "originally planned," the adopted budget.

The adopted budget.

Yes.

So what is the available E911 funds to the City and how much is put in that bucket every single year through the fees we all pay our phone companies?

Chris Donato from OIT. I believe the current cash balance for all the 9-1-1 funds, which is wireline, wireless and voiceover IP, is about 45 million.

Forty-five DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. million dollars.

About half of that is going to be transferred over to -- well, I'm sorry. About million is to 6 be transferred over to the General Fund 7 to cover personnel costs. 8

That's an annual 9 regular transfer. 10

Right. And then there's an additional about 11 million of wireless funds that are going to be transferred to the wireline account for wireline expenditures that were actually wireless eligible in prior years. So that will also be made available primarily for the 800 megahertz upgrade project.

I'm sorry. So of the $45 million available, you're planning to transfer 11 million from wireless to wireline?

Well, PEMA's concern is mostly geared toward the wireless funds, and so we're trying to DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. accelerate that spending so that the million of wireless funds will be going towards --

So why not 6 just spend it on a wireless project that 7 has already been scoped out, that the 8 departments on the street all wanted and 9 that is written instead of moving it to 10 wireline?

Well, the departments --

Do you need a transfer ordinance to move that to wireline?

No, sir.

We actually have, just to expand upon the process, we have internal --

Do you need a transfer ordinance to spend it or budget authorization to spend this money?

We need the appropriations in the General Fund and the Grants Revenue Fund, yes. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

Okay. Thank you. The answer to the question, I take it, Ms. Rhynhart, is yes?

For what?

The state has said that they'll potentially take away money --

I have not heard that directly, but I have heard that we need to speed up the spend, which we have instituted a regular meeting that Everett and I meet with the departments that are involved here, so Police, Fire and IT, and we have a plan to spend down that money, and we have -- and we can show that to you with the projects that are being prioritized. We have a prioritization meeting where we move through this money. So this request for the 7.9 million is because we are spending this money much faster on projects of importance.

So DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. indirectly the answer is yes?

I have not heard that directly, but I have --

You've heard this indirectly through your superiors in the City?

Superiors? No. 9 I have heard it, yes.

From City officials?

Councilman, I have heard that we should spend the money faster. That's what I heard.

Through City officials.

Through City officials, yes. Through City officials.

Thank you.

Councilman Jones.

Through City officials?

I am a City official, yes. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

Just checking. I have a few questions. Help me to understand the difference between Bill No. 120169, 120170 and the allocation of surcharges. I know the EMS prioritization project. Describe that a little bit.

Are you asking for the reason for the difference --

I'm asking describe the project.

Oh, the project?

Primarily it's a Fire Department initiative in order to, as it states, prioritize the calls as they come from 9-1-1. Some people will call with a lesser injury than someone who, say, a heart attack and it will allow the Fire Department to dispatch appropriate personnel in a more efficient manner.

And so the surcharges, what does that mean? DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

Well, the 9-1-1 surcharge is and fees that you pay on your phone bill, a dollar for the 9-1-1 fee, that's those fees.

So those are revenues that come back?

Correct.

And this new equipment, the 800 MHz upgrade, can you describe that a little bit?

Sure. So the 800 megahertz is a spectrum that allows for -- it's a frequency that allows radios to talk to each other.

Is this my former colleague Frank Rizzo's issue of being able to communicate underground? Will this allow us to do that?

Whether it's indoors or outdoors, we're tackling the entire --

So post 9-1-1 in the subways we will have greater coverage? DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

I'd rather check into that detail before I give you an answer, but if that's a question of yours, I'd be happy to come back to you with that.

That is a question of mine. What I would like to also know is, are we buying this equipment, are we leasing this equipment, and what's the life -- technology changes. By the time you do the iPhone this, six months later it's the Hachitachi 10,000 next. Is that true for this type of equipment, and are we buying it or leasing it, and is there a value after its life expectancy?

So we are buying it. It would not make good sense to lease, normally because this is not traditional technology equipment. The useful economic life of equipment like this is more like 10 to 15 years.

Okay.

The only thing that DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. would change are software upgrades, which would be handled as part of the overall scope of the project. So this is equipment that is not here today and goes end of life in four years. This is equipment that's going to be around for at least 10, if not, 15.

Okay. And this is pretty much a sole source contract. There's not a lot of vendors that provide this kind of equipment; is that correct?

I wouldn't use "sole source." However, it appears that the City is standardized on a Motorola platform.

Yeah. We've been using Motorola since forever.

Right. And if you recall, some of you might recall the Motorola lease financing we did a few years ago for the 9-1-1 system upgrade, so I think -- with Motorola, and there were a lot of contract questions at that DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. point, and this is the same contract.

Okay. Thank you, Mr. Chair.

Councilman Green.

Thank you, Mr. Chairman. Why are we spending money we can use for non-capital expenses? In other words, can't we use the capital budget to purchase this equipment and have much of the $3 million available for other purposes that are not capital eligible? In other words, if they last 10 to 15 years, we don't have to use what we can use for purchase of services or other things that would be beneficial, that we can pay for the equipment over the life of its useful life through capital budget borrowing? I mean, why are we making the decision to just purchase this and not do that?

I think that the idea of using funding -- and it's called DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. pay as you go -- from operating funds for something that's capital eligible is a good financial practice. So I don't think there is a negative to a spending revenue source like 9-1-1 funds that are eligible on the type of Motorola equipment that are being addressed.

There's a negative in the sense that the money is not available for other things that we could spend it on. So I would like to get to the Chair the planned E911 expenditures so that we can take a look at that in the context of the budgets that we're going to have to approve for next year.

Sure.

Can I add a little bit to that? It's very common for any jurisdiction, state, county or municipal, to use the E911 surcharge as the source to fund radio projects. It's a very common practice. Certainly of all the systems that I've built in the past in DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. the State of New Jersey, that was always the source of funding.

Thank you. And we could use E911 money for that purpose by appropriating it to the portion of the payment that's necessary to make -- we can use that money in the context of capital also, sort of like we use the HUD money I think for payments on projects that take ten years as opposed to going in grants and things like that. I'm not certain that's possible, but I imagine there's a lot of financial engineering we can do to make sure we have the dollars available for other important projects. But that being said, I will look forward to the planned expenditures for E911 funds.

Any more questions for these witnesses? (No response.)

Seeing none, thank you very much. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

Thank you.

Planning Commission. (Witnesses approached witness table.)

Good afternoon.

Good afternoon, Councilman Goode and members of the Appropriation Committee. I am Gary Jastrzab, Executive Director of the City Planning Commission. The City Planning Commission is requesting an appropriations transfer of $5,000 from purchase of services, Class 200, to materials, supplies and equipment, Class 300. This transfer will reallocate departmental operating funds for the current year from Class 250 expenses, professional services, to the more critically needed category of materials, supplies and equipment. Specifically, expenses for copier and printer toner DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. have run higher than expected this year due to the production of materials related to the new Zoning Code, the adoption of the Philadelphia 2035 Comprehensive Plan and the civic engagement activities of the Citizens Planning Institute. This concludes my testimony. I'd be happy to answer any questions that you may have.

Thank you for your testimony. Are there any questions for this witness? (No response.)

Seeing none, thank you very much.

Thank you.

Director of Housing. (No response.)

Office of Housing and Community Development. (No response.) DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC.

Do you want to take that one, Ms. Rhynhart?

Sure. I'm happy to. I am here today to present testimony in support of the proposed ordinance to authorize an internal transfer of appropriations for Fiscal Year '12. The proposed ordinance will transfer $154,045 to support the acquisition recycling program. This program recycles certain proceeds of compensation paid for condemnations by the Philadelphia Redevelopment Authority. When the Authority condemns land, it is required to pay the owner the equivalent of fair market value for the property. In the absence of the owner, these funds are paid into court. If there are any municipal liens on the property, the City is able to draw on these liens to -- sorry; on these funds to satisfy the liens. The acquisition recycling program DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. specifies that funds paid by the City into court for condemnation would be recycled to be repaid to the City to fund additional acquisition activity. This is accomplished via a payment from OHCD to the PRA, which will then acquire additional properties. This ordinance 9 authorizes the payment to the PRA of Fiscal Year '08, '9 and '10 recycling receipts. I will be happy to answer any questions.

Just one question. What does $150,000 buy?

In terms of?

I have no 18 reference for that number.

In terms of how many properties or what properties?

I know it's paying going forward, but how much does it actually buy?

I would think -- I'm not an expert on this, but I would DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. think it depends on what type of properties it would be, and we could probably provide you some information if you want on the types of properties that have been -- what they have used this money for, let's say, over the last year, if that would be good.

I'm just trying to figure out what the context of the $154,000 is related to.

Their overall operations? I think that's a fair question. I'll get that to you.

Thank you. Any more questions? (No response.)

Thank you. Fleet Management. (Witness approached witness table.)

Good afternoon.

Good afternoon, Councilman Goode, Jr. and members of the DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/21/12 - APPROPRIATIONS - BILL 120169, ETC. Appropriation Committee. My name is James Muller. I am the Fleet Manager of the City of Philadelphia. I am here today to testify on behalf of the Office of Fleet Management. The Office of Fleet Management requests additional funding of $2,965,000 for its General Fund Class 300 in order meet our increased obligation due to the dramatic increase in fuel pricing during the current fiscal year. That concludes my testimony, if you have any questions.

What percentage of this is due to increased fuel prices? Is it 100 percent or is it some of it due to more usage? Is it less usage --

It's 100 percent increase in the fuel costs.

Thank you. Councilman Jones.