2009 COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING - COMMITTEE OF THE WHOLE OPERATING BUDGET - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, March 30, 2005, 10:35 a.m. BILL NOS. 050001, 050002, 050003, 040789, 040767, 050007, 050008. RESOLUTION NO. 050022 PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN JACK KELLY COUNCILMAN JUAN F. RAMOS COUNCILMAN FRANK RIZZO COUNCILMAN FRANK DiCICCO COUNCILWOMAN JANNIE L. BLACKWELL COUNCILMAN MICHAEL A. NUTTER COUNCILMAN DARRELL L. CLARKE COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN MARIAN B. TASCO COUNCILMAN FRANK RIZZO COUNCILMAN W. WILSON GOODE, JR. - - - V A R A L L O Incorporated Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, PA 19103 215.561.2220 215.567.2670 2010 3/30/05 - Whole - Budget P R O C E E D I N G S - - -
Good morning, Everyone. This is the continued public hearing of the Committee of the Whole regarding Bill Nos. 050001, 050002, 050003, 040789, 040767, 050007, 050008 and Resolution 9 No. 050022. We will now hear from Licenses & Inspections. Good morning. COMMISSIONER SOLVIBILE: Good morning.
Please identify yourself for the record and proceed with your testimony. COMMISSIONER SOLVIBILE: My name is Robert Solvibile, Acting Commissioner of Licensing & Inspections. I have prepared an abbreviated verbal testimony, which I am prepared to give with your consent, Council President.
That would be fine. 2011 3/30/05 - Whole - Budget COMMISSIONER SOLVIBILE: Good morning, Council President Verna and Members of Council. I am Robert D. Solvibile, Senior Acting Commissioner of the Department of Licensing & Inspections. Accompanying me today are key members of the Department's management team. We appreciate the opportunity to present our Fiscal Year '06 operating budget. Fiscal Year '06 operating budget request: The Department of Licensing & Inspections is requesting a total Fiscal Year '06 budget of $64,989,792, of which $28,013,349 is in the City's General Fund and $35,997,641 is in the Grant Revenue Fund and $978,802 is in the Community Development Fund. The General Fund budget represents an increase of $6,735,563 from FY05's estimated obligation, which is primarily due to a proposed $8 million increase in demolition funding restored to L&I, which is offset largely by a $1,093,937 reduction in Class 100. Also note that the Department has added a new Business Regulatory Division to 2012 3/30/05 - Whole - Budget more accurately reflect our organizational structure. While the overall number of positions and budgetary request were not affected, there was a shifting of personnel to the new division. The Fiscal Year '06 request will fund 360 General Fund positions, a decrease of positions when compared to the 10 Fiscal Year '05 filled General Fund position 11 level. The only service impact anticipated is 12 the reduction of the number of clean and seals 13 conducted, from 1,392 clean and seals in 14 Fiscal Year '05 to 1,100 in Fiscal Year '06. 15 L&I will continue to prioritize 16 emergency and public safety concerns, 17 especially those impacting areas around our 18 schools, and will also maximize productivity 19 with current resources. 20 Fiscal Year '05 accomplishments and '06 goals: In Fiscal Year '05 budget testimony, I described several key initiatives for the Department that I am happy to report the Department's achievements. In conjunction with the Fire Department, we have established 2013 3/30/05 - Whole - Budget a Zero Fire Deaths Task Force that is committed to identifying and inspecting housing of the older population in the City. To date, approximately one half of our building trade specialists are fully certified. L&I management also established a new performance measure process that will be adopted in Fiscal Year '06 to better manage resources and ensure greater productivity. In February 2005, fast form permits were made available at L&I's website for credit card purchase. In Fiscal Year '06, the Department will begin imaging building plans to comply with the Uniform Construction Code that requires storage for plans for the life of the building, as well as facilitate other departments' needs. This concludes my abbreviated testimony. I welcome questions at this time.
You mention in your testimony that you have created a new Business Regulatory Division. Can you explain the duties of that division, 2014 3/30/05 - Whole - Budget please? COMMISSIONER SOLVIBILE: Basically the business compliance under Deputy Commissioner Dominic Verdi did not show up in our budget as far as being a division. So we really made that to reflect our current operation as to how we're managed. Basically, as an example, housing inspections were under Neighborhood Services. They're now, in our regular budget and past practices, they're now under Business Regulatory. It's just really to align ourselves the way we actually operate.
You also mention in your testimony that you were cut $1.1 million in your Class 100 budget for FY06. I believe that this represents a reduction of 39 full positions from your FY05 adopted budget. Can you explain where these reductions have occurred and their operational impact? COMMISSIONER SOLVIBILE: The Department has taken the majority of our hits with not filling positions and/or layoffs in 2015 3/30/05 - Whole - Budget our clerical force. We have started to build our LICA system, which is a computerization of the Department. We have completed the foundation of that, where all licenses in the City are now on this new computer system, our dangerous buildings are on this system and our inspectional force. By December of '05 -- this coming summer, by September, the majority of our inspectors, if not all, will have been in the new system, and this system will allow us to process our work faster, better, more intelligently, work smarter. As an example, Council President, if called about a particular address, whoever is called will be able to provide the answer, versus before we would have to go to certain units and certain expertise to get it. So that's basically where we have taken the hit so far.
Well, of the 39 full-time positions, how many of them were from the clerical force? Were most of the people on DROP and went out on DROP? COMMISSIONER SOLVIBILE: A lot 2016 3/30/05 - Whole - Budget of people, Council President, were in DROP. And the clerical force, we started to -- when clerical positions were becoming vacant through the last several years, we started in the Department a Needs Committee, where a manager of a unit would have to come in front of this Committee, which was the Deputy Commissioners, and we would recommend if they should in fact have that replacement. We errored on the side of having positions made into inspectors. So if a clerk left three years ago and the manager couldn't prove the need to have that clerk replaced, we then created an inspector's position within that division. So in the last round of layoffs, I believe we had six clerical positions were eliminated, some managers were eliminated and Clean and Seal people, were the majority of what we eliminated, and people in DROP, people that were going to be leaving that were in DROP that we took off the roles. And also of the 39, Council President, we had vacancies that were not filled yet that we just did not 2017 3/30/05 - Whole - Budget fill.
I know, because I'm looking at what you had in your FY05 budget and I think you were being allotted for 398 positions and in '06, I see it's 360. COMMISSIONER SOLVIBILE: Correct.
And you feel that you can live with that? COMMISSIONER SOLVIBILE: But a lot of the positions still were not filled because of the freeze. So in actual bodies, we did not lose that many that we had to lay off to meet the '05 obligation.
But you feel that you could live with the 360 employees that you're budgeted for? COMMISSIONER SOLVIBILE: I believe, with the computer system we are creating, that we over in past have not touched our inspectors for the last several years. About a year ago -- and I will provide this to Council President and Council -- I 2018 3/30/05 - Whole - Budget asked for the number of people that were in our engineering division, our inspectors, and we're, quite frankly, fronted the way we were ten years ago in that area. We basically took it from other areas throughout the years. As I said, the committee we established was pretty effective for us to control the inspectors being kept at the maximum strength they should be kept at for public safety issues.
On -56 of your detail, you list how you will spend $8 million for demolition. Will you explain for the record what the four line items are and how these funds are to be used, the four line items, if you have the detail book in front of you? COMMISSIONER SOLVIBILE: Okay.
Are professional services Line 250? COMMISSIONER SOLVIBILE: Right. Professional services would basically be the asbestos investigations that must be performed prior to the demolition. Under federal, state 2019 3/30/05 - Whole - Budget and city law, any building that's now demolished must have an asbestos inspection to determine, number one, if there is asbestos and then, two, to oversee the removal of that asbestos. The Line 260 --
Line 260. COMMISSIONER SOLVIBILE: -- repair and maintenance charges is stuccoing of party walls and the barge boards that we now place, which, as I testified about two years ago, we improved the barge board along the roof line; whereas, before, Council President, I'm sure as you've seen in your district, it used to be the bent metal. Now it's professional barge board with wood, and it looks a lot nicer and it preserves the party wall a lot better. That's part of the repair and maintenance on that line. Then obviously the demolitions.
And then we have abatement of nuisances. COMMISSIONER SOLVIBILE: 2020 3/30/05 - Whole - Budget Hazardous chemical removals. Council President, in the professional services part where they identify the asbestos, the abatement of nuisances is the removal of hazardous substance, and some of this money may in fact be able to be used for demolition. We estimate that we'll need this, but it's only an estimate. And if there's like PCBs that are in the building we demolish, that's part of the money that we'll need to have them professionally removed. It's more for the HAZMAT type of activity the Department faces in demolition.
Understood. Very well. Can you tell us how many buildings you anticipate will be demolished in FY06? At the same time, I would like you to give me a cost estimate per demolition. COMMISSIONER SOLVIBILE: Roughly 287 buildings will be demolished, imminently dangerous buildings, and our average demolition will be $22,119 a demolition. 2021 3/30/05 - Whole - Budget
I'm sorry. $22,000? COMMISSIONER SOLVIBILE: $22,119.
And I recall when L&I would come in and we'd ask that question, if my memory serves me, I believe it cost $8,000 to demolish a single family. COMMISSIONER SOLVIBILE: You must have been reading my mind yesterday. When I was going over this budget, I thought the same thing yesterday.
Why has the cost increased? COMMISSIONER SOLVIBILE: The asbestos is huge. It's a huge increase for us.
But didn't we always have that issue of asbestos? COMMISSIONER SOLVIBILE: Several years ago asbestos in single-family houses was not required because it was the assumption that it was not there. Now we add 2022 3/30/05 - Whole - Budget asbestos removal investigation and any asbestos found in every demolition. Also, the Department has been more aggressive in its oversight of what is left in the hole in demolitions, and also dump costs have gone up dramatically. As an example, Council President, the cost of stucco has more than doubled, and that's within that cost that we gave you.
Well, when we were paying $8,000 for the demolition, I also recall that we only had one person throughout the City that was stuccoing the buildings once they were -- COMMISSIONER SOLVIBILE: That's correct. And we've since now have three contracts, two different contractors but three different areas that we identified for stuccoing, and that seems to have been working out rather well for us with keeping up.
You indicate that there will be 287 demos in '06? COMMISSIONER SOLVIBILE: Yes.
How 2023 3/30/05 - Whole - Budget does this compare to the NTI demolitions? COMMISSIONER SOLVIBILE: NTI demolitions are a little less. Our per average -- I believe they're $21,500 roughly -- that's a guesstimate. It's not an exact number -- average cost per demolition. They tend to do more volume, and ours are -- we're taking down the worst of the worst buildings, the imminently dangerous buildings.
The imminently dangerous? COMMISSIONER SOLVIBILE: Yes. And that's always been more expensive traditionally. And we're no longer doing string demolition in L&I. We're taking down an imminently dangerous building, and if a building is either vacant and a nuisance property or dangerous and attached, we'll take it down, too. But we're not taking down any large number of buildings with the money we have now.
Thank you. On -60 of your detail, you're 2024 3/30/05 - Whole - Budget requesting $35 million in Class 200 for NTI. Would you please explain how these funds will be spent? COMMISSIONER SOLVIBILE: It's a pass-through from us to NTI, and NTI will, as per the regulations, spend the money per the council districts where it's going to be allotted for and work with the Council people on what and what happens with the money in their areas. L&I is being used to pass through and --
For demolitions? COMMISSIONER SOLVIBILE: Yes. And we oversee the demolition and we in fact lien and bill and do all the functions that we do in our own demolitions for that.
As we're agonizing over this budget, I guess we're all looking at different ways of how we could possibly generate more revenue. Would you know or could you bring us up to date as to how many billboard permits are issued a year? Does anybody go around to 2025 3/30/05 - Whole - Budget ascertain if a billboard has been permitted, how many of them are illegal? COMMISSIONER SOLVIBILE: We are in the process of working with PennDOT. We met with them about two weeks ago, and PennDOT has entered into a contract with a private contractor to survey all the highways, the state highways and within 65 feet, I believe it is, of the highways, identify all of the billboards that exist there. Roughly, I believe -- I'm using my memory, Council President. I'll get you the exact figures. Roughly 550 locations, addresses, were found with about 800 signs, because the sign faces were counted, too. What's interesting about this study, it allowed us to, with PennDOT working with this contractor, it gives you the street address; whereas, before it's a rather intense investigation to determine what the address of the sign is located. And as you're aware, our databases are all address driven. And then they are coming into our shop to work with our personnel to determine which of the signs are 2026 3/30/05 - Whole - Budget legal and which are illegal. And that study should be done by the end of this month, which we will share with Council when it's done. Last year --
The end of April? COMMISSIONER SOLVIBILE: The end of April. I'm sorry. Yes. I forgot what month I was in. The end of April they expect to have it done. I believe they're coming in on two Saturdays. They were going to come in this Saturday and next Saturday to work in our file, because, as you know, our zoning room is so busy during the week, that we could never service them. So we have a couple people to work with them and provide the files and let them determine the signs by the addresses that are legal. We expect to be able to give a better answer to your question, but right now we estimate that last year we took in $83,000 2027 3/30/05 - Whole - Budget in licenses from these sign companies.
Are they to be renewed yearly? COMMISSIONER SOLVIBILE: Yes. Now, what makes this difficult is, as I stated, without the addresses and knowing where they are and without intense research on our part, it's difficult to determine which signs are legal and illegal. And also, we're working with the Law Department to come up with a policy on how we're going to react to signs. At the present time, we've sent etch-sheet (ph) signs that are sort of like a picture on walls that you see throughout the districts that advertise in neighborhoods mostly. There's 895 etch-sheet signs. We determined that none of them are legal. We've sent a violation to the owner ordering the owner to remove the signs immediately or to make them legal, and we gave them 30 days. We're working now with the Law Department to see where we go next with that. If they don't do it, we have the option of 2028 3/30/05 - Whole - Budget removing the signs ourselves or going to court to make them remove the sign, which is what I prefer. I prefer they do it, because it should be removed.
What is the cost for a license for a billboard? COMMISSIONER SOLVIBILE: $150 per -- I'm sorry, Council President. $250 per sign structure. COUNCILMAN DiCICCO: Point of information.
The Chair recognizes Councilman DiCicco for a point of information. COUNCILMAN DiCICCO: $250 per sign structure regardless if it's a single or double-faced sign? And it sounds that way when you say the structure. I just want to be accurate on that.
Good morning, Madam President, Members of Council. My name is David Perri. I'm the Chief Code Official for the Department of Licenses & Inspections. The current fee schedule is based 2029 3/30/05 - Whole - Budget upon what's defined as sign structure. So there could be multiple faces on the sign. COUNCILMAN DiCICCO: So it's 250 regardless of the number of faces on the sign?
It's actually 150. It's 150 per sign structure. So there may be multiple faces. We charge them 150.
I'm sorry. I was distracted. What was the cost of the license? 150 or 250?
It's 150 per sign structure. COUNCILMAN DiCICCO: Regardless of the number of faces?
So it doesn't matter if it's double-faced, it's still 150?
Okay. I'm trying to calculate how many -- COUNCILMAN DiCICCO: I've done some research myself. I'll talk to you a little bit later about some legislation I was 2030 3/30/05 - Whole - Budget considering introducing.
Well, I have been also thinking about doing something, so we'll work together on it. COUNCILMAN DiCICCO: I'll give it to you and you make that decision. Okay. COMMISSIONER SOLVIBILE: Council President, there's some confusion, non-clarity. When Bennett Levin was the Commissioner of L&I, he entered into an agreement that people would pay X amount of dollars. And people are - not everybody -- a lawsuit came out where a license may not have been required and people that are paying are paying voluntarily at this point. COUNCILMAN DiCICCO: Madam President, I don't know if you heard that. It's very interesting. You should hear that.
Yes. I was distracted. COMMISSIONER SOLVIBILE: I'll repeat it. Basically, when Bennett Levin was Commissioner, he entered into an agreement, a unilateral agreement I guess they called it in 2031 3/30/05 - Whole - Budget the courts, quote/unquote, that anyone that paid a set amount of money would then become legal grandfathered in. It was appealed and the courts ruled that a license wasn't required. So at the present time, anybody paying is only paying voluntarily, and the Administration is working on having a new sign ordinance with the Law Department and us and the Mayor's office, are working on having new legislation placed about the licensing of signs and the cost.
And when can we anticipate receiving such an ordinance? COMMISSIONER SOLVIBILE: I would have to ask the Law Department to respond to that. We'll get back to you on that with -- we'll send you a letter, a memo.
Thank you. The Chair recognizes Councilman Rizzo.
Thank you, Madam Chair. 2032 3/30/05 - Whole - Budget Good morning, Commissioner. Let me start off by saying this to your staff: My office has a lot of activity with yours and we appreciate the prompt follow-up that your office provides, and it's greatly appreciated, because people that are dealing with issues, the constituents that deal with issues that involve L&I, are normally timely, and, again, your timely response and your staff's response is greatly appreciated. COMMISSIONER SOLVIBILE: Thank you very much.
Now, you know I have an interest in a couple issues that I would like to follow up on with you here, take advantage of a few minutes that we have with you publicly, is the fact that satellite television has made a significant presence in the City of Philadelphia, and I understand that many of these subcontractors that work for the major providers may not all have the proper documents to perform work in the City of Philadelphia. And I know we're 2033 3/30/05 - Whole - Budget looking at the bigger picture about what tax revenue that possibly could be derived, but at least for now at the licensing portion of business privilege areas, do you have a feel how we can get our arms around it to find out who actually is installing these dishes? Are they properly licensed? Because some of the work that they're doing is real shoddy, running wires through windows, over lawns instead of being buried. It's really now starting to look very, very terrible, and the installations are obviously done by people that aren't very professional. COMMISSIONER SOLVIBILE: First of all, it's interesting that this time of year in May, it's usually in April, it's building safety week and we will have a big push for people to only hire licensed contractors, that they should be licensed. Now, we're only as good as what we can find going on. Unless an inspector can run across the installation while it's going on, it really just happens. There's so many of these dishes. 2034 3/30/05 - Whole - Budget Now, also, in the very near future, if not already today, L&I's website will list all of the contractors that are licensed in the City of Philadelphia. That's something new that's coming out now.
Maybe I'm not making myself clear, and I want to stop you before you go further. Commissioner, when you order satellite television, you don't call a subcontractor. You call an 800 number that's some place in another part of the United States and three days later, a truck pulls up with a magnetic sign on it to install your dish. You really don't know who the contractor is, where I don't think people are honestly going to care. They take advantage of what's a free offer, free installation. You call Direct TV Dish Network. My point is that we've got, from what I understand, dozens and dozens of contractors that are coming into the City from Delaware, from New Jersey, from other places to do this work that may not have the proper 2035 3/30/05 - Whole - Budget documents. So can we communicate with these providers, asking them to send us the names of the contractors that they use and make sure that the subs are appropriately licensed? COMMISSIONER SOLVIBILE: We have sent to the three known satellite providers a letter asking for business privilege licenses from them, from the company themselves. One, I believe, EchoStar, responded the other day saying that they did have a business privilege license under a different name, which escapes me right now, which I will provide to the Council President.
But that doesn't extend to the subcontractors. COMMISSIONER SOLVIBILE: No. I understand that. Again, it's impossible for us to get our hand around who these contractors are. I have staff attempting by dealing with the main providers, and then we'll get dialogue with them and ask who is providing it. As an example, Radio Shack, my own 2036 3/30/05 - Whole - Budget son got the installation. Radio Shack offers a free installation if you get the satellite, and the contractor that came, I was there and I asked him for his license, and he did have one. He in fact did have one. So it's a matter of, I think, getting our hand around who is doing the installation, and we're attempting to do that, and also educating the public on not letting any contractor who is not licensed in their property. A contractor who does in fact get a license, at least at the point in time when they're getting their license, they show us their insurance policy, so we know they're an insured contractor, and then it names -- it also states that if the insurance is cancelled, the insurance company is to notify us. And we depend on that happening. Whether it happens or not, you never know, but at least you know at one time this contractor when he's licensed was insured. So we really -- it's a matter of -- I agree with you that somebody is getting 2037 3/30/05 - Whole - Budget something for free. It's the old adage, if it's for free, it might not be what you really want. Educating the public.
I've talked to some of my colleagues. The way that they're being installed, they're being installed with plastic strapping to people's railing that live in apartments. They're running wires through windows, drilling a hole in the -- I mean, it's just a disgrace of what is going on. And many of these are rental places where the resident isn't really worried about the quality of the install. COMMISSIONER SOLVIBILE: Right. And also, in most cases, a permit is not required if it's a two-inch dish. It's really not even a permit required. The only thing required is for in fact the contractor to have a business privilege license. It doesn't even require a contractor's license.
Commissioner, the other issue that we've talked about -- and I believe, and I just want for the record, you told me that you have no 2038 3/30/05 - Whole - Budget regulatory responsibility or oversight -- is the proliferation of the cell phone sites that are all over. They're attaching them to buildings that are abandoned. They're attaching them to almost everything that can provide a mounting spot for an antenna. Have we gotten that under control? Because the City is just overwhelmed now with these antenna locations. Not that that's a bad thing, but I think that there should be some revenue, there should be some awareness of where they are and how they're installed. I know that they look heavier than they are, but what are we doing about it? COMMISSIONER SOLVIBILE: I'm going to ask Code Official Perri to respond.
Councilman, Dave Perri from Licenses & Inspections. There are several laws on the book that do regulate cell phone towers and antenna. They're all required to have a zoning permit. They're all required to have a building permit at the time that they're installed. 2039 3/30/05 - Whole - Budget There is currently no licensing requirement, and I believe that goes back to the Telecommunications Act of 1996. The Federal Government gave cell phone providers a broad latitude in setting up facilities and basically undermined local authorities' jurisdiction to have much control over them in terms of licensing. So there is currently no 10 licensing requirement for a cell phone tower.
And you're telling me we could not move in that direction or you're telling me we're prohibited from going in that direction because of the Federal Communications 1996 Act?
It's my understanding -- I'm not an attorney on this issue, so I'm not going profess to be an expert.
We certainly can. We will ask the Law Department and we will share their response with Council.
That's 2040 3/30/05 - Whole - Budget great. Thank you again and appreciate all your Department's good work. Thank you, Madam Chair.
You're welcome. The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam President, and good morning. I just want to go back on the sign issue again. I believe, Mr. Solvibile, you testified that your Department collected $83,000 last year for sign fees. Is that for the 800 signs? I think you testified that you've identified 800 signs? COMMISSIONER SOLVIBILE: That was for billboards, and it's roughly 630 companies were voluntarily --
I'm sorry. You're going to have to speak into the microphone. I don't think the stenographer can hear you. COMMISSIONER SOLVIBILE: I'm sorry. 630 companies are voluntarily paying, 2041 3/30/05 - Whole - Budget and that's where the $83,000 comes from. The majority, I would say a lot, are not paying anything. COUNCILMAN DiCICCO: Go back to your statement where your Department is working along with PennDOT and you've identified addresses where these sign structures are located. There's a number on some billboards, there's a 567 digit number. What does that number represent? COMMISSIONER SOLVIBILE: I think the sign companies use it to identify changing of the sign face. I'm really not sure, unless Code Official Perri would know, what that number signifies.
The Commissioner is correct. The number that you see on these billboards, that's the number that the company identifies. It's not an L&I tag or identification. COUNCILMAN DiCICCO: Does L&I have any identification system number? When someone comes in, if I come in and I want to erect a billboard and I get approvals, 2042 3/30/05 - Whole - Budget whatever, from the community and there's no 3 opposition, what happens? I mean, how do you know to follow up with me to collect the annual fee? What is the process? COMMISSIONER SOLVIBILE: If a sign is legal and you get your license, it's an annual renewal and the bill goes out automatically annually for your license. One of the things that we're doing in the Department, Councilman, to get our hand around the sign, which is huge undertaking, we're in the planning stages, Code Official Perri and myself, are in the planning stages of creating a Sign Unit. Their function will be to inspect, approve, process. Right now if you go into the Municipal Services Building for a permit on your building and you need signs, it's a whole other process that you have to go through, and we want to take that away from the building approval end, which is in itself all encompassing, and have this unit deal with signs only, so just for that reason that you're asking, so we get a control on the 2043 3/30/05 - Whole - Budget signs. And then also with working with the Law Department to come up with the policy as to how we're going to enforce against these companies that aren't legal and get them into what needs to be legalized is a huge undertaking that I believe should be undertaken, and get rid of the signs that shouldn't be there, like the etch-sheets -- they're, I believe, a blight on Philadelphia. They're graffiti. They're graffiti that people get paid to have -- and legalize what's there. I think we'll go a long way towards improving the landscape and bring in revenues that will help. COUNCILMAN DiCICCO: The number that Mr. Perri spoke of, the identification numbers by the companies, I assume, the assigning a number for their purpose of identification. So would it be correct to assume that those billboards that do not have any numbering on them are not affiliated with a billboard company and they basically just have been put up at random? Is that a fair 2044 3/30/05 - Whole - Budget assumption?
I think that's a pretty fair assumption. Most billboard companies are going to try to identify their product with a number, so if anybody wants to advertise there, it's commonly known what they're referring to. But I don't think there's 100 percent correlation between those that don't have numbers being ones that are completely illegal. So I don't think you can make that as a complete statement. COMMISSIONER SOLVIBILE: It will be very interesting, Councilman, I believe it's the next two Saturdays, where PennDOT will be in our offices working with our people to determine the signs that are legal and illegal. There's 500-and-some locations they discovered that will give us a better opportunity. Also, one of the things that I've discussed this morning with Mr. Perri was to also get with Conrail or with the -- Conrail basically and get an inspector, along with maybe hiring the contractor to do along the 2045 3/30/05 - Whole - Budget rail lines, because that's where the other part of the signs are, along the railroads and on the highways, because obviously the more traffic, the higher the cost. So that would give us the total picture of signs that are in the City, and then we can really get our hand on a forensic enforcement effort against these companies or working with the companies. I mean, the ones that are legal should be there. COUNCILMAN DiCICCO: I want to share with you, a couple of days ago I met with two developers who are proposing to do some high-rise development in my district along Delaware Avenue at the site of the former club Gotham and the 8th Floor, those two buildings. Their proposal is to tear them down and build luxury high-rise condos there. They indicated to me that there's a billboard, I think, on that building that is not legal. I mean, they buy the building. They're going to tear the building down anyway. Over the years, that building has 2046 3/30/05 - Whole - Budget had a number of different tenants in it who needed to come to L&I for licenses to operate their businesses. I'm wondering how many other buildings in the City have uses within the building but have billboards on the roof that are not either legal or we're not collecting a fee or fees from. I mean, if there's activity in the building, should that not be part of the process -- and I don't mean this in a critical way; just as a suggestion -- to make sure that whatever is attached to the building is legal before any other permits are issued for activity within the building? COMMISSIONER SOLVIBILE: I think it's a great thought process that we should enforce and that we will -- I'm not quite sure how we would get there to the point where we could enforce it, because if a person comes in with a plan and doesn't show that there's a sign up there but then if there's a plan, there's an inspector going and if the inspector sees it, then he has to question is the sign legal. And with this new Sign Unit, 2047 3/30/05 - Whole - Budget we'll be able to take that from an inspector who is there for the building activities who really isn't into what the sign is and give it to that unit and let them determine the legality of the sign. Also, I think that what may be helpful to us, it was in the paper Sunday, the Pictionary -- is that -- pictometry. I'm going back to my childhood in games. Pictometry. I've seen a demonstration of it and it's really neat, that you see from above what's there, and the signs and illegal additions and legal additions, all that will show us, without actually going to the property, what's there. That will be a big help to this unit, too. COUNCILMAN DiCICCO: And I appreciate that, but I just have a final thought on this sign and I'll get on to another issue, and you can respond, Mr. Perri, is that I would assume that there are a number of buildings throughout the City of Philadelphia that either have billboards on the roof or the wall signs. I think you 2048 3/30/05 - Whole - Budget described them as something else.
COMMISSIONER SOLVIBILE: Etch-sheet signs. COUNCILMAN DiCICCO: Etch-sheet signs. That the owner of the building has a license to do whatever it is that that building does, whether it's an apartment building, whether it's a manufacturing building, and assuming that the owner of the building, the landlord, renews his or her license annually, couldn't that not be part of that whole process, is what I'm saying, as opposed to having a separate unit go out? I mean, what is part of the building, and if an inspector goes out to check to see what the proposed new use of a tenant is in the building and sees that there are signs attached to the building, couldn't that not be part of the license renewal process? COMMISSIONER SOLVIBILE: Yes. And that's what I -- it's an intense research in the zoning file to determine what is and isn't legal in buildings. Some of these files are, I'm sure you've seen them, are thicker 2049 3/30/05 - Whole - Budget than our budget books and you really to find out -- COUNCILMAN DiCICCO: We don't have much money left. That's why the budget books are getting thinner. COMMISSIONER SOLVIBILE: And you really have to go through each piece of paper, because there could be a piece of paper in the beginning legalizing that sign. So that's why the unit needs to tell the inspector in the field whether it is or not, and then the inspector in the field could then enforce it, but there needs to be a group to research that for us, and that's why we're going in the direction we're going in.
Just to respond to your earlier question, when a new tenant comes in and they're proposing accessory signs, the zoning unit under Deputy Commissioner Eileen Evans, that unit reviews all the signage on the building and will not issue a permit for new signage unless all the signage on the building is legal. We'll either get the building owner to legalize the signage that's 2050 3/30/05 - Whole - Budget on there or in some cases we'll issue violations. But there is a check at the time when a tenant comes in for new signage, we do review all the signage on a particular building. COUNCILMAN DiCICCO: I could appreciate that, but what I'm talking about is the 8th Floor building, as an example. I'm sure there are many other buildings out there that are in the same category. These are not buildings that owners come in to get additional signage placed on. These are buildings that primarily were factories, manufacturing plants, whatever, and over the years, the owners, for economic reasons, decided to rent the space or put a sign up on the building and rent the sign out. So they didn't come in to you saying, We want to add additional signs. They just kind of appeared. So if there's other activity within the structure that requires an annual renewal of the license or licenses, could that not be part of that whole process? Could the application read, Are there any signs attached 2051 3/30/05 - Whole - Budget to your building? MR. Perri: Let me address that a little bit. There's many buildings in the City that the tenants within the building do not need a renewable license. For instance, if a building houses law firms and real estate firms, there's no annual license that's required either to have the building or for the tenants to continue to operate within the building. COUNCILMAN DiCICCO: Excuse me for interrupting, but doesn't the owner have -- my sons and I own a triplex. We have three units, triplex. Don't we have to get an annual license to rent the property out?
Yeah. If it's an apartment building, there is an annual -- COUNCILMAN DiCICCO: Commercial building there's no annual?
For just being a generic commercial building or a generic commercial tenant, there is no license required. COUNCILMAN DiCICCO: Wait a 2052 3/30/05 - Whole - Budget minute. I own a 40-story office building in Philadelphia and I have law firms, accounting firms in that building. I'm the owner of the building. I'm not required to have a license to rent that space out?
When you're talking a high-rise building, we do have a high-rise inspection fee, which is essentially a license, but that's to do a fire and safety inspection within the building. COUNCILMAN DiCICCO: But there's no fee to me as the landlord for renting out that space, but I own a duplex in South Philadelphia or triplex that I rent three apartments and I have to pay an annual fee for each unit?
Everyone that's in business needs a business license, but you as the renter, the renter of rental properties, residential properties, needs a license; whereas, if you were renting out commercial properties, you would not need a license. COUNCILMAN DiCICCO: Wow. Wow.
We 2053 3/30/05 - Whole - Budget learn something new every day. COUNCILMAN DiCICCO: Listen, I know it's not your fault. That's the way it's been. COMMISSIONER SOLVIBILE: Actually, having 33 years in this job, I learn something new every day, too. The Department amazes me as to the things that we control and -- COUNCILMAN DiCICCO: Well, there will be new legislation next week, I can tell you that. Brian, get to work. Get to work.
How about the large apartment buildings? COMMISSIONER SOLVIBILE: They all have to have a license for each unit. COUNCILMAN DiCICCO: Because it's residential as compared to commercial. So if I took the triplex and I made the first floor into a storefront, I would only need a license for the other two units as opposed to the storefront? COMMISSIONER SOLVIBILE: 2054 3/30/05 - Whole - Budget Correct. COUNCILMAN DiCICCO: Even though I'm generating income for all three units? COMMISSIONER SOLVIBILE: Correct. But you have a business privilege license and you have to show the income as far as your taxes that you pay to the City. That's the reason for the business. That's a lifetime license.
Excuse me, Councilman. How about the sign that you may have outside of that commercial portion? I thought that that was an annual renewal license.
In some buildings that have rooftop non-accessory signs, that is supposed to be a renewable license, to have the non-accessory sign.
I think we're going to have to have a conversation on this. There are other Council members that would like to be recognized, however. 2055 3/30/05 - Whole - Budget COUNCILMAN DiCICCO: I do have other questions unrelated to signs.
Before I recognize you, Councilman, I was just going through the budget and brief and I just don't seem to be able to find the $83,000 shown for revenue estimates. Can you tell me where that would be? I'm on and I just don't seem to find it. Can you tell us where that would be? DEPUTY COMMISSIONER BURNS: Good morning. My name is Fran Burns, Deputy Commissioner for Administration. I'm pretty sure that that fee is wrapped into the revenue "other licenses and permits." We don't break it out. It's not broken out in this budget and brief.
I'll tell you, I think it would be very good if you could break down the amounts of fees, and you can do that in writing. DEPUTY COMMISSIONER BURNS: We'll provide a further breakdown of the revenue. 2056 3/30/05 - Whole - Budget
And send it to us, because it doesn't look like it's very much money in fees. Councilman Rizzo, did you want to --
Thank you, Madam Chair. While on the sign issue, and I think what I'd also like to have -- if my memory is serving me right, somehow we're involved in a lawsuit. But how many outdoor advertising companies are licensed with the City? Is my memory right that there was a lawsuit and two of the companies, I think it's Steen and Crane, are not paying us anything because we haven't made a decision yet on the judge's ruling or right now it's kind of in limbo? But how many outdoor advertising companies are there and is it correct that we've got two that are not giving us any revenue? COMMISSIONER SOLVIBILE: It's correct that some are not paying anything because of the litigation that took place. We'll have to get back to Council President 2057 3/30/05 - Whole - Budget and Council on the number of companies, because I'm really not sure. I believe there's three or four, but I don't want to guess. We'll get you the names of the companies.
What's the delay then in this court case? Because I believe the judge said that there was a decision required, and I think two of them haven't given us any revenue. When was this lawsuit? COMMISSIONER SOLVIBILE: I would have to get back to you, Councilman. I'm not sure at all.
Is there anyone here that knows that can fill us in on this? Because if we have two companies that aren't paying us, that's not a good situation.
Councilman, Dave Perri again. The lawsuit was in the early 1990s. Basically what happened was, there was an ordinance passed that required an annual sign license and it required the same fee whether 2058 3/30/05 - Whole - Budget you were an accessory sign or non-accessory sign. The Department felt at that time that they didn't want to burden small businesses with the same fee that a large billboard company should have to pay for a sign. So they arbitrarily set up a two-tiered system where they were charging billboard operators a higher fee and the accessory sign owners, meaning like your local grocery store, a lower fee. What the court found was that it was illegal to have a two-tiered fee structure. So we lost our ability to collect fees at that time. We have worked on a new piece of legislation that would specifically require fees only from the non-accessory signs because, in essence, they are their own little business enterprises that pop up throughout the City. So we can make a case that we can charge for a specific sign license fee for each of the non-accessory signs. 2059 3/30/05 - Whole - Budget
So are you telling me that we may have X numbers of outdoor advertising companies, some are paying and Steen and Crane are not paying?
It's my understanding that those two companies have not been paying.
Well, like I said, we're preparing legislation to come up with an equitable fee schedule for all the sign companies. The other companies that are paying are paying voluntarily, so there's not much we can do about a company that is not paying a fee that they're not required by law to pay in the first place.
Commissioner, you're talking 15 years now. You said early '90s. This is 2005. And we have allowed two companies -- I mean, I don't know too many companies that pay fees and taxes voluntarily. Again, I just can't figure 2060 3/30/05 - Whole - Budget that we have some people paying and two not and we're allowing them to get away with this. Something doesn't sound right here. COMMISSIONER SOLVIBILE: Councilman, I believe -- I'm relatively sure they have business privilege licenses and they are in fact paying whatever taxes would be from the income that the signs are generating. What we have, working with the Law Department, is in getting a handle on the license cost. In fact, they do have business privilege licenses to do business in the City.
But that's apples and oranges. We're talking now, and I'd like to provide to the Chair, what kind of revenue are we talking about here? We need to know how many companies we have that are licensed, A. What's the revenue from those that are doing what we ask them to do and how much revenue we've lost as a result of these two companies, which are major, that have not been paying for 15 years. COMMISSIONER SOLVIBILE: We will provide the information to Council 2061 3/30/05 - Whole - Budget President and Council.
Let me ask you something. Is there any way of expediting what PennDOT is doing so that we can get a much clearer picture before this budget is passed as to how much more revenue we could possibly be collecting? Because I'll tell you, even with the signs, I mean -- COMMISSIONER SOLVIBILE: We could estimate the number of signs in the City that are presently there.
I'm not just talking about billboards either. I want to have a meeting with Mr. Perri after this hearing, because I think it's very, very unclear as to what we're doing -- COMMISSIONER SOLVIBILE: We would be more than happy to meet with you, Council President.
-- and the amounts of revenue we could be losing. And if we're going to ask people to just pay 2062 3/30/05 - Whole - Budget on a voluntary basis, I think that's extremely, extremely unfair. COMMISSIONER SOLVIBILE: I cannot disagree. As far as the PennDOT study, it's a contract that's not really with us. We're cooperating with them so we get the information. They first came into our office the week before Easter and they couldn't over Easter in fact work on it, you know, Holy Saturday before Easter. So they're coming in this Saturday and next Saturday to go through the files and pull the records of the companies of the addresses they have found the signs for.
This has been a long-going issue. I don't know why we have to wait for PennDOT. I know PennDOT is involved in it now, but, in my view, we should have been doing this independently a long time ago, A. B, I understand that there were aerial shots that were made of the entire City so that L&I could ascertain if there was a 2063 3/30/05 - Whole - Budget deck on a property, did they get their permits. Is that true? If you could find a deck, I'm sure you could find where billboards are located, and if in fact they have been paying a license fee, if they're legal, if they're illegal. We're sitting here, as I said, agonizing over this budget. We're seeing our libraries are being closed for most of the day and yet we're here practically sitting on money and nobody is even making an attempt to find out how much it is that we're actually losing. I think that we should have information, and, Mr. Perri, I want to see you after this hearing about these signs, because I'm totally, totally distressed over this. COMMISSIONER SOLVIBILE: I understand. Council president, if I could add this though: Legislation is at the Law Department and it's pending their review before proceeding.
I'm sorry. I didn't hear you. 2064 3/30/05 - Whole - Budget COMMISSIONER SOLVIBILE: We have a draft of legislation in the Law Department now that's pending their review as far as signs.
We sent it over with our legislative priorities for the second half of this year. So I would say it got to them sometime around the first of the year. I've just been informed it's been two or three months.
Councilwoman Tasco, maybe you'll do a little better than we did.
Probably not. Good morning. I'm not going to talk to you in detail this morning about mutual industries.
Councilwoman, I don't think the stenographer can hear you.
Thank you. 2065 3/30/05 - Whole - Budget Because we're going to be meeting about that. But I just want to ask you about, what is the time period for reinspections after the initial code violation has been issued? COMMISSIONER SOLVIBILE: It varies. An inspector will go out and determine if it should be an immediate -- anywhere from immediately reinspect to 30 days for compliance with the code basically, is the rule of thumb. Now, if an owner after we in fact have written a violation contacts us and says they need an extension or further time to comply, we may give them an extension. It's a case-by-case decision.
What is the current staffing levels for inspectors and does the level -- well, I guess first tell me what's the level, and do you have enough staff inspectors? COMMISSIONER SOLVIBILE: 110 inspectors are in the Department presently.
Is that 2066 3/30/05 - Whole - Budget enough for what we need to do based on the complaints you get? COMMISSIONER SOLVIBILE: It's the same level we've had basically for the last ten years. Is it enough? You could always use more, but I think that we have managed the way we're managing the Department presently, we're sufficiently staffed to handle all life safety issues and code issues.
Do you want to take a minute to get yourself together? Take a break. COMMISSIONER SOLVIBILE: It's not going to go away really. I think I'm now okay. Thank you. Basically the way we're presently staffed with inspectors, I'm comfortable. Within that also you have to weigh the engineering, the people that process the permits downstairs for us. And we've been constantly staffed at the same level for, as I said, the last several years. Under Dominic Verdi, our code enforcement efforts, Dominic has taken the 2067 3/30/05 - Whole - Budget Commercial and Industrial Unit and the Housing Unit and combined the management of that. And we're presently cross-training people, so if there's a problem, we're able to respond to it quicker. And with the management practices and the new computer system we're creating in the Department, I think that we're able to handle what we need to do.
On , you talk about that you all are reengineering the customer service module for your unit that handles citizen complaints, trade and business license, and these have been implemented. And building permits and zoning processes will be implemented by the end of 2005. This question is a joint question between Councilwoman Donna Miller and myself. We want to know, because sometimes we look up and find a business in our district and we didn't know that they're coming in. I mean, certainly if the facility is zoned for business, they have a right to get a permit to go in that business, but we'd like to get an idea before they go there what's going into a 2068 3/30/05 - Whole - Budget location. Will we be able to access that information? COMMISSIONER SOLVIBILE: Absolutely. When we're finished creating the database, every Council person -- presently you have available to you our LIMS information system in your offices, but this is just so much better, because with LIMS, you have to go into different parts of it to find out different things. And the truth be told, I've never learned it because I never liked it to begin with. There's other people that always get that information for me. But with the new system, you put in the address, you put in 2401 anything with that street and it will list right now -- and we've only put the dangerous buildings and the licensing, because the licensing is our foundation in the Department. It will tell me every complaint that we received, all the licenses that are in that building and also if there's a dangerous building or not. So when we get there by the end of 2069 3/30/05 - Whole - Budget this calendar year, we should have all the inspectional, everything, and you'll be able to just access by address, find out everything that L&I is doing.
Well, would it show that someone has applied for a permit for that building? That's what we're interested in, the permitting process. If someone or somebody wants to add on to their property, will we be able to access and request for a permit to add on or take any activity on that in the zoning request? COMMISSIONER SOLVIBILE: Well, zoning requests, all zoning permits are e-mailed on, I believe, a weekly basis to each Council district, which I'm told by some that it's worked rather well and it's decent information that's needed out for the Council staff to deal with. Also, it will tell you that if there's a permit in the system being processed when you go to this. It will tell you if there is a permit that's been approved. And, more importantly than if there's a permit, 2070 3/30/05 - Whole - Budget what I like, when we dealt with Council and we gave you what legal zoning was, what I liked about that is that say we approve a restaurant for ten sit-down tables and people would then, instead of having sit-down like a restaurant, make it all takeout. The community was under the impression that's what L&I approved or what was zoned. Now the community knows that in fact they're supposed to have ten seats there and can help us better enforce when they don't have the ten seats for a regular restaurant. So we made the step in the right direction. Now without us sending you that, you'll be able to get it right off the computer by the end of this calendar year. We're a quarter of the way there. We put in the licensing information, which was the critical part for us as far as building the building. As you know, the foundation is always the most important part. And we're next having permit tracking. Permit and building inspections will be computerized next, is our next -- by middle summer we'll be 2071 3/30/05 - Whole - Budget done, mid summer. And then Dominic Verdi's staff with the enforcement end will be done by probably November, and then we'll do -- the follow-up on that would be the board and such after that, the appeal process. You can't do that until you have the inspection part done. So it works. It's a hard, long, arduous -- believe me, every day it's all that I deal with mainly, is making sure that that's going to be done and on time. And the staff, the IT staff and Fran Burns and her staff, the IT staff, has really been doing a great job for us and we're going to get there, and it will be a great tool for everybody, Council and us.
What role does the Department of L&I play with the Nuisance Task Force, the DA's Nuisance Task Force? COMMISSIONER SOLVIBILE: The Nuisance Task Force -- I'll let Dominic Verdi come up and explain that. DEPUTY COMMISSIONER VERDI: Good morning. Dominic Verdi, Deputy 2072 3/30/05 - Whole - Budget Commissioner of Licenses & Inspections. We have a seat on the District Attorney's Nuisance Task Force. We work closely with the DA's Nuisance Task Force, the Philadelphia Police Department and some Liquor Control enforcement and also some agencies on the federal level in reference to nuisance locations. What we do is combine information along with those agencies who handle the criminal end of it and we deal with all the civil end of it in reference to the building and code issues.
Okay. Thank you. Thank you, Madam President. COMMISSIONER SOLVIBILE: And I might add a little bit of, I guess, self-praise here, that Dominic's people did go out. The Nuisance Task Force really does a tremendous job. As an example, Watson's Pub, that was a disaster waiting to happen, and by working with the Fire Department, as I mentioned in my testimony, Zero Fire Deaths, 2073 3/30/05 - Whole - Budget if there was a fire in that building that night, there's probably 200 people that were dead. So it's really a great, great thing we're doing with this task force.
Thank you. The Chair recognizes Councilwoman Brown.
Thank you, Madam President. Good morning. COMMISSIONER SOLVIBILE: Good morning.
Have either of you by way of background had a chance yet to review the Commerce Department's newly released economic blueprint report, et al? COMMISSIONER SOLVIBILE: I have not.
I only mention that because there's a section of the report that speaks to reducing the cost of 2074 3/30/05 - Whole - Budget barriers to doing business in Philadelphia and they cite a number of places in those few pages the role of L&I. So before I get to my question, in 2002 I understand the Managing Director's Office established a task force to study our City's business regulatory process. So I'm concerned about where L&I is with the recommendations that came out of that report. Is there anything currently underway to streamline our City's regulatory process specifically with regards to start-up and new businesses? COMMISSIONER SOLVIBILE: As I stated, we're in the process of computerizing the Department, and that in itself will go a long way towards helping take the confusion out of what a business needs to do to become a business. We have worked proactively with language access, because a lot of the new businesses starting are --
Language 2075 3/30/05 - Whole - Budget access, okay. COMMISSIONER SOLVIBILE: We've hired a consultant to work with us through Commerce, a Ms. Shin Ju, who is with us here today. We've tried to remove barriers to make it easier, and with the computerization of the Department, I think that where -- as an example, a lot of information that you had to come to the MSB building to get before will now be able to be accessed on computer. Presently you can access the different forms you need to fill out and mail them into us versus coming into us. Also, we've created some of our forms and had it translated to different languages. So it helps, because it's the right thing to do basically.
Is there any talking or interface with other City agencies like PCDC specifically and maybe with the Women's Resource Center, which is in the business of helping small and start-up women-owned businesses so that they know that what the City is doing to streamline the 2076 3/30/05 - Whole - Budget process for the constituencies that they serve? COMMISSIONER SOLVIBILE: We work with MBEC, I believe it's called, constantly with Vince Dougherty, and we have a working relationship where when businesses go to Commerce to, in effect, get started, we work with them and advise them as to what we can do to be helpful. So there is a relationship. I just have not read the report, but L&I was in fact a part of creating the report. So there is in fact a relationship.
Yes. The Chair recognizes Councilman Goode for a point of information.
I've actually asked this question in the past of maybe you and other L&I Commissioners dealing with the same subject and the response has always been that you're computerizing, that you're improving technology, and now you're 2077 3/30/05 - Whole - Budget also talking about improving language access. I guess one of the questions that needs to be asked, are you also streamlining the business regulatory process? Are you requiring less licenses and permits? Are you creating a process by which people as they're trying to open businesses can handle the number of licenses and permits that they need in a streamlined fashion? COMMISSIONER SOLVIBILE: Councilman, absolutely. We didn't want to computerize what we were doing. We wanted to look at what we were doing, the practices that were going on, to make sure that we streamlined the process the best we could. As an example, to get a certain permit, I believe it was an explosive permit, which more are issued than you would think in the City, the gentleman in our Concourse, everybody had to go to this one gentleman and nobody could tell us in the process why. So we eliminated that step, which is -- but throughout our whole process, the deputies, the managers would meet and we would go over 2078 3/30/05 - Whole - Budget step by step. We created an as-is what we presently do and then what we want it to be, and then it came to approval to us. And now Deputy Commissioner Burns's unit is now in the process of getting all this and making it up and running. So to answer your question, we did cut out parts that we thought were unnecessary that we could that weren't part of code to --
I guess a simple question is, do people still have to go to many different places to start a business? COMMISSIONER SOLVIBILE: Yes. They still need -- there's still approvals. To start a restaurant, you --
I'm sorry. How is that process going to be reformed? COMMISSIONER SOLVIBILE: Well, when we create this system, we were just yesterday talking about creating interfaces with, let's say, Health. To open up a restaurant, you need to -- when you apply for a license, we really wait for Health to come and tell us, Yes, they meet certain parts and 2079 3/30/05 - Whole - Budget it's clean enough for them to open, the health code is being met. And in that process, if we create interfaces, it will stop the applicant from having to go from place to place and the interface will do the work for them. So, yes, we are working on having that made simpler for people to do business, to make it easier for them to come to do business in the City.
So if someone is starting a business, they're getting a business privilege license. Information will be entered into a system. It then will tell them they need X, Y and Z and, again, be handled a streamlined fashion; is that what you're saying? COMMISSIONER SOLVIBILE: Right. And right now presently through the Revenue's website, you can get a business privilege license online paying with a credit card.
My question is not so much that it tells them every place they have to go, but do they have to go more than one place and how many places will they 2080 3/30/05 - Whole - Budget have to go? COMMISSIONER SOLVIBILE: Yes. When it's built, it will show them what they need for approvals and what they need to do. We're hoping that the interface itself when they applied to us, because it starts with us, will be able to just send the application -- or the applicant needs to go to, let's say, the Health Department, because there are certain questions that Health needs to have answered. It will a part of the process that we build into it once we're done building our system.
Thank you, Councilman Goode. When you say you are currently engaged in looking at this issue with regards to MBEC, talk that through. What does that mean? COMMISSIONER SOLVIBILE: Could you repeat that?
You mentioned that you're currently interfacing 2081 3/30/05 - Whole - Budget and working with MBEC. COMMISSIONER SOLVIBILE: Well --
MBAT or -- scratch the acronym. Spell it out for me. Is it MBEC or MBAT? COMMISSIONER SOLVIBILE: MBAT is what I meant. When I call my children, I call my daughter Bobby and she looks at me with her hand on her hip and says, Don't you know who I am? I'm horrible with names, and I apologize for that.
That's quite all right. COMMISSIONER SOLVIBILE: Daily Vince Dougherty is on the phone to me or one of the deputies or the people in our department daily asking -- or Sharice Wynn, is asking daily like what we can do when we meet with them daily. We meet with them, their staff, and explain on a quarterly basis what we're doing and new things that we're doing and answer their questions and just general have an ongoing dialogue to bring business in 2082 3/30/05 - Whole - Budget the City. It's part of what we're here for, is to make it as easy as possible for people to want to do business in the City. One of the things that is a little bit different but in the same vein is the BIA, the Building Industry Association. We're working closely with them with the Managing Director to make it easier for people to build houses in the City and get rid of all of the roadblocks and to be there for them and have a dialogue on the roadblocks. But we're finding out now it's like -- what I'm finding out, actually, is that people will say, Well, L&I is saying you can't do this now. Then when it comes to me, it's turning out that really it's a misunderstanding between the parties, and what we're doing is building an information dialogue back and forth with Building Industry and business so information is known and, as Councilman Goode asked, it's clear what people have to do. So it's not like this only a certain few people know how to get you through. So anybody can go in the system 2083 3/30/05 - Whole - Budget rather effortlessly and do what they need to do as efficiently as possible.
Is there a brochure that speaks to exactly what you just said? COMMISSIONER SOLVIBILE: Yes. There's brochures that we produced in several languages, which we will make available to Council and Council President.
Please. I, among other others, I'm sure, would be interested in that. COMMISSIONER SOLVIBILE: Absolutely.
Finally, does your office along with MBAT present workshops of sorts to small emerging start-up businesses to educate, if you will? Because the blueprint also talks about initiating a Business Education Campaign wherein you enlighten and inform prospective business owners about what's required to become legal. COMMISSIONER SOLVIBILE: Deputy Commissioner Verdi? 2084 3/30/05 - Whole - Budget DEPUTY COMMISSIONER VERDI: Dominic Verdi, L&I. We do have workshops, and one of the workshops that work out really well for us right now is the day care workshops that we operate approximately every two to three months. They seem to be very informative, very well accepted. We also have areas in which we will go out with the Zoning Board and do more or less information meetings or information sessions with different communities that would request us to give them information in reference to zoning. We also are involved now with, I think it's, University of Penn and a couple of the local colleges whereas when we have students come in from outside the City that don't know -- we have problems with some student housing or some of those issues. We're able to meet the parents and tell them that buildings that are legal, what they should be looking for, and we have a brochure that's basically a brochure that's Partners in 2085 3/30/05 - Whole - Budget Good Housing or Housekeeping that basically gives them all the information to that. So we're working a lot towards more information ahead of enforcement.
Okay. I'd be interested in the workshops for child care. We no longer call it, just an editorial comment, day care. It's known as child care. DEPUTY COMMISSIONER VERDI: I'm sorry. I made a mistake.
That's the politically correct way to -- we take care of children, not the day. Just joking. DEPUTY COMMISSIONER VERDI: We'll have a package of information sent over to Council.
If you could do that, I'd appreciate it. COMMISSIONER SOLVIBILE: Councilman, Dominic and I both have that same problem. We forget names. We know what we're talking about, but we forget the exact name of it.
As you 2086 3/30/05 - Whole - Budget plan and do workshops going forward, could you please inform members of Council? I'd very much be interested in coming. COMMISSIONER SOLVIBILE: Absolutely. The next one, we'll make everyone know the whole schedule for the coming year.
You're welcome. The Chair recognizes Councilman Kelly.
Thank you, Madam President. Good morning, Commissioner. COMMISSIONER SOLVIBILE: Good morning, Councilman.
I just want to follow up on the Council President's questioning regarding going back into the billboards. Is it possible if we can identify the companies that are involved in this and the amount of billboards that are unlicensed or don't have the proper permits and whatnot? 2087 3/30/05 - Whole - Budget We're talking about a lot of revenue that we've been remiss in collecting from these companies. I just wonder, can we make this retroactive? Because according to Councilman Rizzo, that this has been going on for almost years, that these people have been getting 8 away with murder literally. I just want to 9 know if there's any way possible that we could 10 go back and -- 11 COMMISSIONER SOLVIBILE: We 12 will ask the Law Department to advise us and 13 share that answer with Council President and 14 Council. 15
Because these people at least have been paying some kind of a payment, I'm sure, to the people who own those buildings per month, per year and whatnot. We could probably find out how many years that billboard has been on their property and then make some kind of a settlement. I think this is a good way to recoup some of the money that we've been missing. The next thing I'd like to do is -- 2088 3/30/05 - Whole - Budget
Excuse me. On that vein, if I may, I just want to say it's not only unfair to the City, but it's unfair to the billboard owners who have been paying and others who have not, and in view of the fact I am assuming that the ordinance that has been sitting over in the Law Department was prepared by your office? COMMISSIONER SOLVIBILE: Correct.
Would it be possible for us to have a copy of that draft so that we could review it? COMMISSIONER SOLVIBILE: Yes, Council President.
And could we have that before the end of the day, please? COMMISSIONER SOLVIBILE: Absolutely.
Thank you. COMMISSIONER SOLVIBILE: If anyone is listening in my office now, I'll ask 2089 3/30/05 - Whole - Budget them to bring it over.
That would be wonderful. COMMISSIONER SOLVIBILE: If they have availability.
They're listening, Commissioner. COMMISSIONER SOLVIBILE: Well, I don't know if they have availability where it is.
I would like to get back to -- I know that you sit in a very, very difficult seat, and I commend you for probably trying to walk a very, very tight line, because in Council, I know Council offices, I've been on both sides of the issue. I call your office and I complain about people who don't have the proper permits, who are doing work that don't have the proper licenses to do the work and doing shoddy work and doing a lot of this thing, and your people do take action on it. 2090 3/30/05 - Whole - Budget On the other hand, I also get complaints that you people take maybe too much action in certain areas, where you could go in and close down an operation for not having an exit sign or going in there and a building may have a sign on their premises for maybe ten or years and you're going in there and you're 9 going in there like almost with the effect of 10 closing them down more or less, and there, I 11 call your office and try to get some kind of a 12 compromised settlement. 13 Is there any way that we could 14 like -- maybe Deputy Commissioner Verdi could 15 answer this more so -- that is it possible that they could be more business friendly when they do go in and find some type of infraction? This is one of the things that I get complaints from business people, that they buy an operation, they buy a business and the sign has been up there for ten or 15 years, they have no idea that they don't have the proper permits for it, and they go in there and they almost threaten them to close them down and to 2091 3/30/05 - Whole - Budget do this and do that. What I would like to see, if they can go in there and explain to the people and what they have to do to make it legal. Now, they may exaggerate some of these things, and maybe they do, but I would just like to pass this on to you, that if there is a way that you could tell your enforcement people that go in there with an attitude of, Look, we're trying to make things right, this is the way to do it, go in steps A, B, C and D, whatever it takes. I know in certain instances that has not been done, and I would just like to address that problem. COMMISSIONER SOLVIBILE: I would say I would love people to treat others like they want to be treated, and from that, I will turn it over to Mr. Verdi, who I'm sure has a spin on that, too. DEPUTY COMMISSIONER VERDI: Councilman, in some aspects, what people don't understand is, we won't close a business down because it doesn't have a license for a sign, 2092 3/30/05 - Whole - Budget but the issue is with lawful occupancy signs, the issue is with exit signs, the issue is certain issues with emergency exit lights. These are fire code issues and they're major issues. These businesses do understand what needs to be done. In certain cases, we will give people time to repair those issues. In other cases that are extreme, we don't have the ability, nor do we want to take the responsibility of a dangerous condition hurting someone that goes into that building, and that's why cease operations are initiated. A lot of times when issues with licenses and things of that nature, we have a procedure and we do tell the person prior to any intent to cease letters, prior to any administrative hearings what they need to do. The unfortunate part is, people don't seem to want to take the advice that the inspector gives. In the cases where you say the enforcement officers do go into those locations, fire and electrical violations are 2093 3/30/05 - Whole - Budget very serious issues, and the unfortunate part is, even though if someone buys a building and it has defective fire equipment, it's not the inspector's intention to close down the business just because that person bought it. Again, it's always an issue of what the extreme is.
Well, the point that I'm trying to make is, if a person has had that same violation for maybe ten or years, there are instances where they go in 13 and they have a cease operation immediately on 14 that when you can just look at it and common 15 sense will say, Well, we'll give you three days to repair it or we'll give you two days to repair it since you've been operating this way for ten or 15 years. COMMISSIONER SOLVIBILE: If, in fact, Councilman that it's a fire code violation that we consider serious, we will in fact do immediate cease irregardless of where, who or why.
Commissioner, I think we're -- 2094 3/30/05 - Whole - Budget COMMISSIONER SOLVIBILE: If it's not --
Where we're differing on is, you're making the judgment of what you consider critical and what may not be critical. I don't know. Who makes that decision? Is it your person that you send out there, your enforcement officer or is it -- COMMISSIONER SOLVIBILE: The inspector will -- to do a cease, the inspector has to talk to his supervisor, who has to then talk to the manager, and ultimately Deputy Commissioner Verdi or myself will weigh in on it, and we do not take that responsibility lightly. And, as I said, we really do an immediate cease where public safety, health and welfare are critically at risk.
No. I appreciate that. COMMISSIONER SOLVIBILE: Otherwise, we have a letter that we call an intent to cease, where if a person is not within compliance of certain things, we will send a letter that we intend to do a cease 2095 3/30/05 - Whole - Budget operations and call them in for a hearing. So we try, and we are, in my estimation, fair and if we err, we'll err on the side of public safety and people's actual life that we feel could be threatened by the presence of the conditions in the building.
Well, as I said before, you're in a very difficult seat, and every once in a while, I guess you could -- COMMISSIONER SOLVIBILE: As an old supervisor of mine told me when I first got the job 33 years old, he said, Son, you're walking in as a referee and half the people hate you and half the people love you.
Right. Well, since we're on both sides of the issue on the Council, I'm sure you can appreciate that. But you do have a difficult responsibility, and as far as I'm concerned, you're doing a commendable job in doing it. COMMISSIONER SOLVIBILE: Thank you very much.
Could you 2096 3/30/05 - Whole - Budget tell me what the new performance management system that's going to be adopted in '06, could you tell me a little bit about that? COMMISSIONER SOLVIBILE: I'm going to let Deputy Commissioner Burns explain that for me. Council President, can I take a short break?
Certainly. We'll stand in recess for five minutes. COMMISSIONER SOLVIBILE: Thank you. (Short recess.)
Councilman Kelly, continue with your line of questioning. COMMISSIONER SOLVIBILE: Thank you, Council President.
Commissioner, resuming our hearing today, I 2097 3/30/05 - Whole - Budget just wanted to know what that new performance management system that you're going to adopt in '06, could you go over that a little bit? DIRECTOR COLLINS-GREENWALD: Good afternoon. I'm Bridget Collins-Greenwald, the Administrative Services Director for the Department of Licenses & Inspections. Deputy Burns was going to touch on this subject, but she's in disposed at the moment, so I'll give it a shot. The Department has embarked on an ambitious campaign to actually track and map our performance. In the past, we had always submitted performance reports based on historical data and whatnot. This year what we are doing is, we've met with every unit in the Department. We've mapped out a strategic plan for each unit. We've actually met with them and come up with what they think is worth measuring versus what we think is worth measuring and come up with some really good concrete means of measurement. April 1st, tomorrow actually, is our goal for implementation -- to start 2098 3/30/05 - Whole - Budget implementation of the program. What we anticipate doing is mapping out exactly where we're going and what we're doing, where we do our inspections versus where our calls may come in and things of that nature. So we anticipate being able to track our performance measures much greater than we do now. COMMISSIONER SOLVIBILE: And, Councilman, when we are completely computerized, it will just make it so much easier for a manager to track himself without management overseeing him. It will be a step in the right direction. And it's sort of -- I'll probably get in trouble with the two ladies to my left for saying this. It's sort of like the Police Department's CompStat where all the violations that are coming in or complaints coming in are up on the screen and we'll say, Hey, what are you doing about this.
That's interesting, because I know -- COMMISSIONER SOLVIBILE: That's the goal we're trying to get to.
I know there 2099 3/30/05 - Whole - Budget are districts that you go into. Probably you do one -- for instance, whether it be a business strip and you'll go in there probably with not only L&I but you'll go with the Health Department and other departments, the Fire Marshal. COMMISSIONER SOLVIBILE: In business --
Do you do that periodically or is it just every once in a while? COMMISSIONER SOLVIBILE: We haven't done it for several years. We used to go in and check out all of the different businesses and the zoning for them. It's an intense effort that, quite frankly, we haven't done, but we individually will do it, but not on a whole strip.
Do you have the personnel to do it? COMMISSIONER SOLVIBILE: Personnel is not there to do it. The zoning file, it's so busy during the day to take more activity in it. It's one of the reasons why 2100 3/30/05 - Whole - Budget we wanted to create the Sign Unit. As an example, because there's so much activity with signs and so obviously interest, that to get a handle and have someone manage that for us is needed, and the same with the business census. We did it for a few years and haven't followed up on it since.
You're welcome. The Chair recognizes Councilman Ramos.
Mr. Solvibile, we heard testimony a few weeks ago from MBEC and the Administration concerning a Mayoral directive, an Executive Order, on the minority participation in the government, and I know that this will affect all City departments. Has this information 2101 3/30/05 - Whole - Budget gotten to your Department, and, if so, can you share with us how are you proceeding to implement and abide by this Executive Order? COMMISSIONER SOLVIBILE: Yes, it has through via e-mail, and I shared it with my staff. I believe last week it came out. The Mayor signed it, I believe, within a relatively short period of time. Our Department has always been rather active with MBEC because of the demolition end, and myself personally, because I was in fact in charge of demolition. So we worked closely with MBEC throughout the years and making sure there was participation, working with contractors to get them eligible to be able to bid. What we found out with demolition, say, Councilman, there was a lot of people who could do it, but didn't have the business sense or the experience to get bonding, which was a pretty tough bond to get. It's the second highest risk factor in Pennsylvania. Coal mine is the only thing that's more -- has more risk than demolition, is coal minding. 2102 3/30/05 - Whole - Budget So it was tough for business people to start out in the business. And I'm rather proud of the fact that last fiscal year, 39 percent of our, L&I's, demolitions were in fact minority and female-owned companies. That's a lot of effort, and I take pride in it. As an example, we're attempting to hire someone to do some publications for us, and I was talking to the staff person last night that's in charge of that and I told her to reach out to MBEC to find out if companies, plural, that would be interested in doing that work for us. So we are in fact and have been meeting with MBEC, giving them our quarterly reports, and I'm very proud of the effort we have put into it.
39 percent is very a respectable percentage. It shows that you have made a significant effort to make this equitable for all people in our City. Have you set up a goal of bringing 2103 3/30/05 - Whole - Budget 39 to 49? COMMISSIONER SOLVIBILE: It could be 100 percent. Our goal is to get every company that can participate to bid. As you know, we're to award demolition to lowest responsible bidder, and the critical part is "responsible" when you're demolishing buildings. And when I say 39 percent, I don't mean like subs. I mean direct contract with companies, 39 percent MBEC, minority and women-owned companies that we contract with, not just -- not counting subs, because there could be subs in that too to bring the percentage of minority firms working higher. And with our stucco, as Council President asked me in a question earlier about having one company, we now have three areas in two companies and one of the companies is in fact a minority-owned business. So I'm real proud of the effort that L&I has and will put into the future in getting participation.
Have you compiled any statistics over the years? And, 2104 3/30/05 - Whole - Budget if not, one of the issues that always comes up with companies, and even if they are minority-owned companies, is, if they are hiring people from the local community. Any way that you've been able to gauge if the contractor that you give the stucco work to is actually hiring people from that community where they might be doing a particular job? Are we making sure, in other words, that the Philadelphians get an opportunity if they're unemployed in particular to work for a company in their own neighborhood? COMMISSIONER SOLVIBILE: I believe it's tracked. It's not by the Department. I would have to get back to you. I believe there's an ordinance that Council passed that the Procurement Commissioner -- I'm not quite sure how that works. I'd have to get back to you.
Okay. Also, in light of the minority participation aspect, something that you alluded to earlier, I know that you have and other City departments have started to look into the limited-English 2105 3/30/05 - Whole - Budget proficiency issue and how departments are handling constituents that are in fact limited-English proficient. This is not something that anyone made up, but it turns out that this was something that was part of the Civil Rights Act Bill and was not being implemented. They're probably not being implemented in many other places in many other cities in the country, but this Administration at least had the foresight to go ahead and take a look at this, and an Executive Order also came out a couple years ago, I believe, on this issue of limited-English proficiency. Can you tell me just a little bit of how you have addressed this and what stories you have to tell about it? COMMISSIONER SOLVIBILE: Well, we created a Steering Committee and then also the Department in October of last year established a language access policy which was distributed to the Department. We also implemented a telephonic translation service where if someone walks into our public service 2106 3/30/05 - Whole - Budget concourse and speaks one of, I believe, 125 languages, they can converse directly with the person that's trying to elicit information from them. We have --
How does that work? Because I've heard good things about it, but I've heard also that because it's not a person talking to you in the language of the customer, that it's somewhat of a problem. But I've heard good things about it. What has been your experience with the telephone marketing type of approach? COMMISSIONER SOLVIBILE: Our staff likes it because in fact it takes away the frustration of trying to deal with someone who does not understand you and it let's them in fact serve that client a little better. And I appreciate the need for that because my father, who -- my grandparents were from Italy and neither of them spoke English, and my father would have to be taken out of school to go with them so they could get basic services, 2107 3/30/05 - Whole - Budget because my father was the only one at that time that could translate. So we appreciate the need. I personally appreciate the need for this service, and our staffers, from what I'm being told, appreciate it because it let's them in fact more efficiently deal with the client that needs the service.
Do you -- COMMISSIONER SOLVIBILE: It's a step in the right direction, let's put it that way.
I follow you. Do you in any way -- and I've asked this of at least one other department that comes to mind. We have always in this country, in Philadelphia particularly in the last seven, eight years, had a wave of new immigrants into Philadelphia. As a matter of fact, we have an Immigrant Bill that's been introduced in this Council. Are you able to have an idea, without getting too into the persons -- too 2108 3/30/05 - Whole - Budget much into their background or their business, be able to determine how many immigrant people we are seeing as customers coming through your public service floor? Any way of determining that? COMMISSIONER SOLVIBILE: I don't believe we can presently, but in our LICA system that we're creating, one of the questions will be "what is the language of your choice" on the computer on the application. So we'll be able to track how many different languages and what language the applicant speaks that we can better arrange to serve them in the future. Going forward, that will be online for us.
Is that in place now or it's something that you're working on? COMMISSIONER SOLVIBILE: It's being created. For licenses it's in place. Right now when you're filling out the license, it'll ask you the language of your choice. Matter of fact, that was one of our problems when we transferred our license information 2109 3/30/05 - Whole - Budget from our old system to our new system, was created because that field obviously wasn't filled in, what your first choice of language is. And going forward, it will be a great tool that the Department will be able to use and share with whoever needs that information.
And so for next year, God willing, we'll be able to get that information, right? COMMISSIONER SOLVIBILE: Yes, for new licenses and for renewals. Next year we'll have more and better information.
You said but it appeared right now in what application where you have a block for language of choice? COMMISSIONER SOLVIBILE: Any license. Any license for the Department. If you're getting a business privilege license --
Do you have any of those numbers compiled, how many were Spanish speaking, how much were Russian speaking? Could you get that for me? COMMISSIONER SOLVIBILE: Not yet. I can research, but I'm positive we do 2110 3/30/05 - Whole - Budget not have that information available, but going into the future, we will have that information.
But if you already have this in one form of application, can you take a look at those applications in the last year and add them up for me, see which ones were Spanish speaking, were Italian and so forth? COMMISSIONER SOLVIBILE: Actually, we just really went live with it after January 1st. So it's so relatively new.
So that's relatively new as well? COMMISSIONER SOLVIBILE: It's that new.
Can you take a look at it in the next days, weeks? COMMISSIONER SOLVIBILE: Absolutely.
Just give me an idea. We have a Bill coming up. I don't know when the sponsor is going to bring it up. I think that information helps us take a look 2111 3/30/05 - Whole - Budget at this issue a little deeper. COMMISSIONER SOLVIBILE: Not a problem. Whenever a new license has been issued, I'll ask for the language of choice and the breakdown for you and send that to Council President.
You mention you had 280-some inspectors? COMMISSIONER SOLVIBILE: 110 inspectors.
280 was the number of demolitions you were going to do? COMMISSIONER SOLVIBILE: That was the number of demolitions.
How many of those inspectors are bilingual, and in this case, I'm referring to how many of them are Spanish speaking? COMMISSIONER SOLVIBILE: I can give you a departmental breakdown. Do we have it for inspectors? We don't have it for inspectors, but we can give you the breakdown by race in the Department, by gender and race. 2112 3/30/05 - Whole - Budget
But not the inspectors? COMMISSIONER SOLVIBILE: Not the inspectors themselves.
Can you get that information for me? COMMISSIONER SOLVIBILE: Yes. Absolutely.
Because I know the one thing -- what we have seen in Philadelphia in the last particularly ten, 12 years is that you have mom and pop stores springing up all over the City and they happen to be mostly, not exclusively, by Spanish-speaking people or people whose primary language is Spanish, and I being the only person of Hispanic descent in the Council, I get a lot of folks that come to my office with issues, inspectors are coming here, and I must say that your Department has done a very good job, and my office has a very good working relationship with all of your people over there, but sometimes I get the calls of, I couldn't understand, and I have 2113 3/30/05 - Whole - Budget a -- I learned a lesson a long time ago. I was in New York City walking on Canal Street and every other store had a sign that said aqui se habla espanol, and what it said to me, among other things, was that when you want to do business with people, you really don't care what language and you do anything you can to be able to make your business grow and get those dollar bills into your store. COMMISSIONER SOLVIBILE: As long as the money is green.
I understand. So I just want to make sure that if we have these mom and pop stores that have sprung up, not just on the east side of Broad Street, which was where they were seen before, which the east side of Broad Street has had for over 30 years a significant Hispanic, Spanish-speaking population, but now these merchants or these entrepreneurs have gone on throughout the City, and I just want to make sure that they as taxpayers if -- there you can't go into your telephone system to get an 2114 3/30/05 - Whole - Budget interpreter. You're probably going to need someone, an able body, that speaks their language as well. DEPUTY COMMISSIONER VERDI: Dominic Verdi again. What we've done is in Business Compliance, I have three Spanish-speaking inspectors that work the areas where there are predominantly Spanish-speaking businesses. If other inspectors are in need of those people, they will call. If we do not or if we're not able to get a bilingual inspector out to that location, we also utilize the Police Department, which nine times out of ten has someone that speaks a language or dialect of that area. And if that doesn't work, we have Human Relations to fall back on, and they've offered help to us when we have those issues. But we do in fact have, just in that Business Compliance Unit alone, has 19 inspectors, three of which are Spanish speaking.
Is it enough? 2115 3/30/05 - Whole - Budget DEPUTY COMMISSIONER VERDI: It seems to be enough. I've asked if there's any problems in those areas, and the reports that I get back is that we don't have any complaints. The complaints will go directly to the managers in reference to that or it will come to my attention. If there were any problems at this point, we would address them.
You're welcome. The Chair recognizes Councilwoman Brown.
Thank you, Madam President. I'd like to continue the line of questioning to the Commissioner with regards to MBE, WBE participation. You mention that currently you've reached the goal of 35 percent for demolition with MBE, WBE participation, correct? COMMISSIONER SOLVIBILE: Last 2116 3/30/05 - Whole - Budget fiscal year, that's what we -- yes, 39.59 percent.
Would the figure be different for NTI emergency curbside demolition? COMMISSIONER SOLVIBILE: Well, that is NTI emergency curbside demolition. Curbside demolitions is what L&I oversees, and then the NTI demolitions, which L&I is a part of, is a different level, but that would -- I believe Ms. Smith is going to testify and they'll have that percentage. I do not know it, what the NTI regular demolitions are. One of the things that the NTI regular demolition program has done has created a training program for contractors managed by the African American Chamber of Commerce that has been successful in letting us get, I believe, three new contractors in our list that came from that program. But Ms. Smith will be able to better fill you in on all of that.
I agree with you that that is a program that is 2117 3/30/05 - Whole - Budget working or at least meeting its desired intent. What would the figures be with regards to services, supplies and equipment purchases? Do you have those numbers? COMMISSIONER SOLVIBILE: We'd have to get back to you on that with a breakdown by that, but as an example, as I stated, we're now, with Mr. Williams, reaching out to MBEC and getting -- when we have a need for a contractor, we'll reach out to get some people to be able to bid professional services for us for engineering, for various things that we may need to do.
Just for my own knowledge base, how does that happen? Is it via an e-mail, via a memo, via a sit-down saying, This is what we need? Is a list that's sent that covers a certain period of time? Is it standard operating procedure in which that happens? What is the relationship? How and what does that happen? COMMISSIONER SOLVIBILE: We meet with MBEC quarterly, myself, Deputy 2118 3/30/05 - Whole - Budget Commissioner Burns, and we go over what we did and where we're going basically. We discuss it. Basically that's the effort. The other effort that has been throughout my career is that any contractor coming in that wanted to in fact be eligible to bid on our services, we would work hard with to get them the rules and regulations. The one stumbling block has always been the bond, as I said, but getting them the knowledge is an important thing for contractors, and as soon as they can learn how to do it, you find they're successful. Our stucco contractor is successful. We've been a year and I believe that we have not gotten many complaints, if any, to myself. I'm not sure about Deputy Commissioner Evans, how many complaints she's gotten, but it's working out well, and, in fact, from being no 21 minority to 50 percent is --
Substantial. COMMISSIONER SOLVIBILE: -- substantial. 2119 3/30/05 - Whole - Budget
Knowing that bonding continues to be a hurdle, what measures, proactive or planned initiatives, or efforts are underway with the appropriate departments or agencies to deal with the issue of bonding? COMMISSIONER SOLVIBILE: Well, that's part of what NTI did by starting the contractors -- I'm really not sure of the name. Contractors to bring in emerging contractors, and in fact, L&I is part of the presentation in the classroom activity. We go there and -- the bonding end and we go over that. And really what we found -- what I found through most of my career is that most of the companies had in fact the expertise to demolish a building. They were failing with the business end of it, and that's where the Chamber greatly enhances in going over -- getting their credit report and things like that. And because of that, myself, when a contractor comes in to meet directly, I'm able to tell them, Look, to get bonded, you need to have a good credit rating, 2120 3/30/05 - Whole - Budget which I guess I realize, but never really thought of in the context of getting a bond. You really need that, and it helps, because instead of dealing with middle men, we're dealing with the direct people doing it, which is great for us because it brings down the cost of doing business, which is the goal. As you can see, with the rising, escalating cost of demolition, we need to do everything we can to get the goal -- keep it low as we can.
Well, we will look forward to receiving the additional back-up information regarding the percentages of MBE, WBE contracts in the area of services, supplies and equipment. And can you move to make that a practice every year, because you'll be asked every year about those percentages? COMMISSIONER SOLVIBILE: Not a problem. I have a little cheat sheet here and that's one of the things that -- we made a bet. I made a bet with staff how many questions wouldn't be in our cheat sheet, and 2121 3/30/05 - Whole - Budget that's the first one.
How are you faring with that? Would you give yourself a B plus, or what? COMMISSIONER SOLVIBILE: It makes me seem intelligent, which is not easy to do. So it works.
Thank you, Commissioner. COMMISSIONER SOLVIBILE: Thank you.
Are there any other questions or comments from Members of the Committee? (No response.)
Seeing none, this will conclude the testimony from the Department of Licenses & Inspections. COMMISSIONER SOLVIBILE: Council --
Our next hearing will be the Board of L&I Review. Yes? COMMISSIONER SOLVIBILE: 2122 3/30/05 - Whole - Budget Council President, this is the ordinance that you asked for, except there was only copies 4 and we're making more for you. I apologize. 5 But they'll be in here shortly, but this is 6 what you asked to get. 7
Fine. 8 Thank you. 9 COMMISSIONER SOLVIBILE: But 10 here they are, Council President. 11 DEPUTY COMMISSIONER BURNS: 12 Good afternoon. This is Fran Burns, Deputy 13 Commissioner for Administration. I'm here to present the testimony for the Zoning Board of Adjustment's Fiscal Year 2006 operating budget request to Council. The Zoning Board of Adjustment is requesting a total Fiscal Year 2006 budget of $442,118 in the City's General Fund. The General Fund budget represents a decrease of $59,290 from Fiscal Year 2005 estimated obligations. This decrease represents the elimination of one full-time employee in Fiscal Year 2006. The Fiscal Year 2006 request will fund five full-time General Fund 2123 3/30/05 - Whole - Budget positions, a reduction of one authorized General Fund position. Are there any questions on the Zoning Board before I proceed?
The one position that's being eliminated, was that someone who was on DROP? DEPUTY COMMISSIONER BURNS: No. 10 That was a layoff in Fiscal Year '05 with the recent reduction in staff, a clerical position.
And was the person that was laid off a clerical person or what position was it? DEPUTY COMMISSIONER BURNS: It was a clerk typist 2.
And was she able to get another position with the City? DEPUTY COMMISSIONER BURNS: Her name right now is certified out to another department. We're not sure if she's been hired or not.
Thank 2124 3/30/05 - Whole - Budget you. Are there any questions or comments from Members of the Committee? (No response.)
Seeing none, thank you. We will now hear from the Board of Building Standards. DEPUTY COMMISSIONER BURNS: Again, Council President, my name is Fran Burns, Deputy Commissioner of Administration. I appreciate the opportunity to present the Board of License & Inspection Review Fiscal Year 2006 operating budget request to City Council. The Board of License & Inspection Review is requesting a total fiscal year 2006 budget of $206,082 in the City's General Fund. The General Fund budget represents a decrease of $9,095 from Fiscal Year '05 estimated obligations. The Fiscal Year 2006 request will fund three full-time General Fund positions comparable to the Fiscal Year 2005 authorized General Fund position level. 2125 3/30/05 - Whole - Budget Any questions on the Board of License & Inspection Review?
I don't have any. Does anyone have any questions? (No response.)
Thank you. The Zoning Board of Adjustment is next. DEPUTY COMMISSIONER BURNS: Again, my name is Fran Burns, Deputy Commissioner of L&I. I appreciate the opportunity to present the Board of Building Standards' Fiscal Year 2006 operating budget request to Council.
Wait a minute. I thought we just did that. We just did that. DEPUTY COMMISSIONER BURNS: We did the Board of L&I Review and prior to that, we did Zoning Board of Adjustment. Zoning Board was the first one.
We 2126 3/30/05 - Whole - Budget knew the dollar figure was wrong, but let's go back to the Zoning Board of Adjustment, please. Councilman Rizzo?
I'm curious the Zoning Board of Adjustment, L&I does that?
I wasn't sure. Thanks. DEPUTY COMMISSIONER BURNS: I think when I first started, you had asked for L&I Review Board and I presented first Zoning Board of Adjustment. I then presented L&I Review Board. So that the third board that hasn't been presented is Board of Building Standards.
Councilman Rizzo, do you have any questions on what has been presented?
Charlie straightened me out. It's already been 2127 3/30/05 - Whole - Budget straightened out. DEPUTY COMMISSIONER BURNS: Excuse me.
What are you testifying on now? DEPUTY COMMISSIONER BURNS: Board of Building Standards.
Thank you. DEPUTY COMMISSIONER BURNS: Sure. The Board of Building Standards is requesting a total Fiscal Year 2006 budget of $117,277 in the City's General Fund. The General Fund budget represents a decrease of $4,527 from Fiscal Year 2005 estimated obligations. The Fiscal Year 2006 request will fund two full-time General Fund positions comparable to the Fiscal Year '05 authorized General Fund position level.
Seeing none, thank you. 2128 3/30/05 - Whole - Budget DEPUTY COMMISSIONER BURNS: Thank you.
Earlier you talked about the billboards. I just got information that that ordinance that we were talking about that we're waiting for was sent over in January of '02 to the Mayor's office.
Well, it's only March '05 and you will be receiving a copy of it as we speak.
Very well. 2129 3/30/05 - Whole - Budget This Committee will stand in recess until 1:30. So I'd like someone from the Administration to let the Water Department know that we'll be hearing from them at 1:30. Thank you. (Short luncheon recess.)
Good afternoon, Everyone. I apologize for the delay. I would ask that the Water Commissioner please approach the witness table, identify himself and proceed with his testimony. Commissioner, we do have a written copy of your testimony. We will certainly be more than happy to give it to the stenographer. It will be transcribed in full. So if you could summarize, we would really appreciate it. Thank you. COMMISSIONER BRUNWASSER: Thank you. I'm Bernard Brunwasser, Acting Water Commissioner, and I'm joined here today, on my left is Deputy Commissioner of Finance and Administration, Joseph Clare, and on my right 2130 3/30/05 - Whole - Budget is Deputy Commissioner for Operations, Debra McCarty.
Welcome. COMMISSIONER BRUNWASSER: Again, it's a pleasure to be here today. I will summarize the testimony. It's a pretty extensive amount of testimony, but we do have a lot of good things to say. Our operating budget request this year is technically about $3 million less than our request back in Fiscal 2005. The good news that we have for you is that our water continues to be extraordinarily clean and pure and healthy. Our rivers continue to improve. We've done a lot of significant things in the watersheds area and in managing our system to keep improving our environment and our stewardship of the environment not only in Philadelphia but now partnering with some of the suburban communities as well. We have a huge system. We have three major water treatment plants. Each of the three plants was recognized this past year 2131 3/30/05 - Whole - Budget in winning an EPA Directors Partnership for Safe Water awards. Our three plants are among only about 35 in the country that have won this award. Our three wastewater plants last year won gold awards, including one platinum award for the Southeast Plant, which means perfect regulatory compliance with our permits for five consecutive years. All three of our plants had at one time or other now won platinum awards for perfect regulatory compliance on the wastewater side. Those plants are working very, very well. Our rates, even though they are going up, are still significantly lower than most of our surrounding neighbors, and these rate increases, although are not very popular, are still reasonable given all of the new regulatory requirements we are forced to comply with. The individuals in the Water Department are on many of the top committees in the country for their various expertise. 2132 3/30/05 - Whole - Budget We have many homegrown experts in this Department on various facets of water treatment and wastewater treatment. We're very proud of them. And we're very proud of all of our employees. And with that, I'll leave it open for questioning.
Very well. Thank you. You spoke about the water rate increase. I believe that goes before the hearing examiners that was approved for, what, '05? COMMISSIONER BRUNWASSER: Right. Back in January, I approved an increase in rates after hearings were held in front of an independent hearing officer, and the rate for fiscal '05 that took effect on February 1st was an average 12.8 percent rate increase, or about $5.33 for what we would call the typical residential customer. Seniors would see a smaller rate increase than that.
2133 3/30/05 - Whole - Budget Because of the discount? COMMISSIONER BRUNWASSER: Because of the discount. Seniors who are eligible, income eligible.
And you anticipate the rates will be going up again in '06? COMMISSIONER BRUNWASSER: Yes. And what is before the hearing officer now and will be worked out in a series of formal and informal hearings -- in fact, I think the first informal hearing begins tonight, where the public can come in and voice their opinions --
How does the public know about the hearing? COMMISSIONER BRUNWASSER: This has been widely advertised in the City newspapers, including, I think, two Hispanic papers.
Where is the hearing being held? COMMISSIONER BRUNWASSER: 144 West Dauphin, which is a school, Hunter's 2134 3/30/05 - Whole - Budget School.
Do they in fact have hearings scheduled in every section of the City? COMMISSIONER BRUNWASSER: Most sections of the City, I guess. We have a schedule. We will provide -- we have a lot of material here, that we can certainly provide that as well. That's part of one of our packages.
All right. Thank you. Can you explain why you've abandoned the fire hydrant system? COMMISSIONER BRUNWASSER: Well, that's a good question. We have been working closely, the Water Department, has been working closely with the Fire Department for more than five years on beefing up the regular hydrant system in the same areas that the high-pressure fire system is located. What we've done, fire fighting has changed considerably over the past hundred years. Our old high-pressure system goes back 2135 3/30/05 - Whole - Budget to the first decade, I think, of the 20th century, and it was constructed because we had a lot of major garment industries just north of Center City. We also had begun building skyscrapers in Philadelphia with the advent of the elevator and escalator and the need of high pressure to reach those tall buildings and to put out the fires in any of those major garment works with the advent of new fire fighting equipment, new building materials, sprinklers and other things. We now believe and the Fire Department -- more importantly, the Fire Department believes that it was time to abandon the old high-pressure system. High-pressure systems have been abandoned in, I believe, New York and Chicago as well. So it basically was a system that had outlived its usefulness. With the kind of equipment the Fire Department now has and with the new codes that have been passed over the years, fire codes and fire prevention methods, new materials, we believe that that old system can be disbanded. 2136 3/30/05 - Whole - Budget
What are the projected savings from this in FY06 and the out years of the next five years? COMMISSIONER BRUNWASSER: Yes. There will be savings to the General Fund. The Water Department believes that what we will be able to do is knock down -- in fact, we had decommissioned, I think, in January. There will be savings of half of the O&M expense for the system, about $613,000 in the current Fiscal Year '05. In Fiscal '06 -- there's both an operating and capital component to our cost. So in '05, the cost will be 1.413 --
I'm not asking for the cost. I'm asking about the savings. COMMISSIONER BRUNWASSER: $613,000.
You said that was for '05? 2137 3/30/05 - Whole - Budget COMMISSIONER BRUNWASSER: Right.
Will that be annually for the five-year plan? COMMISSIONER BRUNWASSER: It actually gets bigger. It actually gets bigger.
So what would it be for '06? COMMISSIONER BRUNWASSER: In '06, it drops by, I think, another $813,000 to a total of 600,000, which is strictly for capital expense. In '07, it drops by another $200,000. In '08, it drops another $200,000, and by '09, it's gone entirely.
For how much? COMMISSIONER CLARE: The total savings in '09 would be approximately $2.1 million under current rates. It would be considerably higher if we kept the system in operation.
The Chair recognizes Councilman Rizzo. 2138 3/30/05 - Whole - Budget
Thank you. Commissioner, how many miles of pipe do we have and what size is that high-pressure system? Ballpark. COMMISSIONER BRUNWASSER: I don't -- we'll have to get that number for you.
It's many miles, right? COMMISSIONER BRUNWASSER: It's a fair number. I think there's about a thousand hydrants all together.
Tell me about eight-inch main, ten, 12, what? COMMISSIONER CLARE: Eight to 12.
I would think that. Commissioner, has there been any thought -- we're abandoning it in place. We're not going to dig it up. Is there any thoughts of maybe using it as a conduit for other infrastructure like fiberoptic? It's a heck of a conduit that's underground and it 2139 3/30/05 - Whole - Budget should be utilized and maybe even sold off for other utilities, gas, water, cable. My God, it's a natural conduit. COMMISSIONER BRUNWASSER: Yes, Councilman, we agree, and there is a committee that has been recently formed to explore things just as you suggest, conduit and cable, et cetera. And we will look at that with an eye to either make it a winner for the City or at least not a costly loser.
My point is, I think we need to communicate to let people know. Not everybody monitors these hearings and knows. Eventually I would assume you're going to remove all the high-pressure hydrants and salvage those or resell them. Sell them on eBay, right? COMMISSIONER BRUNWASSER: Yeah. I mean, apparently they don't have a whole lot of value, unfortunately, but --
Scrap, I would assume. COMMISSIONER BRUNWASSER: Yeah, some scrap, and depending on how we structure 2140 3/30/05 - Whole - Budget a contract, that may offset some of the cost.
But my point is, we really need to let the other utilities know, all these other communication providers, that there may be a natural multi-mile conduit there already in the ground, which is probably the more significant cost of any underground excavation, that it's there and it's available. So I think it needs to be marketed a bit. COMMISSIONER BRUNWASSER: Correct. Correct.
You're welcome. Do you mind if we go back to the figures of the proposed or projected savings. The cumulative number, I believe you said in FY05 it was 613,000; for '06, 1.2 million; '07, 1.4. Do you want me to wait until you get your page? COMMISSIONER CLARE: I'll give you the exact numbers. 2141 3/30/05 - Whole - Budget
When you're ready, just let me know, please. COMMISSIONER CLARE: In '06, the savings is approximately 1 million 472. In '07 --
Wait a minute. I thought it was 613 in '05? COMMISSIONER CLARE: In '05, the saving is 613.
And '06? COMMISSIONER CLARE: 1 million 472; '07, 1 million 653; '08, 1 million 838; and then in '09, the 2.1 million. '09 and beyond is 2.9 million.
2.9? COMMISSIONER CLARE: 2.1 million. I'm sorry.
Okay. We're looking for pennies here. Can you explain why these savings were not reflected in the Fire Department's budget? COMMISSIONER BRUNWASSER: I'm 2142 3/30/05 - Whole - Budget not that familiar with the Fire Department's budget. I'm kind of assuming that it's -- I don't know whether the Fire Department handles it directly or through interfund. I see Mr. McPherson indicating direct. This came about probably after they had begun preparing their budget, so that's --
Ms. Reed, would you be able to respond to that question? Can you tell us why these savings were not reflected in the Fire Department's budget? DIRECTOR REED: Dianne Reed, Budget Director. I think that the Commissioner is correct in that this was an opportunity identified by the Fire Department a little bit late in the process, but I'll have to get back to you on that for sure.
Very well. Thank you. Commissioner, on -6 of your detail, within the Residual Fund you are requesting $125 million for full funding of 2143 3/30/05 - Whole - Budget annual requirements. Can you explain what this is for? COMMISSIONER BRUNWASSER: 54-6?
Yes. COMMISSIONER BRUNWASSER: I guess that could be -- this is the $125 million from our Sinking Fund reserve that is planned to be used for water and sewer infrastructure as part of economic development.
Is this what we commonly have gotten to learn is called River City? COMMISSIONER BRUNWASSER: I think that's certainly part of it, yes.
Will this be an annual requirement? COMMISSIONER BRUNWASSER: No. 20 This, I guess, is a one-time requirement.
This is somewhat misleading. Do you know how these funds are going to be used? COMMISSIONER BRUNWASSER: 2144 3/30/05 - Whole - Budget Pardon?
Do you know how these funds are going to be used? COMMISSIONER BRUNWASSER: No, not in any detail at all. No. 7
Do you know who will oversee their expenditure? COMMISSIONER BRUNWASSER: I'm not certain. I've heard that perhaps PIDC will do that, but, again, I have to defer to either the Finance Director or Chief of Staff.
Do you have bond counsel's opinion that these funds can be used, and, if so, I would like to simply see a copy of what they say. COMMISSIONER BRUNWASSER: Right. I don't think we have any formal legal opinion at this point, but we certainly could ask for that.
What is the cost to the water rate payers if these funds are spent? COMMISSIONER BRUNWASSER: Well, the cost would incur mostly to the General 2145 3/30/05 - Whole - Budget Fund, because the Sinking Fund reserve is the source for the excess interest earnings payment that happens every year.
Well, can you tell us what the cost of the surety bond is? COMMISSIONER BRUNWASSER: I don't know what that cost will be yet. I don't think we have any direct information yet.
Well, do you know who would pay for it? COMMISSIONER BRUNWASSER: I am also not certain of where the payment is coming from.
Ms. Reed, are you in a position to respond? Do you have any knowledge? How can we budget something that nobody seems to know anything about? Ms. Reed, do you know who is going to pay for the surety bonds? How is this budgeted? I don't know what to take from this testimony. 2146 3/30/05 - Whole - Budget COMMISSIONER BRUNWASSER: We know that the source of the funding is our Sinking Fund reserve, the Water Department's Sinking Fund reserve. It's my understanding that that reserve could be replaced with a surety bond or a letter of credit.
But you would have to know what the cost is, don't you? COMMISSIONER BRUNWASSER: Correct, but we have not personally explored the cost. It's probably three to five percent of the amount, but that's a big difference.
So that would take us to over $5 million? COMMISSIONER CLARE: It's possible.
Pardon me? COMMISSIONER CLARE: Yes, Your Honor. It's possible.
But where is it budgeted? COMMISSIONER CLARE: The cost 2147 3/30/05 - Whole - Budget of the surety bond right now is not budgeted unless it's taken out of the 125 as part of the transaction.
I think we certainly need more information than you're able to provide us today. Councilman Clarke, your light is on. Did you want to be recognized? I think you're going to have to get information on many of the unanswered questions today and we'll just have to have a call-back. The Chair recognizes Councilman Clarke.
Thank you, Madam President. Good afternoon, Commissioner. Commissioner, let me understand your rate increase process. You indicate that you went to the PUC -- COMMISSIONER BRUNWASSER: Not the PUC. We're not PUC regulated.
You went to? I'm sorry. 2148 3/30/05 - Whole - Budget COMMISSIONER BRUNWASSER: Well, I think we're going to pass out some booklets for you.
Talk to me about the process. COMMISSIONER BRUNWASSER: The first step in the process really is that when we take a look at our finances, we look at our revenues and expenditures. We review those on a continuous basis. When we believe that we are not receiving enough revenue to cover our expenses, we have to seek a rate process, and what we do is, we commission the rate study, first of all, to confirm our suspicions, and once that study is complete, we announce our intention to hold a rate process by sending a letter to the President of City Council. We did this a while back. Shortly after announcing our intent, we request that a hearing officer, an independent hearing officer, and a public advocate be chosen to --
Who selects 2149 3/30/05 - Whole - Budget the independent hearing officer? COMMISSIONER BRUNWASSER: Both of those positions are jointly selected by the Mayor, the President of City Council and the City Controller.
Okay. COMMISSIONER BRUNWASSER: And once that happens, the hearing officer -- well, anyway, the rates are also filed with the Department of Records.
With respect to the selection process, will all three of the members have to agree on that, hearing officer and public advocate? COMMISSIONER BRUNWASSER: I believe so.
It can't be a two-one vote; it has to be all three? COMMISSIONER BRUNWASSER: I believe so. Under our regulations, I don't think there's any great detail as to requirements, but it's in one of our regulations.
Wait a 2150 3/30/05 - Whole - Budget minute. You say there is no great detail or you just don't know? COMMISSIONER BRUNWASSER: I think it pretty much states that they jointly have to agree upon a hearing officer and a public advocate for the rate case.
With a unanimous vote? COMMISSIONER BRUNWASSER: I don't think it says unanimous.
It doesn't say anything? I'm just trying to understand. COMMISSIONER BRUNWASSER: No. 15
Normally when you have three people, it gives you an opportunity -- COMMISSIONER BRUNWASSER: I don't believe it says unanimous, but --
All right. COMMISSIONER BRUNWASSER: -- I think, in effect, it is.
Okay. Go ahead. I'm sorry. So they select a public advocate and -- 2151 3/30/05 - Whole - Budget COMMISSIONER BRUNWASSER: Right. The rates -- they're chosen. At the same time, the rates are filed with the Department of Records, and there are notices in the paper which allow any interested party to register and be a party to the rate case, to be part of the formal rate case.
Is there any criteria associated with it being a party to the case? COMMISSIONER BRUNWASSER: I don't believe so.
Just a citizen? COMMISSIONER BRUNWASSER: Right. I think even a citizen can be a formal party, but --
You think? COMMISSIONER BRUNWASSER: They would have an opportunity to cross-examine Department witnesses and present testimony of their own.
All right. You say you think. You think or is it -- 2152 3/30/05 - Whole - Budget COMMISSIONER BRUNWASSER: No. 3 That would be -- a single person can be, I think, a party, a formal party.
A formal party? COMMISSIONER BRUNWASSER: Right. Typically they're not. Typically residential customers are represented by the public advocate. That's the role that the public advocate would play in this whole proceeding. And then there are other interest groups that, of course, can be parties, large meter customers or commercial or industrial groups.
Then what happens? COMMISSIONER BRUNWASSER: The hearing officer will call all the parties that registered with the Department of Records, call them together and schedule rate hearings, both formal rate hearings and informal rate hearings. At these hearings, there's a court stenographer that takes everything down, and the hearings then are scheduled, they take 2153 3/30/05 - Whole - Budget place, a record is developed. The various attorneys prepare their briefs of the case. Those briefs find their way to the hearing officer. The hearing officer then summarizes the case.
Excuse me. I hate to keep cutting you off, but as you're speaking, I want to ask questions about it. When you say the attorneys prepare briefs, are you -- COMMISSIONER BRUNWASSER: To the formal parties, the formal parties.
So it does not have to be an attorney; an individual citizen is not required to get an attorney to prepare a brief? COMMISSIONER BRUNWASSER: That's true. That's true. And they can opt out at any time. In other words, they want to be a formal party, they want to cross-examine witnesses, things of that nature, that could happen.
Okay. COMMISSIONER BRUNWASSER: But 2154 3/30/05 - Whole - Budget do they want to file a brief? I guess to the extent that they have the ability or they want to hire someone to do that for them, that's fine.
Okay. COMMISSIONER BRUNWASSER: So ultimately the various attorneys in the case summarize the case for the hearing officer, stating their points. The hearing officer summarizes the case and accepts or rejects some of these arguments. They're all on the record. And the hearing officer makes a recommended decision to the Water Commissioner, and then the Water Commissioner reviews the hearing officer's --
Is it solely the hearing officer or is it the hearing officer and the public advocate, or just the hearing officer? COMMISSIONER BRUNWASSER: The hearing officer has taken the legal brief of the public advocate, the legal brief of the City, the legal brief of any other formal party and puts it into the record. And the 2155 3/30/05 - Whole - Budget record, I mean, the transcript is there for me to review, all of the record is there, the exhibits and arguments, and the hearing officer has all that, and then he makes recommendations to the Water Commissioner. Then the Water Commissioner reviews the hearing officer's report, gives it substantial weight, looks at the record, looks at the transcripts and all the other material and then renders a final rate determination. Ten days after the final rate determination, new rates can go into effect.
You determine the final rate increase or decrease, it goes into effect. Is that ten-day period given for any opposition or is there challenges to that? COMMISSIONER BRUNWASSER: No. 23
What's the significance of the ten-day period? COMMISSIONER BRUNWASSER: I 2156 3/30/05 - Whole - Budget think it has to -- the rate determination has to reside in the Department of Records. I think that's basically --
So the Commissioner makes the ultimate determination? COMMISSIONER BRUNWASSER: That's right.
There's no 10 ability to challenge that determination? COMMISSIONER BRUNWASSER: Only in court.
Only in court, okay. Thank you. With respect to your chart on of your testimony, earlier in your testimony you referenced that the bills that rate payers get in the City of Philadelphia include both the water and sewer rates? COMMISSIONER BRUNWASSER: Correct.
In this particular chart, in these other municipalities or counties or authorities, does that include solely water rates or does 2157 3/30/05 - Whole - Budget it include the water and the sewer rates? COMMISSIONER BRUNWASSER: The column on the left says Monthly Water Bill. That is only water. That's only the water side of the bill. In the second column, the Monthly Bill, you see a lot of N/A's there, and I'll explain that in a second. That's only the sanitary wastewater part of the bill. We also charge for storm water. That's not shown here. And that's approximately $18 a month. And that's -- excuse me. That's not 18. It's less than $18 a month. $18 is roughly the service charge today.
Let me understand this. So in the chart, on the column on the right, there's no number for sewer for any of these locations, any of these locales? COMMISSIONER BRUNWASSER: The reason for that is, these are only water providers. In a lot of suburbs, not all suburbs have a sewer charge directly. Some of the sewer charges, particularly those 2158 3/30/05 - Whole - Budget associated with storm water, are often buried in their taxes. It's part of their tax bill 4 in many cases. Or they pay some other sewer assessment kind of charge in many of the suburbs. So only in those areas where we had a comparable service were we able to list dollar amounts.
The reason I ask that is, conceivably if you're doing an analysis on the water charges, understanding that in Philadelphia there's no listing of the sewer, some of these locales could in fact not have any sewer charges to the customers or -- COMMISSIONER BRUNWASSER: Not called sewer charges. In some cases, they do. In some cases, they don't.
So we don't really know what the number is in comparison to other locales for both water and sewer? COMMISSIONER BRUNWASSER: Correct. Correct. There are many communities that really have not a clue as to their storm water charge, for instance, and we do. We 2159 3/30/05 - Whole - Budget have a pretty sophisticated delineation among our various charges, because we need to have that. And some of these other communities, you know, again, some of these wastewater charges are in their taxes, sometimes they have a sanitary waste bill but no storm water bill.
So is it your contention -- because if I'm looking at this chart, understanding that Philadelphia does in fact have a sewer charge and that sewer charge, based on your testimony, can get the total number up $40-something an hour, $47 per month, if none of these other locales have sewer charges, then conceivably Philadelphia may not rank as highly as it appears in this chart. COMMISSIONER BRUNWASSER: Well, again, we can only compare apples to apples, and that's what we are trying to do here. Believe me, they're paying for sewer. They just don't know -- in many cases, they don't know how much. It's part and parcel of their tax bill, and their tax bill 2160 3/30/05 - Whole - Budget contains sewer. In other words, it would be like trash collection here. It's part of our tax bill. We don't have a separate trash collection bill if you're a residential customer.
I mean, I bring that up because you talk about comparisons between Philadelphia and other locales, how we are much better off in terms of the rate payers, but yet you don't indicate -- I mean, how do you know that if you don't know specifically the sewer charges for the other locales? We have a finite number for an average household in Philadelphia, which is 40, 45, whatever. If you compare it to what you have listed, not knowing what those costs are for sewer, then we would only be lower than one Pennsylvania American Water without knowing what the cost of the sewage is. COMMISSIONER BRUNWASSER: That sounds correct, but, believe me, they are paying for sewer. They just can't tell us how much they're paying for sewer. 2161 3/30/05 - Whole - Budget
Okay. But, I mean, how do you know that ours is lower if you don't know what the number is? COMMISSIONER BRUNWASSER: For one thing, we charge them on a wholesale basis. Many of these communities are our customers. They're our customers.
That was actually my next question, who we're selling water to. COMMISSIONER BRUNWASSER: You have to remember, they're wholesale customers of ours. We're not allowed to retail outside of our borders. Now, we charge them a significant amount of money. We make, out of our wholesale customer base --
Before we get to that, that was my next question, but let's finish up on this one first. Can you give me an example -- because our bills come to us as one bill, as you indicate in your testimony. So we don't get a 17.50 water bill and then a separate 2162 3/30/05 - Whole - Budget sewer bill. So I'm trying to get a sense of your claims -- and I believe you -- that we have low water rates than other municipalities. I'd like to be able to determine the factual basis of that, and, therefore, you would need to include some of these locales' sewer rates so you can get an accurate number. COMMISSIONER BRUNWASSER: Yes. We would include them if they knew what the answer was. They don't. They don't know what that answer is.
So how do we know? COMMISSIONER BRUNWASSER: We know that it's significant, because wastewater costs if you're treating to full secondary standards, which you need to treat to today, generally run 50 percent -- well, in our case, we probably -- our bill is almost two-thirds sewer costs. Sewer expense is actually more expensive than water.
Okay. COMMISSIONER BRUNWASSER: So we 2163 3/30/05 - Whole - Budget know that if, in the case of Pennsylvania American, if they're serving some customers out there -- let's take Aqua Pennsylvania, which here is Philadelphia Suburban. It really should be Aqua Pennsylvania now. We know that many of the customers that Aqua Pennsylvania services for water in our suburbs come to us for wastewater. So already we know on a wholesale basis what we are charging in bulk for sewage service. Now, that, of course, has to work its way back to the customer, but we don't -- we have an arm's length role here. Let's say Lower Merion, take Lower Merion for an example. Lower Merion gets a wholesale wastewater bill from us based on the amount of flow and the strength of that flow. We charge them for that. Now, Lower Merion, on top of the charge from Philadelphia, they have their own pipes, their own inlets, their own storm sewers that they have to maintain in addition to the charge that they send to us. So we know that it's a significant chunk of money to the average customer in 2164 3/30/05 - Whole - Budget Lower Merion, but unless they get charged for their sewers separately, we don't know, we can't tell you how much it is. We just know that it's a significant piece and probably in excess of the water side of their utility that you see here.
Okay. With respect to the cost or the charge relating to raw cost of water to suburban counties, what is that in comparison to the raw cost of water provided to the citizens of the City of Philadelphia? COMMISSIONER BRUNWASSER: Well, by "raw cost" --
There's a cost of water. In most people's minds, it's free, but I'm assuming we put some number to the raw cost of water, then the cost associated with the systems that provide the water. So I'm trying to get a sense of what we're charging other municipalities. COMMISSIONER BRUNWASSER: What you're thinking about -- and I know we had some discussions at length. I know Councilman 2165 3/30/05 - Whole - Budget Rizzo is here, and he certainly brought this subject up on occasion and others have. We wholesale water in bulk to two customers that we have, Aqua Pennsylvania and Bucks County Water and Sewer. Let's take Bucks County Water and Sewer. They get their water through one big pipe at a pretty constant rate day in, day out, and that costs us something. We have calculated all the costs associated with providing Bucks County with water. We've done depreciation. We've done other things on the capital associated with the Baxter Plant that services them and the pipes that service them, and we then add ten percent called a management fee. Well, actually, that's an older contract. That's about the only contract we have that doesn't really have a management fee. When we renegotiate that water contract, it certainly will have it. But we collect all of the costs to us and depreciation, return on investment, and that's what we charge Bucks County. Now, when you send 20 million 2166 3/30/05 - Whole - Budget gallons of water a day through one pipe at a steady rate and contrast that with sending 4 million gallons a day to a big community, 5 let's say Torresdale community, and let's say 6 it's 20 million gallons a day, but you take a 7 look at the pipes that you have and the 8 infrastructure that it takes to send that same 9 amount of water to thousands of customers, and 10 then you take a look and -- you have that 11 aspect, and then you have to turn around and 12 bill each of those customers every month and 13 collect and mail, you know, postage, et 14 cetera, then the cost is a retail cost. You 15 are also cleaning your inlets. You're also -- 16
So you're 17 saying that the administrative costs, the 18 infrastructure associated with the cost of 19 providing water to an area that could be 20 comparable in terms of pure usage to Bucks County is higher because of the administrative and infrastructure versus a single pipeline that pushes water out to a county and then they have their infrastructure out there to distribute and their billing process? 2167 3/30/05 - Whole - Budget COMMISSIONER BRUNWASSER: Right.
It sounds like you're telling me that they pay less for water than we do. COMMISSIONER BRUNWASSER: They pay less on a unit-charge basis at the border, at the border of Philadelphia. They then take that water, the million gallons, and 11 distribute it and pump it and distribute it 12 through their own system to all of their 13 customers, all their individual customers. 14 They meter them, they bill them, they fix 15 those pipes. 16
How much 17 less per unit cost than the City of 18 Philadelphia? 19 COMMISSIONER BRUNWASSER: Well, 20 our most recent customer, which is Aqua Pennsylvania -- even though we have a lot more service, we provide a tremendous amount of services to inside City customers that we don't provide to outside customers. Aqua Pennsylvania signed an 2168 3/30/05 - Whole - Budget agreement with us a few years ago, and it was good because we now are able to market more of our reserve capacity. We have a significant amount of capacity to produce water in Philadelphia, water of the highest quality, and we're very proud of that. Now, they needed some water in one of their areas of service, and actually it was a power plant that was built in Eddystone, Pennsylvania. They didn't have such strong water reserves there, so they opted to come to Philadelphia and see if we could wholesale water and they could push it to that area, and the rate that they signed up for is very close to some of our -- the lowest block rate of some of our largest water users inside Philadelphia. In other words, we have a declining block rate in the City. It is cheaper -- just as I said, it was cheaper for us to provide one pipe, one steady flow of water to Bucks County, it's also cheaper if you have a big water-using industry in Philadelphia, because they may be operating on a 24-hour basis, and 2169 3/30/05 - Whole - Budget the infrastructure required with that is less than if you had to send that same volume of water to a bunch of residential customers. So we recognize the usage pattern and the cost to Philadelphia. Our rates are cost-based, and we recognize that in a lower block or lower-unit cost to some of the very heavy users in Philadelphia. And the same thing happens with the suburban customers. You have to recognize the fact that they are taking a steady stream of water, and that's all you have to do. You have to pump it out there and they have to do the rest.
You said earlier we charge a ten percent management fee? COMMISSIONER BRUNWASSER: We charge a ten percent management fee, I think, on virtually every wholesale contract that we have, except the oldest wholesale contract, which is the Bucks County Water contract, which dates to 1966. We incorporated a ten percent management fee in, I believe, 1987 on all the other subsequent contracts. 2170 3/30/05 - Whole - Budget
When is that contract terminating? COMMISSIONER BRUNWASSER: 2011.
And I'm assuming we will impose some management fee at that time? COMMISSIONER BRUNWASSER: Correct.
As it relates to determining the rates for wholesale outside of the City of Philadelphia and if we have any inside the City of Philadelphia, is that a similar process or is that included in this process with residential rate payers? COMMISSIONER BRUNWASSER: Right. The wholesale rates do not go through a hearing process. As a matter of course, when we do a detailed comprehensive cost of service and rate design, we have to do wholesale also. We have to do wholesale and retail and see what the mix -- how that affects our cost. Once we know what those rates are, we can, with 90 days' notice, we can change rates to wholesale township 2171 3/30/05 - Whole - Budget customers.
So with respect to the wholesale process, is it the Commissioner or internally you determine what those numbers should be? COMMISSIONER BRUNWASSER: Right. And basically we filed a study with the increased rates. In other words, we don't do this haphazardly or we just decide we want more money. We have to have some data and details. And so when we commission a rate study, we also study township rates, and as soon as we have the study in hand, we can give them 90 days' notice that rates are going to be changing.
So do you have the ability because you are the Philadelphia Water Department to determine before you raise the rates on the citizens of the City of Philadelphia, it will be more prudent to raise the rates on wholesale customers? COMMISSIONER BRUNWASSER: It's all part of the whole -- in a way, it's part 2172 3/30/05 - Whole - Budget of the whole process. I can tell you that we raised rates to the wholesale customers long before we raised rates to the residential customers, because the rate process did not happen as quickly as we would have liked, but that didn't stop us from raising rates to the townships, and that, we did.
The Chair recognizes Councilman Rizzo for a point of information.
Commissioner, could you answer this question: If we weren't in the wholesale water business, would the rates to our customers be less? COMMISSIONER BRUNWASSER: No. 19 No. They'd probably be a bit more, because we would have to pay for all of the capital that's been constructed that also services the suburbs. In other words, our water plants were designed in the 1950s when, I guess, most people believed our population would continue to grow to about two and a half million and we 2173 3/30/05 - Whole - Budget had, of course, a lot more industry back in those days, a lot more water-intensive industries, breweries and packing plants. So it helps us to be able to wholesale water in this particular instance so that we spread some of those capital costs that we have at the Baxter Plant, let's say, and some of the pipes --
Is that the same with wastewater? COMMISSIONER BRUNWASSER: Yes. Exactly so, yeah.
Thank you. With respect to the wholesale sales in other municipalities, I'm going to assume that they probably don't have the capabilities of getting alternative sources of water without a major infrastructure improvement or 2174 3/30/05 - Whole - Budget addition. Am I correct? COMMISSIONER BRUNWASSER: Yeah. I think to some extent, that's correct. In other instances if we weren't there, they would obviously have to look for other sources. Aqua Pennsylvania, for example, has some of its own sources of water. The reason they came to Philadelphia, by and large, was, there are certain places within its large area network that it would take them a lot more to pump water from an area perhaps where they're producing it to where they need this water to be, because they have more of a sprawling area than we have. And so it made sense to them, because the numbers came out all right, that it was better for them to buy water from us on a wholesale basis and distribute it where they needed it in more of a weaker area of their distribution than it would have been for them to get it from another area of their distribution and have it pumped a great distance. They'd have to have the infrastructure to do that. 2175 3/30/05 - Whole - Budget
So it's a substantial cost that would have to be taken into account if they determine that they were going to go to alternative sources? COMMISSIONER BRUNWASSER: Correct, and it's especially true on the wastewater side. With few exceptions, most of those townships are dependent on our wastewater treatment plants, and our plants actually were built and sized appropriately to take their wastewater load. And since those plants were built with two-thirds federal money, the Federal Government is also a partner in this.
I'm a little concerned that there's not a process beyond just the Commissioner, and I understand you guys are the experts, to determine increases or decreases in wholesale rates, because I think the average person, the average layperson, would say, Before you start raising our rates, why don't you raise the rates of the suburban guys, because they're taking our jobs, taking our tourism. 2176 3/30/05 - Whole - Budget I mean, there's always this battle between suburbia and the City of Philadelphia. But without a, quote/unquote, independent process, we're simply left with the process that incorporates the Commissioner and his staff on determining whether or not we should raise those rates in suburban counties and outside the State of Pennsylvania as opposed to raising the rates on the City municipal customers. I don't know if there's some charter-mandated requirement that prohibits that independent analysis that could determine the rates on wholesale customers outside the City of Philadelphia. Do you know if there's a reason why we don't do that? COMMISSIONER BRUNWASSER: It is the City Charter.
The City Charter. So we can't do that? COMMISSIONER BRUNWASSER: The City Charter --
Prohibits 2177 3/30/05 - Whole - Budget us from doing that? COMMISSIONER BRUNWASSER: The City Charter says the rates are set by the Water Department. As long as the Water Department sets rates in compliance with City Council ordinances; for instance, percent 8 discount to eligibility senior citizens would 9 be a mandate of City Council, as long we raise 10 rates -- 11
I 12 understand that. I'm asking about the 13 prohibition from a process that is 14 incorporated in residential increases or 15 decreases, rate payers, that includes the City 16 Council President, City Controller and Mayoral 17 appointment to determine or make 18 recommendations as it relates to rate 19 increases or decreases. 20 I guess I'm trying to determine, is 21 there a prohibition that would not allow us to 22 incorporate that process in the event that we 23 thought we needed to have some increase in 24 rates for wholesale customers outside the City 25 of Philadelphia? 2178 3/30/05 - Whole - Budget COMMISSIONER BRUNWASSER: Well, the way I see it, and I've been with the Water Department for 34 years, the City Council can affect rates through our budget. If in theory, not only in theory but in fact, if there's something in our budget that doesn't seem appropriate or right or we're not -- then theoretically that could have an effect on rates. So that's kind of the bite of the apple.
I'm not looking at a hostile situation. COMMISSIONER BRUNWASSER: Right. I understand, but assuming that we budgeted --
But my concern is that you will raise the rates on the citizens before you will raise the rates on the wholesale customers. I don't want to do that. COMMISSIONER BRUNWASSER: We have already raised the rates on wholesale customers because we didn't have to go through the rate process. So we have the study on 2179 3/30/05 - Whole - Budget which retail rates are based. That same study is also the way we base our wholesale charges. The fact that we didn't have to go through a rate process, we were able to raise wholesale rates within 90 days. We had to wait to and we are waiting again for the next three fiscal years to change the rates for our inside City customers. So the townships are not avoiding rate increases, by any means. They've gotten them and they've gotten them --
I'm not saying they're avoiding them. I'm suggesting that maybe we need to be raising rates on townships -- COMMISSIONER BRUNWASSER: They're set by contract.
-- even more so than the citizens. COMMISSIONER CLARE: There's very long-term contracts with the wholesale customers, and the contracts basically call for the rates to be set based on cost of service, plus a management fee. So there's 2180 3/30/05 - Whole - Budget very little discretion that the Commissioner has in setting the wholesale rates. It's basically --
Excuse me. How long are those contracts for? COMMISSIONER BRUNWASSER: Well, most of the wastewater contracts that we've signed in recent years are for 35 years.
Wastewater or water service? COMMISSIONER BRUNWASSER: Water service are also very long contracts. I was saying earlier that the Bucks County contract, which was signed in 1966, goes until 2011. It's a 45-year agreement. Now, we are able to change rates as our costs go up. We provide a study and we show that they are costing us more money, and we are eligible to collect our costs and raise them appropriately, but we can't -- we have to 2181 3/30/05 - Whole - Budget operate under the contracts that are in force.
Point of information. I really need to chime in here. Can I chime in here? Commissioner, what I'm hearing, and maybe you're not, is that we've got something that they want, very valuable, wastewater treatment facilities that people don't want in their backyard. We've got water that they want, because it's probably cheaper for those water utilities to buy it from us than it is to manufacture it, purify it, whatever they have to do. What I'm hearing is, we've got something that is very valuable, and we may be selling it to -- we might be giving it away instead of charging top dollar for it. You're throwing this around the Commissioner as discretion. You have discretion to say, No, don't sell it; am I right? COMMISSIONER BRUNWASSER: Well, after the contracts expire, yes.
My point being is that what I'm hearing is that you 2182 3/30/05 - Whole - Budget need to jack the price up a little bit here to make it worth our while. And also if this is such a good business, why aren't we out selling more water? Why aren't we going after some of the other municipalities that have their own municipal water companies and provide them water? If this is a good deal and the sewage treatment plants are under capacity because they were built for two and a half million people, that our water supply system was designed for two and a half million people, you should be beating the bushes if this could bring the rates down, which you said maybe more wholesale customers could bring the rates down for some of our core customers, our businesses and our residential users. But what I'm hearing here today, that maybe you're not negotiating the best deal that you could negotiate or with your prerogative to change the rates midstream, no 23 pun intended, but maybe you're not doing that. Maybe you're not adjusting the fact that -- and I'm not suggesting we hold them hostage 2183 3/30/05 - Whole - Budget for our water, but we've got it, they don't. And to give it away at a price that maybe isn't the price that it should be, to help what Councilman Clarke is saying, maybe give our rate payers some relief, maybe you're looking in a way that's not -- you hear what I'm saying? COMMISSIONER BRUNWASSER: Absolutely. I understand. I understand.
I think Councilman O'Neill said basically the same thing the last time we had this go-around. COMMISSIONER BRUNWASSER: Right. The Councilman said that avoidance of building a wastewater plant is priceless, as I recall. And I agree with him there.
And I think if you raise the price, I don't think they'd blink, because the last thing they want -- how much does a water treatment plant cost to build? How many millions? COMMISSIONER BRUNWASSER: Well --
Millions, 2184 3/30/05 - Whole - Budget millions, millions, a lot of millions.
Probably more like a billion. COMMISSIONER BRUNWASSER: If you wanted to build a Baxter Plant, you're talking hundreds of millions of dollars.
So I think you might be able to cut us a better deal than you do and I think you ought to look at doing that. COMMISSIONER BRUNWASSER: Right. When we market water -- and we have tried. We've looked at Delaware, we've looked at New Jersey and, of course, other areas in Pennsylvania -- we have to partner with someone, because we don't have the franchise outside of our borders. We have to go through an authority or a community or Aqua Pennsylvania. For instance, Aqua Pennsylvania pretty much surrounds Philadelphia. We would have to partner with them, for instance, to 2185 3/30/05 - Whole - Budget push water south. And we have explored talks with Aqua Pennsylvania and with Chester. We believe that Delaware eventually will be, next time there's a drought, will be facing some hard times. Now, this is the time when it's been raining, et cetera, and they've kind of put their heads in the ground now, you know, and ignored it. Now is the time for them to sign up for a long-term solution to their future problems, but you can't force them.
Well, Commissioner, it's not a matter of forcing them. If you're going to sell them water and they have a little municipal water company that they don't control, the deal you should cut is the fact that they're going to be the supplier of our water or that small municipality puts a pipe up to their pipe and -- if we're going to sell them water, they got to cooperate. If we have a potential customer of Richboro Water Company and Aqua America is all around it, the deal is, we're not going to 2186 3/30/05 - Whole - Budget sell you water unless you give us the ability to run our water. It's like the regulation of electricity. It's the same concept. So I think that what you have to do is write into your deal the fact that they're going to be the supply line for the potential sale of Philadelphia water to other municipalities or we don't do the deal. I know they're going to resist it, because they want to supply the water. COMMISSIONER BRUNWASSER: I understand what you're saying. We do have some limitations on what we can do. The ten percent return that we're getting on virtually all of our contracts is comparable, if not better than, a lot of the private utilities are allowed to earn today.
But I agree with my colleague. We've got something here that they want, both in the area of water treatment and water, and it sounds to me like we could do better, because I think that they just sit back and say, Boy, are we lucky we have Philadelphia supplying us our water and 2187 3/30/05 - Whole - Budget treating our waste and we get it for a piece of cake.
Thank you. Councilman Clarke, can I just ask a question on this vein?
Thanks. I'll just have a presidential minute, as they say. Can we go back to the 35-year contract? COMMISSIONER BRUNWASSER: Yes.
Wouldn't the contract have to come back to City Council every four years for approval? COMMISSIONER BRUNWASSER: No. 20
How does this work? COMMISSIONER BRUNWASSER: City Council enabled the Water Department to --
I beg your pardon? 2188 3/30/05 - Whole - Budget COMMISSIONER BRUNWASSER: City Council back in 1987 passed an ordinance which had a lot of issues addressed, including a management fee, and we're allowed to charge a management fee that gave us -- not allowed. That told us to charge a management fee for water and sewer in any future contracts that came up, but we were allowed to sign contracts for as long as 35 years on the wastewater side of the utility in order -- and the reason for it was, these --
Is it a Charter issue? I mean, I never heard of -- COMMISSIONER BRUNWASSER: No. 16 The Law Department was, of course, part of this deal. Back in the late 1980s, it was decided by the then Commissioner that in exchange for a long-term contract, in this case 35 years, a wastewater customer could pay for their capital up front, and that's what happened in those days. We got large capital payments up front for the capital that was already in place.
What 2189 3/30/05 - Whole - Budget year was that? COMMISSIONER BRUNWASSER: 1987.
Do you still have a copy of the Law Department's opinion? COMMISSIONER BRUNWASSER: Yes, but I don't think we have it with us. We actually provided it during the rate hearings in City Council recently, but we can certainly provide it again.
Would you provide us another copy, please? COMMISSIONER BRUNWASSER: Sure. Sure.
Just one last follow-up. In the earlier statement when I asked about a process that essentially was comparable to the process for residential rate payers and you implied that if we were to somehow adjust the Water Department's budget, there may be a necessity to look at increasing 2190 3/30/05 - Whole - Budget opportunities for revenue from the external customers of the City of Philadelphia, I just want a little clarity on that. Are you saying that if there was some budgetary issues in the Department, you may have to look at those contracts or those rates and adjust those rates? What exactly did you mean by that? Explain that to me. COMMISSIONER BRUNWASSER: No. 11 What I was saying was, the way our rates can be affected by City Council is through various ordinances; for instance, again, the discounts to charities, discounts to eligible senior citizens, discounts to schools, percent 16 discounts. 17
I was 18 going to ask that question. I don't mean to 19 interrupt you, but if you look on the last 20 page of the Commissioner's testimony, a 25 21 percent discount is provided for charities, 22 churches, non-profits, hospitals, schools and 23 universities. And with that being said, 24 according to the chart we have, 3,200 25 organizations or individuals took advantage of 2191 3/30/05 - Whole - Budget that to the tune and cost of $7.2 million. So they get the same discount rate as the senior citizens; am I correct, percent? 5 COMMISSIONER BRUNWASSER: Yes. 6 And I should -- 7
I'm not 13 looking to impose any additional increases for 14 internal customers. I'm looking to impose 15 some additional costs to external. So if 16 you're suggesting that we want to increase our 17 revenue by taking away some of the exemptions 18 from the internal customers, that's not what 19 I'm looking for. 20 COMMISSIONER BRUNWASSER: No, 21 no, no. I didn't think so either, but what 22 I'm saying is that when we propose a budget, 23 we send that to the Administration. The 24 Budget Bureau reviews it, the Mayor's office 25 reviews it, and then it comes here to City 2192 3/30/05 - Whole - Budget Council. If the budget is approved, that is the biggest triggering mechanism for -- that's the expenditure side basically of the equation, and then we have to balance that budget with revenues. In our case, we get the revenues through rates. We have a history now the last dozen or so years of very modest, if any, rate increases, by and large. We had six consecutive years of no rate increase throughout the '90s simply because we saved an enormous amount of money operationally and through refinancing and through other methods, and we were able to absorb the increased costs of wages and health benefits and inflation throughout the '90s without raising people's rates. We get to the point now that we have to have some increase in rates to balance our budget. So if our budget is somehow too big, if there's something wrong with our budget, then that is the way that rates would be affected. 2193 3/30/05 - Whole - Budget Now, how that --
Rates internally? COMMISSIONER BRUNWASSER: Yeah. You have to cover your budget.
If you're sitting here telling me that if we decrease your budget, you will look to increase the rates on suburban counties -- COMMISSIONER BRUNWASSER: No, no, no, no. If you decrease --
I'm not looking to create a problem for our internal customers. COMMISSIONER BRUNWASSER: Right. If you decrease our budget, then we decrease the rates. We may not be able to do the job, but we will decrease the rates, because our requirement to raise rates would be less. Lower budget, lower rates. We think our budget is right, and we take a sharp pencil to our budget every year, but --
Let me 2194 3/30/05 - Whole - Budget understand it. You said if we were to decrease your budget, you would in fact decrease the rates. Is that what you meant to say? COMMISSIONER BRUNWASSER: Yes. Yes. That is, in theory and in fact, City Council's role in the whole rate-making process. You review our budgets. If our budget is too high and you lowered the budget, then we're going to spend less money, by definition, and if we spend less money, than we need less revenue and services go down in our case. But --
Well, the last part, you added that last, part service will go down. COMMISSIONER BRUNWASSER: Right. If everybody wants -- if they want to us continue with the good work we've been doing and we get -- believe me, within the industry, we are top dog, we're very well known in the United States and the world, and we get a lot of accolades. We get awards. Some of it is in the testimony. 2195 3/30/05 - Whole - Budget
All right. So you're telling me -- COMMISSIONER BRUNWASSER: If you want to run the Demille Water Department, it will cost you a little less, but not much less.
If it's going to impact services, I obviously don't what to do that, but it sounds like to me that the bottom line is, you're not looking to increase the revenue from our surplus -- I'm sorry; from our wholesale customers outside of the City of Philadelphia, bottom line. COMMISSIONER BRUNWASSER: We have certain restrictions, certain legal restrictions, because all of our relationships with these township customers are embodied in contracts. So they signed up on a basis of we would charge them all of our costs, we would recover all of our costs from them, plus ten percent management fee. And that's what they signed up for and that's what we have to give them so long as these contracts are in force. These contracts comport with an ordinance of 2196 3/30/05 - Whole - Budget City Council which dates back to 1987.
If our costs go up, then -- COMMISSIONER BRUNWASSER: Their costs go up, correct.
Commissioner, with the senior citizen discount, isn't that by a means test presently, and those that were receiving the discount when the means test was initiated were grandfathered? COMMISSIONER BRUNWASSER: Yes. Yes. This dates back to the early 1980s, and we keep raising the means test by way of CPI each time we change rates. I should say that this is actually a dated piece here under Senior Citizen Discount. It says 24,400. That was the threshold under the rates up until February 1st. That threshold has been raised to 26,100. So I need to correct that. 24,400 has been raised to 26,100. So that seniors, people who become 65, if their 2197 3/30/05 - Whole - Budget household income is less than 26,100, they should apply and they will receive a 4 percent discount. 5
Very 6 well. 7 Councilman Rizzo, did you want to be 8 recognized? 9
Yes. Thank 10 you. 11 Commissioner, one of the issues that 12 I've talked to former commissioners about, and 13 you probably were aware of it, is the way we 14 allow contractors to get a permit to take bulk 15 water from a fire hydrant. I mean, I know 16 personally and I passed it on, but nothing was 17 ever done about it, where a contractor from 18 the suburbs gets a permit, comes into 19 Philadelphia with his water truck, loads a few 20 thousand gallons of water on the water truck 21 and then goes back to the suburbs and waters 22 his flowers. 23 What's he paying for that permit to 24 come and haul away thousands and thousands of 25 gallons of water in the truck? 2198 3/30/05 - Whole - Budget COMMISSIONER BRUNWASSER: Well, that permit fee is going up substantially with this rate filing.
What is it now? COMMISSIONER BRUNWASSER: I'm hearing it's $105 for a six-month period.
For six months? COMMISSIONER BRUNWASSER: Plus estimated usage.
Self-managed, obviously? COMMISSIONER BRUNWASSER: Yeah, I believe so. I believe so.
So I have a big tanker truck and I want to come into Philadelphia, block in, tap into a hydrant. I would hope, Commissioner, that the people that get these permits get them for legitimate reasons, that they're working in the community, they're doing a project, streets project or whatever, that when a contractor files for a contractor from Ambler, 2199 3/30/05 - Whole - Budget Pennsylvania, that for 105 bucks, they could take hundreds of thousands of gallons in the period of six months, right? COMMISSIONER BRUNWASSER: That's certainly possible.
Because you don't have any water -- COMMISSIONER BRUNWASSER: Now, you have to remember that our rates are very low even -- and he's going to spend more on gasoline to get it from us, then get it back to Ambler than he's going to spend on the water.
I can tell you that they would prefer to take it from the fire hydrant and wash down their trucks and wash down the driveway with our water than they would the water that comes from either their well or the municipal government. All I'm asking is that these permits not just be rubber stamped and given out, that they really need to be legitimate, because nothing gets me more than when I see or having a police officer come to me and say, you know, 2200 3/30/05 - Whole - Budget I saw a truck at a water hydrant loading up and I asked the guy where he was going and he told me back to Montgomery County. So I would hope that they be scrutinized to the point where they're legitimate. I mean, there's times when people need access to water, but to give a permit, it should be for the specific length of the job, not for six months. I mean, just imagine having a free source of water for six months. If it's abused, it can really -- even though it's probably not significant to you, I think it's significant to the people that see that kind of activity and think they're getting over on us. So I would like to see that whole program reviewed and overhauled. Now, you indicate the rates are going to go up, but I'm just talking about the process itself to get the authority to go and load up a truck with Philadelphia water and not use it for the purpose that the program was intended. Would you agree with me? COMMISSIONER BRUNWASSER: Yes. 2201 3/30/05 - Whole - Budget Yes. As a matter of fact, Councilman, I don't know all the details, but I think we actually have tightened up, because you have mentioned this specifically to me before. I don't have the details all in front of me, but --
I understand. Now, Commissioner, we touched on it briefly a few weeks ago about some of the work that is going to go on that the Water Department is going to do, and the importance is to communicate, and we kicked around maybe two or three jobs, the one that's going to cross over Lincoln Drive. Now another one has surfaced, which Councilman Nutter elaborated on the other day, which was a Wissahickon Avenue disruption there. Could you comment on -- I understand it's going to allow people to abandon their septic systems, but what is the impact it's going to have? And could you go backwards and just identify some significant Water Department projects, the one that's going to go through the cemetery or under the cemetery, 2202 3/30/05 - Whole - Budget just to talk a little bit about what we can expect and what we can communicate to our constituents? Because, again, the people that use Wissahickon Avenue are hearing about this and it's starting to concern them, knowing that there's the potential of the Bells Mill Road job, there's the potential of this one. I mean, how are they going to get out of their neighborhood to go to work if we have not good coordination and good communication? So if you could walk us through the jobs that you're aware of, including the most recent, the Wissahickon Avenue, on what impact that's going to have on that Mount Airy community and other people that use that? As you know, that is a heavily used stretch of road. COMMISSIONER BRUNWASSER: Right. That's a good question, obviously. We're going to pass out to all the Council folks copies of our street capital work that we see over the next 18 months that we budgeted for for roughly the next 18 months so that people can see what intersections, what 2203 3/30/05 - Whole - Budget streets are affected. I mean, we do try to replace over 4 miles of water main each year. So that, in 5 itself, is a very disruptive process, but a 6 necessary one, of course. And we hope to do 7 eight to ten miles of sewer main, which -- so 8 in total, you're talking about disruptions all 9 over the City. I know that the area that 10 you're most familiar with is certainly one of 11 those areas that's most affected. 12 As far as Wissahickon Avenue is 13 concerned, that is a sewer job that will 14 replace some of the septic systems that are 15 failing, and actually some of them have been 16 cited by the Health Department. They have 17 some problems with the land being able to 18 accept a new septic system perhaps or it 19 should never have been put in in the first 20 place, but in any event, on Wissahickon Avenue, we believe there will be a two- to three-month disruption, and there's really no 23 way of getting out of it. It's Wissahickon between Westview Avenue and Springbank Quarter -- I'm sorry; Hortter Street, and it 2204 3/30/05 - Whole - Budget should be two to three months sometime within this construction period. It has not gone out for bid yet. It will probably go out very shortly, and hopefully all the work can be done before the cold seasons --
What's your definition of disruption? Are you talking about the street being closed? COMMISSIONER BRUNWASSER: Yes. That street would have to be closed for two to three months. I know it's a narrow point in the street, but the way -- it's two lanes. There are no shoulders there, and the way it sits, it just has to be done in that fashion. Our engineers tell us that there's no avoiding it. Now, when this thing happens and we have a contractor, we talk to that contractor, when we get a little closer to it, we are going to be coordinating with the Streets Department, Police Department, Traffic, all the stations that have traffic bulletins. We are going to -- we're working, I think, with 2205 3/30/05 - Whole - Budget Streets right now to find what the best alternative route will be, what the detour should look like, and, of course, we try to do this with the least impact on the neighborhood, but it's unavoidable, I think, in this particular case.
One thing, Commissioner, I hope with all the things -- and you're going to take a minute to talk about the other cemetery job, whatever that -- I forget what you call that project. I hope that all these don't hit at once. Let's finish one before we start another. Because if you had Wissahickon Avenue out and also disruption to Lincoln Drive at the same time, I think Bucks County would have a lot more water customers. So really, sometimes the folks over there, they think about what they need to do, but sometimes the ramification of these jobs has to also be considered as part of your responsibility, not just -- COMMISSIONER BRUNWASSER: Sure.
-- start 2206 3/30/05 - Whole - Budget doing three things at once that are going to have a major impact on our City. COMMISSIONER BRUNWASSER: Right. I mean, this is something that we have to coordinate the jobs as well. In other words, you can't take two or three main arteries out --
Commissioner, that has happened and that's why I'm cautioning you. Before your time as Commissioner, obviously, but during your time in the Water Department, there have been lots of lack of coordination where three or four things happen at once. I mean, I saw them start to dig up a detour route. It was that bad. So I would appreciate that, because three months with Wissahickon Avenue out is going to be a real, real problem. COMMISSIONER BRUNWASSER: I understand. 2207 3/30/05 - Whole - Budget
Let me see. The hydrants, Wissahickon Avenue. I guess I hit it all that I had an interest in. Thank you, Madam Chair.
You're welcome. Commissioner, with the list that was just circulated to us, can you just explain the list, if you will? Like on the first page, I assume that's the first district. I don't know what the 10th means. COMMISSIONER BRUNWASSER: I don't think we were -- we didn't break this down by district.
10th at Johnston and Bigler, I assume? COMMISSIONER BRUNWASSER: Yes. 10th Street, Johnston, Bigler, yes.
Is this for new water mains? What is this for? What is this schedule?
I just wanted to know, if I could, the timing. I understand the Commissioner said that the 2208 3/30/05 - Whole - Budget Wissahickon Avenue job has not gone out for bid, but when do you anticipate it going out for bid and when would you think the work would begin and end? COMMISSIONER BRUNWASSER: I believe that the Wissahickon work will probably be out for bid by July and --
So what are you talking, a few months to get the bid back? COMMISSIONER BRUNWASSER: Yeah. I think we get -- we start to talk to -- the plans are reviewed by the contractor and then we figure out when he can actually start to dig.
So also you should also is this a better summer job, winter job. So you're talking that we could be September, October, November, like going into the end of the year? COMMISSIONER BRUNWASSER: Probably October, November most likely.
But please keep that in consideration also, whether summer would be a better time versus winter. 2209 3/30/05 - Whole - Budget COMMISSIONER BRUNWASSER: Sure. Sure.
Thank you. I'm sorry I interrupted. COMMISSIONER BRUNWASSER: That's fine. I think there's a code to this report. Those codes that begin 20, with a two, those are water jobs. And those codes that begin 40, those are sewer jobs.
So it's -- COMMISSIONER BRUNWASSER: If desired, we can try to crank this out by councilmanic district. The councilmanic district is identified, but it's not sorted by that.
That's fine. I think for the first number of pages, it's the First Councilmanic district. All right. Does anyone have any other questions or comments? (No response.)
2210 3/30/05 - Whole - Budget Commissioner, regarding the Residual Fund, I couldn't tell you today whether I'm for or against that. I don't think you were able to provide us any information whatsoever that would lead me to believe that this is the direction we should be going. So I'm going to suggest that, with many questions that were unanswered, that you certainly look into this issue and we will call you back at a later date so that we could all make a very good judgment in our own minds. And, again, the question about the surety bond, how would that be paid for. So I think you know all of the questions and I'm sure you know all of the answers. You're not sharing them with us today, but at a later date, we hope to have you back. Okay. Thank you very much. This Committee will stand in recess until Tuesday, April the 6th at 10 o'clock. Thank you. (Committee of the Whole adjourned at 3:30 p.m.) - - - 2211 I N D E X WITNESS: Licenses & Inspections Robert D. Solvibile, Sr. 2010 Zoning Board of Adjustment Fran Burns 2122 License & Inspection Review Fran Burns 2124 Board of Building Standards Fran Burns 2125 Water Department Bernard Brunwasser 2129 2212 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on March 30, 2005, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)