COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, April 20, 2010, 10:40 a.m. - - - COMMITTEE MEMBERS PRESENT: Anna C. Verna, Chair Marian B. Tasco, Co-Chair Jannie C. Blackwell Blondell Reynolds-Brown Darrell L. Clarke Wilson W. Goode, Jr. Bill Green William K. Greenlee Curtis Jones, Jr. Jack Kelly Joan L. Krajewski Donna Reed Miller Maria Quiñones-Sanchez - - - DISCOVERYWORKS GLOBAL Litigation Support Specialists 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET
Good morning this is a continued public hearing of the Committee of the Whole. The first department to testify will be the Register of Wills. (Witnesses come forward.) COMMISSIONER DONATUCCI: Good morning, Council President and members of City Council.
Good morning. Welcome. COMMISSIONER DONATUCCI: Thank you.
Please identify yourself for the record. COMMISSIONER DONATUCCI: Ronald R. Donatucci. And to my right is my Chief Deputy, Ralph Wynder.
Good morning. CHIEF DEP. WYNDER: Hi, good morning. COMMISSIONER DONATUCCI: And Anthony DeRose, my finance officer. 3 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET MR. DeROSE: Good morning.
Thank you. Please proceed with your testimony. COMMISSIONER DONATUCCI: Yes. First of all, I'd like to -- a little aside. This is my thirtieth appearance here, on behalf of the Register of Wills office. And I had a number of conversations this week with the Finance Director, if I could save some time. We're basically asking for an additional $81,811 in our Class 100. We are in agreement in Class 200, 300 and 400. This may sound insane: I may and try and make your life easier if it's possible. And I understand the fiscal problems of the City. And if we have to, we will live with the recommendation of the Finance Director.
What 4 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET would the $81,000 be for personnel in Class 100? COMMISSIONER DONATUCCI: Well, we just want to try and --
Personnel or -- COMMISSIONER DONATUCCI: Yes. As you know, and I've always stated in the past, there's more and more requirements being mandated to our department from the Supreme Court because of the problems of theft in the states. And, you know, we're very aware of the number of properties, not through our office, but through different departments, where there are illegal transfers. And so, there's much more requirements on our part to do more of due diligence, which we always have, touched with all of these different exposés that are done that's not our department. It's, you know, other departments where these deeds are being 5 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET transferred. And we even met with the -- with Judge Dembe's task force and let -- and we would let them know what we do. But these are things which require personnel. You could have all of the computers in the world but what good is it if there's not a person batch-feeding 'em.
And in my letter, if you will recall, we don't have voice mail; I think we take pride. And I believe your office doesn't have em; am I correct, when I call?
(Shakes head.) COMMISSIONER DONATUCCI: We found it in -- and I believe that the first study on the 3-1-1 number, the third-highest requests are questions about my marriage license bureau -- or our marriage license bureau. 6 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET And we found that, you know, people -- the public should expect somebody to answer a phone, especially at an important time in their life or if, God forbid, somebody passes away. So we're just trying to keep our level of service up in a difficult time. If you see it in your wisdom to give us the extra 81,000, you know it would be put to good use. And like I said, we are very proud of our audits. And in my 30-some years at the Register, I believe we were only off cents, and 15 I'm still trying to find the 16 cents. 16 (Laughter.) COMMISSIONER DONATUCCI: And this wasn't even our monies; these were monies we collected. We did close to half a billion dollars in the last five or six years in inheritance tax, and we were off 16 cents, I believe, so I may just give the 16 cents to the state. But I'm very proud of the 7 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET operation, and I believe in difficult times -- as you could see, we're going to be down to -- and it's important that I keep my 66 authorized positions. When I first became Register, we were at close to 80 positions, and, as I stated in my letter, we had, I believe, in excess of 80 funded positions; we're now down to 66. And as I stated to you, when I became Register of Wills, if you recall my testimony from prior years, the inheritance-tax functions were being performed by the state; the state said, "We want you to do it." So now, that's four employees, which we had to absorb. Plus, as I stated earlier, the Supreme Court and our own due diligence has required us to hire -- but not hire but to absorb the duties of at least four to six additional employees. So we're really doing an operation that at one time, if we still used the formula, it would be in excess 8 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET of 90; we're down to 66. And I believe any other cuts other than those 66 funded positions will really affect the revenue to the City. We are a revenue-producing office. And lawyers that come in, they expect -- they pay these fees to get the estate's raised within a reasonable time. And, as you know, we have genealogical archives where we have records going back to 1682. We have individuals from across the world that write to us, and it's revenue-producing. We work with the title companies and the credit card companies, where we charge for research. So, in order to keep this type of revenue coming into the City of Philadelphia, we have to have a certain amount of staff, and we're struggling at 66. But if we have to, we'll live with the City Finance Director's recommendation.
Thank you. 9 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET I would like to compliment you and your staff for doing an outstanding job. I know that -- I know of people that have to deal with your office from time to time, and they have nothing but complimentary remarks about the way that they are treated -- with respect and professionalism. I really think you're doing a great job. Your staff should be commended. And I wish I could say now that the 81,000 would be available, but I can't do that. COMMISSIONER DONATUCCI: And I'm not going to go to the casino and bet on it.
Thank you, Madam President. Good morning, everyone. And I just first want to echo 10 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET everything that the Council President said about the service that your office provides; I think I've said that at every budget hearing, and I think that it continues through the years. So thank you for that. Just some real quick question, Mr. Donatucci. COMMISSIONER DONATUCCI: Yes.
You mentioned the issue of theft of the property -- COMMISSIONER DONATUCCI: Yes.
-- which is something that I've been concerned about. Am I right to assume that once it gets to you guys, it's really kind of -- the horse is out of the stable, if you know what I mean. I mean, it's... COMMISSIONER DONATUCCI: Well, not necessarily, Councilman, 'cause we -- we could have an individual that could come in and say they've learned a 11 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET neighbor passed away -- no known heirs.
Mm-hmm. COMMISSIONER DONATUCCI: And they could come in and say that they could look at the deed. I'll give you a perfect example. There are a lot of deeds where, over the years, a husband or a wife predeceases the individual. And if somebody's familiar with that individual, they could come into our office and say that they're the wife.
Mm-hmm. COMMISSIONER DONATUCCI: But we have so many safeguards in place. You know, we ask for identification, photo ID.
Mm-hmm. COMMISSIONER DONATUCCI: We immediately check with the Department of Revenue, which is on our website we go on and we have access. So when I met with Judge Dembe's representative, I believe that he 12 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET was impressed of the four or five different steps we have to review. That's almost -- I'm not -- look, nothing's impossible.
Right. COMMISSIONER DONATUCCI: But I'd say that we make it very difficult because --
Mm-hmm. COMMISSIONER DONATUCCI: And sometimes there's complaining that they feel that we go maybe -- we're overzealous, but I think we have an obligation to protect the citizens that are not aware of what's going on.
And as I've always said -- and I've said this to the Records Department numerous times -- usually, the most valuable thing a human being will ever own in their life is their property. And I don't think there's anything wrong with doing those safeguards. Without getting into a debate, 13 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET I wish some other departments would -- COMMISSIONER DONATUCCI: No, we do a balancing act.
Mm-hmm. COMMISSIONER DONATUCCI: We keep certain documents we ask for. And after a certain amount of time, 'cause they're personal, they're not -- if you came in, like, we may ask for some type of Social Security issues.
Mm-hmm. COMMISSIONER DONATUCCI: We keep them in a locked-up place, and after a certain amount of -- How many days, Ralph, do we actually destroy them? MR. DeROSE: No more than a week; or even less sometimes. COMMISSIONER DONATUCCI: Yes. After we're convinced and -- and there's three steps of review before we issue short certificates.
Mm-hmm. COMMISSIONER DONATUCCI: So, I 14 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET mean, we've gone, you know, to the extreme; it's extra. That's what I mean: These are some of the things which require additional employees.
Sure. COMMISSIONER DONATUCCI: We've absorbed those duties. And I know it's one of your pet projects.
Right, right. All right. Thank you. COMMISSIONER DONATUCCI: My pleasure.
Thank you, Madam President. I also wanted to say thank you for all of your service. In fact, I was a few minutes late because I was working on a case, trying to hold someone up from sheriff's sale. 15 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET The daughter is in the home, and the mother passed, and we had to send her 'cause she hadn't probated the will to get the property in her name, so we have got to do all of that to try to get her home safe. So you're here, and I'm there, working on the same issues that affect your office. But certainly -- COMMISSIONER DONATUCCI: Well, we ought to send somebody to your office if it's --
Yes, thank you. COMMISSIONER DONATUCCI: We'll move it along; you know we will.
Oh, I know you always do. And thank you all very much. COMMISSIONER DONATUCCI: Thank you, Councilwoman.
16 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET Mr. Donatucci, how much do you think your office would generate in revenues by the end of the fiscal year? COMMISSIONER DONATUCCI: I believe in this fiscal year, we're going to show approximately -- if we keep at the rate we're going, in excess of over a $100,000 over our allocated budget.
Wonderful. All right. Any further questions? COMMISSIONER DONATUCCI: If we can get our feed bill -- we have a feed bill pending in Harrisburg. It's not only our feed bill, but it's the court system. And it's going to be very promising if we could get it passed. It'll -- it'll adjust any type of future fee increases to the consumer price index. So, you know, if the City like any other -- you know, everything goes up, and this will bring additional 17 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET revenues to our department.
What will the fee go from? COMMISSIONER DONATUCCI: Pardon me?
What is the fee presently and what will it be -- COMMISSIONER DONATUCCI: Well, there are all different schedules of all of our different fees. What we try to do is --
For all of them? COMMISSIONER DONATUCCI: What we try to do, Council President, is we -- our staff -- we get the five counties, and we match our fees what we're charging with the surrounding counties. And we try to do the -- to stay within those guidelines of our four surrounding counties. But we have a unique situation in Philadelphia, that if you go to 18 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET Montgomery, I understand, which is -- the register is doing a great job, but they require you to have an attorney to probate in the state. We don't require that. Many of our participants in our office are people of need. We actually sit there and help 'em prepare the papers. We take 'em through every step. This is very time-consuming, and we try to keep some of those fees more reasonable. Now, the larger estates, that's where we would like to increase some of our -- on a sliding scale, an escalating scale some of these fees. But that's where our forte is. You don't -- you don't -- you do not need a lawyer to walk into our office. We help you every step along the way. And credit to the Bar Association and my colleagues, 'cause I'm an attorney, they encourage us to try and help the public. I mean, they're not complaining that we 19 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET sometimes are performing the job of a lawyer, but they understand. They're small estates. And like the Councilwoman said, this is probably a -- a house is the only asset. There's probably taxes owed on it. By the time whatever is left, it's minimal. So we try to save fees and help the public in that particular way.
Very good. Again, I thank you all; you're doing a wonderful job. COMMISSIONER DONATUCCI: Thank you for all of your help. And, I mean, like I said, the past thirty years, this body has been very supportive of our office.
Thank you. COMMISSIONER DONATUCCI: And thank you again.
You're welcome. Thank you. Thank you all. 20 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET COMMISSIONER DONATUCCI: Thank you. MR. McPHERSON: The next department is the Sheriff's Department.
Please approach the witness table. (Witnesses come forward.)
Where is the Sheriff? DEP. SHERIFF DEELEY: The Sheriff had an emergency, which took him out of town, so I will be giving the testimony today.
Please identify yourself for the record and proceed with your testimony. DEP. SHERIFF DEELEY: Good morning, Madam President and members of City Council. First let me apologize for the Sheriff not being here.
And for being late. DEP. SHERIFF DEELEY: I'm 21 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET sorry?
And for being late. DEP. SHERIFF DEELEY: And for being late. I'm sorry, I apologize.
Thank you. DEP. SHERIFF DEELEY: My name is Barbara Deeley. I am the Chief Deputy for the Philadelphia city and county Sheriff's Office, and I want to thank you for this opportunity to speak on the critical work of your county sheriff's office and its FY Budget 2011 request. The Philadelphia Sheriff's Office is responsible for the transportation of accused individuals to and from our Philadelphia court facilities. Deputy sheriffs are also responsible for providing security in and around the county court buildings. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET participating in the criminal justice process. The Philadelphia Sheriff's Office provides security and/or prison transportation and other services at eleven locations, these sites being: the Criminal Justice Center, Family Court, Domestic Relations Court, Traffic Court, Community Court. The Sheriff also provides security in City Hall courtrooms, bench warrant hearings at CFCF. Also the Northeast parking lot, where our transportation fleet is stored. This also now provides security for Administrative Adjudication, which is a branch of the Philadelphia Parking Authority on Filbert Street. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET main filing desk, Real Estate, Judicial Sales Unit, Civil Enforcement, and our executive offices. These offices hold free monthly seminars as a public service effort to assist those who desire to purchase homes at sheriff's sale. Also, this office collects and stores firearms pursuant to protection- from-abuse orders and houses the Post- Judicial Unit, which assists homeowners who may have proceeds left over from the loss of their homes at sheriff's sale. The City is entering into a second year of a residential mortgage foreclosure diversion pilot program. As you and members of City Council are aware, this program was a pilot program for homeowners facing foreclosure. As a result, it became still and serves as a model across the United States, which started right here in Philadelphia. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET numbers as a solution to this mortgage foreclosure crisis. In most cases, they are afforded little -- a little how are time and the opportunity to save their holes. Two measurements that we look at with regard to mortgage foreclosure are the number of homes scheduled and the percentage of homes that were stayed. In 2009, we saw a slight decrease in the number of homes scheduled for foreclosure. It is too early for us to have a definite picture of percentage of homes stayed in 2009 because the sales of 6 percent of the homes scheduled in 2009 have been postponed to a future date. However, in the best-case scenario, all of the homes that were postponed from 2009 being stayed, we would still be about 8 percent below the previous calendar year. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET 2008 were 8,575, while the number of homes scheduled in 2009 dropped to 7,956. 2 percent drop in the number of homes scheduled. S. homes entering foreclosure has risen from about 35 percent in the first quarter of the year, in comparison to the same period a year ago. The Sheriff's Office still faces significant challenge as a result of the budget cuts, which, we realize, are a direct result of the economic result but still remains. The workload of the Real Estate Judicial Unit, which saw a drastic increase in its work last year, still exists because the City's budget crisis and the Sheriff's Office has an existing hiring freeze. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET Unit of the Sheriff's Office still remains short-staffed and carries out its duties with a minimal staff of sheriff's deputies. In conclusion, the Sheriff's Office continues to meet our responsibilities with fewer employees and with an increase in workload. Our budget allows for 243 employees. However, we currently have 232 in our employ, thus causing the shortage in crucial areas; for example: the Courts, Real Estate, Civil and Warrant Units.
In the physical [sic] year 2009, the Sheriff's Office generated over $70 million through sales of real property, fee-generated services. Of that, $7,929,688 in fees, commissions, and interest was distributed to the City. This number amounted to 50 percent of our physical [sic] budget appropriation. The remaining balance went to satisfy judgment on properties via all sheriff's sales. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET Madam President, our appropriation for this year's budget is $13,888,657. We believe this amount to be adequate to fund our operation for the upcoming physical [sic] year. I would like to introduce, if I may, the people that are with me today. To my left is our finance director, Tyrone Bynum.
Good morning. DEP. SHERIFF DEELEY: To my right, as you all know, is Miss Connie Little, our under-sheriff. Also our inspector is here, who can answer any criminal questions that you have, Mark Stipa. And Miss Catherine Hicks, our executive assistant. And Ed Chew, our attorney.
Good morning. What is the amount of money budgeted for overtime in your office? 28 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET
It seems like an awful lot of money for overtime. Can you elaborate on that, please? DEP. SHERIFF DEELEY: Well, there's more judges and there's more court proceedings going on. We have to have the deputies in the courtroom with the judges. And we, unfortunately, cannot dictate to the judges -- the courts dictate to us -- how long they're going to be sitting on the bench. And unfortunately, this is --
Barbara, how many are there after 5 o'clock? DEP. SHERIFF DEELEY: How many are there after 5 o'clock?
How many courts in session? Isn't that where over the would come in? DEP. SHERIFF DEELEY: Yes. 29 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET
How many courts are in session after o'clock? 5 DEP. SHERIFF DEELEY: Inspector? INSPECTOR STIPA: Good morning, Madam President.
Good morning. INSPECTOR STIPA: They have six to eight courtrooms at work after 5 o'clock at the CJC. DEP. SHERIFF DEELEY: Traffic Court? INSPECTOR STIPA: They also have Traffic Court working. DEP. SHERIFF DEELEY: And they have Night Court; Traffic Court does have Night Court. INSPECTOR STIPA: And we also have Night Court at the Criminal Justice Center. We also supply security for the courtrooms at 1801 Vine and the Family Court at 34 South 11th Street. So just alone at the Criminal 30 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET Justice Center would probably be eight courts alone working. And you have to add the additional courtrooms from Juvenile, Traffic, and Family.
So you cover Traffic Court too? INSPECTOR STIPA: Yes. DEP. SHERIFF DEELEY: Yes. And we now also do security for Administrative Adjudication down on Filbert Street.
Okay. Any questions from members of Council? (No response.)
Is there something you wanted to add? INSPECTOR STIPA: Madam President, concerning overtime for the Sheriff's Office, it usually takes us a 12-hour day to satisfy an 8-hour court day because of the fact that it takes us two hours to bring the prisoners into the Criminal Justice Center to satisfy the 31 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET courts, and it also takes us a couple of hours, after the court's closed, to return the prisoners back to their particular institutions. So it's transportation of prisoners; I wanted to add onto that, also.
Thank you. DEP. SHERIFF DEELEY: Council President and Council, thank you very much.
Okay. We will now hear from the City Commissioners Office. Mr. Lee, is the Commissioner coming up? (Witness comes forward.)
Good morning. Is Commissioner Tartaglione coming up? 32 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET
Okay. Please identify yourself for the record and proceed with your testimony.
My name's Robert Lee. I'm the Voter Registration Administrator for the City Commissioners. We're here to present our budget testimony. We had prepared a budget request and sent it to Finance, and the budget request was prepared. I'm not going to read it word-for-word, if you don't mind. Is that --
We'll give a copy to the stenographer and it will be transcribed in full, so you can abbreviate your testimony.
Yeah. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET ground zero. I took exports from Finance from all of our expenditures '08 and '09 and tried to see which of those expenditures would be recurring on an annual basis and which ones were special in nature, where they only occur every so often. And we prepared that budget to try to give a realistic portrayal of what it would cause us to conduct the elections in FY '11. That was submitted to Finance, detailed. And, lo and behold, when we got done doing that, the numbers that we were presented for our budget for FY '11 were the same numbers that we were told that we were going to get before that. And basically, I'm just going to go through the chart on the front. Class 100, we requested $6,056,410. The Administration's budget is $5,511,210. It's a shortage of about $545,000. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET 100 needs were based upon the current employees that are there, their annual salary. And it was just from ground zero, it added up. So with a shortage of $545,000, there is insufficient funds to meet our payroll through the Fiscal Year of FY '11. And, in fact, we went into default in the last fiscal year, and there had to be an end-of-year transfer of about 323,000 just so that we could meet our payroll. Class 200, Purchase of Services. We had requested $3,025,000; I think that's about 100,000 less than what we had requested the prior year. The Administration came back with $2,741,350; we estimate that's a shortage of about $283,908. And Class 200 is where we pay our poll workers from. 15 million; that's what it's going to run. We've identified just four major expenditures, including the cost for hauling the machines -- I'm on 3, by the way -- the contract technicians for Election Day services, the annual hardware and software maintenance fees that we have on the voting systems, and postage for federally-mandated mailings. Those four major items alone come to $875,000. So the math just doesn't add up. 5 million for poll officials, polling-place rentals, polling-place inspectors, all Election Day activities, interpreters (that's correct), and then you add those four major categories, you're well and above already over what the Administration has allowed for Class 200. That was a problem last fiscal year. We ran short of Class 200 funds. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET funds. That meant that the poll workers who worked the election in May, their check was delayed until July 1. We only had $899,000 in reserve to pay them, so we had to the delay the payment of the poll workers till July 1 so the shortage could be made up out of the next Fiscal Year Budget, out of FY '10. The poll workers right now wait anywhere from four to five weeks to get paid. It's a massive job because we start from scratch and enter it. We all know they're underpaid. Making 'em wait an additional couple of weeks -- and a lot of 'em look forward to getting that check before the July 4th holiday. No 18 matter how small it is, they use it for things. So the Class 200 allocation from the Administration is just not enough to meet just those five major categories of expenditures. Class 300. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET with $491,472. It's a shortage of about $44,890. And in Class 400, our request was actually lower than what the Administration's was. We asked for $38,876; they come back with $50,145, which is $11,269 more than we asked for. And because of 3 or 400, if you combine the two, you can use the 400 in 300. We're going to wind up with a combined Class 3 of 400 shortage of about $34,000. This is an ongoing annual issue with the department, with our department. It seems that the budget is always underfunded. And it consistently, year after year, requires either midyear or end-of-year transfers or going into default or holding off paying the poll workers. These costs are pretty much hardcore. We've done everything we can to control overtime.
10 - COMMITTEE OF THE WHOLE - 2011 BUDGET staff on overtime until a week before the deadline to register. On both the primary and the general we held off. We try to control whatever we can control. But as I said last year, we're still actually filing paper applications from the '08 general election, where we had 300,000. We finally got that number down to about 50,000. And that's what we do; we concentrate on the computer so people can vote. They're in the poll book, they're on the street list. And then we go back and do the paper filing later. But alphabetizing 300,000 pieces of paper and filing it in cabinets takes quite a bit of work. And we use the temps to supplement us on the alphabetizing and the (indiscernible) filing. But it seems to be an ongoing problem. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET budget and then just keep throwing midyear or end-of-year transfers, that's why a lot of times, when we're asked to prepare a budget, we figure why, why? I spent seven weeks putting this thing together and came back with the same amount of money they told me we were going to get before I started. I got to spend my time doing other things. That's basically it. There are a couple of contingency items in this budget. There is a lawsuit out to increase the poll worker pay. We're being -- or the City's being sued, and they want the poll workers to be paid. I believe -- I guess it's the 21st Century Act or the hundred percent -- 50 percent of the minimum wage. That suit is still in litigation; there's been no decision on it. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET year. There is also a lawsuit in the Commonwealth that's -- they're individuals that think we ought to use paper ballots.
There are individuals who do not believe in electronic voting systems, and they believe we ought to be using paper-based systems. And if they should prevail, and my hope is that they never will prevail, but if they should prevail, it would cost the City millions to replace its voting system. But there's no -- there is no -- (indiscernible) when that litigation may be settled.
Thank you, Madam President. First, briefly, I was going to 41 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET ask about those contingencies 'cause I saw them in the budget. I had heard about the one with the paper ballots. I mean, is there must thought that that could be successful? I mean, is the general -- 'cause has it really been proven that there's been real problems with this (indiscernible)?
I remember you had the one year a few years ago where there were some issues but, you know...
And there was a problem in South Carolina that was cured within six months, but they did have a special run of elections for a -- I think it was in Savannah for a council seat. After we purchased it -- there was one problem in Kentucky, where the 42 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET sheriff lost and he burned the polling place down but he forgot the votes were in the cartridge, so he still lost and then he went to jail.
Yeah. No, ours are much more calmer than that and much more honest than people actually know. There was a problem in Berks County, where they made demo cartridges and used 'em on Election Day. And they should never do that, because when you make a cartridge for demonstration, when you shut the power off, it resets and clears the votes out of the table. The company had a solution for that within about three weeks, and it was tested by the Commonwealth within six weeks, and we tested it here. So now that if you get -- we've never had a 43 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET problem where we made a demo cartridge. It's human error. It's just a matter of setting the system right when you're copying a ballot to a cartridge. And then there was one in Columbus, Ohio. So these machines have been on the street probably since about '82, '83. And don't have an operating system. They're very good and very reliable.
The biggest problem we had was the printers in '06, where that was operator error. We went and did hundred hundreds of tests.
They were too tight or something, from what I remember?
There were two issues. There -- your paper roll is on a spool, and hanging from that is a weight; it's called a counterweight. And that counterweight hanging down swinging keeps that paper tight. 44 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET And one of the operators at the warehouse -- so your counterweight must be in the down position when you shut the door and seal the machine. Unfortunately, one of the operator there thought it was supposed to be in the up position. And when it's in up position, there's no tightness on the paper roll. You press (indiscernible), the paper comes out the (indiscernible) window or it jams up inside.
We haven't had issues since, but it was pure human error. But the machines are solid.
You know, we got away from paper decades ago because of what you can do to paper.
I mean, it can be altered, lost, burned, thrown in the river, switched. And you don't have that 45 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET issue with these machines.
Right, right. And on the other lawsuit, which I was not aware of, is that something recent, this --
I went to a deposition probably about five months ago or so. It's within the past year, I guess.
Again, have there been any sort of prospects? What's the prospect of that --
I haven't heard from the Law Department all in the last four months, so I don't know what the current status is.
'Cause that would be a lot of money if that was successful. And, again, I think those folks, in a perfect world, should be paid more money, but that's a lot of -- that would be a big difference. 46 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET
Well, they're paid more money in most jurisdictions outside of Pennsylvania. In Pennsylvania, we're probably on a par with the other counties.
-- they get paid more money. We did not put a request in for funding for a raise this year. I believe last year we did put in a request to give us an additional $1.7 million to increase a poll worker pay up to the limits allowed by state law, which would be $200. We were thinking of kind of breaking it and having a little bit different -- maybe 180 and an extra 20 for training to try to entice more people 47 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET and keep 'em a little longer. But we didn't put that request in this year because of the City's condition and the fact that we're short just on the basic needs that we need to run an election.
You're welcome. The Chair recognizes Councilman Kelly.
Thank you. Thank you, Madam President. Good morning, Bob.
I just wanted to know, how much is budgeted for these temps, for your temporary --
In FY '11, we dropped the amount; the reason being is that there were some employees that were really in like an apprenticeship or some 48 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET kind of permanent status, who were actually paid as a temp, the way it works. And they've now moved from temp status up to permanent status. So they're there. So you'll see a decrease in FY '11 money for temps by a couple hundred thousand. But then, also, there's got to be a like increase on the permanent side.
How long do you use the temps? In other words, is it two months before each election?
No. They're hired for ninety days, and most of 'em do come in about two months before, and they're done thirty days after. But we do get temps during the other periods of time, and we use 'em. We use 'em basically, like I said, in preparing a lot of paperwork, the paper filing that has to be done.
How does the motor voter enter into this thing? Does 49 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET it decrease the amount of work? 'cause it's all electronic, I would assume.
Well, you know, every time somebody gives you a computer and they say, "This is going to make it easier for you and make it quicker," it's always more work. If you remember -- and I'll give you an example. When Motorola came in, we decided we had to image our records. And we set up own county system there. IBM put in a million dollars. We designed it and they built it so that when you wanted to check petitions, you come down and give us a name and address on the screen, and we bring up a full image of the record, with the signature. In the old days, you had to take the petition and code it by word and division (inaudible). You would go there, get the binders, sit there and pull the binder and out look at the paper record. So in the old days, the 50 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET challenges that we got to petitions was low because there was a lot of work. I mean, I still remember Harry Janotti sitting in there for hours on end, hours on end, coding lines on petitions, checking every little detail, and our people bringing him binders. Well, that's gone because you just sit at a terminal, our operators bring it up, and it's there. But everybody knows how easy it is. So now they all come down and they want to challenge somebody. We've had 28 challenges in Commonwealth Court in this election for state candidates in Philadelphia, and we had 312 challenges against committee people petitions, which is low, because in '06, we had 410 challenges against committee people. So when tell you they're going to give you computers and it's going to make your job easier, it makes it easier to do your job but it also brings on additional demand. 51 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET
Okay. How about your poll -- the people that are employed for Election Day? Where are they budgeted, in Class 100 or 200?
Yeah. We have a few casuals we bring in for the weekend before and on Election Day only. And usually these are people that we bring back every year. We staff 'em on phones 'cause they know what they're doing. Some of them are retired employees from our department; we have three or four that come back, which is good for us. There are others that are polling-place inspectors; they're paid $50. They go to anywhere between 13 or 26 polling places in the morning and make sure everything is up and running.
I see. Now, the Administration, of course, has requested $283,000 cut in 52 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET your budget for -- and this would affect the amount of people that you can employ for Election Day?
No. We'd still have to put the people out on the streets. We have to have an election.
The repercussions of not having an election -- (Indiscernible; parties talking over each other.)
Well, like I said, last year, the way they made it up, is they gave us -- I believe it was an end-of-year transfer of $223,000 in Class 100. And the way they worked the 200 was, they just deferred paying the poll workers until July so we can use the balance --
Of the following year. 53 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET
The balance of the money for the following fiscal year. The checks were printed they're in envelopes; they just held 'em and didn't mail 'em until July 1. They were probably dated July 1, though.
Okay. So what they're doing is -- I understand. All right. Thank you. Thank you, Madam President.
You're welcome. The Chair recognizes Councilwoman Krajewski.
Thank you, Madam Chairwoman. I would just like to compliment the City Commissioners on a job well done. I have several divisions in the 65th Ward that we can no longer vote at. And with the help that the City Commissioner has given me, I just want to thank them, and under the conditions that they have -- 54 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET And I'd like to add too: I have a tough time -- I don't know whether any other ward leaders have it or committee people -- trying to find workers on Election Day to work for that amount of money. So I'd just like to compliment and thank you.
Yeah. Well, most of the poll workers we do get -- thank God, we have a good, strong party structure in a lot of the City, and it's the party people that help us get the poll workers; or the poll workers themselves, through their families and neighbors. And it's a good thing, because if we had to spend taxpayer money to recruit these people, it would cost even more money. I went to Columbus, Ohio, and they had two people hired there full-time, year-round, and all's they did was recruit poll workers; that was their only job. 55 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET And we don't have to do that here because we get support from the parties and the poll workers themselves. So probably it's another major issue, but fortunately, we have outside grant funding for it, is polling place accessibility. I mean, we were sued by the Justice Department and private plaintiffs, and we have very little wiggle room. We were able to sign a settlement agreement with them that completely forgets parking altogether, which fortunately happens because nothing would be accessible if we had to go by every place having designated van parking, and we wouldn't even make anything. And so, we have HAVA Grant Funds that come from the State. And a lot of it's geared specifically for accessibility. We bought portable aluminum ramps. We just spent $31,300 to buy 10,000 orange doorstops. 56 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET
Doorstops, because the Justice Department -- there's criteria to meet their standards for the weight of a door and door hardware. And if you don't have accessible door hardware or the door weight -- we have to measure the pressure of opening the door now. And if it doesn't meet, the solution is to replace the door with automatic doors or have the poll workers prop the doors open. Our argument with them was, if you go to polling places in Philadelphia, there's usually five, six, seven people outside pushing candidates, and our people are polite enough to open the door for the voters. That didn't meet their standards, so we went and purchased 10,000 doorstops. Hopefully, we'll get 'em all back. 57 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET We had (indiscernible) thresholds, we bought portable aluminum ramps. We're working with the City capital plans and the Recreation Department to upgrade rec centers at a 8 cost of 581,000 in federal grant money. 9 We met with the City personnel 10 again, and we gave 'em another list of 11 about 30 City facilities, where we either 12 want them to change the doors, change the 13 hardware, build ramps. And that would 14 all be federally funded; we have the 15 money allocated for that. So wherever we could, we -- and wherever we were permitted to by the agreements, we have supplemented our needs through the use of HAVA Grant Funds. I'll also remind you that it was those grant funds that we were able to give the City a reimbursement of $10,066,000 from our original purchase of the machine. And in here, you'll see -- 58 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET in our budget, you'll see for FY '11, there's a payment for Class 100 in the Grant Funds; it's about 2.8 million. That's our estimate of additional funds that we will be able to send to the City as a reimbursement for the original purchase of the machines back in 2001. So that came about through one reason: There was a Congress hearing here in Council back in April of '01. And we signed a contract for our machines in March of '01. So we already spent the money. But Chairwoman Tartaglione recommended to Congress that if they enact any law, that it includes federal funding, that since Florida caused it, the funding should be retroactive to November of 2000. So that's how we qualified to get a lot of this money; they listened.
I would like to echo the compliments of Councilwoman Krajewski. 59 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET And as you were testifying, I thought to myself, Somebody looking in thinks your job is very easy. They don't realize all of the technical obstacles that you have to face, excluding the money portion. It's the first time I heard about doorstoppers.
We had to get mats. The Justice Department said, "You need to get mats to throw over any threshold that's over a half-inch." So I said, "Well, what are you talking about, a mat?" I'm used to the threshold wedges and this kind of thing; they're $150 each. So, fortunately, they sent us a link to Home Depot, where it's a simple welcome mat that was 10.97. But in order to get it, we couldn't even buy it. We were running around, trying to figure out 60 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET a way to buy it. I wound up ordering it online, paying for it, and getting reimbursed for it with petty cash. So for 10.97, we're going to solve some thresholds in the City instead of -- you wouldn't know what we got to go through.
Oh, my. Bob, let me just ask: You have met with the Administration regarding the needs? And what has their reply been?
Well, we met with them last fiscal year, and the needs were probably about the same then, the shortage was probably about the same then, although we've tried to control some of the costs in this fiscal year to keep it down. I was told to send over a budget, and I did. And I asked for a budget analyst. I said, "Are you sure they saw it this time?" So I don't get here --
But 61 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET you never contacted anyone in the Administration?
I never contacted anyone, and I was never contacted, no. 6 I did tell our budget analyst, I said, "You understand, this is the same predicament as prior fiscal years." The one fiscal year where you made arrangements for us to meet with Steve Agostini, they did, fortunately, allow us to hire those ten additional people. And it came at a very critical time, and that was August of '08. I mean, that was a historic year for us processing work. And we didn't finish our work until October 28th; I mean days before the election. When we cut our poll book tapes we had 40,000 records still to enter. So the poll books were short 40,000 records. We entered the rest right after -- we finished October 28th, and those people were on the supplemental poll book pages. 62 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET Fortunately, we can do that because we would have never been able to make it; we would have wound up with 60, 70,000 provisional ballots. But it was through the addition of those ten extra people who came in August and September that we were able to get 'em on the system. And that helped.
What would your priority be? Would it be for personal services or purchases of services, equipment? What would your priority be?
I don't know if I could pick a priority between 'em. I mean, there's people employed that are employed there -- we're at a level now where we have maybe four or five vacancies that are not filled, but we're at a level now where I'm comfortable that when we do a major election and when we 63 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET go into next year's county and city elections and we follow the following year do a presidential election that we should have sufficient people to be able to do this job, without having any problems or issues or litigation -- although they sue you for any reason anyway, no matter how you good you do it. So I think the Class 100 -- you can't hire people if you're not going to pay them; you can't keep 'em on the payroll if you're not going to pay them. And the Class 200, you can't really say that's not a priority, either, because you have to pay your poll officials. And A lot of these costs are hardcore costs. I looked at exports of them budgets, and there's very little wiggle room in there. It's all for forms, printing, poll books, street lists; it's everything you use. And all of our purchases are made through the City's normal 64 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET procurement process. I mean, we just don't go out and buy stuff; we go out and put it out on bid. So, I mean, we're regulated just like any other City department as to what we can buy and how we buy it. So I -- we tried to work out where we could with those 3 and 400, where we could. And basically -- I see it as a realistic portrayal of what it's going to cost. It may come in under. I don't think it will go higher, fortunately, I hope, you know.
Thank you. The Chair recognizes Councilman Kelly.
Thank you, Madam President. Now, I just want to know: Has there ever been any discussion about cutting the hours of operation on Election Day? 65 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET
Because I agree with Councilwoman Krajewski, what she said. It's very difficult sometimes to find people who are going to sit in those polling locations for 12, hours 8 a day and be paid the little amount that 9 they do receive. 10 And I just want to know, is 11 there any -- I don't know. It's probably 12 state law or federal law. 13
State law mandates 14 what time the polls are open in Pennsylvania.
Has there ever been any discussion with state legislators or anything?
I don't know of any proposed legislation to decrease the time the polls are open. There has been legislation for early voting, but I don't think that does anything for anybody; it just takes people that normally would vote Election Day and let 'em vote two 66 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET weeks earlier on the machine. And that would be an extraordinary cost to the City also. So fortunately, that hasn't passed. But I don't know of anything shortening the hours. And I really don't think you can really shorten the hours of voting. You get into major elections where -- I mean, the only general we had -- that's the highest turnout we had in about 25, 28 years. Some places people had to wait before work and after work. We try to size our polling place and our divisions the right size so that people aren't put in long lines because that's usually what leads to -- that's the primary cause for disfranchisement.
And if more people use absentee ballots, that would also increase the cost of your operation; isn't that true? 67 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET
It wouldn't decrease it because we still have to pay for the Election Day operations.
You're welcome. I'm just curious. If the machine is already set up and there's reason to lock a key for any purpose, how much time do the City Commissioners need?
We bought this machine because it was similar to the lever machines, full face.
And it had a paper ballot. The other ones had paper strips. 68 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET There's no levers to lock. And we can't -- the problem is, it's a database, so you've got to enter all of the names, proof 'em. You got to cross-test everything on the machine to make sure all the buttons are working. And we do that with every machine. So if you had to take somebody off, what we do is, when we get an order from the court removing a name, we'll leave the name in the database until we see if they appeal. And if they don't appeal, then, rather than take it off at the last minute -- or if they lose an appeal, we place a sticker over the top of the voting position, both the name and the number. That position's still active. You can still push the button to light a light, and it will record that somebody voted for a blank position. But we place -- that's our equivalent of locking the lever or 69 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET pulling the lever off.
Yeah. Because the issue is, once you take somebody out of the system and you've gone through all of your testing, if it's a citywide candidate and you were to actually remove' em and then you get an appeal saying to put 'em back on, it would be impossible. It would be virtually impossible. We're actually running a little bit behind right now. Our people are still doing their ballot split test because of all the committeemen and the audio ballot that we have to have do. So we do it similar to locking a lever. Because it's on paper, we put a label over their name.
And that happened with -- in the Nader case, when we took Nader off at the last minute. That case 70 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET didn't get over till days before the election, right before we were ready to ship the machines. And we put labels over the top of them. But he still recorded; there was still 61 votes for that position. And the State told us to count 'em as write-ins.
Thank you. All right. This committee will stand in recess until 1 o'clock, at which time we will have the City Controller and the Board of Revision of Taxes. (Lunch break taken at 12:10 p.m.) (Proceedings resume at 1:30 p.m.)
This is a continued public hearing of the Committee of the Whole. 71 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET We will now hear from the City Controller. Please approach the witness table. (Witnesses come forward.)
Please identify yourself for the record and proceed with your testimony. CONTROLLER BUTKOVITZ: Good afternoon, Madam President --
Good afternoon. CONTROLLER BUTKOVITZ: -- and members of Council. I am City Controller Alan Butkovitz, and I'm here to testify today on the City Controller's Fiscal Year Operating Budget. I am joined by Deputy City Controllers Harvey Rice, Albert Scaperatto and John Thomas, as well as our Administrative Services Director, Andrea Rose. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET opportunities like these: to work with members of City Council, under the dedicated leadership of Council President Anna Verna. The Mayor's proposed Fiscal Year 2011 Operating Budget for the City Controller's Office includes a General Fund appropriation of $7,291,566. This is almost a $1 million reduction from our Fiscal Year 2008 Operating Budget of $8,254,796. When we were hit with the consequences of the global financial crisis in October of 2008, I voluntarily reduced my office's budget by 5 percent; I also took a voluntary 5 percent cut in my own salary. Then, again, in Fiscal Year 2010, my office took another 5 percent cut, including a 5 percent cut in pay for all of my exempt employees making more than $50,000, along with a five-day furlough for all exempt employees. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET additional $637,757 just to maintain our existing workforce because of built-in costs and increases associated with our current employees. Such costs include anticipated lump-sum retirement payments, increments in longevity, scheduled promotions, necessary overtime, as well as reinstatement of our Class 300 and 400 monies, which we cut from last year's budget. I again would like to publicly thank my employees for their willingness to sacrifice and do their part to help our city. They are to be commended for their commitment, but I feel it would be unfair to ask them to make the same sacrifice for another year. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET deadlines related to the American Recovery and Reinvestment Act monies imposed on us for completing both the City and School District CAFRA audits and related Single Audits. We are currently operating with twenty fewer positions than we had three years ago; these are positions vital to our ability to continue functioning at maximum efficiency. Our office is constantly receiving requests to meet tighter deadlines, fulfilling departmental requests for contract and other audits, and an increased workload on the CAFRA audits because of the staff shortages in the Finance Department. Next week, I will be back before this esteemed body seeking a transfer of $120,000 to our Fiscal Year 2010 budget so that we can complete the Single Audit by the end of July 2010. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET funding, the extension for this year was not granted. By not completing this audit on time, millions of dollars in federal funds would be at stake for the City. Therefore, the additional $637,000, which we requested over the Budget Office's appropriation recommendation, will not be sufficient to meet the increased demands and timelines for our services. I respectfully request an additional $220,000 over and above the $637,000 so that we may hire just six of the twelve auditors that our department has been operating without for the past three years. Even with this increase, we will still be operating with 14 fewer positions. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET grant audit and an opinion on the City's five-year forecasted statements. We made 238 new recommendations to safeguard assets, enhance financial management, strengthen internal accounting controls, and improve operating economies and efficiencies. 4 billion and other compliance deficiencies, cost reductions, and increased revenues totaling over $4 million. We also completed a number of performance audits this past year. The NTI review provided City Council and the Administration with the first comprehensive reporting of NTI property acquisition expenditures since the inception of the program in 2001.
The review revealed accounting, reporting, funding, and oversight issues that need to be addressed before any additional funds are spent on the program. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET Revenue billing systems (basis2), which was awarded the Silver Knighton Award by the Association of Local Government Auditors, our fifth consecutive Knighton Award. The judges stated that the report clearly presented weaknesses in the system's billing, adjustment, enforcement, and financial reporting functions. These weaknesses have contributed to poor collections and decreased revenues. Our review of the Revenue Department's tax enforcement actions resulted in Councilwoman Krajewski's introduction of the Tax Amnesty Ordinance, which, after being embraced by all of City Council, is set to begin in 14 days. Finally, our departmental audits continue to identify poor controls over the administration of financial resources and offer recommendations to reduce the opportunity for fraud and irregularities. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET report on prior-year findings until corrections or recommended changes are made by the Administration. Our Preaudit Unit provided oversight for more than 125 capital projects totaling more than $250 million. Our inspections resulted in cost savings to the City in the form of credits for work not performed and over-billings. In one case, we performed a contract-compliance audit on a construction company and found they had overcharged the City $128,000 for services that were never performed, including charges for employees who never showed up for work at the designated jobsites. I am pleased to report that this was settled for $85,000, with a check for $25,000 for the first installment already received by the City last Friday. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET Commercial Corridors Grants, and conducted a review of design errors for the expansion of Terminals D and E at the Philadelphia International Airport. This resulted in the City hiring a claims consultant to conduct detailed reviews for all change orders. 5 million in payments and generating over $400,000 in past-due taxes. And lastly, but definitely not least, my Preaudit Unit is to be commended for their work in exposing and eradicating barriers to minority contractors getting full access to City work. Their comprehensive report helped persuade the Administration to intensify its efforts to increase participation by minority- and women-owned businesses in City contracts, especially those contracts resulting from the American Recovery and Reinvestment Act (ARRA) funding. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET Our Fraud Unit investigated more than 100 residency cases as well as the misuse of City equipment, timekeeping, and tax avoidance. " 11 Some of the findings uncovered 12 in our report included schools which had 13 leasing agreements with related organizations for which their only source of income was rental payments; related party transactions involving construction and maintenance contracts between spouses and relatives; employees with non- teaching positions who received retirement benefits from the State's employee retirement system; and, as many of you have heard from news reports, the discovery that one school was operating a nightclub serving alcohol on weekends. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET been the basis for many of the provisions that Senator Piccola, Chair of the State Education Committee, is offering in his charter-school reform legislation. The Fraud Unit also completed a review of private towing operations in the City, and an assessment of the Office of Administrative Review, which found almost $54 million in money owed the City for a variety of services.
This unit has generated over $1 million in tax revenues and savings during 2009, including the discovery of a beer distributor that was operating without a business license and now owes the City $128,508 in back taxes, and other investigations uncovering $295,441 in real-estate taxes owed due to improper underassessments by the BRT. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET accounts at local banks. This past year, we instituted the first-ever employee tax withholding program and are currently deducting payments from an estimated 400 employees for back taxes, having collected $266,000 so far, with a projection of having 60 percent of the employees all paid up by the end of the year -- this year. We also instituted a yearly review of monies owed the City for police services. Within hours of releasing a report detailing over $4 million that was owed for police services, companies began contacting the City to make arrangements to settle their outstanding balances. Although I am proud of all of these accomplishments, the loss of these positions has impacted our ability to continue completing all of our Charter-mandated audits in a timely manner. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET contract compliance review requests from City departments. One of our major auditing responsibilities each year is the comprehensive Single Audit of the City and School District's federal and state grant-funded programs. The Single Audit process remained essentially unchanged for years, until the enactment of ARRA, which has resulted in increased accountability provisions and significant audit challenges for us in the upcoming Fiscal Year 2011. In the coming year, the goal from my office will be to continue identifying as much waste, fraud, and inefficiencies in City government as possible in order to save taxpayers money. We will be implementing a new pilot review on departmental processes for managing performance efficiencies and savings. This is called Savings and Accountability to Valuate Efficiencies (SAVE). 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET extension of the annual departmental audits, beginning with the current fiscal year that starts on July 1, 2010. It's aimed at uncovering new, creative ways for City departments to reduce costs and become more efficient by expanding the current departmental audit process to include performance audit measures. As City Controller, I will continue working on issues and solutions to make Philadelphia a better place to live, work, and raise a family. During these difficult financial times, I will continue to seek out more revenues that are owed the City and identify more performance and management efficiencies in City government so we can identify savings, reduce costs, and have the revenue for necessary City services. I appreciate this opportunity to present testimony, and I thank Madam President and the members of Council for your time and consideration. 10 - COMMITTEE OF THE WHOLE - 2011 BUDGET year. My staff and I will be happy to answer any questions you may have.
Thank you very much. You testified that you're requesting an additional $220,000 over and above the $637,000. Have you discussed this with the Administration? CONTROLLER BUTKOVITZ: The $637,000 we did, and we didn't get relief with them on that. The 220, we have not. Although we had an agreement -- that 120,000 that we're talking about is a related issue. I think it was two weeks ago that the federal government notified us that they were not granting an extension for the Single Audit, and that caused a deep concern on the part of the Administration because there are, I believe, hundreds of millions of dollars at stake on that. We have similarly heard from 86 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET the School District that the signals that they're getting from Washington is that there will probably not be an extension of the deadline. So ordinarily, it would take us an additional -- probably an additional eight months to complete it. Now, we are being told by Washington they want it done yesterday -- or, for all practical intents and purposes, by July. The Mayor and the Finance Director acknowledged the necessity of it in their agreement to the $120,000 transfer. So the $220,000 is really an extension of that general principle. So I would hope and expect that we would get their agreement on that.
Thank you. The Chair recognizes Councilman Jones.
Thank you, Madam President. Mr. Butkovitz, in basketball, 87 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET when somebody scores a point and someone gives 'em a alley oop, we give you a high five as credit for helping us make the basket, but the freshmen put in a recommendation, efficiencies that would result in cost-savings. One of them was to do electronic cash -- or electronic transfer of funds from places like the State and the federal government. To that end, there has been a bill introduced to actually bring that into being. And we are thankful because one of the things in audits that you did brought major attention to it, and that was the finding of funds that were, for a year, federal checks not being cashed and all of the interest that was lost as a result of that. So you get a high five from the freshmen for that assist. CONTROLLER BUTKOVITZ: I appreciate that.
In that 88 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET concert, along those lines, if you could quantify monetarily the efficiency recommendations. How many out of the percentage -- if you had a hundred efficiency recommendations, how many of them are actually followed by the respective departments; what percentage? CONTROLLER BUTKOVITZ: I don't know. We can't really do that right now. I'll tell you that as -- over time, we are approaching a 95 percent compliance rate with the recommendations, which is what our goal was. It's what Kansas City and other leading cities accomplished. And I will also say that the Council has been very aggressive this year. The freshmen and actually the entire Council have been very aggressive in identifying specific ideas for savings and efficiencies.
Just to the upper classmen, it takes nine votes to do anything. 89 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET CONTROLLER BUTKOVITZ: Yes. I think --
We don't want them. CONTROLLER BUTKOVITZ: -- even the senior Councilmembers have made a significant contribution. And we have been paying very close attention to the hearings on TV. One of the reasons for the Safe Initiative, it actually segués off of Councilman Green and your questioning of Administration witnesses, 'cause we think it as has not been a systemic, internalized process of actually looking for savings. So, they come in here and they give you a gross idea about either there's a set percentage that they're going to cut off this year, 'cause they only have so much money, and it's done in a very blunt way. And we have watched witness after witness come in, and I think City 90 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET Councilman Green got really a non-response to that kind of prodding. And I think that's the -- those are the things that you're identifying as "the freshmen initiatives." So the thought was that we could incorporate the question into the annual departmental reviews by putting the departments on notice that they will be reviewed on that basis by us, on an annual basis. Not that we are imposing specific savings ideas on them, but that they should be, as part of their planning process, presenting ideas about how they're going to do it for less and how they're getting to do it as well for less.
In your responsibilities, do you -- I saw your audits and findings on the charter schools. Do you have a equal responsibility to do the public schools? Or do you, by a manner of practice, look at the public school administration 91 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET similarly? CONTROLLER BUTKOVITZ: Well, actually, that was a review of the public schools, because the -- under the state chart law, the sole power to look at the charter schools has been granted to the Philadelphia School District, and the Philadelphia School District hasn't been doing it. So all of that detailed information about the charter schools 13 that were reviewed was actually an appendix or exhibits in support of the major finding of that report, which is that there is no oversight of the charter schools by the School District.
I guess one of the things that I asked by way of regular public school and a charter school, if you had to generalize, how do they stack up, one to the other, by way of straight and efficiencies? If you had to generalize. CONTROLLER BUTKOVITZ: Well, I 92 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET mean, the truth is, I think they're all over the place; there's a range of responses. But it's certainly true that many of the charter schools have excelled and acceded what could be achieved for parents and students in public schools. And that's why I'm a strong supporter of the idea of charter schools. And you'll notice that in our -- I mean, in our report, we didn't purport to make any judgments on the academic capacity of those schools 'cause it's really not a part of our competence; that's something for the Education Department and the education experts to judge. And we don't pick winners or losers or friends or enemies. I mean, we think our responsibility is to test everything in the City and the schools at one time other another. If we haven't -- if we haven't angered everybody at one time or another, then we're really not 93 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET doing our job.
That's a good point. CONTROLLER BUTKOVITZ: So -- but it's not punitive, and it should not be interpreted -- certainly there will be people in the debate who will use it as ammunition against charter schools, just as people use things as ammunition against public schools, et cetera, et cetera. But the real point of that is, first of all, there was a change in the law, and there were specific things that were prohibited under state law, which, apparently, in practice, are still occurring. Of greater alarm is the fact that there's no systemized way for the School District to know whether that's happening or not. And I would say that the Council and the people in City government have recognized for the last three or 94 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET four years the importance of demonstrating accountability on their part. You've passed a number of ethics laws, you subject yourselves to all sorts of insults and reviews by the Board of Ethics and by every other entity because there's been a general sense on the part of Council that this will demonstrate to the public that you're all living up to this higher standard, even if it means occasionally getting your wrists slapped. And, certainly, that same kind of accountability has to be applied to charter schools and to everybody who gets public money, because, in the end, the truth comes out anyway. I mean, there's no point in trying to suppress truth. People in the neighborhoods, people in the school, they know what the truth is in terms of violence, in terms of who's being hired in the local school and what's going on. It just breeds cynicism if it's not generally recognized. 95 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET And, you know, I was in the legislature for a long time. I've been a local -- I can tell you I personally was appalled, for example, when the information came out about Philadelphia Academy Charter School because in Northeast Philadelphia, where I used to represent, the appeal and attractiveness of that school and the waiting list and the quality of education was very -- people loved it. And, frankly, people love Brien Gardiner, who was really a genius, and he was a pathfinder; I mean, he created a new frontier. But he also did wrong. And in the end, as a result of that, he gave a tremendous black eye to the entire movement of what he was trying to do. And it was inevitable that that -- if you were going to behave like that, it was inevitable that it was going to come out anyway. So it wouldn't -- it didn't pay to hate the Inquirer for being a 96 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET messenger of disclosing bad news in disclosing what was. What was going to come out. And we think that in the end, by exploring these issues on a continuous basis, we will be doing the same kind of review in various City departments. And as you know, when I came into office, we did this kind of review with the School District under the administration of Paul Vallas. So everybody thinks, when it's their moment under scrutiny, that they're being treated differently than everybody else. But, I mean, we did it with the Fire Department over paramedic services. But one thing that we've always -- you've never heard us grandstanding or calling for anybody's head or trying to use it in a punitive way. I mean, I believe that systems can be improved. I think that, when we find out the way things are, that most people do have a sense of wanting to do the 97 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET right thing and that this enables us to correct serious deficiencies before they get to the point where they are going to be a fatal weight on these organizations.
Well, I remember when I first ran a major organization, the auditor came in and said, "Hi. I'm the auditor and I'm here to help you." And it was almost like being -- going to the dentist's office. You know you have to go; and in the end, if you go through the recommendations, you are in better health because of it and -- CONTROLLER BUTKOVITZ: I had the same reaction with my urologist so -- (Laughter.)
So we understand that your job is -- you're here to help us get to better financial health. And as I look at things that have manifested by way of your recommendations, they have helped us -- 98 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET at least $4 million worth that I can count in this year -- to get to a better place fiscally. And so, thank you for that. CONTROLLER BUTKOVITZ: Thank you.
You're welcome. The Chair recognizes Councilman Green.
Thank you, Madam President. Good afternoon, Mr. Controller. CONTROLLER BUTKOVITZ: Good afternoon.
I really appreciate you saying that you take some of the questions that I and others in City Council ask and make them a part of your auditing process and budget process. Oftentimes, you feel like nobody is listening, and I'm glad to hear you are. 99 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET It actually -- I appreciate it. Just a couple of quick questions. What is the -- I don't think anywhere in here you said the actual number that you're looking for. I know it's -- what's the total appropriation you're looking for? CONTROLLER BUTKOVITZ: Well, I think we're going to have to add three numbers.
Okay. That's fine. We can do that. I just -- CONTROLLER BUTKOVITZ: It's going to be the 7.2 million plus the, uh...
So roughly 8.1. CONTROLLER BUTKOVITZ: It's going to be $8,389,000.
So that's taking you sort of above the FY '08 level that you came down from very generously. 100 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET Can you just briefly describe for us what you will be able to accomplish? I understand what's not getting done, but what you'll be able to accomplish if we were to appropriate this additional money in terms of -- CONTROLLER BUTKOVITZ: Well, to begin with --
-- catching up on departmental audits or what exactly -- do you have an idea of sort of how many additional audits you'll be able to do, what departments will be impacted, what audits will come out as a consequence of these additional resources? CONTROLLER BUTKOVITZ: Well, the most important thing is, we'll be able to get the Single Audits and the KAFRAs done so that we will be in compliance with the federal government requirements. And that's the $220,000 component of that. The $637,000 component really 101 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET just keeps us where we are, because we are at a stage where we have a number of high-level retirements in our office this year, so that it comes out of our budget to pay people for accumulated sick leave and vacation and so on. I think that's an $170,000 item, where I don't get any extra productivity out of them. I happen to be -- when they stop the music on musical chairs, I happen to be standing there when I'm losing high-salaried retirees. And so, I'm going to have to pay all of that money for not getting any work.
And I -- I guess I thought fringe was paid by finance and benefits? CONTROLLER BUTKOVITZ: Well, we have $62,000 in increments, 3600 in longevities, $26,000 to reinstate the exempts for the five furlough days, and 102 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET $3500 on promotions. And so -- and $12,000 for seasonal overtime, $55,000 for regular overtime. We went for long stretches last year without any overtime, and it's impossible to do our mandated functions without overtime forever. What I just described as the retirement payments is $129,600.
No, I appreciate everything you're saying, and I'm not asking you to do it right now. If you could just provide the Chair sort of what return we'd get, what additional work is going to be able to be done by the department as a consequence of providing the million dollars. In other words, take your steady state of what you're able to accomplish now and what additional return you can give us. I thought the DA's testimony was excellent. He asked for additional resources and then basically said, And if 103 4.20.10 - COMMITTEE OF THE WHOLE - 2011 BUDGET you give me these resources, I will save the system overall $7 million. CONTROLLER BUTKOVITZ: Well, I'll give you an -- I mean, our Fraud Unit, which was really developed most recently in a very dramatic way, has just documented a million dollars in savings right there, in revenues just collected.
That's great. And you've documented lots of savings with your various reports and audits that we have for potential, most of which have not been implemented yet. CONTROLLER BUTKOVITZ: Right.