All right. Close relationship? 74 3/10/10 - WHOLE - RES. 100141
Is this your pipeline so that those former City employees continue to work?
Having worked in the oversight agency for Census for a period of time before I came here, I can tell you that the enumerator process, the hiring of enumerators, is centrally controlled. They are all civil service designations at the federal level. There was a series of hiring announcements that were done over the past 12 months for enumerators, as well as for the follow-up process. We have made a point working in our office principally with Tricia Enright and working with Fernando Armstrong, who is the Regional Director for Census, to provide him with the names of community groups that have potential individuals, to be sure that it covers the range of ethnic groups and geographic 75 3/10/10 - WHOLE - RES. 100141 groups in the City, because the enumerators are where the success is going to be in getting everybody counted. So we've done that, but it really is a process controlled by Census. We can make suggestions. We can provide them with names, but at the end of the day, Census has entire control over that.
You're welcome. The Chair recognizes Councilman Kenney.
Thank you, Madam President. I had raised this issue in two separate public hearings and I want to raise it one more time, because it seems to be a major obstacle in an intelligent discussion of tax increases, fee increases, service cuts and the like. There is this belief within the 76 3/10/10 - WHOLE - RES. 100141 community widespread that there's a $400 million outstanding uncollected tax liability that we simply aren't efficient enough or willing enough to go after. I know that number is not accurate. Some of these debts are and 30 years old. 8 We keep on piling on interest and 9 penalties on top of the 25- or 10 30-year-old debts. 11 No business or bank would carry 12 a receivable or a bad debt for 25 or 30 13 years, and I recognize the issues 14 relative to Sheriff's sale and other 15 things why we have to carry this so long, 16 but when can we get a real number on what 17 we can collect and what we can't? 18 Because every e-mail, every piece of mail 19 I get, everybody that stops me on the 20 street says, Go collect the 400 million 21 first before you tax soda or before you 22 tax trash. What are we doing to fix this 23 myth? 24
One of the things 25 that we have already done is looked back 77 3/10/10 - WHOLE - RES. 100141 to kind of track where this requirement that we keep receivables on our books for 30 years comes from, and it looks like there's no legal requirement, no 6 particular policy requirement, so we are going to -- we're not going to be doing that anymore. So we'll be looking at our numbers and figuring out what to drop off, probably more than six years. That will bring down the number significantly. The other thing that we should focus on is that -- and I think this is part of what you said -- that there is a principal amount, which is only a portion of that 400 million, and then there's the interest and penalty that we stack on top of that. I mean, at the very least, we should at least acknowledge that the principal amount is much lower, somewhere in the two's, and then we have to see of that principal amount, what is really in the last five or six years as opposed to seven or 30.
In this 78 3/10/10 - WHOLE - RES. 100141 difficult economic time, all these things are on the table as far as cuts or increases in revenue, and it is an absolute obstacle to any realistic discussion about those things because people believe we just haven't collected this money from deadbeats. So could you please get that number to --
-- a rational number, please? Thank you. Secondly, as it comes to development and tax ratables and jobs, do we have any idea what City property we own, the Public Property Department, PHDC, RDA? Do we have an inventory of City-owned property that is either not used or vacant land?
Well, there are two sets to this, and then I'll turn, I think, to the Managing Director's Office. With respect to the inventory of publicly-owned, City-owned properties, I 79 3/10/10 - WHOLE - RES. 100141 believe it's --
We hold title to. Not that we need to go to Sheriff's sale. Stuff that we have.
I believe that that database is in process. I know there's a portion of it in the RDA. There's a portion at Public Property. I understand and I believe that RDA and Public Property have been putting an inventory of it together. I don't know what the status of that is. I know that Terry Gillen is here and you might want to ask her. With respect to just a general inventory of properties across that are not ours, just sort of all the properties, we're still working through trying to get that.
Just starting with the stuff we have, the stuff that we own, we hold title to, that's not being used or that's vacant.
I will ask and 80 3/10/10 - WHOLE - RES. 100141 see if there's something we can get to you in the course of the next week or so.
It's clear to us that we're in an environment of very high taxes here in the City, a school district that's always struggling, state taxes are high, utilities are high comparatively. It seems that one of the only assets we have is land and property. Why don't we -- and I'm looking at legislation or the possibility of legislating this as we speak. Why don't we take that and put it out there at, if we have to, zero appraisal, not fair market value, we'll give it to you. And if you have a plan of development that passes muster with the community, that passes muster with the District Councilperson, that's zoned appropriately and if we agree not to give you a tax abatement on it, so that if this arrangement could be made, the property that's transferred to a developer would not be tax abated, so whatever is 81 3/10/10 - WHOLE - RES. 100141 developed on it would be a tax ratable immediately, whatever is built on it would be built by people working and whatever improvements are made to the property that's not being used or vacant is a betterment to the community. Why aren't we going to the table with the asset that we have, which is land, putting it out there over the next year or two and say, Come get it, give us a proposal, we'll give it to you?
Is Terry still here, Terry Gillen? She left, okay. We have actually started, Councilman Kenney, on some pilot programs in various sections of the City where we solicited brokers to broker property that we own and to try to get it back on the tax ratables and things like that. So it is something that we've started to look at and something that we really need to increase.
I mean, 82 3/10/10 - WHOLE - RES. 100141 again, we need a jump-start for development, we have construction workers out of work, we have people looking for jobs outside the construction industry, and we have land that we own and control, and we're going to kind of dither around about what the value of it is. Right now the value of it is zero because it's not being utilized. So if we bring to the table an asset, put it out there, I don't think we need a pilot program, get an inventory of all the properties we own, put it on a website and say, Come to us with an idea, and we'll sit down with the District Councilperson, with the community, plan of development is approved, bingo, let's go. I see no 19 reason why we should be waiting any longer.
Thank you. Councilman Clarke is not in the 83 3/10/10 - WHOLE - RES. 100141 room? (No response.)
I just want to ditto what Councilman Kenney just said. Councilman Kenney, I absolutely agree with you on the City-owned land and properties, because right now it's doing nothing but being eyesores and public nuisances, most of them, in neighborhoods. I have a couple questions, but I also have one request, and the request is actually regarding the healthcare program that we now have, the self-insurance. And, Council President, I think we need another briefing on the healthcare that we now have. We had the 84 3/10/10 - WHOLE - RES. 100141 briefing. I did attend in December. I believe it was in December, and there were many people there from Council offices. However, now that people have started to use it and realizing the changes, I think we need to have another briefing so we can have more questions answered. Okay?
Okay. I just have a couple questions for now. In your testimony, Clay, you talk about on Page -- well, there's no page number, but when you're talking about specific spending will be down in nearly every City department next year.
I just want to know what types of spending are you talking about. It says the Free Library budget will be down 18 percent, Parks and Recreation down by 11 percent, 85 3/10/10 - WHOLE - RES. 100141 and it goes on. Can you tell me what some of those --
A lot of that are the cuts that we made last year as we rebalanced the Plan in '09 and cuts that we made in '10. So, for example, the Library budget is down because of the cut we made during the year in '09, and you've see that reflected in hours. Parks and Recreation were also cut during that process. You saw some of that in pools, although with private money we were able to bring that back. So it's a whole range of service and expenditure cuts and efficiencies that you've seen over the last year or so. There's nothing really new in there in '11 other than the kind of four or five items that we laid out in the testimony.
Okay. But it's good that I know that in the Rec Department that all the pools will be open, except -- all the pools that can 86 3/10/10 - WHOLE - RES. 100141 open will be opened, except for a couple that are in disrepair.
So the seasonal workers will still be there and all those activities that people participate, particularly in the summer, will still go on, correct?
All right. Great. I have another question regarding prisons, and you can probably answer it.
Commissioner Giorla is here. (Witness approached witness 87 3/10/10 - WHOLE - RES. 100141 table.)
Last year we had -- COMMISSIONER GIORLA: Good morning.
Good morning, Commissioner. Last year we had a couple of hearings taking a look at ways that we can decrease the prison population with electronic or day monitoring as a method to reduce the prison population, and my question is, what's being done around this? And I know in the Five Year Plan you talk about the speed in which the system is now processing inmates that has impacted, I believe, a decrease by ten percent through CJAB. What else is being done? Because I do think that that's an area where we actually can hopefully get more to reduce the costs.
Commissioner, I suggest you identify yourself, please. 88 3/10/10 - WHOLE - RES. 100141 COMMISSIONER GIORLA: Good morning, Council President. Lou Giorla, Commissioner of Prisons. We're engaging in a number of efforts, not only to reduce the population overall, but to reduce the length of the stay by inmates in the prisons. One of the initiatives is day reporting. Now, we're in the process of evaluating -- we published an RFP about two months ago and we're in the process of evaluating proposals for that program. That may take a number of different forms as it develops. At first we began looking at violators of probation and parole in our population that may require -- may be good candidates for community supervision as opposed to full-time confinement. Electronic monitoring is another initiative we're in the process of developing for our work release program. We think that it will minimize 89 3/10/10 - WHOLE - RES. 100141 the number of walkaways or inmates who leave that program. It may also provide an additional control and a way to enhance public safety. We have awarded a contract, but we haven't executed it as yet for that program. Along with the CJAB, we're looking at everything from video court hearings, and we've just begun our program at the prisons. All prison sites are equipped with video stations that are connected to the CJC. We're looking at reports that we file with the courts for defendants prior to sentencing, so they can be accelerated and census can be leveled and executed more quickly.
Point of information, since we have the Commissioner.
Good morning, Commissioner. Along those lines, can you tell me -- and I know 90 3/10/10 - WHOLE - RES. 100141 we've made tremendous progress on this -- how many state-sentenced prisoners we still have in our system and -- COMMISSIONER GIORLA: I don't have that exact number today. I can tell you it's far less. It's approximately 300 less than we had this time last year.
So we had about 500 last year, so you're saying we potentially still have about 200? COMMISSIONER GIORLA: I would hesitate to say at this point without a good count, and I can supply those numbers to the Chair.
And do we have a plan for how quickly we're going to move those out? COMMISSIONER GIORLA: Well, as part of the prison population subcommittee of the Criminal Justice Advisory Board, the District Attorney's Office, along with the Deputy Mayor's Office, brokered a deal to make 250 beds available to us at the state. We've 91 3/10/10 - WHOLE - RES. 100141 since filled those beds. We are looking at anyone within our population who has a state sentence, either straight state sentence or an aggregated state sentence, to change the place of confinement, and the courts have agreed with us to do that and there have been some petitions done to do that as well. Statutorily, I believe in about another 11 months, local judges will no 12 longer be able to sentence inmates to county custody who have state sentences, and that should eliminate the need for us to do this.
When the bell rings, Council President, does that mean you can't like wrap it up or --
Councilwoman Sanchez took some of your time. 92 3/10/10 - WHOLE - RES. 100141
I just want to wrap it up, that's all. Thank you, Commissioner, and I didn't really want -- I know that you'll probably talk about more of the alternatives when you come for your department testimony, but I still believe that that is where we can probably find lots of money that might offset some of these other new taxes. COMMISSIONER GIORLA: I believe so, too.
You're welcome. The Chair recognizes Councilman Clarke.
Thank you, Madam President. 93 3/10/10 - WHOLE - RES. 100141 Good afternoon, gentlemen. (Good afternoon.)
A couple of quick ones for this round. There were some issues with respect to the City's ability to impose a sugar tax, legal issues, during the course of the discussion, is my understanding. Was there a legal document or something done to reflect the legality of this particular version of --
The Council President earlier asked us to provide that, and --
I'm sorry. Disregard that. I'm sorry. During the course of the discussions in various forms, leadership 94 3/10/10 - WHOLE - RES. 100141 meetings here and other meetings, there's this notion where there continues to be this comparison of the trash tax and other municipalities and counties. Has there been an analysis on those other municipalities and counties that are referenced in various discussions as it relates to the other taxes that people have to pay? Bottom-line question, in some of the counties that are referenced, my assumption is that they probably don't have a wage tax that's as high as the City of Philadelphia, the wage tax that pays a significant portion of the City's ability to do basic services. So my question is, when you make these announcements -- you actually referenced this, one of you, earlier in your speech -- what are the other tax burdens that residents of those counties and municipalities have when you make those comparisons?
It's clearly true 95 3/10/10 - WHOLE - RES. 100141 that for all but maybe a couple of dozen, at most, jurisdictions in the surrounding counties, we have a higher overall tax burden. We also provide a higher or a larger array of services.
We have a higher tax burden, but we also provide more and different services from those jurisdictions, because we're a city and a county. So, for example, they don't have the same kind of prison costs we have. They don't have the same kind of costs like we have for the Department of Human Services. So it's hard to compare in terms of what tax dollars go to, because we provide such a --
That's kind of what you all do. I'm just saying, I continue to hear this notion that it's okay to impose a trash fee because this county does it or that city does it, but you don't talk about the other things 96 3/10/10 - WHOLE - RES. 100141 associated with those various taxes. The reality is, as I said in the earlier meeting, a lot of those counties started as little small towns -- or not the counties, but --
They started as little small towns. People started to move out there. At the time, there was no need for the level of both infrastructure and government services. And then as time moved on, the population grew. Then they said, you know what, we actually need trash collection, and the ability to get it was based on the township or the city contracted with a private server that probably did it for less than what we do. So that's not really a fair comparison, from my perspective, when I'm trying to make the argument that we should start paying for trash.
Councilman, at 97 3/10/10 - WHOLE - RES. 100141 least in today, we were asked the question if there are others, and I think what we were simply providing is information related to the fact that there are other municipalities that impose a charge on sanitation. It wasn't done primarily for comparative purposes. It was done just to show that it exists.
It may have been in an earlier conversation, but at least in today's conversation, I just wanted to make that clear, in response to Councilman Goode's question.
I don't think it's a completely unfair comparison, because it's one of the ways that they balance their budgets. And I know they have lower tax burdens, but it's the way they balance their budgets with the lower level -- lower level of services. So I mean, it is fair to say that there are other people who do the same thing 98 3/10/10 - WHOLE - RES. 100141 regardless of how they got there.
All right. Well, I hate to put an additional burden on your workload, but is it very difficult for you to get an analysis of some of the outlying counties in terms of, one, whether or not their collections are done by the municipality or done by a private salver who is contracted by the municipality, the comparison with their other, quote/unquote, significant taxes versus the City of Philadelphia? So as we go through this process of determining as to whether or not we support something like this, we'll be doing it based on broad-based information, not just simply, Well, they pay it, we should pay it. And I'm not suggesting that that's what you're saying, but it kind of sounds like that to some outsider. I mean, I'm saying it because I know you guys wouldn't do that.
Is that 99 3/10/10 - WHOLE - RES. 100141 very difficult?
-- it's a little challenging because many of the municipalities are within counties and so the apples-to-apples comparison gets a little tricky. We'll take a look at it to see what's there. We'll work with the Deputy Mayor for Transportation and Utilities, because she's got an information base of what's out there. We will try to do the comparisons. One thing, although it's not clear apples to apples, again, it might make sense for us to look at some other city/counties in the United States, like San Francisco and I think Denver, that have that kind of fee in place and try to do an apples to apples. So we'll take a look at both.
All right. I mean, the only reason I would like to see an analysis in the general area is because, I mean, the likelihood of -- our economy is relatively similar. You know 100 3/10/10 - WHOLE - RES. 100141 what I mean? Man, that was quick. President, I don't get extra time for deferring when I missed --
No? All right. I'll come back. Thank you, Madam President.
Thank you. I think we're scheduled for a lunch break. So we will stand in recess until 1:30. Thank you. (Luncheon recess.)
Council is ready to resume the public hearing of the Committee of the Whole. I would ask Councilmembers to please come down to the Chamber. Thank you. (Pause.)
We are now resuming the public hearing of the Committee of the Whole regarding Resolution No. 100141. 101 3/10/10 - WHOLE - RES. 100141 Gentlemen, on of the Plan, it states that between the Commerce Department and PICA (sic), 4,000 jobs were created. Can you tell us where these jobs are, what type of jobs they are and during what period of time were they created? . (Trouble with the microphone.)
On of the Plan states that between the Commerce Department and PICA -- PIDC, I'm sorry.
-- PIDC, 4,000 jobs were created. Can you tell us where these jobs are, what type of jobs are they and during what period of time were they created?
We can get that information from PIDC, Council President.
Thank you. 102 3/10/10 - WHOLE - RES. 100141 On of the Plan, it states, quote, "Without a series of tax changes proposed by the Governor, the state Budget Office projects that the Commonwealth is facing deficits that could reach 2.4 billion," B, billion --
Yeah; "by 2012 and 12.7 billion in 2015." What assumptions with regards to the state revenues are in the Plan and can you tell us what are the risks?
Yes. The Plan is consistent with the Governor's budget. So it assumes -- most of the revenue items, the tax revenue items that the Governor's budget included -- well, a lot of them don't take effect until 2012, but for '11, they assume -- their largest assumption is that something called FMAP is extended, which is an extension of Medicaid benefits. They assume about $800 million for that. If they don't get that, they will have to make some severe 103 3/10/10 - WHOLE - RES. 100141 cuts to their budget. Kind of a guidance for what type of cuts they might make probably comes from some of the states that have not included that FMAP extension in their budget. About half of the states have assumed it will happen and half have not. The ones that have not have assumed things like cutting hundreds of thousands of people off the Medicaid roll, getting rid of CHIP. So states are doing really dramatic things when they don't assume that FMAP will be extended. So that's a really substantial risk that's included in our budget, but we are consistent with the Governor's budget, which is what we're required to be under the PICA Act.
When do you think we would know what we're doing?
Unfortunately, the vehicle for extending FMAP is the federal budget. So we won't know what happens with FMAP until that process is done. 104 3/10/10 - WHOLE - RES. 100141 Since their budget year doesn't start until October 1st, they may go right up until that date, and I guess they've been years when they even went beyond that. So the state won't know what's happening or may not know what's happening with FMAP until partway through its fiscal year, and if FMAP is not extended, they may have to make adjustment in the middle of the year, which then could have an impact on us.
The American Recovery and Reinvestment Act is discussed on of the Plan. It states that the City has been awarded $135.8 million, spent $4.3 million and created or retained 114 jobs. Can you tell us where the jobs are and which are new and which are retained? Also, when does this funding run out and what happens to these jobs when it does? And I'd also like to know what is the rest of the $135.8 million used for?
Let me see if I 105 3/10/10 - WHOLE - RES. 100141 can remember all of those, and if I forget, please remind me.
Okay. The numbers that you have in the document are as of December 31st, which was the reporting period where the City was required to report to the federal government, both the OMB directly and the President's Office, as well as to each of the individual agencies as to where we were. The spending to date; that is, as of this past week, is closer to 7.2 million, and I can provide that to the Council if you're interested.
The 114 jobs, we do have a list, and I can provide that. I don't have the list with me. Fifty-two of those jobs or the bulk of those jobs are in the First Judicial District. They 106 3/10/10 - WHOLE - RES. 100141 are supported by a Byrne Justice Assistant Grant. The grant is for $3 million for the balance of our fiscal year, FY10, as well as FY11. Those funds will then run out sometime in, I believe, our FY12 period. Your question as to what we will do at that point I think is a very relevant one, because we in the case of the courts are going to be faced with do we supplant or replace those funds with General Fund dollars of approximately $3 million annually or do we ask the courts to come back with a proposal for either other revenue sources or to eliminate that spending. But that's a decision that will have to be made. With respect to the General Fund and support of General Fund-supported departments, that's really the largest place where there are both dollars that are being taken in from the Recovery Act monies as well as positions being supported. We'll provide you with 107 3/10/10 - WHOLE - RES. 100141 a list of where the other jobs are by department and by grant, if that's what you're interested in. We can give you what's outstanding currently in terms of what we have received in actual dollars, what we have been awarded and what dollars we're still waiting for. We have all of that, and I can provide that to you probably the beginning of next week, end of this week. All of that is very detailed. I hope that answered most of your questions.
Yes. Thank you. The Chair recognizes Councilman Green.
Thank you, Madam Chair. When we left off, I was asking some real estate questions, and so my question would be related to Councilman Goode's earlier questions. I think he mentioned that over the five years, the 108 3/10/10 - WHOLE - RES. 100141 increased real estate collection was only going to be $700,000 or something similar to that amount, because we're not going to get the full value for a couple years the way the Administration is currently contemplating it. If we were to go to full value right now on a revenue-neutral basis, would not the increase in real estate prices that is going to occur over the next few years create additional revenue? Assuming we come out of this recession and it has an impact on real estate, couldn't we gain $20, $30, $50 million in the Five Year Plan by going to full value now on a revenue-neutral basis and then in future years, any increase in real estate prices would help out the City budget?
It's going to maybe sound like I'm avoiding answering, but I'm really going to try to answer. I think the issue is not only what will happen over the next couple 109 3/10/10 - WHOLE - RES. 100141 years with values, but what's already happened that we haven't captured. So if we've missed the downturn in values over the last couple of years and that hasn't been captured in the assessments, then it's not necessarily true that even increases over the next couple years will mean --
Well, no, actually I'm not. What I'm trying to say is, I don't think there's any guarantee that going to full value necessarily means an increase in revenue.
Right. It doesn't even mean it for the year after that compared to the assumptions we have in the Plan. 110 3/10/10 - WHOLE - RES. 100141
Of course it does, because you're going on a revenue-neutral basis, which means to the extent that real estate is under-valued, going revenue neutral to fair market value over the basis will capture that difference in the form of increased revenues compared to what would otherwise happen. Leaving millage the same, wouldn't we increase --
I'm sorry. On a revenue-neutral basis, the concern you have doesn't exist, because essentially some people are going to get less of a tax decrease than they otherwise would.
Well, if you're capturing -- yeah. If you move the millage, right, if you move the millage in a way that means essentially that people would be paying more in the future relative to what they would have paid in 111 3/10/10 - WHOLE - RES. 100141 the --
Let me finish, please. More than what they would have paid in the past if their house had been valued accurately, then I think that's right. If you're saying that the revenue that we would have lost because values are going down, we won't lose because we'll calibrate the millage --
So how much does that cost us over the next five years? If we go to full value now on a revenue-neutral basis based on the revenue we received on properties last year, aren't we essentially just giving some people a little less of a discount than they'd get if they were at full value now?
I mean, the other thing you're assuming is that we could 112 3/10/10 - WHOLE - RES. 100141 actually get to full value now, which we can't because we don't have the data.
Well, that's a topic for another day. I don't accept that premise. The material the BRT already has is within IATA standards -- I'm sorry; ILAO standards.
Mr. Agostini can walk you through some of the problems with that data, but we don't --
Okay. But we don't have faith in that data, which kind of makes the hypothetical not real.
Well, then maybe we should put the BRT back in charge, because they were going to do full value. I mean, that doesn't make any sense to me.
Point of information. 113 3/10/10 - WHOLE - RES. 100141
I actually totally agree with Councilman Green. I think what he's saying is, if you went to full value at current assessments in a revenue-neutral manner, then you would at least break even this year, and then moving forward, you would absolutely increase revenue. And the argument for not going to full value, which would necessitate a change in the millage rate, can't be that the assessments aren't right, because you're still charging people based upon the current assessments. So I don't get that argument. I mean, if I'm paying --
Well, if we're saying we're going to change everyone's assessment and we're going to do it --
Well, if you went 114 3/10/10 - WHOLE - RES. 100141 to full value, you're changing everyone's assessments. Otherwise you're staying on the same assessments.
You're going with the same property value you're using now, but what you're using -- this is what Councilman Green is saying, I believe, and he can speak for himself -- you're using the same property value, you're just not going through the other calculation of multiplying it by 32 percent. What you're doing in the pre-determined ratio, what you're doing at that point is just using the full value. People are paying the same value of their home they're paying on now. You're not changing the value of their home. And then we would adjust the rate from 0.826 percent to roughly percent, whatever it is, to break even or to get to a revenue-neutral place, and then you would build upon that. He's just saying, I believe, under that scenario, would we have more property tax revenue in the 115 3/10/10 - WHOLE - RES. 100141 Five Year Plan.
Under the scenario you're laying out, yes, we would, but that's not moving to actual value, because part of the problem we have now is that the relationship between --
-- values is not accurate. So, for example, on average, low-valued houses are a higher percent of their value than high-valued houses. So if you just went to full value and left it there, you're building in the inaccuracies and inequities in the system and saying that you're going to move forward with that.
You're not building any new inequities. You're keeping the same inequities that you're going to keep anyway.
You're not solving them, right. 116 3/10/10 - WHOLE - RES. 100141
One last thing. We're not talking about necessarily going to the actual value initiative. We're using the term "full value" to say if you use the full value of people's homes that they are now on the rolls, then you lower the tax rate to make it revenue neutral, would you capture more money in real estate revenue over the Five Year Plan? The answer to that has to be yes, and I think Councilman Green's question is, how much more revenue would we have in the Five Year Plan?
Only if you are actually changing their assessments, because the only way you capture more is if assessments go up, unless you're saying you just go to full value --
The 117 3/10/10 - WHOLE - RES. 100141 assessment is 100 percent of the price they have right now, and if you move to the actual value initiative a year from now, two years from now, three years from now, then it can become more fair and you might capture even more. But under any scenario, if you move to full value now in a revenue-neutral way, you would still be getting more money now and over the five-year period.
Let me try to answer it -- I think get to the answer, is if you started to do -- if you didn't freeze assessments and you did new assessments and those assessments resulted in increased values, you would generate more funds. So the earlier you start doing assessments, again, if values are going up --
-- you'll get more revenue. Also if -- and I think this was 118 3/10/10 - WHOLE - RES. 100141 the Councilman's question. If you decided that you could really go to actual value now and that meant that everyone's assessed value was going up, because you're going to full value, and you calibrated the millage in such a way that it was revenue neutral and then you started assessing again and values started to go up when you assessed, you would also have more revenue. Does that answer all the --
Because we don't think we have reliable data to go to the new values on.
But, Rob, what you're doing is leaving in place a system that is not reliable today. In other words, what you're saying is, we're going to keep our current broken system and forego future revenue increases rather than create a new system one way or another that is maybe more or less 119 3/10/10 - WHOLE - RES. 100141 accurate or exactly as accurate, which would allow us to grow off that base.
I mean, I understand your point. Our concern is that we have really one chance to make this change, and if we make the change and we get it wrong, then we've lost the opportunity to have an understandable, fair system.
It is, and we want to make it fair. If we jump to a new system that's also unfair, we've lost the opportunity to make it fair.
Well, if we go to a new system that doesn't work, it's still going to be unfair for them. We're not making it fairer by going to a new system that doesn't work. We're institutionalizing a change that keeps things unfair. 120 3/10/10 - WHOLE - RES. 100141
It's very simple. You hire a bunch of property assessment appeal people to do hearings. You require everyone who wants to challenge their new assessment to allow you into their home. It will cost us several million, maybe $5, $7 million, to have that done within a year, but if we go ahead and get that done while the market is down, even though it's before an election year, maybe it's in the City's long-term interest.
The other thing I should say is, we will -- our goal is to get this done as quickly as possible. And I understand what you're saying about putting more resources to it, which we should look at to try to get this done as quickly as possible. We do want to make sure that whoever is doing the assessments is trained and knows what they're doing and that there's consistency among the different assessors. 121 3/10/10 - WHOLE - RES. 100141
Sure. Okay. Well, I think I've made my point. We can agree to disagree on whether or not we should move forward, and I guess Council could always by ordinance just sort of do it and then you can decide whether or not you want to go to full value or actual value initiative, or whatever.
I'm not sure what you mean "just do it," but we can talk later about that.
Yeah. So the Five Year Plan indicates the Administration is continuing its assumed $25 million per year in anticipated workforce savings. It also indicates that you're assuming zero dollar increases for firefighters, DC 33 and 47 over the life of the Plan. Given our recent experience with the FOP award, I'm puzzled by these assumptions. Also, as noted by the text of the Plan, the 80 million net cost of the FOP award, plus 43.5 million foregone 122 3/10/10 - WHOLE - RES. 100141 anticipated workforce saving related to Police yields a total cost of 123 and a half million, and this projection doesn't take into account potential raises that might be awarded when the contract is reopened with respect to wages in '13 and '14. Starting with the FOP and using your assumptions about economic growth, how much would inflation-only raises for the Police be in FY13 and '14, and with respect to firefighter arbitration results, if the award is similar to the Police, what would the cost be and then how much would it be if every other union-represented person got a one percent raise each year over the Five Year Plan? And then turning from wages to benefits, what would the saving be in each year of the Five Year Plan if the Administration achieved similar agreements on pensions and healthcare with the three remaining unions as it did with the FOP? 123 3/10/10 - WHOLE - RES. 100141
You want us to get back to you with that information, I assume?
The FOP arbitration award allows officers with more than five years of service to move out of the City starting in January 2012. Do you have projections about how many officers will move out and what the economic impact of that is, and have you made any adjustment to your tax revenue projections, especially with respect to wage and real estate, to take account of this out-migration?
The answer is we don't know and haven't projected how many officers might take advantage of that.
That's 124 3/10/10 - WHOLE - RES. 100141 okay. You can keep going.
Thank you, Madam President. I have a few questions. One, there is an issue with regard to -- and it's in our Plan -- that we plan no wage increases for the municipal labor over the next five years, but then even with 38 million in new revenue from the beverage tax and 107 from the trash fee. Is this the Administration's position?
Councilwoman, yes. As you know, we're currently in arbitration process with the firefighters and are currently in negotiations, and for the benefit of those proceedings, that is currently our position.
But yet we have -- maybe you could respond. 125 3/10/10 - WHOLE - RES. 100141 We know we need an obesity program and we saw that 76 percent of our youngsters are overweight, but how can we spend 5 million for this obesity program and yet 6 say that for the next five years we can't 7 consider labor increases? We know we're 8 in arbitration, but throughout the Plan, 9 we say no to labor increases, but yet we 10 could come up with other plans with 11 regard to obesity and such. 12
I'll kind of 13 repeat my previous answer, which is that 14 we are currently in these proceedings, 15 and for the benefit of those proceedings, 16 that's still the Administration's current 17 position. 18
I 19 believe those are serious issues that we 20 have to deal with. And my final question is about why we should go back to wage and business tax cuts, Plan for Fiscal Year '14, when nearly a billion in tax cuts given between 2008 are a substantial 126 3/10/10 - WHOLE - RES. 100141 reason for budget gaps we suffered to present. So if we're saying one thing about tax cuts and yet we are still continuing to try to move forward and try to get more money from individuals and our residents, businesses and small businesses, and yet we say we're gaining more money, but yet we're going to still do tax cuts, how are we going to do that?
As you know, the tax cuts are projected to take place in Fiscal Years '14 and '15 of the Plan, and that is a condition upon us hitting our projected fund balance targets. So we have not committed to them unless and until we can hit those fund balance targets, because ultimately the Administration believes very strongly that in order to produce jobs and economic growth, we need to be in an environment in which we're continuing to reduce taxes for businesses and hopefully for wage-earners as well.
So 127 3/10/10 - WHOLE - RES. 100141 we'll see. All right. Thank you, Madam President.
Thank you, Madam President. Consistent with my first line of questioning, which was prioritizing efficiencies, then going to cuts and then going to revenue enhancement, I have a couple of questions in that regard. And for the record, I applaud the Administration on some of the recommendations that were made in the Freshmen 15 suggestions and actually incorporating them, and we appreciate those levels of efficiency. But last year I asked a couple of questions, and I'm perplexed in particular to one, that it is true that we are losing population in our prison system, but it seems as though we're increasing costs. 128 3/10/10 - WHOLE - RES. 100141 What has been the impact of the thousand or so reduction in inmates? If I read that wrong, please correct me.
Councilman, if you give me a moment, I'll turn to the Prisons budget. So in the FY09 actual, the Prisons spent 241.3 million. The FY10 adopted budget anticipated about 248.8 million. The current target for FY10 is 239.8 million, and we're going to carry those savings into FY11 at 239.6. So there is a small decrease in the Prisons' budget over that period of time. So we're starting to realize --
I guess my point being, conventional wisdom would suggest even -- and if I recall, the answer might be that even though we lose population, we still have to carry an infrastructure that fits the 8,600 inmates that it was designed for and so we won't see a dollar-for-dollar inmate reduction in cost for a time. 129 3/10/10 - WHOLE - RES. 100141
Point of information. Mr. Agostini, what years did you cover in your response?
FY09 actual, 241.3 million. The FY10 adopted budget was 248.8 million, and the current target for FY10 is 239.8 million, and that's, in essence, the number for FY11 as well.
So it continues to go up, which was Councilman Jones' question. Why is it going up if we're going to continue to decrease population in the prison system? That was actually one of the questions I was going to ask earlier.
So the estimate that we have in the budget for FY11 130 3/10/10 - WHOLE - RES. 100141 assumes that the population is not at the 8,600 or 8,700 we have currently. It's actually at 9,200, with the expectation that we may be at risk for it going higher, and then we have inflationary costs associated with a range of contractual services that we provide. But I'll let the Prisons Commissioner respond to that. COMMISSIONER GIORLA: Good afternoon.
Good afternoon. COMMISSIONER GIORLA: Lou Giorla, Prisons Commissioner. Councilman, over the last probably ten years, we've seen an average 4.5 percent increase in population. Some of the efficiencies that I described earlier, working to return inmates to the state, video hearings, accelerating court appearances, have helped reduce our population. There's also an unknown -- there's a couple of unknown components, 131 3/10/10 - WHOLE - RES. 100141 crime for one thing. Crime has decreased. Our admissions decrease, our population decreases. Looking at the historical data, we can't guarantee or we don't know whether this will be sustained over the next couple of years.
I guess we assume the worst at times of things that we want to and then we assume the best. I mean, either our assumptions are always pessimistic or -- when we do a thing to reduce costs, we'd like to at least see some middle ground by way of optimism about things continuing along that trend, because we do the exact opposite when it suits us. And I know budgeting is a guesstimate, but sometimes can we guess a little more towards a savings as well when we achieve them?
One of the things to look at is, if you look at the FY10 adopted budget, we were assuming that based on the patterns and growth we've had over the years, that we'd get to 249 132 3/10/10 - WHOLE - RES. 100141 million, and now we've taken that down to 239. So against budget, we're showing a $10 million savings this year, and it's even greater in '11, because we would have assumed, as the Commissioner said, continued growth. So against what we had budgeted and what we assumed was going to happen, we are showing substantial savings.
I guess the simple question is, over the Five Year Plan, is there more money budgeted because you believe there's going to be an increase in prison population? That's the first question, the simple question. The other question is, if we have saved money from a decrease in the prison population, are there investments we can make over the five-year period that will continue to decrease costs? I 133 3/10/10 - WHOLE - RES. 100141 understand how you budgeted it, but the issue is what direction are we moving and is there direction which we can move and investments we can make that will decrease prison population and, therefore, decrease costs?
Such as day centers, community courts, things that will keep us in that trend of keeping the population down. COMMISSIONER GIORLA: I'll answer your first question. Yes, we've seen a reduction, and we've realized those savings. Depending on the demand, how many admissions we see. Now, we know that there are -- court case load and admissions determine our population. We're working, for instance, the video initiative to reduce both the time it takes to try someone and the court case loads. That's one investment that we've made. Other investments we're looking at --
134 3/10/10 - WHOLE - RES. 100141 Commissioner, I appreciate the answer. I don't want to interrupt you. I want you to answer the first question first, which is, does this Five Year Plan assume that there are increased costs to the Prison System because of increased population? That was the first question. COMMISSIONER GIORLA: It assumes slight costs to the Prison System based on an increased population. It also assumes inflation for services like medical service, food service.
But it does assume increased population? COMMISSIONER GIORLA: Yes.
Are there investments that can be made over the five-year period that would decrease population as opposed to increase population? COMMISSIONER GIORLA: Yes, there are investments that can be made.
This is a five-year financial plan. I mean, 135 3/10/10 - WHOLE - RES. 100141 shouldn't those investments be part of that plan that actually drive down prison population and save costs in the Prison System? COMMISSIONER GIORLA: Two of those initiatives are already part of the Plan, and we've made small budget allotments in FY11 for day reporting and for electronic monitoring. The video system that I mentioned was part of an expenditure in our FY10 budget and it doesn't require any more investment on our part at the Prisons at this moment.